The Link Between APIs and Fleet Profitability
Mar 22, 2021
Gain a better understanding of application programming interfaces (APIs), what their role is in connecting fleet data and how they can potentially improve your fleet's profitability.
Matthew : [00:00:00] Welcome to The Fleet Code, a podcast brought to you by Fleetio where we'll dive into the latest fleet trends, technology and best practices. Get the inside scoop, as we decode the challenges of fleet management.
Luciano: [00:00:22] Talking in terms of fleets specifically, the way you take care of your fleet shapes your company's reputation. So it is critical in the sustainability of the business. I am totally convinced about that. I talk to colleagues that work in other logistic companies, and we all share the same vision.
Matthew : [00:00:43] In this episode of The Fleet Code, we welcome Dominique Leupi, Fleetio lead customer success manager and Luciano Briozzo of OTL Solutions.
Luciano is based in Spain and runs a logistics fleet operation that spans across several European countries. We'll discuss what are APIs or application programming interfaces and how they can be the bridge between the operations and finance side of a fleet.
Hi, Luciano. Thanks for joining us today.
Luciano: [00:01:09] Hello, Matt. Nice to be here. Thanks for the invitation.
Matthew : [00:01:13] Yeah, absolutely. And we also have Dominique as well. Dominique, thanks for joining us on the show.
Dominique : [00:01:17] Hey Matt. Thank you. Great to be here and nice to see you Luciano.
Matthew : [00:01:21] Alright, I want to get right into it. Luciano, could you maybe give everybody a little background on yourself and the company that you work for?
Luciano: [00:01:28] I've been working since I'm 16. So the story is a bit long now, please don't do the math 12 years in it companies while I was starting finishing, but allow his degree in electrical engineering and master's in strategic management and then 13 years in the steel industry in Argentina, most of 15 in quality control and warehouse management.
And then I moved in 2018. I moved from Argentina to Spain. With my family to join OTL during the last two and a half years, I have been running the operations here in Spain for OTL. There are even more details, but don't do the math. Yeah, no, that's fantastic. In terms of OTL, can you maybe explain what it is that company does and what the fleet is?
We do logistics. OTL is a group of companies with focus on last mile logistics. We offer an integrated solution. So imagine that you have a product and you have a customer that wants your product. So we put everything in the middle. So we connect the dots with what vehicle we put to the driver. We also have our own software for the traceability of the process.
And we also provide the management to control everything. Forget all about the logistics. We take care of that the company was founded in the UK in 2013, by our Ercilio the classical success story, a man with humble beginnings, that crosses the ocean from Brazil into the UK. He started from scratch and the decade later, boom, conglomerate of companies working in three countries.
It is a really nice story. And now we are operating in the UK, Spain and Italy. We serve a variety of sectors like retailer healthcare, or spare parts, food. With last mile delivery with just the boom and e-commerce and everything that happened in 2020. How have things really evolved in that world over the last year or so?
As I mentioned, I came to the company in 2018, 19 was a year off, calming things down and establishing the process. And 2020 was meant to be the year of expansion, but COVID came. And a new world came, new world, new you, Tony Robbins said we needed to adapt. Luckily we were used to video conferences because we have our team in different countries, in different cities.
So we were used to working like that. We added this part of working from home. I was reluctant at the beginning, but we realized that we could spend 24 hours at the home and with increasing in revenue and increasing in profit, everything was really good marketing in the right moment, in the right place.
Perfect timing because other types of businesses, they weren't so lucky. And so I'm very grateful to provide a service to the society that was needing it in time for confinement.
Matthew : [00:04:31] Absolutely. And that's a lot of what fleets have to do in fleet managers is just being able to serve their customers. And like you said, for some people, it was an unfortunate year and for others, it was the exact opposite and a revelation.
I wanted to talk about the challenges of managing your fleet because you talk about being spread out amongst multiple countries in Europe. And so how do you overcome those challenges? Especially if you have to even be remote. Challenges, perhaps in a widespread fleet, I could talk about two challenges, which is traceability and data.
Luciano: [00:05:04] These are the most important challenges, traceability, because you have assets moving our business. It has a main characteristic. Which is change. You run up and you ramp down very quickly. You ramp up from 300 vehicles and you'll receive a forecast and need to ramp up to 500 in two weeks time, and you work some months like that, then you need to ramp down, and then you need to ramp up and so forth and so on.
So you need traceability to register all these changes. Accordingly, you have vehicles moving in the cities drivers that are moving fast and they have accidents and vehicles are driven by different drivers. So you need to trace that to operation and traceability involves data. So data gathering and data analysis. So you need to spot trends, the critical changes. So data is everything and the fleet is no exception to that.
