A primer for trucking rookies

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FedEx Corp. has acquired Parcel Direct, a company that consolidates shipping for catalogue and Internet retailers, for $120 million. Parcel Direct will be a subsidiary of FedEx Ground, the shipping giant’s parcel carrier.

Frozen Food Express Industries Inc. plans to purchase up to 750,000 shares of its outstanding common stock. The company believes the current market price of the stock is undervalued and the repurchase is an attractive investment. The corporation has 17.4 million shares of common stock outstanding.

Segmentz Inc., a Michigan-based third-party logistics provider, has agreed to buy 100 percent of the stock of Express-1 Inc., a privately held carrier based in Buchanan, Mich. Terms include a cash payment of $6 million, 50,000 shares of common stock and more than 2.9 million options priced at $1.75.

Fresh Del Monte Produce Inc. has purchased Can-Am Express Inc., a refrigerated trucking operation based in Fargo, N.D. Can-Am has a fleet of 150 tractors and 200 trailers and facilities in Fargo, Cincinnati and Denton, Texas. The deal also includes RLN Leasing, a National Lease member.

U.S. Sen. Charles Schumer (D-N.Y.) criticized the U.S. Customs and Border Protection for delays in crossing the Peace Bridge – which links Buffalo, N.Y., and Fort Erie, Ontario – and for not being prepared to allow commercial vehicles on the new ferry serving Rochester, N.Y., and Toronto. Local businesses are seeing fewer customers and more expensive deliveries, Schumer said.

On the surface, trucking looks simple. You move goods from point A to point B. Few outsiders understand that accomplishing this feat for thousands of shipments requires the coordination of numerous moving parts – and a little luck.

Suppose you had to explain the essence of trucking to someone new to the business in fewer than 1,000 words. What would you say? You should be able to describe important principles succinctly. Virtually all carriers hire and train at least one person a year who is new to the industry. Shippers, too, are turning over people constantly; many of the newcomers have no experience in transportation.

It’s to your advantage to help these employees and business partners grasp trucking as quickly as possible. Here are a few concepts that anyone working for or with the industry should understand:

Drivers are paid differently. Most workers in the United States are paid by the hour or on a salary. But in a two-week pay period, a truck driver can get paid by the loaded mile, empty mile, hour, pallet, hundredweight, trip destination, meeting attendance, retention bonus and so on.

Not only is pay confusing, but drivers also have few guarantees as to how much money they will make in any given week. Plus, there is a world of difference in how much effort a driver has to put forward to earn that pay. Most would prefer driving a truck 400 miles to earn $150 versus spending a day unloading a trailer to earn that same $150. They would rather take a load to Texas, where there are ample areas to park a rig, instead of maneuvering a tractor and trailer into and out of the New York Metro area.

These differences lead to the “why me” factor, which goes something like this: “Why didn’t I get that Texas load? They know I don’t like going to the East Coast. Didn’t I just unload a trailer for this company? Wasn’t I promised I would be taken care of? Why did they give it to the other guy? I wonder who he is paying off.”

I often hear people – even those who have been in the industry a few years – say that since a driver is a company employee, he should just do what he is told. Knee-jerk reactions like this only add fuel to the fire that is high driver turnover.

Trailers that look alike aren’t the same. Most people coming into this industry probably know the difference between tank trailers and vans. But within vans, do they understand that there can be wide differences in the dimensions of width, height and length, and that these dimensions are different at the door versus the nose of the trailer? Throw in special equipment such as liftgates or hydraulic roofs, and the number of trailer types within vans is in the hundreds. This is true for every major type of trailer.

Often this doesn’t matter, as the shippers’ freight will fit into just about any type of trailer. But I can’t tell you the number of times my dispatcher sent a trailer to a new customer, only to be refused the load because it wasn’t the right size. I don’t think we were unique.

Trucks don’t travel as fast as cars. Everyone has traveled in a car and has driven on the interstate where some trucks are going every bit as fast, if not faster, than most cars.

As a result, it’s hard to persuade people who should know better that trucks don’t average 70 or even 50 mph. Most knowledgeable observers use 45 mph, but even that may be optimistic depending on the distances involved, territory covered and where the driver stands in his logbook. Shippers in particular seem to have unreasonable expectations of how quickly a truck can move a load.

A mile is not a mile. There are the miles the truck actually travels, and there are book or computer miles. Within computer miles, there are shortest and practical, with tolls permitted or not. You may determine mileage based on a trip through Canada, if that happens to be the shortest route.

I recently worked with a shipper whose major carrier switched the miles used for rating bills from “household goods miles” to “practical route miles.” The carrier promised the change would be insignificant, but instead it raised the shipper’s rate by more than 5 percent. This episode certainly didn’t improve the carrier’s credibility with the shipper.

No doubt, you have your own ideas about what people new to trucking should understand. Don’t just complain when the novices get it wrong – write your ideas down and give them to the rookies.