I have been writing a blog on the transportation industry for five years. During this period I have received hundreds of postings and e mails from readers. Every now and then I receive an e mail that stands out. This week I received a thoughtful and interesting e mail and article from a truck driver, David Robson. In the article, he shares his thoughts on what trucking companies can do to improve driver retention and increase trucking company profits. With permission, here is an edited version of his story.

The Future of the Professional Driver

“I was looking up the top 50 trucking companies and reviewed a few of the well-known companies CSA scores from the FMCSA website. I was surprised and disappointed with what I saw. Many of these carriers advertise on the backs of their trailers, “We hire only safe and professional drivers.” If you saw their CSA scores I would think that the owners would be embarrassed to display those signs. Perhaps the owners are not aware of their scores.

The first thing I noticed was that many were near the 60% intervention score. The other common factor involved “Subject to Placardable HM Threshold.“ I found some violations that were commonly high among most of the carriers.

Driver Fitness:

 383.23(a)(2) Operating a CMV without a CDL
 383.51(a) Driving a CMV (CDL) while disqualified
 391.11(b)(4) Driver lacking physical qualification(s)
 391.41(a) Driver not in possession of medical certificate
 391.45(b) Expired medical examiner's certificate

Fatigued Driving:

 395.3(a)(2) Requiring or permitting driver to drive after 14 hours on duty
 395.3(a)(1) Requiring or permitting driver to drive more than 11 hours
 395.3(b) 60/70- hour rule violation
 395.8 Log violation (general/form and manner)
 395.15(b) Onboard recording device information requirements not met
 395.15(c) Onboard recording device improper form and manner
 395.15(f) Onboard recording device failure and driver failure to reconstruct duty status
 395.15(g) On-board recording device information not available

Unsafe Driving:

 392.16 Failing to use seat belt while operating CMV
 392.2C Failure to obey traffic control device
 392.2FC Following too close
 392.2LC Improper lane change
 392.2T Improper turns
 392.2-SLLS2 State/Local Laws - Speeding 6-10 miles per hour over the speed limit
 392.2Y Failure to yield right of way
 392.6 Scheduling run to necessitate speeding
 392.60(a) Unauthorized passenger on board CMV
 392.71(a) Using or equipping a CMV with radar detector
 397.13 Smoking within 25 feet of HM vehicle

Vehicle Maintenance:

 392.22(b) Failing/improper placement of warning devices
 392.7(a) Driver failing to conduct pre-trip inspection
 393.11 No/defective lighting devices/reflective devices/projected
 393.19 Inoperative/defective hazard warning lamp
 393.207(b) Adjustable axle locking pin missing/disengaged
 393.25(e) Lamp not steady burning
 393.25(f) Stop lamp violations
 393.45 Brake tubing and hose adequacy
 393.45(a)(4) Failing to secure brake hose/tubing against mechanical damage
 393.47(e) Clamp/Roto-Chamber type brake(s) out of adjustment
 393.53(b) Automatic brake adjuster CMV manufactured on or after 10/20/1994— air brake

These are only a few of the 670 violations that can be given to a carrier through CSA. All of these violations can be avoided with a proper pre-trip inspection and driving skills training.

These avoidable violations, if left un-addressed can put a company into expensive fines, intervention and possibly suspension of their dot licensing. All of these can be avoided with proper driver training and updating. I would like to question the violators and verify if the drivers were reckless, or just unaware of how to prevent these violations.

As I continued looking through the CSA scores, I noticed a great number of small carriers (50 power units or less) were faring better than the carriers with more than 500 power units. This I believe is because the larger the carrier, the harder it is to monitor, educate and train drivers. Smaller carriers can better control the safety and compliance of their entire fleet.

These scores are showing me there is a great need for companies to restructure their safety policies and training. Corporate staff is going to require additional education to better train and educate drivers on a practical level. No longer will reciting the rules and regulations at drivers meetings (if the company has them at all), be sufficient to create safe and compliant drivers. Drivers I have talked to have said they asked their Safety Department for help and come away more confused about their issue.