Matthew : [00:06:01] Yeah. Gathering that data and being able to organize it in a way that allows you to analyze it. And as you mentioned, spot trends will definitely be advantageous for your operation. When you think about fleet management, what are some of the most important factors to consider?
Luciano: [00:06:15] I think there are two factors, people and dashboards, you build dashboards to manage this, and then you need people to take a look at these dashboards and what's in the middle fleet management tool. And so between the people on the dashboard.
So people are really interesting because in the case of the fleet, we worked with fleet assistance and I found two roles for them. They are teachers and they are auditors. First, they must teach. They must coach the team, the drivers and the traffic controllers. They must teach the masses go and say, okay, the app, you work like this, there is an update in the app.
Look at these, you must populate the information like this and that. And then you go and audit. So you make physical audits and you make remote audits. You download information, you start playing with the data and see what, what are the highlights? So that said, I think we can summarize that in people dashboards and the fleet management tool in the middle to overcome these challenges.
Matthew : [00:07:19] And those audits are important because you have the data piping in that. We'll get into that with APIs and you're cycling through all of this to make sure that it's accurate. But if you don't have a means for that checks and balance, that's really going to skew a lot of your results because everything's just so interconnected from a data perspective.
Luciano: [00:07:39] Yeah, everything is so interconnected and there is critical information that goes to the heart of the company. You have lots of APIs. Many of them are accessory or secondary importance, but the life of your businesses in those APIs. So we are using APIs. Okay,for those who are not used to the term APIs, application programming interface, it is a door in software platforms.
So you go to that loading dock and you interact with the platform mainly to download the information. So that farms have native charts and dashboards, but it happens that you need a particular information or analysis. So you download into a CSV file or Excel file. And what happens if you need to combine that with information from another platform, then you go to the other platform and repeat the process.
And then you combine the Excel files for intending. What happens if you need to do that every single week, every single day, every single hour, then you need to hire a person or two or three, or you must hire a robot. And this robot is the API, or actually you end up hiring. I bet you guys would also use people and they develop the API.
So you can read it, and act on downloading data to every single morning. So that's API. So it is critical because you are reducing the possibility of mistakes. It is a computer downloading information. So humans make mistakes, even more with repetitive tasks. If I'm someone who maybe operates a little bit smaller of an operation, let's say that I only have 40 or 50 vehicles, but I still want to leverage the capabilities of API APIs to be able to pull in that data and access it.
Matthew : [00:09:30] If I don't have the resources to, you know, hire people, like you said, robots, maybe one day, but. What is the best solution for someone that might be in that situation?
Luciano: [00:09:40] It depends on the budget. Okay. These types of processes, I like to divide them into three stages. First is the concept stage where you observed the operation, you detect the problems and you think about the API.
You can build to find the answers you're looking for, or the behaviors you're trying to explain. And you make sketches, you go to a whiteboard, you talk to your team and you imagine things. And then it's the second stage, which is like a draft stage where you manually download the information to Excel as we mentioned before. I say Excel or any tool, you have a BI which you are comfortable with and you start monitoring the API. You build a basic dashboard and you start monitoring the APIs. In order to see if they are useful, if they work. And once you are convinced this API works, then you can start thinking about the payback of the project of hiring an IT guy and implement these, make an automation of it.
But with the first two stages, I think every company has the capability to do that. And if they can go an extra mile, they can go to it department. And once you go there, In the third stage you come so solid because many IT guys face customers or their internal clients are saying hi to know, I want to like their moon connected with the stratosphere and, and that is challenging for them.
But if you go in this order, you go to the it guy, you show them your drafts, eh, charts, and you bind with the finger into the screen. I want to. These fields. So this guy can connect with the API, goes and retrieves the information from there. It is easier for them. And you also give them the formula. The way the ratios should be calculated
Dominique : [00:11:38] I have a question for you. When you're thinking about your suppliers and your vendors, is that one of the things that you look for is to make sure that they have an open API so that you can pull data out of the system or push data into their system?
Luciano: [00:11:53] I mentioned before, I talked about Ercilio the founder of the company, and he's a big fan of software platforms. He's continuously looking for platforms. And once he picks. Uh, software or decides to change platform. He has done the research that this platform is open and you can customize the information according to your needs. So we definitely look for platforms that offer that direct connection.
Dominique : [00:12:23] Luciano. When you think about your APIs and the data that you're transferring between systems, what specifically is important for you to bring into other systems and why?
Luciano: [00:12:34] It started with retrieving information of the operation. I would have customers and we need to satisfy their demands. You have your Russian army all over the country with your assets over there, and you need to do things fast and you need to measure that if you don't measure your blind, we started like that.
But then. We started to see the connection between operations and finances. So let's talk about the fleet management software, the fifth management tool. We started downloading information of statuses to see what vehicles are active or inactive. You can define different statuses in the workshop or broken or stolen or in rental anything, but think about this active or inactive because you need to satisfy an operational need.
