Bridge the Divide

1 Trimble Transportation Bridge the Divide The 7 Bridges crossing the divides between fleet maintenance and the full business enterprise Bridge the Divide WHITE PAPER

2 Trimble Transportation Bridge the Divide Introduction to funnel IT investments and more so system connectivity to technology such as transportation management software (TMS)and leave fleet maintenance software, teams and outcomes siloed on an island and disconnected from the fleet. Incorrect and missing information, guesswork and inefficiencies of double data entry are some of the many outcomes of fleet maintenance systems being on an island. These divisions and other disconnects contribute to excess costs, downtime and safety violations, among other relevant challenges. This whitepaper describes 7 Bridges to move fleet maintenance off the island and bridge the divide, connecting the full enterprise to a broader ecosystem of linked services and applications. Commercial and private fleets use a variety of software systems to manage equipment assets, from scheduling preventive maintenance and repairs to tracking parts inventory and accounting for lifecycle costs. In many instances, some — and perhaps all — of the transactions and information in maintenance systems are not connected to the full business enterprise. Instead, a divide exists that often places maintenance in conflict with the other areas of the organization, limiting success of entire company. The organizational structures and IT systems of transportation companies traditionally have been geared for operations and the order-to-cash cycle of loads. This operational focus often leads companies Each of the bridges are structured to create alignment between the information systems, teams and data used by separate departments to accelerate a company’s overall return on investments in people, equipment and technology.

3 Trimble Transportation Bridge the Divide The Evolution of Maintenance When properly connected and retooled, fleet maintenance systems will deliver insights and visibility of equipment repair and operating costs by the mile and by the hour; asset availability; and total lifecycle costs for each make and model of equipment. With this and other dynamic information, fleet managers in maintenance and other departments will be able to: | Keep fleets moving and operations schedules aligned with maintenance needs | Fine-tune Preventative Maintenance (PM) services to ensure that equipment is not over- or under-maintained | Keep maintenance in line with budgets | Make educated and defensible decisions for spec’ing, buying and disposing of equipment Getting fleet maintenance off the island is not a singular event. Rather, it is a process that will transform the role of maintenance in an organization. The process started more than five years ago at NFI, a North American supply chain solutions provider with more than 4,000 trucks. Operations, finance and other departments of the Cherry Hill, N.J.-based company previously viewed fleet maintenance as the enemy, says Bill Bliem, senior vice president of Fleet Services. That perception changed with the emergence of Fleet Services. This department at NFI is delivering valuable information and services to the full enterprise. “They realize that we are the experts and that we know what we are talking about,” says Bliem of the interactions that now take place between Fleet Services and other departments. “We are providing them with the right data out of our system — ‘look, here is what we need to change and why,’” he says. “Now they are listening to us and asking us for help.” We are providing them with the right data out of our system. Now they are listening to us and asking us for help. — Bill Bliem Senior Vice President, Fleet Services NFI

4 Trimble Transportation Bridge the Divide The highest marginal cost for fleets, driver wages, is followed immediately by equipment line items of fuel, loan/lease payments and Repair & Maintenance (R&M). Fleet R&M expenses averaged 16.7 cents per mile and $6.58 per hour in 2017 , according to the 2018 Operational Costs of Trucking report by the American Transportation Research Institute (ATRI). The report shows R&M costs increased by more than 60 percent from 2008 to 2017 on a per-mile basis, despite the average miles driven per truck declining 13.6 percent during this period. ATRI attributes R&M increases to technology advancements in newer power units and trailer models. While equipment continues to be more expensive to repair and maintain, the bridges are a path to savings by aligning the resources of all departments to maximize the impact of maintenance outcomes and by spreading these successes across the entire organization. A Path to Savings R&M COSTS INCREASED BY MORE THAN 60% FROM 2008 TO 2017 ON A PER-MILE BASIS Trimble Transportation Bridge the Divide

5 Trimble Transportation Bridge the Divide The 7 Bridges WARRANTY RECOVERY VENDOR RO INTEGRATION OPERATIONS DRIVERS REMOTE DIAGNOSTICS FINANCIAL TIES BEYOND THE CAB

6 Trimble Transportation Bridge the Divide Bridge 1: Operations By crossing this bridge, transportation companies will bring together parallel functions in maintenance and operations to maximize asset availability and utilization. Trimble Fleet Maintenance and TMS systems have pre-built integrations that give visibility to load planners for matching the right equipment and accessories with loads and drivers. Operations also can identify assets in the TMS that are unavailable for dispatch and take an active role in routing vehicles to shops for PM intervals, equipment inspections and repairs that are coming due. Canada-based Bison Transport in Winnipeg, MB, has proactive notifications sent automatically from its Trimble Fleet Maintenance system to operations. With this visibility, personnel in operations play an active role in scheduling and routing equipment to the company’s five internal shops. The custom dashboards help the departments coordinate shop appointments and schedules, says Trevor Johnston, Bison’s maintenance analyst. “Our daily dashboard audits allow us to stay on top of any scheduling conflicts,” he says. Estes Express Lines has a live dashboard in the operations room that gives real-time visibility of breakdown status. Out-of-service trucks are displayed with the time remaining for dispatch availability, says Mike Palmer, vice president of Fleet Services. “Our goal is to be up and running in two hours,” he says. The custom application was developed in house by Estes, a full-service freight transportation provider with a network of more than 230 terminals. The software combines equipment status and locations from its fleet maintenance and mobility systems from Trimble. Bison’s maintenance and operations have visibility of key metrics for more than 1,500 power units and 5,000 trailers in real-time dashboards.

