McLeod Software

 

Transportation Insights

Going Beyond Margin 

How Brokers Can Use the Profitability Analysis Module to Track Costs and Boost Profits
10/13/2014

By Randy Seals, McLeod Software Customer Advocate

The most frequently used word in the broker vocabulary is “margin.” Everyone is always talking about the margin between settlement costs and revenue. Without doubt, that’s important, but let’s not forget that margin isn’t profit.

Margin may tell you how much you made on a specific load or a group of loads, but your settlement costs aren’t the only costs associated with doing business. You have expenses for payroll, utilities, office equipment, software licensing, and marketing, just to name a few. Some of these may be set, but others vary. If you want to track profit, not only margin, you have to find a way to factor all of your business costs into the equation. Now you can.

A New Window into Profitability
McLeod’s Profitability Analysis module can be used by brokers to pull the lid off of profitability. This powerful software module has a long history of giving asset-based companies in-depth views of costs from every angle, but it can also be used to provide a similar level of cost visibility to brokers. You gain the ability to isolate specific cost components, so you can start evaluating and comparing your costs in an amazing variety of ways.

Depending on how you define the fields, you can look at CPL by customer, commodity, lane, length of haul, day of the week, employee, and more. Maybe you are regularly hauling both wallboard and bricks. Examining the CPL by commodity for these loads will reveal if one is much more profitable than the other. If so, you can drill down into the data to uncover the reasons. With this information in hand, you can determine which actions are needed to increase profits.

Have you considered looking at your cost per hour? The module makes this possible. Brokers may want to look at this metric in certain situations instead of rate per mile, because the time spent on the load can have a huge impact. Having access to your costs at this level of detail opens new doors for negotiation with both carriers and shippers.

By providing visibility into costs, the Profitability Analysis module reveals cost variances that are completely absent from margin data. For example, consider having a metric that tracks the time members of your staff spend covering the loads. Call it the Cost per Load Effort Variable (CPLEV).

Here’s how CPLEV can help. The orders from a customer who uses EDI may require next to no time at all, while the orders from another customer may regularly present complications that keep your staff busy for hours with almost every load. The second customer is costing you substantially more per load. This fact is lost when comparing margins, but it will jump out at you in your report on CPLEV by customer.

It’s a New Equation
Moving freight is a highly competitive business, so the companies who succeed are the ones who have found ways to improve. The more you understand your business, the better positioned you are to make the improvements that give you an advantage. McLeod Software has the tools that give you unparalleled visibility into your operations.

The Profitability Analysis module is one of those tools. No one disputes that margin still matters in the brokerage world, but margin doesn’t tell the full story. All business costs are part of the equation now. And this new equation will help you boost profits more than ever.

 

 

 

Leverage Your Mobile Comm Investment 

Use McLeod's Symphony Module to Integrate Your Mobile Comm System with LoadMaster®
09/22/2014

By Robin Hamlin, Project Manager

Carriers of all sizes are making use of mobile comm units in tractors and trailers, but many of these trucking companies are failing to fully leverage their investment in this technology. Mobile comm data can be extremely valuable for improving performance across the enterprise, but there’s no easy way to make full use of this data if the mobile comm system is not integrated with the dispatch system.

McLeod’s Symphony Mobile Communications module allows you to automate the delivery of mobile comm data to the LoadMaster dispatch system. All of the information can be viewed from one screen, so critical data is at the fingertips of your operational personnel. They can manage their work much more efficiently. The result is that you get more capabilities and business value than you could from either system by itself. It’s truly a case of 1+1=3.

Here are some of the ways mobile comm integration brings value to your business:

Load planning
Load planners gain easy access to position data provided by the mobile comm units, so they can find the nearest tractor to each load quickly. This reduces deadhead miles and saves driving time. Without the Symphony module, load planners would need to work in two systems to have access to all of the data needed to make the best matches. Going back and forth between the mobile comm system and LoadMaster is much more work. Given the time pressure to assign loads quickly, it’s a big advantage to have position data right there in the LoadMaster screens.