Carrier Image

Customers can access a carrier’s CSA scores and violations history. If the CSA is a marketing tool like the CTPAT program, carriers are going to find it hard to get accounts. ABC carrier might be on the top 50 list but when the customer views their CSA and discovers they are flagged for interventions due to Driver Fatigue, they may reject the carrier’s bid. I believe many carriers are going to carry on until intervention strikes, and then they will cry the blues.

Prevention is the best medicine

Carriers should be on top of these scores and intervene with the drivers before the FMCSA intervenes with the company. Drivers CSA scores should be monitored regularly. Drivers should be made to explain themselves for each violation (re-trained if necessary) and reprimanded for each repeated violation.

Driver training should be implemented on a one to one basis if needed. If the driver is new to trucking, he may be uninformed and require further education. If he is a veteran driver, he may have to be reminded or shown how to break old unsafe habits.

In the end, it requires the carrier to step up and protect their scores and public image with training, internal monitoring and enforcement.

Fleet Driver Trainers

Fleet driver trainers can be a great advantage to carriers of 50 drivers or more. These are experienced drivers that have excelled in their driving skills. They are fully knowledgeable about both Federal regulations and company policies. Driver trainers are knowledgeable and practice defensive driving, possess full knowledge of log books, Fleet Smart practices, vehicle pre-trips and preventative vehicle maintenance.

From a trucking company’s perspective, these driver trainers will be fully trained on all company driver policies. They will be the eyes and ears of the company, and the resource for drivers to help them become productive and safe employees.

With a driver trainer as part of the driving fleet, drivers can access this resource on the road. As a driver trainer on the corporate site, the individual is available to drivers visiting the yard and free to do driver analyses and in-class instruction if required.

Out in the cold

Many drivers I have talked to feel left out in the cold when it comes to having access readily to available information or training. When and if they can contact the Safety Department, the personnel are too busy to sit with them and discuss their needs, because of their responsibility to corporate issues.

When they do get information, many drivers leave confused, or feeling they didn’t get the answers they were looking for. A driver trainer helps immensely in this area because he has been there, done that, and can better relate to the driver’s issues than someone who has been out of touch with the driving environment for a while. The driver trainer can help the driver with other issues such as Human Resources policy because he is a long term employee and can instruct the driver how to better comply with company policy.

Using your best resource for optimal results

If I were a company owner, it only makes sense to me to use every available resource to build a company that is professional in the eyes of the Federal regulators, customers, general public and of course my most profitable assets called drivers.

If you want professional drivers, does it not make sense to have them monitored and trained by professional drivers (Driver Trainers)? It costs less than insurance hikes, repeated fines, lost customers, and the expense of driver turnover in the end? The driver trainer can be the company’s link to driver problems and opinions. The drivers feel more at ease with one of their own kind, so to speak, and more openly provide feedback. This useful information, when given to the company, allows them to better analyze, restructure and adjust for optimum operation.

Conclusion

The CSA scores and Canadian CVORs tell a story. Apparently companies aren’t reading the book. If they are, perhaps they can’t see the plot. If they value their future, changes need to be made before they lose all their profits. I believe driver trainers, if used effectively, can improve the quality of life for their drivers and improve the bottom line for their owners.”

Written by David Robson
Professional Driver and Certified Fleet Driver Trainer

I have written about intermodal transportation several times over the years that I have been preparing this blog. I became a big fan of intermodalism during the 90’s when I ran Canada’s largest IMC (Intermodal Marketing Company). Each time I wrote a blog on this topic, I felt that the service was on the brink of making a major breakthrough in customer acceptance and market penetration. While intermodal activity has shown steady growth over the past 10 to 15 years, this mode of transport is still viewed as a niche market by some folks or a slow and unreliable mode by others.

These attitudes and perceptions appear to be changing. Mark Yeager, Vice Chairman, President and CEO of the Hub Group, one of North America’s largest intermodal operators, has labeled 2012 a “transformational” year for Intermodal transportation. A year is a short period of time. My own belief is that by the end of the decade, intermodal service will reach significantly higher levels of market acceptance. Here’s why.