How many vehicles do I have to deliver parcels for instance. Okay. I have these forecasts of, of routes, I need this forecast of vehicles, but then those vehicles have a cost. One thing is, is it available for leveling parcels or not? But the other question, my CFO comes and asks, are you paying for it or not?
Because you can have an inactive vehicle, but you are paying for it. We started downloading statuses active or inactive and the rest of the data series. And then we started loading information about monthly cost and vendor. And think about this, you have monthly costs, so you have daily ghosts. And if you have the vendor, you have the type of contract.
So you can decide if you are paying for an inactive vehicle or not. So imagine your vehicle is damaged during the afternoon, so you can have 0.7 day active. And 0.3 day inactive. So what do you do with that? 0.3. Is that ghost or not? Then you have renting because if you have to pay for the vehicle or not, if you have fuel tickets, you have another cost information of cost and you can connect to other platforms.
You download ours from time sheets. So you have labor, renting, fuel, Whoa, we are building a P and L let's go download the invoices of what we do. We have everything. We have the margin, the Aboriginal marching, because in those three, at least in this business are the pillars of the cost. 99% of the costs are in those three labor renting and fuel and renting and fuel are in the fleet management tool.
So it is really important to connect to these platforms. And you are doing something more because it goes beyond, you're not just putting a smile in your CFO or your director. You're also sitting in a mindset all across the company, because if you share this info, you get visibility of this operational P and L to your supervisors.
They start thinking like micro CFOs, because they are thinking like that they are selling and they have costs and they must reach some marching. You don't give all the details because they are infrastructure costs, overhead costs. They don't need to learn. But in general terms, they start thinking in a P and L mindset.
And that is awesome. In order to do that, you need to access information reliably and quickly to have the information right away. You cannot wait for a team of 20 people downloading information, populating databases. You need to leave that to a robot and free some time to humans so they can think.
Dominique : [00:16:15] And they can take care of their other responsibilities, but it sounds like they're now empowered to take ownership of their operations. And are they also then privy to what the data that other teams are returning? Is there any sort of competitiveness between teams to see, Oh, they're doing better than I am and I need to improve my operations in my region. Or is there anything like that happening?
Luciano: [00:16:38] Yeah, totally. I published the information in one single email to all the teams, but that leads to share best practices. One site learns from the other, they talk to each other. How do you do that, man? How can you get to those numbers where I do this and that? So you unified, that is something. And the other thing is that it starts behaving like an organism. Like living things that are regulated from my point of view, I start looking at things that in the past, you need to struggle to change a trend in costs, and now they are micromanaging, these changes. So it isn't a self-regulating organism. I talk about organisms because we are living things like no.
Dominique : [00:17:35] But yeah, that makes a lot of sense. And then I think overall, do you, are there thresholds that if you go below this threshold, whatever it is, there are like specific types of actions that are taken or are there incentives when somebody is doing really well? Like how do you handle some of that?
Luciano: [00:17:53] Yeah, totally. The company is a tree where everyone eating from that tree. So we need to take care of this story and if things are going well, that should be shared and there are incentives. There are bonuses. And that's the part of the carrot. I try not to use this, the stick.
Dominique : [00:18:14] But that's a great analogy. It's a great analogy.
Luciano: [00:18:17] Yeah. But there is no need to stick. If you set possible targets, possible objectives, doable things, and you give, be civility and empowerment to decide. And so it is really good after working a lot, we can reach that level of accuracy. We are not publishing daily P and L information.
We are monitoring daily to make adjustments during the morning or during the afternoon, but we publish the information of weekly PNLs. That will be absolutely impossible if you don't have access to the information through APIs at the beginning, we didn't have a choice because we were in stage one and two.
Do you remember that we were approaching what we wanted? But now that we have it, we can use it weekly. And that is a competitive advantage. You have your lions on the front line supervisor with BNL mindset, micro CFOs in the frontline. So that is a competitive advantage. You have micro owners.
Dominique : [00:19:18] Yes. They're really empowered to own their responsibilities. So actually that brings up another question. How long would you say it takes to really get set up from concept to this is the data that I want to track. This is the information that I think I need to empower myself and my teams to actually get to that place of where you are now, where your teams are benefiting daily, from the insights that you're sharing with your data.
Luciano: [00:19:46] In our case, it is, I arrived at the company and there were no APIs. So it was very difficult. So I really needed to start from scratch. The information was there. We needed to start digging. It could be months. It depends on what you want to measure to reach these structures of an operational P and L very similar to the financial P and L, or you need perhaps working for a year or so until you understand the business, because, you need insight of your business.