Hours of service
Mobile comm technology includes the ability to record hours of service (HOS) data through electronic on-board recorders (EOBRs). Integration allows you to bring the EOBR data into LoadMaster, so you can see where each driver stands in terms of HOS. You can use this data to plan more effectively and match the right driver to the right load. You reduce the chance that a driver will run out of available hours and cause a load to be delayed unexpectedly.

Customer service
Integrating your mobile comm system with LoadMaster frees up time for your operations personnel, because they no longer have to enter all of the mobile comm data manually. This means that they can give more of their time and attention to tasks throughout the day that raise the level of customer service being delivered. Integration of mobile comm real-time position data within the LoadMaster ETA/OOR module also makes it easier to track load progress, and aids in taking proactive steps to address late loads and avoid service failures. 

Drivers
More efficient load planning and dispatching improves life for drivers. Integration means that you can see their HOS and their current location on your dispatch screen, so you can give them the loads that fit their needs and availability. Your drivers get the miles they seek and the loads get delivered on time.


Get Your Full ROI
Mobile comm technology has proven to be indispensable for trucking companies today, but if you don’t have this system integrated with your dispatch system, you’re not getting the full return on your investment. Bringing these two systems together by integrating the mobile comm data into your LoadMaster application gives you the benefits of 1+1=3. Freed from the burden of needing to pull data from two systems to manage and operate your business, you’ll be able to take your company to significantly higher levels of service, efficiency, and profitability.

 

 

 

Lane Analysis for Brokers 

How Brokers and Logistics Providers Can Use the Lane Analysis Tools in PowerBroker to Expand Capacity, Improve Margins, and Increase Volume
08/29/2014

By Randy Seals, McLeod Software Customer Advocate

Everyone knows that carriers have lanes, but do brokers and logistics providers have lanes, too? Absolutely. That’s what you bid for. That’s your yield. That’s where your money’s generated. In this sense, lanes are assets, so even brokers have assets. If you don’t claim your lanes as your assets, you’re ignoring a valuable source of information that can be used to improve your business.

McLeod’s PowerBroker system contains a wealth of valuable data about lanes, so why not put it to productive use? When this data is analyzed and studied with care, you gain invaluable knowledge about your business. You can see in fine detail the role that lanes play for your company, and you can determine precisely which actions are needed to expand capacity, improve margins, and increase volume. Empowering you to boost your business in these ways is what Lane Analysis is all about.


Secure and Expand Capacity

Lane Analysis can help you strengthen your relationships with your carriers so that you secure more capacity. You can examine your freight patterns to see where your sweet spots are. Your goal is to know your lanes backward and forwards. Learn about every factor that may affect carriers, such as fuel prices, weather, and traffic. Lanes brand a broker in the eyes of a carrier.

Then put the Lane Analysis data on your website. What’s your average LOH? Let them know that, too. In this way, Lane Analysis becomes your carrier-attraction tool. This in-depth knowledge improves your ability to market your business to carriers. If you can show them in detail what you need, you’re more likely to find the right carriers, and finding these carriers will expand your capacity.

And when you send them somewhere, help them get back out. As a broker, you may not have to deal directly with backhauls and deadhead, but if it’s a problem for your carriers, you need to think of it as your problem too. Find out what your carriers need, then look at the data on your lanes and see if you can find ways to help the drivers get back out after they drop the loads they carried for you. Look at your lanes by state and also by market. Be sure to get everything in view and find carriers that want to work every lane that you run.


Improve Margins

Improved margins show up directly on the bottom line, and an excellent strategy for making improvement is knowing your lanes inside and out. Use Lane Analysis to look at all of the variables that affect margin in each lane, including inbound versus outbound, volume and margin percentage per state, commodities, claims and accidents, carrier pay, and accessorials.

Concentrate on expanding your good lanes and scrutinize your bad lanes. Lane Analysis can show you where your good freight is, so that you can get more of it. The lanes that have the highest margins are where your salespeople need to be focusing. But not all freight is good freight. You have decide what you want and what you don’t want, and then build your identity around that.


