Strategic Alliance

When companies reach the size of Q Carriers, it is tempting for the owners to start numbering their drivers. But even with 240 independent contractors and employees and 90 percent turnover the past year, Greg Gorvin, president of Q Carriers Inc., still knows most drivers by name.

Between 1995 and 2000, Q Carriers, located just south of Minneapolis in Shakopee, Minn., grew from 90 trucks to 200 trucks and 265 trailers. During the growth period, Gorvin admits he began to lose track of names and faces. About 18 months ago, he took it upon himself to memorize each name and face in his company. He started by creating an electronic directory of drivers with his digital camera.

“We’re getting serious about getting our database to be complete,” Gorvin says. “If you can say, for example, ‘Jim, how are you,’ it really impresses them. Many times they think they’re just a number. It’s pretty effective.”

Dispatchers also use the photos on an ongoing basis, as do other administrators, especially during meetings when Gorvin and other managers discuss personnel issues.

“When you can pull up the guy’s face, it helps a lot. Sometimes, someone will say ‘Oh, him. I didn’t realize he was a problem.'”

People first
Ironically, when Gorvin started in the trucking business, managing numbers, not people, was his forte.

In 1980, after

"There are so many levels of communication necessary to make things happen in this business," he says.

Gorvin's career with Q Carriers began in 1987 when he left Graebel Van Lines and hooked up with Randy Quiring, the owner of Q Carriers, which, at the time, was a 40-truck refrigerated fleet in Shakopee, Minn. Gorvin started as the controller. In 1991, he began buying into Q Carriers. In 1995, with the fleet at 90 trucks, Gorvin and Quiring decided to expand but realized they could no longer make all the decisions themselves. Gorvin, for one, was working nights and weekends. "It was too much," he says.

"We wanted to start growing the company, but we knew that prior to growth we had to have a structure in place. We formalized all the jobs – operations, safety, administrative, maintenance and sales," Gorvin says. "We wanted to change the process where the two of us were making the entire decisions for the company. In order to grow, we had to grow out of that way of thinking."

When he delegated managerial responsibilities, Gorvin's first objective was to instill his philosophy in his new managers.

"We empowered our managers to make decisions and to gain the confidence of our internal and external customers," Gorvin says. "We didn't sacrifice our corporate culture; we extended it." Gorvin expects greatness from everyone – managers, company drivers and owner-operators.

Drivers are more important than everybody else in Q Carriers operation, Gorvin says. "We expect them to be treated as professionals and, at the same time, to treat others in our operation professionally," he says.

Drivers as business partners
With the exception of four company drivers, who run local pickups and deliveries, Q Carrier drivers are owner-operators. Once a year, Gorvin or one of his managers, meets individually with his contractors for about one-half hour to discuss such things as cash management and expense control. Gorvin has a vested interest in the success of his owner-operators. He also owns a separate company, Valley Ridge Leasing, which leases the tractors to the owner-operators.

In 1990, as a part-company and part-owner-operator fleet, Gorvin and Quiring decided to transition to an all-owner-operator company to reduce their workers’ compensation in Minnesota. To keep their company drivers, the two formed a leasing company.

“Basically, the idea came out of necessity,” he says. Gorvin consulted with an attorney when starting the leasing company but learned most of his lessons through trial and error, he says. Acting as a banker and company owner creates a double headache at times, especially when a driver decides to quit and walk away from his lease. When this happens, Gorvin takes the matter seriously.

“We pursue them any way we can,” he says. Despite the hassle of running a leasing company and the additional financial risk, Gorvin believes the program has been successful.

“By having the lease program, we expand the pool of available owner-operators. A lot of owner-operators can’t get the credit to buy their own truck,” Gorvin says. “We provide the opportunity.”

When hiring new drivers, the management at Q Carriers conducts a two-to-three-hour orientation meeting to teach basic business skills and to prepare drivers for the responsibility of owning their own businesses. Besides education, Gorvin seeks to provide motivation.

“If you want top performers performing at their very best you need to be modeling the behavior,” says Gorvin, who is usually the first one in the office every morning at 6:30 and usually the last one to leave. “Anyone that owns a business needs to take that responsibility very seriously,” he says. He includes himself, foremost, in that statement. “If you’re responsible for the livelihood of 240 people and their families, you have to give them the opportunity to be successful.”

Terms and conditions
New owner-operators with Q Carriers can choose from the trucks on Valley Ridge Leasing’s lot. The leasing company specs its trucks to be “moderately priced,” Gorvin says. Rather than lease drivers their dream truck and saddle them with heavy payments, Gorvin specs trucks to help the drivers become successful businessmen.

Owner-operators that lease with Q Carriers have two pay options: 82 cents per mile or 71 percent of load revenue. About three-fourths of the drivers choose mileage pay, Gorvin says. To help drivers increase mileage and productive time on the road, Q Carriers operates a local cartage service for its outbound loads. Four company drivers pick up and deliver trailers to and from local customers to the yard. The line-haul operators then take the loaded trailers to their destinations.

Despite his best efforts as banker and boss, however, several owner-operators at Q Carriers – like thousands of other owner-operators during the past year – have parked their trucks and quit. Fuel costs are mostly to blame for the recent “sky-high” turnover, Gorvin says, but so are poor business moves by the owner-operators.

To protect the leasing company’s interest, Q Carriers deducts lease payments from the drivers’ settlements. As another form of debt protection, Q Carriers requires drivers to pay for physical damage insurance. The company pays for liability insurance. Lease contracts last three or five years. At the end of a three-year lease, drivers can renew the lease on a new tractor or arrange for bank financing to pay off the residual. Most drivers, Gorvin says, choose to amortize their lease over five years and take ownership at the end. Overall, about 20 percent of the drivers at Q Carriers choose to renew their lease or purchase their truck, Gorvin says.

Wired for success
To coordinate dispatch and communicate with his business partners across the country, Q Carriers uses PeopleNet Communications’ fleet management system. Q Carriers pays for the PeopleNet hardware and installation. The contractors pay $15 per month of the monthly service fee.

For dispatch, Q Carriers uses McLeod Software’s LoadMaster, interfacing with the PeopleNet system for sending dispatch instructions and routing information from the office computer directly to the truck.

Gorvin also uses Netwise, a load optimization program that allows him to track revenue yield by unit, by lane and by customer. Gorvin says that Netwise has helped him pinpoint which customers and traffic lanes are profitable. Q Carriers operates its trucks in a 1,000 to 1,100-mile triangular service pattern with Minneapolis as the apex and the base stretching from the southeast over to Texas.

“It (Netwise) allows us to institute rate increases by lane instead of across the board, which carries a lot more credibility with our customers,” he says.

The long-term success at Q Carriers depends on the success of its business partners – its drivers. Having experienced rapid growth throughout the 1990s and now the high driver turnover caused by a tough economy, Gorvin focuses on helping his business partners succeed. As the coach of the team, Gorvin says his business has reached the size he believes he can govern most effectively.

“Any bigger, and I would start to get too removed,” he says.