Scorecards and similar tools help fleets identify drivers who need attention – as well as those who should be rewarded
Increasing driver pay during a recession may seem counterintuitive. But as Greg Brown and other fleet executives know, funding pay raises with the extra cost savings or revenues that drivers produce is a no-brainer.
In January, B.R. Williams started paying its drivers a monthly performance bonus. The amount that drivers receive varies according to the scores they obtain in three categories – revenue, operations and safety. The program already has paid big dividends for the Oxford, Ala.-based company.
“We have positively enhanced our operation across the board,” says Brown, chairman and chief executive officer of the 165-truck fleet.
Each month, drivers are eligible to receive a maximum bonus of 1.5 cents per mile, or about $140 to $200. Going forward, Brown says drivers will have to earn any future raises with their scores.
Besides using financial incentives to improve performance, B.R. Williams puts drivers’ pride on the line. Every month, drivers receive a ranked list in their mailboxes for fuel mileage, revenue productivity and other categories. “They don’t want to be anywhere near the bottom,” Brown says.
Initially, drivers might have a negative perception of any new program that monitors their performance, especially when it might result in less pay. To be effective, incentives or differential pay programs must be realistic and attainable for the driver – and easy for the company to manage. Technology can automate the management aspect with new tools to monitor and score driver performance from highly accurate and unbiased sources of information.
Building the base
At any time, drivers must perform at a high level for a company to stay profitable – and that’s never been as true as today, considering the current economic climate.
But for less-than-truckload carriers, tying performance to variable pay is a risky proposition. Owners or executives at LTL carriers would love to introduce variable pay, but “the current system doesn’t provide the incentive for a really productive worker to step out of the box and be extra-productive,” says Dave Ward, a partner with ThoughtDrivers, a firm specializing in business performance for the trucking industry.
Most LTL carriers mimic union pay structures where drivers are paid an hourly wage fixed by experience and tenure. “It’s a riskier time to be experimental,” says Ward, a former LTL executive. That’s because the union “card check” legislation that the Obama administration and many members of Congress have pledged to enact will make it easier for employees to unionize over issues such as management making changes to their pay, he says.
By contrast, mileage-based variable pay always has been the standard for the truckload industry, Ward says. And technologies such as onboard computers, wireless communications and enterprise resource planning (ERP) systems can provide fleet managers with accurate performance details that leave no room for debate from drivers.
Mesilla Valley Transportation, a truckload carrier based in Las Cruces, N.M., currently is integrating information from across its enterprise to gain a more broad-based view of driver performance. The new driver reports, or scorecards, will include categories such as the number of loads a driver turned down, service failures, miles driven and fuel efficiency.
Eventually, the scorecard could be tied to a financial incentive. But for now, MVT uses it to provide additional low-conflict opportunities for managers to discuss performance with drivers. “That changes the tone of the conversation,” says Mike Kelley, director of information technology. In addition to using scorecards for guiding one-on-one communications, MVT is developing a process to feed reports directly to drivers in the cab through its PeopleNet onboard computing and communications platform.
B.R. Williams obtains driver performance information primarily from two sources. Its ERP system – LoadMaster from McLeod Software – provides monthly driver revenue and on-time deliveries. The scorecard also includes drivers’ fuel mileage, idle percentage and hard-braking incidents obtained from the company’s Qualcomm onboard computing and communications system. The company gathers information from these and other sources into a spreadsheet application that managers use to compare driver performance and calculate monthly bonuses, Brown says.
Managing direct costs
Of all the categories to monitor for driver performance, fuel has the most visible impact on costs. However, creating a variable pay program for mpg can be complicated. Perhaps the most difficult scenario to manage is when drivers slip-seat vehicles or run as teams. Fleets that rely on data that is downloaded manually from a vehicle may have no way to parse the data accurately by driver.
MVT has developed the business logic necessary to correlate trip data from its AS400 dispatch software to PeopleNet’s engine connectivity product, PerformX, to track performance data by individual driver, Kelley says. “The amount of slip-seating is on the increase,” he says. “The way things are going now, it has been increasing for the last year and a half. We are pushing to achieve a high number of miles per unit.”