Increase Volume

Use the data from Lane Analysis to look for backhaul opportunities. There are sales opportunities there. Another angle is examining all of the geographical data concerning your lanes, including the state, the consignee’s location, and the zip code. This makes it easy for you to see what freight might be in the neighborhood. Go after that freight and build up your density in those lanes. You can also use Lane Analysis to pitch your lanes to new shippers. When they see that you specialize in running the lanes they need, you have a much better chance of getting their higher volume business from the start.


We Can Help You Do More

The Lane Analysis tool within your PowerBroker system is one more way you can maximize the value of McLeod Software. Our goal is to help you work smarter, not harder.

 

 

New Metrics and Fresh Strategies for Improvement 

A Look at New Ways to Use Information to Boost Your Business
08/07/2014

By Randy Seals, McLeod Software Customer Advocate

One of our hurdles in the trucking business is breaking out of the mindset of “We’ve always done it this way.” Maybe you’ve always kept an eye on certain metrics, such as revenue, deadhead miles, loaded miles, and such. But are you looking for new and better ways to see how your business is running? Your software systems are full of valuable data, and I want to suggest some new ways that you can put that information to use.


New Metrics: Velocity, Revenue per Hour, and Optimal Freight Movement Index

Velocity and Revenue per Hour
Velocity and Revenue per Hour (RPH) are both very straightforward metrics. Velocity tells you the speed at which loads are being handled, from pick-up to delivery. To calculate the velocity for a load, take the load’s distance and divide that number of miles by the hours taken between when a load was picked up and when it was delivered. This gives you the velocity of that load in miles per hour. If a 1,000-mile load takes 20 hours, the velocity for that load is 50 mph. RPH is simply the amount of revenue generated by a load divided by the number of hours it takes to deliver the load. A good way to increase your RPH is to increase your velocity.

If you’re like most mangers, you probably tend to focus on revenue per mile (RPM), but that’s only one side of the story. Try comparing RPM on two loads when one is a long, lonely haul across the Great Plains and the other involves fighting traffic in the densely populated East Coast. Your RPM may be the same for both loads, but your costs per mile go up when a load takes longer to deliver, so RPM numbers alone don’t provide an accurate view of your profit in every case.

Focus on Asset Utilization and Driver Productivity
Your costs go up when a load takes longer because asset utilization and driver productivity suffer; and in most cases, you burn more fuel. If you want to improve asset utilization and driver productivity, then you need to start looking at velocity and RPH. Which loads are getting delivered too slowly? RPH helps you determine that. Also, if increasing your velocity in some situations is impossible, RPH helps you see how such loads must be priced to ensure a profit.

You want to watch driver productivity, too. Most drivers are paid by the mile, so that cost is set for each load, but driver productivity does affect your bottom line. Higher driver productivity reduces the need to hire new drivers, because you can get more done with the crew you have. Finding good drivers today is labor-intensive and costly, which is why so many carriers are striving to increase driver retention.

If you want to retain your drivers, you should help them earn more money, and velocity can help. Look at what’s slowing down your loads. Detention is always a good place to start. Fix some of these problems and hike your velocity up a notch. Your drivers will thank you for it.

Optimal Freight Movement Index
Every load has a finite time in which you can optimize your profit on that load. The Optimum Freight Movement Index (OFMI) is defined as the optimum speed in which any individual load could be delivered. The point of looking at OFMI is to establish the ideal. How would it look if you were operating at the height of efficiency?

Consider a 500-mile load as a simple example. If everything goes right - no detention picking up or delivering the load, no traffic delays or accidents, and a driver with enough hours available to go straight through - you should be able to average 50 mph over those 500 miles. That means your OFMI for handling that load would be 10 hours.

If you deliver that load in 10 hours, you’ve maximized your profit per hour, but if you assign the wrong driver and hours-of-service limitations kick in after five hours, you might have to relay the load or let it sit for a spell. Now the total time becomes 15 hours. You end up taking fifty percent more time than your OFMI.

In this way, OFMI gives you a goal for operational efficiency. Track your performance against this benchmark. When you fall short of the goal, dig down to see why, and find ways to get your loads delivered more quickly.


