Is your terminal ready for a Yard Management System?

I recently sat down with AGX Vice President of National Sales, James Bagwell, to learn more about Yard Management Systems. James has been in the transportation and logistics industry since 1992, working in a variety of leadership positions. His main focus today is in developing specialty customized logistics programs for customers, which include Yard Management Systems (YMS). By taking a full 360 view of his customers’ business, James has been successful in developing and sustaining long-term relationships that withstand the challenges of normal market volatility we see today, ultimately benefiting both trading partners. Here is a transcript of our conversation. 

Curtis Hazel (CH): Hi James, thanks for spending some time with me today. So, perhaps we can start with an easy question, can you explain what a yard management system is? 

James Bagwell (JB): Hi Curtis, my pleasure, thanks for inviting me. In simple terms, a yard management system is a software platform that provides a customer visibility of their yard, specifically, the units on their yard, whether its trailers, intermodal containers, ocean containers and the contents of each.  Most companies that have a warehouse typically have a Warehouse Management System (WMS), which allows them to track product once it has been unloaded from a trailer or container.  They have that visibility because someone has input data into their WMS. A YMS simply extends that visibility into the yard and to include all equipment as well. A lot of manufacturers today are operating a just-in-time system. By design they don't have space within the warehouse to unload every trailer that comes in, so they depend on visibility provided by their YMS to tell them what they have available to them in the yard. 

CH: So the YMS integrates into existing systems, like a Warehouse Management System or Transportation Management System?. 

JB: There are some big box systems out there that have different components. They'll have a TMS, a WMS, and a YMS and you can buy any combination and they integrate together. But the problem with those is that you have to adjust your business to fit into that system. The solution we provide is custom-tailored to each facility. So, to answer your question, yes, the YMS can integrate into a WMS or TMS, or both, but we focus on the YMS. For example, you could have a customer that is scheduling trucks through their TMS and we can tie that into the YMS for dock scheduling to make their dock flow efficient. We can tie that into a WMS so as they unload a truck, the data from the YMS transfers into a WMS seamlessly, tying the entire system together based on the customer’s design, not the software company's design, if that makes sense.   

CH: Yes, that does make sense. How long have Yard Management Systems been around? 

JB: They’ve been around for some time, but I think that probably over the past 10 or 12 years is when it's really started to gain some traction. I'm sure there were systems around before that, but I've really noticed this taking traction over the past 10 or 12 years and there's a lot more companies out there offering it. 

CH: What problem does a YMS solve for an organization?

JB: The simple answer is visibility.  A more complex answer to that is the visibility translates to savings, such as the amount of inventory that they're keeping on hand in the yard at any given time. Let me give you an example; we went into a customer that had seven or eight hundred trailers on the yard at any given time and we were able to cut that in half by giving them visibility into what was and wasn’t being used. We found that they were storing raw material in a trailer and they might unload 2/3rds of the content of a trailer when needed for manufacturing, and then push the trailer back into the yard. Now there's a third of a trailer load of raw material on the yard that has the potential to get lost in the shuffle. They may mistakenly order another trailer load of the same raw material and now they're sitting on thousands of dollars worth of extra inventory in the yard. A properly configured YMS helps avoid that problem.  

On the outbound side, if a customer is managing ocean containers on their yard, our YMS will help them manage the time each container stays on the yard to reduce or eliminate any potential detention charges they could incur. That would also apply to trailers used by over-the-road carriers that are coming in and doing a drop and hook. They’re typically only allowing so many free days to unload a trailer. We can manage all of that now in a YMS. The system allows us to flag equipment based on time, so a trailer that has only one free day left may have a yellow flag on it, and a trailer on its last day would have a red flag. This translates to significant cost avoidance for a company that is managing hundreds of trailers coming in and out on a daily basis. Again, this can all be customized to address each terminal.

CH: That's excellent. I imagine a YMS is a good theft deterrent too, does that ever come up with customers?

JB:The real threat of theft is pilferage of freight between the time it leaves a customer's facility to the end user. While there is not much we can do after the freight has left the yard, some customers have us take photos of the back of the trailer to capture how it was loaded, verify counts and upload that to the trailer file in the system. So, if there's any pilferage that occurs, we've got an image of what that trailer looked like and a verified count when it left the facility, and if it doesn't look the same when it reaches destination, then we're going back to the carrier and try to track down where pilferage may have occurred. 

CH: What are the key components to a YMS? 

JB: So, there's a couple of options in the marketplace. Some options allow you to attach an RFID (radio-frequency identification) tag to trailers, and you're able to keep up with those trailers via RFID tag. We’ve found that those systems can be costly when you include the price of each RFID tag and so, we do not use the same technology. We use barcodes instead of the RFID tag. We print the barcodes and attach the barcode to the trailer. The barcode has a typical lifespan of three to five years and only costs a couple cents for each one, so no matter if the same trailer is coming and going to your yard for years, or it only appears once, you haven’t sunk a huge cost into the tracking device. This allows us to keep our system cost effective, while at the same time able to track every single trailer. 