Having a precise record of mpg data for each driver is critical for driver acceptance of MVT’s fuel incentive program. Every quarter for the past 21/2 years, the driver with the best mpg has received a Harley Davidson. Drivers that stay on top for an entire year receive a new Harley and $25,000. On the other end of the spectrum, any driver or vehicle falling under 6.8 mpg is placed on a “hit” list for managers to follow up with and determine why.
Vendors of mobile computing and communications systems say their latest applications allow users to track performance by individual driver, regardless of what vehicle they drive, by using a universal login procedure. When drivers log in, the computer downloads the driver’s past operating data and updates it continuously with current performance data.
If a driver does not log in to the Xatanet computing and communications platform, an “Unknown Driver” is assigned to the trip, and management later can assign the correct driver to maintain a valid log or allocate performance data, says Tom Flies, Xata’s senior vice president of product development.
The latest 4.3 release of the Xatanet on-demand fleet management system has business intelligence reporting tools. Users can create their own custom dashboards to measure driver performance both individually and collectively. Gauges with red, yellow and green zones have become popular tools to quickly analyze driver performance in areas such as mpg, idle time, average speed and out-of-route miles, Flies says.
Even with the latest computing technologies, Davis Transfer has resisted implementing a fuel incentive program because drivers do not control some variables – including equipment type and terrain – that can impact mpg significantly.
The 170-truck dry-van truckload carrier limits the top speed of its vehicles to 65 mph and limits the top-end rpm of its engines. Besides restricting certain driving behaviors that impact fuel economy, the Carnesville, Ga.-based company closely monitors its vehicles to detect any driver or mechanical issues that impact mpg.
Davis Transfer uses Qualcomm’s Fuel Manager, a Web-based software interface, to break out vehicles by model, year and engine type in order to compare “apples to apples.” Today, the company is averaging about 6.7 mpg. “A lot of the variance in the fleet has to do with the year and model of truck,” says Todd Davis, director of operations.
The carrier promptly diagnoses and repairs vehicles that fall out of range. “We seem to be able to make a big headway by identifying those trucks that are not performing,” Davis says. “A lot of times, it is due to a problem with the engine.”
In addition to monitoring fuel usage, many fleets also use planned versus actual hours and mileages to score driver performance. Appian Logistics says its DR Track software system puts route schedules, actual data and historical information directly on the Web to help companies monitor vital route information. Appian says it designed the system to allow data feeds from a variety of sources rather than making the system device-dependent.
Scoring driver skill
Besides quantifying the impact drivers have on immediate costs such as fuel, new technology is helping fleets accurately score driver risk and evaluate driving skills – areas that traditionally have been difficult to quantify.
For the past few months, Chattanooga, Tenn.-based U.S. Xpress has been pilot-testing Ivox’s DriverScore, a Web-based software that uses sophisticated algorithms to calculate a driver score using onboard data. Ron Viso, vice president of safety for U.S. Xpress, is testing the system at two different locations on 50 of the fleet’s 5,000 trucks.
Viso says that in addition to using DriverScore to measure the risk of each driver, he can envision using the tool to create a spirited, friendly competition among drivers. U.S. Xpress could give drivers access to login and view their own driving reports to see the exact location, on a digital map, of where they braked suddenly or had other types of risky behaviors.
“I’d like to see it be part of a driver’s review as well,” Viso says. If a driver continually is getting low marks, it could be grounds for continual education and counseling – or perhaps termination. The driver scores from Ivox also possibly could be used as part of a new performance incentive for drivers that keep their scores below a certain level, he says.
From a risk management perspective, having access to drivers’ skill and risk levels will mean having more predictive information to provide targeted training or counseling before drivers get a ticket or are involved in an accident, Viso says.
Bringing it all together
Onboard computers and various types of software applications capture and report specific areas of interest related to driver performance – mpg, idle time, speed, etc. But the sheer volume of information provided by these systems may make it difficult for a company to prioritize the data – let alone use it to take action.
Vigillo offers a Web-based fleet risk management software system designed to receive data from external applications such as onboard computing and mobile communications systems. These external data sources can be combined into one scorecard in the Vigillo system to help manage driver risk and performance.