Fresh Strategies: New Ways to Leverage Standard Metrics

Lane Analysis
It’s common to look at length of haul and deadhead by lane, but are you looking at hires, turnover, domicile, and accidents by lane? It may seem odd to evaluate your power lanes in terms of where drivers live, but keep in mind that drivers like to get home as much as possible. Do you have excessive turnover on one lane? Why? Are the drivers not getting home enough? It costs you money every time you lose a driver. Are you hauling freight to Georgia and you have drivers who live there, but you’re not making a point of giving the loads to those drivers? There are multiple ways to analyze your lanes and you need to be exploring as many of them as you can. And you need to put the data together in a way that you can make sense out of it. For example, gather your data on revenue, then make a matrix that shows all of your power lanes and how much you make on each one. Get all of this on one sheet of paper (or one screen) so that you can compare it all with ease. You can see at a glance where you should look for freight and where you shouldn’t.

Accident Data
Look at all of your accidents by day of the week, time of day, location, length of service, road type, road condition, accident type (such as backing up or making left turns), and more. Your safety team needs to look into all of this, analyze the data, and report back to you. You want to put information in the hands of your drivers and you want to educate your staff. Say that 35% of your accidents happen while the drivers are backing up. You want to keep the drivers thinking about the problems that arise when they back up. Your operations people need to talk to the drivers and help them become aware so that they can reduce the number of accidents.

Hourly, Daily, and Weekly Rhythms
Everything happens in rhythms. Certain times of the day or days of the week are highly productive and others are slow. When are those times at your company? Are your personnel functioning more efficiency in early morning, late morning, midday, early afternoon, or late afternoon? On Mondays or Fridays? Why? What is the secret of the high productivity or the reason for the low productivity? You have this data in LoadMaster or PowerBroker. Examine it and find out. Then try to learn some lessons that can help your personnel boost their productivity throughout the entire day or entire week. Productivity gains can allow your business to grow without the cost of adding more staff.

Fuel
Everyone uses strategies to get fuel at the lowest price, but how many of us are doing all we can to use the least amount of fuel? To reduce fuel consumption, try looking at these things: appointment times, circuitous miles, deadhead, idle time, the fuel efficiency of your equipment, pre-planning, routing, Y-splits, and loading schedules. If your planners and dispatchers aren’t always thinking about the impact of appointment times on fuel usage, get them to start paying attention to this. Are you monitoring your out-of-route miles? The money spent on the fuel that’s used to go out of route is just lost. Look closely at your split loads. How long does one driver wait for the other driver to arrive? How much deadhead is involved? Maybe you need to establish limits for your personnel, so that you can get a better handle on avoiding splits that take too much time and use too much fuel.


Let Your Staff Know the Score

All of this work to transform raw data into useable information won’t mean much unless you put the information in the hands of the people who can use it. Look for ways to reduce the complexity of your company’s business by giving people clear and easy visibility into their performance. Provide multiple views, put data in context, tailor reports to fit individual tasks, export data to other software tools, and present data in easy-to-comprehend graphic displays. Most people come to work eager to make a difference. Let your people see metrics that reflect the results of their actions, give them the coaching they need, and they’ll work with you to take your business to new levels of success.

 

 

Data Protection Essentials 

Five Steps Every Company Should Take
07/31/2014

By Ben Barnes and Jason Turner, McLeod Software Customer Advocates

If your company’s data is lost due to a server failure or a natural disaster, can you recover the data? How much data will you lose permanently? How quickly can the business be back up and running?

The worst-case scenarios may never happen to most of us, but the risk is too great to ignore. The statistics on data loss are sobering. Most companies that suffer a major data loss go out of business within a year.

One of the dangers is that it’s easy to think your data is protected, when in fact it’s not. Companies commonly neglect to back up all of their data or to back it up frequently enough. Then there’s the issue of data recovery. All too often, backed-up data can’t be recovered. Some experts say that half of all tape backups fail to restore.