We can keep track of everything through handheld cellular devices. We can scan the barcode to pull up all of the data for the trailer, as well as pinpoint it on a map of the yard. 

A customer will typically define the zones of their yard and we’ll configure that into the software. Really, the components of the system are determined by the facility, so if they have a guard house and need to scan driver’s licenses, we can build that in - if the system needs to integrate with a TMS, or WMS, as we discussed, we can build that in too. The best way to think about it is we are a consultant that comes in and helps create a system that contains all of the components needed to provide the best solution for each use case. And because of that, we’ve found that no two systems are ever the same. 

CH: When you put it in those terms, it seems that AGX is providing high-tech solutions for its customers, not just your typical transportation services. What did companies do before YMS came along? 

JB: One of the companies that we're providing a YMS to employed people to ride around the yard in a golf cart, looking in the back of trailers for product. As you can imagine, that’s not the best use of resources. Needless to say, our technology revolutionized the way they were able to manage their yard. And, yes, to your point - our system is proprietary and we work directly with the developer of the software, so, we are in fact offering high-tech solutions to our customers. 

CH: What are the minimum requirements, or minimum size operation to benefit from a YMS?

JB: There's really no minimum or maximum size. Any company that has a need to manage inventory on the yard, before it comes to a door, before it comes inside the warehouse, they can benefit from a YMS. If they've got trailers or containers, we have the ability to barcode them. So, we really don't have a minimum requirement, but obviously, if a customer has a substantial amount of trailer volume in and out of the yard and storage of trailers or containers on the yard, then they need the visibility that a YMS will provide them. 

CH: What about customers that have multiple terminals, is a YMS able to incorporate multiple locations?

JB: Yes, in fact, we're currently providing service for a customer with a location in South Carolina and Illinois. An individual working at the Illinois location will have a login and their login permission allows them to see the facility in Illinois. Same with the person in South Carolina, they're only seeing the facility in South Carolina, whereas somebody at the Corporate office located at a different site has the ability to see both facilities at the same time and any interaction between the two facilities.

CH: Obviously, there's an investment in these systems. How long does it typically take for a company to get a return on their investment?

JB: Just about every customer we work to install a YMS for is seeing a return on their investment within the first year. That includes the time it takes to analyze the operations and develop a custom solution for their facility. 

CH: How have these systems evolved since you've been in the business?

JB: They've evolved by way of integration. In the past, everything was fragmented and operating in silos.  Now we can tie a YMS into a TMS, we can tie into a WMS and it allows efficiencies throughout the customer supply chain.

CH: James, you’ve already given us a few examples of how a YMS can improve your customer’s efficiency, can you think of any other examples of how a YMS has proven to be an effective tool?

JB: Yes, so, one thing we haven’t talked about yet is the ability to help the motor carriers that our customers work with. The system has the ability for customers to give a specific login to a carrier that gives them visibility into their equipment that they are utilizing with that customer. For example, if a carrier has five trailers in use at a terminal and two of them are empty, the carrier’s dispatcher can tell a driver where to locate an empty trailer when the driver gets there, decreasing load and unload times. This makes the customer far more attractive to the motor carrier, and in todays’ market, that could mean better access to capacity and better rates. 

CH: Yeah, that's a great point because, you know, Chris (AGX CCO, Chris Reeves) recently published an article on the “Top 5 Best Practices Every Shipper Should Know”,  and one of them was “protect your reputation”  by having efficient loading and unloading times. So, a YMS could actually enhance your reputation and make you more desirable to carriers. 

JB: Absolutely,  and I think I've given you two examples of that; the one I just mentioned of a driver having the ability for his or her dispatcher to go in and identify where an empty trailer is located on a particular facility; and, then the one we discussed earlier about being able to flag equipment to denote dwell time, which is also a great benefit to the carrier to make sure nothing is incurring unnecessary penalties. So, in my opinion, a YMS gives you the tools to be a more desirable shipper to some of the trucking companies out there.

CH: James, this has been really good, is there anything else that comes to mind that we haven’t covered?

JB: Well, I think I would just like to add that AGX is not just a trucking company, you know, point A to point B, we are a full-service logistics consulting company. We listen to our customer’s  problems and we provide a custom-tailored solution to fit their needs. 

CH: I think you have done an excellent job of illustrating that for us today, and I sincerely thank you for taking the time to meet with me. If someone reading this has more questions, or wants to schedule a meeting to analyze their facility, what is the best way to get in touch with you?

JB: Thank you. I can be reached at (904) 222-6479, or by email at james.bagwell@agxfreight.com.