Rails have made and are continuing to make major Investments in Infrastructure

The six class 1 railways in North America have all made significant investments in their intermodal operations. As examples, Norfolk Southern’s 1400 mile Crescent Corridor and its Heartland Corridor and CSX’s National Gateway (that is one third complete and will be fully operational in 2015) are just three examples of the major investments being made by two railways to allow taller trains carrying more cargo to move through the east coast of America. The rails are better equipped to handle more intermodal traffic than ever before.

The Service in better

According to Joshua Dolan, Director of Global Logistics and Customs Compliance at Pep Boys, who spoke at the recent SMC3 winter conference, intermodal rail service has proved reliable and more predictable than the over-the-road market in a post-recession era of tight truck capacity. Over a six month period, Mr. Dolan converted all of his traffic over 1,000 miles to “Express Rail”. He also mentioned during his presentation in Atlanta that Express Rail service was also being used by his company on distances down to 500 miles.

When I first entered the intermodal business, the service was competitive with truck on distances of 1500 miles and above. The combination of infrastructure improvements and improved service on shorter lengths of haul are opening up markets that were previously unattainable to IMC’s and trucking companies using intermodal service.

Tight Truck Capacity and Cost Savings

With truck capacity still tight and with truck rates on the rise, intermodal can offer shippers a savings of 10 to 20 percent. Depending on the date shipped, intermodal transit times can be comparable to truck or one or two days longer.

Increasing interest from Truckers

JB Hunt was the first major trucking company to fully embrace intermodal service back in 1989. Intermodal traffic now accounts for 60 percent of their $728.8 million in revenue. Schneider National signed agreements with CSX and BNSF in 2008 and intermodal revenues now account for one third of their $3.7 billion in revenue. US Express is Pep Boys’ key partner on its Express Rail service.

The LTL and small parcel segments of the trucking industry are also becoming increasingly large supporters of intermodal. UPS has designated trains running on the rail networks and is one of the rails’ largest customers. FedEx is now moving 10 percent of its volume via rail.

Shipper Perceptions are changing

For many years, intermodal was perceived as a slow and unreliable mode of transportation. It was the mode selected when service was not a critical issue but cost was. As truckload carriers target more short haul regional markets, this places most intermodal transit times in the range of “truckload plus one day” according to Steve van Kirk, Vice President of Intermodal Commercial Management at Schneider National. Mr. Van Kirk’s objective is to make intermodal “truly seem like trucking service.” In other words, the issue will no longer become mode but transit time requirements. As shippers shift their focus to transit times and not to mode, this should allow intermodal transportation to achieve breakthrough levels in revenue.

With so many stars in alignment, this looks like a “transformational” decade for intermodal transportation.

Over the past week, there has been a barrage of comments posted in one of the Procurement groups in LinkedIn on the topic of why so many of these activities fail. For those of you interested in this topic, please sign in to the group or read the following blog prepared by Tony Colwell, Executive Interim Manager and Director at Acuity (Consultants) Ltd. (http://acuityconsultants.com/wp/2012/01/avoiding-the-pitfalls-of-centralised-procurement-18-reasons-why-procurement-cost-saving-initiatives-fail-to-deliver-to-the-bottom-line/).

In Tony’s blog, he tabulates the results of 311 comments that he received. For those of you who take the time to read the postings in the LinkedIn group and Tony’s summary, you will see a fair bit of commonality. For the benefit of the readers of this blog, I will take the ten most frequently mentioned reasons for failure and elaborate on them based on years of experience in dealing with shippers on freight RFP projects.

1. Cost Inaccuracies/True Costs not understood

My company has confronted this problem repeatedly over the past eight years. In many shipper organizations, the freight transportation data is not clean and well organized. The data may or may not include fuel surcharges and other surcharges. In some cases, it is not possible to discern whether the freight costs include or exclude fuel. A lack of standardization of fuel surcharge formulas may further impede the work of calculating an accurate base cost estimate and detailed lane data.

2. Poor Planning and Leadership/Unclear Objectives

Some people may find it hard to understand how something so apparently straight forward as a freight tender can get so messed up. Here are a few reasons. Successfully executing a freight cost savings initiative requires a range of skill sets. These include Project Management, Time Management, Negotiation Skills, Data Management, Organization Skills, Interpersonal Skills, Communication Skills – to name just a few. If the bid is poorly constructed, if it contains bogus data, if carriers are given insufficient time to respond and/or if it is unclear how the company wishes to serve certain markets (e.g. mode choices, warehouse options) this can lead to confusing results.