We’ve seen firsthand the damage that data loss can cause to transportation companies. There are steps that you can and should take to ensure that your company’s data is protected. Here is our basic checklist:

1. Make data protection a priority.
Data protection is not something to be put aside temporarily until someone has some extra time available to address the issue. In order to be certain that the right steps are taken in a timely manner, top management has to make data protection a high priority.

2. Ensure that all data is backed up.
LoadMaster and PowerBroker users sometimes forget to include data that resides outside of those systems. Are you using a third-party accounting system, such as Dynamics GP? That data is crucial. Have you added imaging capabilities, such as DocumentPower? Both the documents you’ve scanned into the system and the related DocumentPower database need to be backed up.

3. Determine how frequently data should be backed up and do it on schedule.
The specific nature of your business will dictate how frequently data should be backed up. The longer you go between backups, the more risk you take in terms of losing vital information if a disaster strikes.

4. Back up data offsite.
If servers fail and you have data backed up on media in your office, you should be okay, but if your business is destroyed by fire or a tornado, your onsite back-up is lost along with your primary data. Server failure may be more likely than natural disaster, but given the severe consequences to the business that follow when all data is lost, it makes sense to find an offsite solution. At McLeod, we use Renovo Data as our offsite data protection solution.

5. Routinely check to ensure that your data recovery method works.
Conduct data recovery drills on a regularly-scheduled basis, such as once each quarter. Until you have tested your recovery process, you can’t be certain that it works.


McLeod is Ready to Help

Your business is moving freight. Our business is giving you the software tools you need to succeed. If you need help determining how to create a good data protection plan for your business, call us. We’ll work with you to ensure that if a problem ever arises, you’ll be able to recover your data and get your business running again quickly. You’ll also sleep better at night knowing that your business is protected.

 

Increase the Value of your Company 

Why Software is Instrumental and Worth the Investment
07/23/2014

By Kasey Burleson, McLeod Software, Chief Financial Officer

In my experience, company value is of vital importance, even if you never intend to sell, because a company that is growing its value is a company that is well-run and sustainable. Company value increases when companies prove their ability to achieve above average profit margins consistently. We continually hear about networks, lanes, trips, optimization, and velocity. Going down a level, we think about rates, empty miles, length of haul, etc. We also understand how customer service, drivers, equipment, and technology all drive our business and its equations. So how can we synthesize all of this into two concepts that come back to value creation?

Value = Certainty, Certainty, Certainty

I like to say that creating business value is all about certainty, certainty, certainty; and certainty is the equivalent to location, location, location in real estate. If you look around, you’ll see evidence of the human craving for certainty everywhere—in our personal lives and in the way we behave economically. Buyers pay more and accept lower returns for certainty, and likewise, they pay less and require higher returns for uncertainty or risk. In business, certainty means that risk/volatility is reduced, and that translates into value.

Here’s one way this plays out. Imagine two companies, ABC Carrier and XYZ Trucking. Both companies have annual revenue of $100 million and annual earnings of $8 million, but ABC is valued at $64 million, while XYZ is valued at only $48 million. Why? ABC is getting a higher multiple due to its certainty (less risk – buyer will pay more).

Compare quarterly earnings. It turns out that ABC’s earnings vary only slightly from quarter to quarter, while XYZ’s quarterly earnings are much more volatile. For both companies, the end result is annual earnings of $8 million, but XYZ isn’t consistent/predictable from quarter to quarter (network, lanes, trips, velocity, equipment, service, pricing, etc. – think Southwest Airlines).

The fundamental formulas used to calculate value include variables that reflect consistency and volatility. In mature industries, companies that deliver consistent profits are more highly valued.

Another way value increases significantly is when margins are not only consistent, but also above average. Increasing margins by 1% or 2% and maintaining that level can create huge leaps in company value. Buyers want the company that can produce and sustain above average margins.


