A few caveats for our friends and peers across various industries encompassed by the transportation and logistics spectrum; the school bus transportation industry is, for lack of better words, “old school”. For example, it has been estimated that only approximately 35 percent of the school transportation fleet of 500,000 vehicles that operates each day is equipped with GPS. This lack of installed infrastructure has reduced the adoption of technology driven services that enhance overall performance, from routing systems to solutions that drive operating efficiencies such as our roll out of Fleet Soft that enables us to streamline our maintenance repair program through electronic repair orders, service schedules as well as inventory management and warranty recovery. However, this is rapidly changing and our team at Student Transportation Inc., the largest pure-play school transportation provider in North America, is leading the charge. Over 70 percent of our fleet of 13,000 vehicles is equipped with GPS. Technology is changing the way we play the game, and the way the industry does business. Technology is changing the traditional definition of “our customer”, and it’s creating more opportunities to enhance service across the entire customer value chain, but with that, comes a more scrupulous eye on operating performance (which is good for everyone). Ultimately, technology enablement is here, and for early adopters like us, we are leading the industry into the world of “new school”.
“Technology is changing the way we play the game, and the way the industry does business”
The historical definition of our “customer” has broadened beyond school officials to include the super-connected parents who are changing the way the industry does business. While the school official is still the ultimate decision maker, the sphere of influence that our super-connected parents yield is changing the way that school officials make transportation decisions. These young Millennial parents are curious and want to know more about safety, driver training, whether we use clean, alternative fuels and how they can monitor their child’s school bus arrival time on their smart phones. Educated customers who better understand what we do and how we do it, are great supporters of ours and are yielding this power with school officials.
A great example of this confluence between new technology and our new customer is SafeStop, our school bus tracking application. The SafeStop app allows parents and school officials to securely track their school bus. The app has a real-time map feature that displays the location of their child’s bus, provides estimated arrival times at their bus stop, and an alerts and messaging center. The alerts and messaging system serves as an extra communication channel for schools allowing them to alert parents about important school news such as delays, closings, early dismissals or upcoming school events. And so, as we think about the development of SafeStop, bringing Wi-Fi to buses, and along with additional technological advancements, we are learning how to maximize the relationship with our parents, which in-turn significantly deepens it with school officials.
We have found tremendous success with this cutting-edge application that was first to market, with our existing customers, but also with other contractors who are being asked about a school bus tracking solution from their parents. And so, the ultimate prize for SafeStop is much bigger than the million plus parents who trust us with transporting their children to school safely each and every day. It is the 36 million parents in North America who rely on school bus transportation each day.
While the confluence of new technology and our new customers are driving additional revenue streams and deepening our customer relationship, the core of technology adoption is truly being a better operator and taking costs out of the business. The new GPS telematics that we have been installing on our vehicles are providing an enormous amount of data, which helps us operate more efficiently. This basic technology solution that has been utilized across nearly all other fleet-type industries is relatively underutilized in school bus transportation. We are learning a lot from the vehicles talking to us as we are developing ways to use the data to reduce our operating and asset cost. Our transformational initiatives pertaining to GPS combined with student routing systems, advanced mathematical algorithms and customized mapping data is providing our location managers with tools to target improved driver productivity, reduction and/ or elimination of inefficient routes, lowering fuel consumption and, of course, enhancing our service commitment to our valued customer base.
Technology is also continuing to be a key element, used by our company to develop and train our front-line managers how to use each system to maximize the impact on reducing cost and improving efficiency. Our internal state-of-the-art Learning Management System is the right education platform for making this happen. Our Student Transportation University now has over a dozen management development modules geared towards advancing our managers skills in cost control, labor relations, and revenue generation. These programs will reduce our costs and improve even further our service levels while allowing us to become even more competitive and increase revenues per vehicle and achieve margin improvement.
In short, technology is changing the game in school bus transportation from creating new revenue streams to taking costs out of the business. Our industry is largely several innings behind the rest of the T&L landscape, but the gap is quickly narrowing and with this comes huge opportunity. Given the highly personalized nature of the industry (i.e., transporting children), and the high level of revenue stability and visibility versus other transportation industries tied to macro economic trends, innovative necessity is never going to drive our industry to be the leader in technology innovation. But, you will find that customers, operators and even manufacturers are moving into a “new school” mindset. And that is changing the way we do business.