7 Trimble Transportation Bridge the Divide Bridge 2: Beyond the Cab This bridge enables companies to identify immediate and future maintenance needs using real-time connections with drivers, telematics and other fleet management systems. To identify current maintenance items, Bison Transport is using electronic driver vehicle inspection reports (eDVIR) . The application feeds defects noted by drivers’ during pre- and post-trip inspections directly to its Trimble Fleet Maintenance system . Shop personnel can immediately open work orders and schedule repairs. The Fleet Services department of NFI has an analytics group that looks for continuous improvement opportunities. Currently, the group is working on a project that brings route-specific information together from multiple systems to identify future maintenance needs. The project includes the use of driver scorecards to track their damages and breakdowns by routes. The analysis is also tracking engine fault codes and tire costs by specific routes. “Maybe we have a route where a driver has to make a right turn and is curbing a tire every time?” Bliem says. Other sources of real-time information that can be connected to fleet maintenance systems for triggering proactive alerts and data for analysis of present and future needs are: | Truck telematics —asset locations, mileages, engine hours, fuel efficiency and fault codes can automatically update maintenance records and trigger notifications | Fleet cards —purchase data for fuel and over-the-road maintenance expenses can be used to track changes in vehicle performance and identify problem areas | Trailer telematics —mileages, tire pressures, axle temperatures, brake wear and lights can be monitored to find items needing maintenance | Tire pressure monitoring systems (TPMS) — sudden or gradual changes in tire pressures can trigger alerts to prevent breakdowns and premature wear We are trying to figure out if certain routes are having different types of service failures to optimize and come up with a predictive maintenance program. — Bill Bliem Senior Vice President, Fleet Services NFI

8 Trimble Transportation Bridge the Divide Bridge 3: Remote Diagnostics 8 AVERAGE MECHANICAL COST OF AN UNSCHEDULED REPAIR (EXCLUDING TIRES) $311.33 IN THE THIRD QUARTER OF 2018 BREAKDOWNS MAY INCLUDE TOWING EXPENSES AS WELL, WHICH VARY FROM $300 to $1K PER HOUR AND HEFTY PER-MILE CHARGES Navistar, is analyzed to identify the top fault codes by geography. The analysis looks at fault codes from a nationwide perspective and by individual regions, terminals and trucks. “In the past we have blasted our maintenance guys with information,” says Mike Palmer. To simplify the process, the company uses a feature in its Trimble Fleet Maintenance system to create “campaigns” for fault codes based on information from its OEM partners. When a technician opens a work order triggered by a fault code, the campaign informs the technician what to do about it. Trimble Transportation offers a product, TMT Predict . Fault Code, that identifies eight types of “red lamp” fault codes up to three days in advance of an actual fault code. The red lamp codes signal imminent breakdowns such as an engine de-rating event. Information about the predictive fault codes appear in a dashboard in Trimble’s fleet maintenance software for managers and technicians to take immediate actions. Perhaps nothing is costlier and more preventable in maintenance than breakdowns and “unscheduled repairs.” The average mechanical cost of an unscheduled repair (excluding tires) was $311.33 in the third quarter of 2018, according to the TMC/ FleetNet Vertical Benchmarking program. The cost increased by seven percent from the second quarter. Breakdowns may include towing expenses as well, which vary from $300 up to $1,000 per hour and hefty per-mile charges. Lost revenue and customer service failures are cost factors as well . This bridge connects fleet maintenance systems directly with OEMs to identify problems and action plans for preventing breakdowns. Factory-embedded and aftermarket telematics systems supply data to truck and engine OEMs who monitor for fault codes and provide guidance. Fleets need to tailor the information from remote diagnostics services to their own specific needs, says Estes Express’ Mike Palmer. The information Estes receives through OnCommand Connection, the remote diagnostics service from Trimble Transportation Bridge the Divide

9 Trimble Transportation Bridge the Divide Most fleet maintenance systems are equipped to manage internal shop activities and information. Even so, many lack the necessary tools to gain total visibility and control of outsourced maintenance events. This bridge connects companies with internal shops to an extended network of dealers, truck stops and OEM service centers using a fully connected and paperless system for efficient and transparent management of the entire repair order lifecycle. Direct and seamless repair order integration between fleets and their trusted vendor networks delivers an accurate and current picture of repairs and the cost of work that is done not only within their own shops but outside their own locations. With the integration, fleet managers communicate electronically with outside maintenance service and repair networks within their native fleet maintenance software system. Through instant connectivity with established vendors, fleets can order work and receive estimates quickly and provide the ability to view all part and labor line details. Fleet managers can also maintain an important degree of control by having the ability to exclude service items from the repair order estimate before they accept or reject the work order. The direct line of communication remains open throughout the repair order to receive status updates and manage exceptions. Upon completion, the final repair order data and invoice details can be imported with a single click into the TMT Fleet Maintenance system. Having a complete electronic repair order process for outside service events will reduce administrative overhead by eliminating data entry time and the exchanging of emails and phone calls with vendors. The repair order integration also extends data accuracy when working with external service providers and minimizes estimate-invoice mismatches and overbilling. Bridge 4: Vendor RO Integration 9 The proactive maintenance notification and scheduling process reduces downtime associated with outsource service events by 25 to 50% Trimble Transportation Bridge the Divide