The Role of Your Transportation and Logistics Platform

One of the most powerful tools for creating certainty is your primary operations software. The right software platform delivers the right information to managers and users, includes the tools to execute the company’s objectives consistently (customer service, utilization, etc.), and provides the opportunity for a company to grow. Software allows for controls and repeatable processes. It also ensures that the business depends less on any one individual’s ability to manage everything daily. Users are managing and handling exceptions versus “pushing the pencil.” Think of software as the tool that gives your company the opportunity to grow and continue to deliver service and results in a consistent manner.

Through McLeod’s Planning, Feasibility, Telematics Integrations, Rapid Alert Notifications, FlowLogix, Private Network Notifications, CRM, Vital Signs, Profitability Analysis, Imaging, and more, we are focused on building the platform that will help our customers grow, produce above average margins, deliver great customer service, and ensure consistency.

Why Invest in Software? 
It Pays Off via Customer Service, Margins, and Value to the Owners

A common way to think about the ROI for investing in software is to consider the savings in labor costs that come from automating various tasks. This is an entirely valid and important component of the ROI, but there are many aspects to consider. If the use of software allows a company to turn volatile earnings into consistent earnings, while also pushing up the margin, the value of the business may jump by 50%, 100%, or more. If software can help you grow your business, serve your customers better, and maintain or increase your rates, it is hard to even quantify that. Returns such as these are not hypothetical. McLeod customers are doing it. We develop new products and enhance our core products every day. McLeod is continuing to build with a single platform “from the ground up” for focused or diversified transportation and logistics companies. It is McLeod’s pleasure to serve you, so you can serve your customers better and create a more valuable business.

 

 

Using Technology To Help Manage Your Drivers 

A Look at the Tools that McLeod Software Can Offer
07/07/2014

By Randy Seals, McLeod Software Customer Advocate

The Eleventh Rule: Use Technology Wisely

Even though driver relations are fundamentally matters of human interaction, technology has a vital role to play. Used wisely, the right software will support your efforts to improve driver management.

The vital task of managing your drivers is largely a matter of human interaction, so where does technology come in? What opportunities are there for using software tools to assist with driver relations? Doesn't technology tend to get in the way?

Technology does have a crucial role to play with managing drivers, and it doesn't get in the way when it's used wisely. As with any tool, software can help or hinder your efforts. It depends entirely on how you use it. Here are three ways that McLeod Software tools can be used to support driver management.

Use LoadMaster Driver Scorecard to make it easy to evaluate and track driver performance.

Which drivers are doing a great job and which are creating a series of problems that you have to fix? It may seem that your dispatch staff has a good handle on driver performance, but in the end, you need cold, hard facts. You need to be able to look at a report that gives you numbers on claims, all relevant safety records, on-time performance data, and more. McLeod's Driver Scorecard gives you the full picture. At a glance, you will be able to see how every driver on your payroll is performing in terms of every vital statistic.

Use LoadMaster Symphony Mobile Communications to help manage driver home time.

Given how much of their drivers spend away from home, one of the most powerful ways you can promote driver satisfaction is to increase the opportunities for them to get back to their families. McLeod's Symphony Mobile Communications module allows you to track home time, so you can easily see which drivers need to get home more often, and the driver screen includes fields for noting the dates of important family events. Most of us are always around our families for fun times, such as birthdays and high school graduations, or scary times, such as critical medical procedures, but it's not so easy for drivers. If you know about the dates, you may be able to adjust schedules as needed. This is a perfect example of how technology can make life better for your drivers.

Managing your drivers well has never been more critical than it is today, and one of the smartest moves you can make is to use technology to help. This is just one more way that McLeod gives you the ability to do more.

Managing Drivers 

The Top Ten Rules For Managing Your Drivers Well
06/30/2014

By Randy Seals, McLeod Software Customer Advocate

In the previous post, I spoke about “why” managing your drivers well is so critical to the success of your business. Now let’s look at the “how.” Here are my Top Ten Rules:

1. Recognize that drivers are important.

Don’t treat them as second-class citizens.

2. Appreciate the positive character traits of people who are drawn to become good professional truck drivers.

They are independent, adventurous, mobile, energetic, ambitious, and responsible.

3. Understand the difficult life that comes with driving a truck.

Drivers face long hours, odd hours, too much time away from home and family, and a lack of good places to sleep, bathe, and eat.

