Regional LTL carrier improves service and profits by managing key operating indicators and adopting flexible technologies.
The 26 terminals operated by Benton Express may be physically spread out among six Southeastern states, but that’s not how Mark Headrick sees them. As director of information technology for the Atlanta-based regional less-than-truckload carrier, Headrick thinks in terms of the facilities’ ability to communicate and act as a unified enterprise.
“From a technology standpoint, we don’t have different cities and states, but different floors in the same building,” Headrick says.
For example, Benton Express recently completed installation of a voice-over Internet protocol (VoIP) telephone system at all its terminals. The system gives Benton Express significant communication benefits, including the ability of terminals to contact each other and headquarters by punching just five buttons – as if they were in the same building.
VoIP connectivity among facilities saves time and communication costs, but the real benefit for Benton Express is improved customer service. One of Headrick’s major projects today is integrating VoIP into the customer support center in the Atlanta headquarters. Once fully implemented, a centralized customer care operation will be able to work with each terminal – again, as though they were in the same building.
In the past, a customer might call the terminal for a special rate quote or other information that only could be supplied by headquarters. That often meant giving the customer another number to call. And once the customer obtained the necessary information, he might have to call the terminal back to tender the load. That’s three phone calls. With VoIP technology, these could be seamless transfers – and the agent at the terminal could stay on the line with the customer the whole time.
“If you make it so easy for customers, they will come back again and again,” Headrick says. That’s important for any trucking company, and especially one that commits as its slogan to the promise: “We Do It Right The First Time.”
With VoIP now in place at every facility, Benton Express uses a single, standard phone set in the company – from the president’s desk to the driver lounges.
Standardization simplifies training and inventory management, Headrick says. But customer service is the driver. Headrick envisions future enhancements that will match phone numbers of incoming calls to company databases so that anyone answering the phone will have immediate access to key information about the customer.
Managing key indicators
Linking 26 facilities with seamless technology is a continuing challenge, but it’s probably easier than managing them on a daily basis. Until fairly recently, Benton Express executives graded their terminals and terminal managers on one thing only: operating ratio. That’s certainly a key metric, but it’s a broad one, says Clete Cordero, vice president of business improvement.
“One terminal might operate at an 80 OR and the other at 100, and we had no easy way of knowing why,” Cordero says. Especially as Benton Express grew, this lack of insight into the numbers was troubling.
So in 2003, Cordero implemented key operating indicators, or KOIs. The KOIs measure each terminal on eight or nine different monthly goals. Each terminal has its own goals based on past performance and the expectation of continual improvement, Cordero says. A group including Cordero, the company’s senior vice president and its regional managers establishes new goals for each terminal each December and distributes them in an annual meeting each January.
The KOIs are based on a point system, with OR counting for 20 points and all others counting for 10 points. The other KOIs common to all terminals are accessorial additions, billing accuracy, claims ratio, on-time performance (origin and destination) and revenue (outbound and inbound). Terminals that use lift trucks equipped with scales also are judged on weight and inspection, ensuring that weight of a shipment as listed on the paperwork matches actual weight.
“There isn’t a terminal that hasn’t shown an improvement in some area,” says Bill Jones, regional manager for Georgia and manager of the Atlanta terminal.
Once set for the year, monthly KOI goals don’t change – even if a terminal is beating them easily. “I don’t think it’s fair to say, ‘You did what we ask, now you have to do more’,” Cordero says. “If you make something a moving target, people lose interest in the program.” But Cordero’s team certainly will take a terminal’s ease in achieving goals into account when setting the following year’s goals.
KOIs allow upper management to drill deeper and more easily into a terminal’s operation and identify opportunities for improvement, Cordero says. But the benefits also flow among terminal managers, who meet at least three times a year and often share best practices.
“We had one successful meeting where we asked the best manager in each category to give a presentation on what they did to reach that goal,” Cordero says. “I think the managers were very apprehensive at first, but now they see that it has made their jobs a lot easier to focus on what matters. It has helped when we go into an annual meeting and say we’ve done this and we have had our biggest profits ever.”
Jones believes the strength of the KOIs lie in their simplicity. “You don’t want to make it so complicated that people don’t want to use it,” he says.
Based on profit growth over the past three years, the KOIs have been a success, Cordero says. And it’s profits that matter. “You rarely see a trucking company go out of business because of lack of freight. It’s usually too much freight, too cheap.”
Like Jones, Cordero believes that measuring just a handful of metrics keeps terminal managers focused on the most important activities, although Benton Express does plan to add a safety element and a maintenance element to the KOIs, beginning next year.
Complementary management team
Brothers Lex and B.D. Benton launched Benton Express in 1934 as a motor carrier specializing in distributing films to theaters. It was a just-in-time operation. Failure to deliver a film on time meant paying for empty theater seats.
Today, Benton Express, which operates about 350 power units, is led by Chip Matthews, Lex’s grandson. But Matthews shares leadership with Benny Cordero, senior vice president.
“We’re almost like salt and pepper,” Matthews says. “He’s an operations guy. I’m a sales and maintenance guy.” The two play off each other well, he says. Another tool for ensuring collaboration is a quarterly planning committee of senior management that reviews key decisions.
Innovation isn’t new to Benton Express. A number of years ago, the company established its Driver Academy, under which new hires and veterans alike undergo two days of training every two years in all aspects of the job, down to hygiene and interpersonal skills.
And about 10 years ago, cargo theft had become a significant problem for Benton Express, especially in Florida. The most common scenario was a break-in at a lot, a hotwiring of the tractor and theft of the tractor and trailer. So the company’s safety manager devised a simple disconnect on the tractor’s air tank to prevent the tractor from building enough air to move.
“Our mission is to be the best LTL carrier for our customers, doing it right the first time,” Matthews says. Given that its competitors are many times larger than Benton Express, innovation is a necessity, he says.
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