By Contributor Steve Banker
Daniel Powell, CEO of Optimal Dynamics
Optimal Dynamics
Optimal Dynamics offers an innovative transportation solution for trucking firms. Whereas most routing solutions optimize only after a set of moves has been committed to, Optimal Dynamics takes a fundamentally different approach. Their platform provides end-to-end decision support, enabling carriers to evaluate whether to accept a load before committing—based on a holistic view of their entire network. What makes the approach especially novel is its ability to make and execute high-quality decisions in environments with significant unknowns and uncertainty. In addition to strategic planning, the operational system itself is designed to function effectively under these same conditions, continuously adapting as new data becomes available to ensure profitable, network-wide outcomes.
While intrigued by the briefing Daniel Powell – their CEO – gave me, I wanted to validate that this was a workable approach. Optimal Dynamics introduced me to their customer D.M. Bowman. I spoke to Mark Scanlan, the vice president of operations at D.M. Bowman.
The D.M. Bowman Business Model and Supply Chain
Don Bowman started the firm that bears his name in 1959. At the time, he had one truck. Over those decades, the firm expanded from trucking to a diversified company called the Bowman Group. The Bowman group spans transportation, real estate development, trailer leasing, warehousing, logistics, and even hospitality, where the firm runs a couple of hotels.
The Optimal Dynamic solution was implemented by the trucking division, D.M. Bowman. This division has several hundred power units and primarily serves the Mid-Atlantic region of the United States. They offer truckload moves for short-haul and regional dry van, flatbed, and dry bulk. Flatbed and bulk are a means of transporting heavy, wide, oversized, and uniquely shaped goods like construction equipment, chemicals, building supplies, and machinery. These cargos do not fit within standard trailers and do not require the enclosure of dry trucks.
The division also offers a dedicated fleet service to manufacturers. A dedicated fleet refers to a transportation service where a carrier owns and operates the vehicles, but those vehicles are exclusively dedicated to a specific customer.
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The trucking division, according to Mr. Scanlan, aims to be driver-friendly. They offer a home daily and regional model. In many cases, drivers can get home every day. To do that, they focus on a local and regional, not national, network. The smaller network allows for good density, which improves the ability of a transportation solution to optimize shipments. For home daily drivers, the maximum distance of a load would be 200 miles. For regional, the load could travel between 500 and 600 miles.
Why Buy a New Transportation Solution?
“I don’t think it’s controversial to state that since COVID, the industry has been chaotic,” Mr. Scanlan said. There have been a large number of carriers entering and exiting the market. There’s been rate instability, volume fluctuations, and shortening time windows to process RFQ and RFP responses.”
Mark Scanlan, vice president of operations at D.M. Bowman
Contracts are also getting shorter. “You used to be able to get contracts that were two or three years long. Now everybody wants 12 months or less.” Driver hiring and retention remain an issue for the industry. “The list goes on and on and on.”
“I’ve been to quite a few conferences,” Mr. Scanlan continued, where the question on everybody’s lips is ‘when will the industry return to normal?’ The real question should be, ‘Is this the new norm?’ If that is the case, then we need to pivot the operation in a way that allows us to operate effectively under these endless constraints” on an ongoing basis.
To do this, the trucking firm needs to make faster decisions. Those decisions needed to be based on data and facts and not assumptions and feelings. Mr. Scanlan pointed to the subjective nature of decision-making: two planners sitting beside each other make very different load planning decisions. “We needed to be smarter about how we evaluated our network, the business that we’re doing, versus business that may not fit the network.” And the decisions made had to support the commitments to their drivers to get them home to see their families.
Why Optimal Dynamics?
“We started looking at productivity tools for the operations team,” Mr. Scanlan explained. “We evaluated a sizable number of tools before ultimately landing on Optimal Dynamics. When we started, it was, it was almost suffocating. The number of vendors that are in this area, that are telling you that they can make you all this money, and make you so efficient.”