10 Trimble Transportation Bridge the Divide Bridge 5: Warranty recovery To keep the wheels of commerce turning, fleets often will replace failed components and assemblies on equipment on their own dime even if the parts are covered by warranty. With this bridge, fleets can automatically capture and recover the cost of replaced items covered by warranty. When technicians for Estes Express Lines create work orders, the fleet’s Trimble system automatically identifies components in work orders covered by warranty. Estes Express has between 600 and 800 claims a day, Palmer says. When Estes uses parts from its own inventory the Trimble system automatically generates warranty claims for review. Once the claims are validated, Estes batch uploads claims directly to its suppliers. In addition, any work orders covered by warranty that are performed by dealers are received automatically into Trimble for record keeping, Palmer says. Palmer estimates the fleet has saved nearly $7 million in 2018 from warranty recovery. 10 PALMER ESTIMATES THE FLEET HAS SAVED NEARLY $7 MILLION IN 2018 FROM WARRANTY RECOVERY

11 Trimble Transportation Bridge the Divide Having fleet maintenance systems connected to the financial and accounting systems of an enterprise will streamline payroll, vendor payment and billing cycles for invoices. This bridge will also provide more robust financial reporting capabilities and visibility to equipment lifecycle costs. The connections are made by exporting financial data from fleet maintenance, either on a scheduled basis or by using real-time interfaces. The replacement cycle for trucks at Estes Express Lines is typically 15 years and 1.2 million miles. The company has established rules for this cycle, which vary depending on used truck prices and analysis of lifecycle costs and predicting component failures, Palmer says. A truck that is five years old with one million miles, for example, may need an engine replacement. Analysis may show the particular make and model of truck is worthy of an engine replacement, while other models would be disposed of based on a high probability of having other component failures within the next year, he explains. NFI has its Trimble Fleet Maintenance system integrated with all of the company’s financial systems to have visibility of transactions and to analyze the cost of ownership for all types of assets. “We are constantly looking at cost per mile and the cost of ownership,” says Bliem. The purpose is to find the ideal replacement cycle for assets. “We are comparing truck manufacturers and looking at where they cross that line where maintenance is exceeding the value of the asset,” he explains. Bridge 6: Financial Ties The ultimate prize is having all financial information available in a single source for analysis to optimize buying and selling decisions.

12 Trimble Transportation Bridge the Divide Recruiting and retaining drivers and technicians is another area where fleet maintenance adds value to the enterprise. A recent study by Stay Metrics, a firm that provides driver surveys and other retention products, shows the impact of fleet maintenance on driver turnover. The study compared survey responses with turnover for maintenance-related survey questions. Sharing visibility of maintenance schedules with operations and safety is one strategy fleets can use to increase job satisfaction by creating a personalized work experience for drivers. When a driver is passing through for maintenance, technicians and fleet managers can be automatically notified of the events. This visibility can help build relationships. The driver can be greeted by name and recognized for recent accomplishments from data that is being collected from various systems. Bridge 7: Drivers The data show the expectations drivers have for maintenance are influential in determining whether they stayed or left a carrier. Drivers who felt most positively about the expectations set by companies during orientation on the condition of equipment are approximately 9.2 percent less likely to quit. Trimble Transportation Bridge the Divide

13 Trimble Transportation Bridge the Divide Conclusion Not all fleet maintenance systems in the market have the capabilities to build and support the 7 Bridges to maximize opportunities to connect the full business enterprise and ecosystem of third-party applications and services. Companies that have the right systems in place, such as Trimble’s TMT Fleet Maintenance Solutions, can get a head start at bridging the divides between their shop and the rest of the organization and increasing cost savings, communication and productivity. The end result elevates the role of maintenance in their organizations and improves the success of the program for the benefit of the entire company. We’ve built a department that everybody in this organization relies on. — Bill Bliem Senior Vice President, Fleet Services NFI

14 Trimble Transportation Bridge the Divide Phone: +1 866 914 5299 Website: transportation.trimble.com Trimble Transportation provides solutions to create a fully integrated supply chain, helping customers make more informed decisions and maximize performance, visibility and safety. With an intelligent ecosystem of products and services, Trimble Transportation enables customers to embrace the rapid technological evolution of the industry and connect all aspects of transportation and logistics — trucks, drivers, back office, freight and assets. Do you have questions? Contact us. To learn more about Trimble Transportation.