3. Inadequate Stakeholder Engagement

In many companies, the head office team may be tasked with a leadership role in conducting these exercises. But in a multi-plant environment, the individual factories may have considerable authority and autonomy. Then there is the issue of inbound freight that is often under the control of Purchasing rather than Transportation or Logistics. If inbound freight costs are embedded in the landed cost of the goods, these organizational and cost dynamics make it difficult to execute a complete transportation cost savings initiative.

4. Savings redirected or passed to Customers

There are very few businesses like Apple that are able to create and sustain their own products, markets and pricing power for so long. Most of us work in highly competitive industries. In a successful procurement exercise, the temptation is always there to “shop back” part of the savings to the customer to try to gain market share. In the “real world” there are forces at play that can erode procurement savings.

5. The Wrong Numbers are Measured

This can happen in a number of ways. There are theoretical savings and actual savings. An estimated savings number can be calculated by taking the best carrier rates and multiplying by the volumes on every lane. But in the “real world,” some carriers don’t have the capacity to handle all of the volume, they overcommit to get the business, they secure better paying accounts and/or they divert some capacity to other companies. The contract numbers may be based on achieving certain volume thresholds that are not attainable. As a result, the expected level of volume discounts is not obtained.

6. Conflicting Metrics and Incentives

Freight costs are often calculated in terms of a rate per mile, a rate per hundredweight or a line haul cost to go from A to B. However total landed costs may reflect warehousing costs and/or cross-dock costs and other accessorial costs. Is it more cost effective to ship in LTL quantities direct to customer or is the superior option to ship full loads to a local warehouse and distribute locally? If the supply chain scenarios are not fully analyzed at the beginning, this can result in conflicting metrics and confusion at the end.

7. Baseline Shifts

In a freight cost initiative, it is commonplace to provide carriers with historical freight data and/or projections of what the next 6 to 12 months will look like. But the baseline can shift. A company may decide to move the manufacturing of certain products from one plant to another. Companies gain and lose customers from year to year that can have a material impact on their businesses. This makes the exercise of accurately computing the true cost savings more complex.

8. Inadequate Follow Through and Contract Management

This can be partly related to item 3 above and to a host of other reasons. Over time, good carriers establish strong bonds with their shippers at all levels of the organization. Whether it is customer entertainment, NBA tickets, the son of the dispatcher playing on the same hockey team as the carrier’s driver, personal relationships can trump the best intentions of management. Too many companies think that at the end of a procurement event, their work is done. It isn’t. A lack of detailed tracking reports and vigilance can let the savings slip “out the back door.” A whole new set of tasks begin at the end of each procurement project.

9. Inadequate Sponsorship

At any given time, the leadership teams in manufacturing and retail organizations are dealing with an array of challenges. The leaders in some companies have trouble maintaining their focus on certain projects. While their intentions are good, after the launch of a major procurement project, they may soon be on to the next big project. The management team below them can sense that they have taken their “eye off the ball” and they then take their “eye off the ball.” The expected savings dissipate over time.

10. Off Program Spend/non-Compliance

The so-called “maverick spend” can happen for many reasons. At the end of a freight procurement project, companies often produce routing guides. These written or software-based tools capture the rates, volumes and lanes allocated to each carrier. But to impress a customer, Sales may override the routing guide and send a shipment via expedited transport. Manufacturing may decide to delay the release of certain products until more economic production runs are established. Again, Transportation may be tasked with moving the freight via road versus rail or LTL versus truckload, to meet the customers’ expected delivery times.

These are the top ten. To see the 8 lower ranked causes of unsuccessful procurement cost reduction initiatives, please click on the link above. In no way should anyone infer that these projects are not worth doing. As a company that has been involved in multiple, successful freight cost savings projects over the past 8 years, the key point for shippers is to be aware of potential pitfalls and to seek assistance if satisfactory results have not been achieved in the past.