“So, we stepped back. We took our time. We were very slow in the discovery phase.” Ultimately, Optimal Dynamics was selected because their product offering was “aligned most closely with what we wanted to do. They had a very robust customer service and support team. And the software vendor demonstrated a commitment to innovate.
Functionally, the solution also had the best user interface. It was the easiest to work with of the solutions they looked at. That may sound “insignificant,” but if you want users to fully adopt the solution, it is critical. For planners flipping loads between different divisions of the company, being able to toss asset loads to the brokerage team, or have the brokerage team toss loads back over to the asset group, is much easier. A robust UI also makes training easier.
The solution allowed for the network to be frequently reevaluated. They have tools that allow you to potentially look at a new piece of business and lay it over top of your current network to see how it would function. “They have a tool called bid, which helps evaluate potential RFQs and RFPs much faster,” Mr. Scanlan added. “They have a lot of really cool stuff.”
Whatever solution they picked also needed to bolt on to their existing legacy TMS.
Also important was that D.M. Bowman was “looking for a partner, not a vendor. And I cannot express the importance of that in this decision,” Mr. Scanlan emphasized.” Any carrier that implements an optimized transportation solution will go through “a fundamental change to the business and culture. You need a partner to walk side-by-side with you through that.” The culture change can be very challenging.
The Implementation
It took about five months to evaluate and research the different vendors before. Once they selected Optimal Dynamics, the implementation took about a year. But other companies might be able to implement the solution more quickly because integrating to their legacy transportation management system was difficult and they had to clean up their data.
It was evident that this magnitude of change needed to be driven by senior management so that planners did not drift back into old ways of doing things. Even before Optimal Dynamics was selected, management talked to operations and explained that a better, more automated way of running the business was needed.
This frequent communication was not focused just on planners; the frontline managers, customer service reps, and drivers knew change was coming. Workers were assured no one would lose their job, but some roles would change.
One critical point communicated was “that AI is not planning the trucks,” Mr. Scanlan said. A planner, “someone on your staff,’ looks at the AI recommendations, and makes the final decisions. “It’s not magic, ‘like push a button and fix everything’. It’s not really expected to be a 100% solution. There’s always going to be exceptions.” But the solution does streamline many of the obvious, tedious functions associated with load planning.
This was a more straightforward implementation than expected. “I thought our IT team would be more heavily involved in this process.” But it was primarily driven by operations. The IT team was involved up front to ensure the integration was going well. But beyond that, operations really took the lead during the implementation.
But planners did need to think differently about planning. They needed “to relearn how they think about the business, their network, and what a good decision really is. A traditional load plan that might be perfect for one driver or one truck, but it might not be the best load plan when you’re looking at the entire network.” Planners needed “to think bigger.”
With load planning, it is difficult to quantify the exact return on investment. Margins change as the proportion of business swings between the brokerage operation, flatbed, and bulk. As new customers are added and old customers are leaving, and the network density changes, profitability is also impacted. Finally, fuel prices are changing all the time.
Further, not all parts of the business benefit from optimization. Optimization could not be used to improve some dedicated fleets due to operational constraints.
But there is no doubt that the solution is improving their operations. Key performance indicators, including loads per shift, revenue per shift, revenue per mile, and empty mileage percentages, have all improved.
Further, these results occurred while using fewer planners. “We’ve used Optimal Dynamics to consolidate the load planning that we had spread across five separate business divisions down to one person.,” Mr. Scanlan explained.
However, no one lost their job. Former planners are now focused more on customer service and data integrity. Being able to focus more on customer service is important. “I’m old enough to remember when customer service was a pretty simple function,” Mr. Scanlan said. You’d either get an email or a phone call from a customer, built a load, and then watched it to successful delivery.”
“Now, almost every customer has its own website, its own portal, and its own performance metrics.” Customer service personnel have to be trained in those portals and ensure the data needed to track a shipment makes it to the customer portal in a timely manner.
There are more opportunities to improve operations with this solution. If D.M. Bowman can get some of their customers to get them load tenders earlier or change their load specifications, there would be more optimization opportunities.
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