4. Understand what drivers need and want.

Professional drivers don’t want special treatment, but they do want to be treated fairly. They want to be treated with respect and dignity by their employer and the public, and they want reliable, safe, and clean equipment.

5. Follow basic professional guidelines when dealing with drivers.

  • Be courteous, tactful, concise, honest, and helpful.
  • Offer assistance and show gratitude.
  • Always do your part to resolve any complaints.
  • Return calls from drivers promptly and answer questions as clearly and thoroughly as possible.
  • Do your homework before returning calls so that you have all relevant files and information at hand.

6. Follow these essential rules of communication for all encounters with drivers.

  • Show drivers that you take their problems seriously by listening carefully and showing empathy.
  • Ask questions to clarify problems.
  • Identify the driver’s expectations.
  • Ensure that company policies are explained carefully.
  • Be willing to admit your mistakes.

7. Avoid common mistakes when interacting with drivers.

  • Don’t let an encounter with a driver cause you to lose your cool.
  • Don’t tell a driver that you’ll solve a problem and then neglect to follow through.
  • Don’t blame other people at the company for the problem at hand.
  • Don’t promise solutions to problems that are beyond the scope of your responsibilities.
  • Don’t assume that a driver is less professional simply because he or she sounds uneducated or does not speak English well.

8. Handle conflicts with care.

Try to diffuse difficult encounters by sticking to the facts and seeking solutions. Use conflicts as opportunities to educate drivers and to highlight changes that are needed.

9. Be willing to work with your drivers when problems arise.

Give good drivers some extra latitude at times and try to help struggling drivers become good drivers.

10. Be fair.

This means keeping solid records on each driver so that you reward the good drivers and eliminate the drivers who can’t or won’t improve.

Our next post will give you the Eleventh Rule and also using technology to manage your drivers with McLeod Software.

Managing Drivers 

Why Business Success Hinges on Your Drivers
06/03/2014

By Randy Seals, McLeod Software Customer Advocate

There’s at least one trait shared by every successful trucking company—they all do an excellent job of managing their drivers. Driver retention has been and will continue to be a major factor effecting company profitability. As capacity tightens up and CSA regulations have their impact on the driver pool, managing these drivers will become even more critical.

Anyone who’s not convinced about the crucial role driver relations plays in the trucking business should consider these points:

No income is generated until the “big wheels” turn.

Trucking companies rely on people to handle every aspect of the business. There are people in sales, dispatch, accounting, and more, and yes, each job is important. It definitely takes everyone working in tandem to make the business run smoothly. Yet when you assess each contribution, you have to conclude that one job is paramount to the production of corporate revenue and that job is truck driving. This is the activity which “puts bread on the table.” For every 100,000 miles a driver runs, he or she produces approximately $134,000 of income to pay the bills, the wages, and to secure everyone’s future.

Drivers can survive without trucking companies, but trucking companies go out of business without drivers.

The trucking industry’s long history of driver independence is one reason some individuals choose the difficult work of driving a big rig over hundreds of miles week after week for years on end. There’s no question that many drivers prefer to be part of a larger organization, because working for a company can bring benefits of all sorts. At the same time, don’t forget that a single owner-operator can handle his or her own sales, accounting and dispatch, but if a trucking company runs out of drivers, it’s not an option to send salespeople, accountants, or dispatchers out to haul the freight. You have to have trained and qualified professional drivers. There’s no way around it.

Driver turnover is a problem, driver recruitment is expensive, and there is a shortage of good drivers.

Driver turnover is high relative to employee turnover in other industries. There are many reasons for this, but one of them shouldn’t be that trucking companies fail to manage their drivers well. A good deal of work goes into each new driver that comes on board. Some estimates put the cost of replacing one driver at somewhere between $5,000 and $10,000. Currently, all indications are that the driver shortage will get worse before it gets better and the lack of good drivers makes driver recruitment even more expensive.

Stay tuned for our next post where following ten rules can turn your goal of improving driver management into a reality.

 

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