“You can begin to correlate behavior in one area to another,” says Steve Bryan, chief executive officer of Vigillo. A company might find that more aggressive drivers miss more days of work, file disability claims and score high in other areas of cost and exposure. “With our scorecard approach, you can instantly begin to surface the problem children,” Bryan says.
In addition to monitoring performance and risk throughout an organization, the Vigillo software has features designed to automate workflow by assigning tasks for drivers to complete or content for them to review through e-mail or in-cab messaging.
EBE Technologies says its Ships Driver Performance management software offers a workflow queue that allows fleet managers to act on exceptions within their pool of drivers. Managers can use the software to schedule meetings with drivers by automatically sending messages to the cab or to a separate portal created for drivers to login to and review their performance, says Cindy Nelson, vice president of marketing and business development for EBE.
DistTech – a Newberry, Ohio-based liquid bulk carrier – uses the Ships module as an overall management tool for 425 drivers. Data includes mpg, idle time, on-time delivery and drivers’ hours of service. DistTech also enters incidents such as accidents, spills, roadside inspections and customer complaints, and attaches any related documentation, including e-mails and text messages from public motorists. Each incident is assigned a weight factor by severity and scored. By gathering this information into one source, the Ships application helps management predict problem areas and take action quickly, says Mark Kadlec, DistTech’s vice president of safety and human resources.
The latest technology makes it possible to create a complete picture of driver behavior and performance. Creating automated systems to score drivers can help managers detect problems early while helping drivers maximize performance in the areas they can control – and be rewarded for doing so.
A season of rewards
Morning Star uses technology, financial incentives to boost performance
In January, Paul Pimentel and Mike Reuter turned in a stellar annual report for Morning Star Co. They saved the company hundreds of thousands of dollars by using technology and financial incentives to improve driver performance.
Pimentel and Reuter are trucking operations coordinators for Morning Star, a California-based tomato ingredients processor. Reuter manages a private operation of 100 drivers at the company’s northern plant in Williams; Pimentel manages 300 drivers at the southern plant at Los Banos.
In 2007, the company started using the “GYR” (green, yellow and red) driver performance report in its onboard computing platform from Cadec. Pimentel and Reuter set the GYR report to track and score drivers on five areas: road speed, sudden decelerations, over-rpms, extended idle time and unknown stops.
For each category, the Cadec system records an incident when drivers exceed the following thresholds: speed above 63 mph; deceleration more than 7 mph per second; rpms exceeding 1,700 for more than a minute; idle time exceeding five minutes; and stopping at an unknown location.
Pimentel and Reuter assigned each category a weight factor based on the company’s priorities and goals. The GYR report computes a driver’s score as the percent he attained out of the maximum score from having zero incidents in all categories. In the cab, the onboard computer warns drivers before any one of these incidents occurs.
Starting in 2007, drivers received daily, weekly and year-to-date summary GYR reports. To create friendly competition, Pimentel and Reuter showed drivers how their scores compared to other drivers. “Drivers embraced it,” Reuter says. “Improvements were quite encouraging.”
For the start of 2008, Morning Star used the GYR reports to launch a new bonus program. Drivers qualify to receive two percent of their seasonal earnings – about $750 to $1,000 – by scoring 90 percent or better. As an added incentive, drivers receive $100 each week by scoring 100 percent. And at the end of the season, the top 20 performing drivers receive another $500 each. If all of the drivers at a location have no accidents, each driver receives another 0.25 percent bonus.
The final results for 2008 included a 75 percent year-over-year decrease in the number of accidents, and a 388 percent increase in the ratio of miles per accident. The cost of damaging leased equipment dropped by 25 percent, saving $400,000. The technology and incentives also contributed to an increase in fuel economy from 6.1 to 6.4 mpg, saving hundreds of thousands more. Pimentel expects positive results from the investment in onboard computers and financial incentives to continue this year and beyond. “The bigger challenge is to improve on what we achieved in 2008,” he says.
When the fleet’s operating season begins in July, the private fleet will lease 230 trucks to transport 1,500 loads every 24 hours, seven days a week, and cover nearly 17 million miles over a 95-day period. Pimentel and Reuter already are considering a new incentive when drivers – all of whom are seasonal operators – return to work this year; the final 2008 driver rankings of returning drivers will determine who gets the first choice in shifts.
“Banker’s hours are highly coveted,” Reuter says.