From an operations perspective, there needs to be specific priorities, mandates, and requirements. It’s necessary for carriers to focus on their primary priorities, but it’s essential they cover the details that allow them to achieve their defined goals.
The relevant and obvious elements of lane balance, asset utilization, revenue per truck, meeting service standards, and operations planning go without saying, and should continue to be a priority.
The unstated and un-prioritized elements that allow for a successful operations succession into a new age of profitability requires not a crystal ball to define revenue projections, but to be out in front of a changing world economy that will define how business is going to evolve. This doesn’t need to digress into a discussion of macro economics, but the way you do business today will not be the same way you do it in a year and a half.
When it comes to driver recruiting, orientation, and accountability, now’s the time to be putting quality over quantity. If you expect more from people, you’ll get more. You need to have your people out in front, and get the departmental attention that’s required. Is that person always right and do they spill over into areas they may not have a direct impact on? Maybe, maybe not, but their views are known whether everyone agrees with them or not. It’s about results, and that is something sorely lacking in many organizations today.
There needs to be out in front of fuel consumption, and with 35% of fuel price variance falling under “driver habit”, programs should be in place for ALL drivers – not just the bottom 10%. It needs to be a priority. Also, you’re required to accept fuel surcharge allowances that differ from customer to customer. From my review of many policies, they vary from just plain terrible to a profit center. Fuel will return to being a greater factor, and control of deadhead (solved by better lane balance) and out of route miles (solved by monitoring and route optimization) will go a long way towards controlling fuel costs.
It’s a given that both the initiative and the results of many maintenance departments’ tire programs are ineffective. There needs to be joint coordination and cooperation between various departments: operations, maintenance, and safety/orientation, in order to find a solution to the federally mandated DVIR requirements and an improvement in tire inspection and pressure verification. Tire costs are out of control for those fleets that don’t separate tire costs, or don’t differentiate between tractor and trailer. It’s not driver abuse but driver inattention and a lack of protocols for maintenance personnel and drivers to record tire conditions. That and the lack of a plan to reconcile the fact drivers are not performing proper DVIR. If so few are looking at tires, or checking (and recording) pressures, it only makes sense that other components are suffering as well. Unfortunately, tires are a major cost component for maintenance department budgets, so no matter how costs are assigned; it will benefit a company to find a solution to this issue.
Many flatbed fleets continue to have load securement issues. Have you recently put in place an updated plan to ensure all your drivers have not only been properly trained, but also participated in a refresher program to update and reinforce the prescribed federal and company requirements? Have your drivers been certified in the Alabama Steel Coil program that can be taken online?
There needs to be a standard and consistent effort between all company terminals concerning orientation of, and accountability for, company policy, dispatch, and data entry. If that’s not in place, how will you ensure that everyone – not just in the home office – is consistently entering and planning loads? Central control and orientation is not only cost-effective, it allows for more efficient planning of loads and assigning just the right power unit for reload. Although often met with pushback, preplanning is a very effective tool when there’s more than one truck available that takes into account available hours, revenue per truck for the week, and decreased deadhead to accomplish customer service goals.
LPs and ICs
Not only is the failure rate of Lease Purchase drivers and Independent Contractors disconcerting, the recovery of abandoned Lease Purchase units is staggering. Have you looked at inviting in an outside company to discuss programs for your LP and IC drivers to better position them for success – to make them more aware of load choice and maintenance decisions, among other things? This is a potential solution to an identified problem that desperately needs addressing. If you find yourself faced with a higher than acceptable failure rate, I suggest a comprehensive review of your LP program to determine the main causes behind it.
Like a puzzle, each piece of a successful operation relies on the pieces that surround it. The cooperation needed to identify and solve problems and improve customer service, safety, and employee retention rates has several components. ‘Operations’ needs to take the lead in ensuring the effective participation of all departments that play a role in the company’s ability to achieve maximum asset utilization and employee retention. This is where revenue will be made or lost, so all components need to be in sync, whether they control essential areas, or not.