It’s likely not a surprise to drivers, but many of the things that negatively impact day-to-day productivity and efficiency are outside of their control, and it’s up to the fleets to find solutions, as a panel of executives explained last week at the CCJ Fall Symposium.
The panelists – Kevin Quast, COO at Knight Transportation, Greg Koepel, vice president of workforce development and administration for Roehl Transport and Justin Kreimer, vice president of operations for Marten Transport – discussed four key areas to consider when evaluating truck productivity:
At the dock
This is the area that was the subject of the most discussion and a clear point of emphasis for the audience.
“This issue is one of the biggest challenges we face today in our industry,” Quast said, and he broke down the impact on driver wages: Based on government statistics, the wage gap between truck driver earnings and the workforce average has climbed from 1 percent to 15 percent over the past decade.
“We have to get more money to drivers, and we can certainly do that through raising pay,” he continued, “but if customers want to mitigate rate increases they have to address this issue.”
That’s easier said than done, of course.
Quast pointed out the importance of open communication with customers, and of explaining how valuable drivers’ time truly is – and shippers can either help pay them more by improving their dock operations or can pay them more directly through rate increases.
But they’re going to have to help, one way or the other, Koepel agreed.
“We go to the customer and talk about inefficiency, and we give them a chance to correct it,” he said. “But if we don’t see some kind of action, we’re going to move on. There’s enough demand and enough alternatives to be able to do that.”
Even if customers are willing to accept significant rate increases, Koepel suggested that’s still not enough because of the high value of efficient operations.
“Even with additional compensation, we sometimes find it isn’t worth our while,” he said.
At Marten, drivers are now paid $20 an hour after one hour of detention, so downtime is a “huge discussion point” with customers, added Kreimer.
Marten measures its customer with scorecards, and currently about 64 percent are getting trucks loaded or unloaded within two hours.
“When you break out that scorecard, it’s really compelling. It helps you gauge the inefficiency and how much room for improvement there really is,” Kreimer said.
Indeed, if dock improvements would allow drivers to spend just another 10 percent of their work day with wheels turning, Marten wouldn’t even need the money, he added, noting how critical time is for temperature-controlled loads.
In rate negotiations
The shipping community needs to understand the difference between rates and accessorial charges, Kreimer emphasized.
“Unfortunately, when they don’t listen to us we have to punish them with fees to get their attention,” he said. “When you go in to negotiate, you’re typically talking to someone in procurement – but detention is not really a procurement issue, it’s operations. So we try to separate the two and say ‘this is your transportation cost’ and ‘this is your loading and unloading cost.’”
Indeed, with the supply/demand equation now squarely in the carriers’ favor, this is the time to address these problems – not that trucking companies haven’t been trying all along.
“I don’t think the conversations have changed, but the responses are a little different,” Knight’s Quast said, drawing a big laugh from the audience. “They’re more interested in doing these kinds of things now.”
As for the notion of shippers and carriers being part of a collaborative supply-chain team, Quast spoke about how few customers made visits to Knight headquarters during the freight downturn – but they’re back today, talking “partnership.”
“So it’s a real opportunity for us to work with the shipping community on these key issues,” he said.
At Roehl, the issue isn’t whether of not to “fire a customer” whose freight isn’t profitable; it’s a broader matter of evaluating lanes and “moving toward places where we can be more successful” with that customer.
“We’re certainly seeing a lot of folks that are interested in locking in capacity through a dedicated operation or getting very specific on lanes and working toward consistency and efficiency,” Koepel said. “And that’s good to see.”
Whether Marten is successful in its relationship with customers often depends on company culture – such as having leadership that is engaged with supply chain issues and will allow change.
Of course, in business “money fixes everything,” Kreimer added.
“There are certain environments where this can be addressed financially,” he said. “But we actually have certain destinations that we’ve blacklisted, based on extremely expensive unloading times. You can pay a driver $20 an hour, but it gets to the point where he’s going to get frustrated and quit because he wants to drive.”
Both Roehl and Marten have rolled out pay plans that go beyond basic cpm scales.
Roehl’s “Your Choice” plan is designed to ensure that the “top performers” are also the top paid, Koepel explained.
The key is to set objective criteria and structure the plan around those. Driver scores are calculated based on performance points that can be awarded or deducted. The most significant points are awarded for productivity achievements, with others going for basics such as clean inspections, fuel economy, hazmat loads, etc. The driver’s mileage rate is then based on where the score fits on a scale.
“The primary goal was to reward our top performers,” Koepel said. “And it also helps in the general conversation about productivity, and the driver’s influence on productivity. Now we’re talking in terms that are connected to pay, and people understand.”
Marten has introduced holiday pay this year, with drivers picking up as much as $300 extra for driving the week around Christmas, for example. For national holidays throughout the year, the bonus is $150 for the three-day holiday window.
At Knight, the focus is on creating more driving time.
“You can put a few cents into a bonus, but you’re really going to impact their income by addressing the issues where they can drive more and generate more personal income,” Quast said.
For fleet managers
“We have a good, experienced driver base that’s productive. We feel like the fleet manager is the number one key to a driver’s success from a productivity standpoint,” said Marten’s Kreimer. “It’s one of the most challenging dilemmas in trucking: productivity versus home time. You can use route optimization software, but at the end of the day these guys aren’t robots.”
Marten applies performance measures to fleet managers, assessing both productivity and driver turnover as a means of balancing the sometimes conflicting demands.
Roehl is developing tools based on the same productivity-points model applied to drivers.
The next-day review of performance evaluates “what went well, what didn’t go so well, and what can we change to improve productivity,” Koepel said. “Our fleet managers have a bonus that’s not perfectly aligned with what our drivers have, but we’re working toward that alignment.”
Weekly meetings with fleet managers identify Roehl drivers with low miles and low pay, and develop “action plans” to bring those numbers up.
“It’s all about the data,”added Knight’s Quast. “We measure it, we report it. And we have software to optimize planning. We just work on it every day.”