And when you start downloading that year, start finding out you are not measuring things that you should be measuring, and then you need to start applying more controls and acquiring more data. It depends on what you want to measure for a process like that. I would set a year is 10 months. It depends on the resources you want to embarrass and the size of your company also.
Matthew : [00:20:43] I think when we talk about finance, everybody understands that. But for maybe people who don't understand that we're talking about the profit and loss and how we're calculating that to get the statement. And that's what you're talking about on a weekly basis. What is P and L? Exactly. If I'm someone who's not exactly versed in the finance part of things?
Luciano: [00:21:01] You're selling things, you're selling a service or you're selling a product, that's your income, but then you need to pay things. Those are your costs. So the difference is what you get in your pocket mainly. So that can be known as coast as an operational margin sales. Minus the cost of your income and you deduct your cost.
So you have the first margin then you will have overhead costs. You need to rent the place you need to pay internet. I don't know, generally costs, maintenance, everything that's related to the fleet. Continue the ducting, deducting the doctor and not the end of the calculations.
Do you get your final outings? Earnings that are connected to the balance sheets. People from finances are really acquainted with these terms. It's financial information, but that is more or less the idea income minus costs that is margin P and L.
Matthew : [00:22:00] And there's a lot of ways that you're leveraging things like APIs and the fleet management software, to be able to automate some of those, if you will calculations that, even though you are still using spreadsheets, Excel, what have you from time to time? And you're still able to automate some of those things as well, so that you can produce those, P and Ls on a much quicker basis so that you have that insight and visibility, as you talked about.
Luciano: [00:22:23] Yes. We actually put that information into that warehouse in postgres SQL, or a main big database. And you can connect that database too. BI business information, BI software, like power BI or Tableau. We used to work with the law. Now we are using power BI. So you put that information online and it is real quick. It just really easy for you to distribute that information.
Dominique : [00:22:52] So Luciano, you mentioned earlier when you were talking about the process of building your APIs to surface that data that was important for decision-making, that you learned a lot, and you notice there were things that were maybe missing that were not informing previous decision making for someone who's just thinking about setting up an API and trying to understand what data is going to be important for. Decision-making what are some things, maybe some of your key learnings from that process that you would share with others?
Luciano: [00:23:22] Observe your process and try to identify problems, talk to people because the answer's there and talk to people. Talk to them, make meetings, go to the field, talk to drivers, talk to supervisors, talk to human resources. Talk to the fleet, talk to finances, talk to everyone.
Gather information. And then what? Okay. You're a manager. So you must decide you must have the vision also. So you're not just a listener. So you have your own, well, we just suspect that according to your salary stuff. Yeah. So you need to gather all this. Uh, he might change things and start little by little constructing.
I wouldn't start calling an IT developer to connect to an API. I would start from scratch and understand the business, like the first step. When I think about talking with other companies, just like the, where do I get started? Yeah, I think it sounds great. I'd like to set up an API, but I'm not even really sure where to get started.
These are the natural answers to boredom. When you download the same spreadsheet every single morning, you start thinking, I think I'd be served more. My mom didn't want this for me. That's awesome. That is so awesome. That's so true though. You should be asking why and you should be asking questions, like you said, really investigating.
Matthew : [00:24:56] If we could circle back on just fleet management as a whole, you talked a lot about your experience and how it evolved from it and warehouse. And now you're managing this fleet at OTL. If there was something you could tell yourself back when you first started that now that could have been a big help, what would that be? And why?
Luciano: [00:25:14] I would say measure everything and act correspondingly. Talking in terms of fleet specifically, the way you take care of your fleet shapes your company's reputation. So it is critical in the sustainability of the business. I am totally convinced about that. I talked to colleagues that work in other logistic companies, and we share the same vision.
Renting companies started to become reluctant to rent vehicles to last mile logistic companies, because the matches ratios were so high. So if you have a fleet management tool and you can work reducing . That will assure the continuance of the business all along the years. Otherwise in a few years, companies will say, Oh, no money.
Now forget about that. My insurance company will not allow that you don't have the senior astrology ratios according to what we expect. So we are not renting you. And I would pay anything. I don't care. I don't want to work with you. That will be the end of the business. So you must use a fleet management tool that is sustainability of the business. It's critical.
Matthew : [00:26:28] Well, that just about does it for this episode. Luciano, thank you so much for joining us today and sharing your knowledge about APIs, fleet finances, and profitability.
Luciano: [00:26:38] You made me feel so comfortable guys. So thank you for this opportunity it was really nice to be here.
Matthew : [00:26:46] Thanks for listening to The Fleet Code. If you're looking for a modern software solution to effectively manage your fleet, be sure to check out fleetio.com/podcast to learn more. Join our monthly newsletter to stay up to date on all things Fleetio and don't forget to connect with us on Facebook, Twitter, and LinkedIn by following at Fleetio.