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Profit margin of safety

When Jeff Digby founded Colorado-based Voyager Express, he didn’t set out to create one of the safest trucking companies in the country; he set out to establish a profitable trucking company.

But having spent his entire life around trucking companies – his father owns Digby Truck Lines, a 400-plus truck fleet near Nashville, Tenn., and his uncle owns Navajo Express, a 660-truck fleet in Denver – Digby knew unsafe trucks, drivers and business practices don’t help the bottom line. That’s why he incorporated specific safety goals into the business plan he drafted before launching Voyager in 1997.

Digby’s No. 1 safety goal was avoiding roadside out-of-service orders. After all, a truck that is sitting isn’t making money.

“Being raised in the industry, I understand the importance of being safe,” Digby says. “We told our drivers from day one – and whenever we hire a driver – that we run right, and we run legal. We don’t think about accidents. We just focus on the prevention.”

For Digby, the basics are obvious: running legal, following the hours of service, doing pre-trip inspections and recording everything. But it’s more than obeying regulations. “It means paying attention to the weather,” he says. “We run the Colorado Rockies every day. You’ve got snow, you’ve got wind, and you’ve got young kids running around in SUVs that fly past at 80 miles per hour.”

Four years later, attention to prevention has translated into results for the 84-truck fleet. Earlier this year, the Truckload Carriers Association recognized Voyager as the top safety program for trucking companies that run fewer than 25 million miles per year. Voyager became a finalist for the award due to its low accident rate. Following an audit of the competitors’ safety operations, Voyager stood out from the rest.

Scrutiny from the beginning
The Voyager safety program begins with hiring the right drivers. When a driver first applies at Voyager Express, he must clear some hurdles, starting with the company’s requirement for at least two years of experience. Then Voyager’s safety director, Debbie Heupel, goes over applications and the accompanying paperwork with a fine-tooth comb.

“I believe strongly that you hire your problems,” Digby says. “There’s a lot of average and above average guys we’ve turned away because they don’t believe in our safety philosophy.” Digby doesn’t want to waste his staff’s time or the driver’s time; even before Voyager gives a driver an application, the company lets the prospect know about its culture and expectations.

“It usually takes three or four days to process an application,” Heupel says. “We discuss any discrepancies or questions – no matter how minor – with the applicant.”

Once hired, drivers must attend monthly safety meetings, and they receive bonus points for doing so. At the end of the year, those bonus points translate into safety awards and prizes. Annually, drivers must undergo a complete review of their safety procedures and driving skills.

“We take them out on a little run,” Heupel says. “We do some backing, go through paperwork and logs, do pre-trips with them again. It’s like getting their CDL. We go through every part again. Drivers can build bad habits and nobody catches them. When you take a ride with them and notice those things, you can let them know about it and correct it.”

Debbie Heupel, Voyager’s safety director, accepted TCA’s fleet safety award for the company.

Watching on the road
A safety review is a controlled situation, however; drivers may know the proper procedures and have the right skills and not necessarily use them on a daily basis. So several times a year, Debbie and her husband, Collin, who is Voyager’s recruiter, take to the road in rigs of their own to observe drivers while en route. They follow and watch a driver and, if they like what they see, stop the driver along the trip to offer praise and buy lunch. TCA cited this on-the-road surveillance as one of the factors in the selection of Voyager for the safety award.

“They never know where they’re going to see us,” Heupel says. “Some are a little nervous about running with us, but we want to be on the road with them.”

Every step of the way, Voyager subjects its handful of owner-operators to the same requirements and scrutiny as company drivers. In addition, the company inspects owner-operators’ trucks before they sign on. Trucks must be less than five years old and have all maintenance records. “They send in monthly maintenance reports, so we see every time they do something with their trucks,” Heupel says.

Voyager’s award from TCA was based on its 2000 performance, but the company isn’t satisfied with resting on past laurels, Heupel says. In January, Voyager instituted a small incentive program that has improved out-of-service violations over the same period last year. Because Voyager’s fleet is relatively young – no truck is older than three years – most of its few violations are driver related. When drivers successfully complete a roadside inspection, they receive $10, or as Heupel puts it, “lunch money.”

Forcing customers to help
Digby recognizes that Voyager and its drivers aren’t the only players in ensuring a safe trucking operation. Shipper and receiver practices often create or add to driver fatigue. Digby addresses this concern in two ways. First, the company hauls no-touch freight exclusively, relying on drop-and-hook operations or requiring the shipper or receiver to unload.

“I want my drivers to drive, not unload boxes all day and then drive,” Digby says.
A driver doesn’t have to exert himself to become tired, however; excessive waiting also contributes to fatigue. The second way Digby addresses fatigue with customers, therefore, is to enforce delay penalties. Voyager’s standard contract includes clauses that penalize shippers for unforeseen delays. “It’s pretty standard,” Digby says. “I started it because with my dad’s and my uncle’s companies I saw the waste when drivers and trucks weren’t generating revenue. The policy helps the driver get moving and get going faster. It makes us and the shipper more efficient.”

Digby says most trucking companies he’s worked with have such agreements, but none enforce it. “Nobody talks about it,” he says. “This was my plan of action. It’s a win-win for the customer and the carrier.”

Not all his clients like this particular aspect of the business relationship, but most pay the bill or get his trucks rolling without delay.

“We’re not perfect with all our customers, shippers and consignees,” Digby says. “But we’re very strong and very firm on billing back to the customer downtime. We will give part of that money to the driver. If my driver is there four hours, and he was supposed to be there two hours, he knows he’s going to earn money for four.”

Carriers must be willing to walk away from business, but it’s not easy, Digby concedes. “I have accounts that I’m afraid to raise the rates on because I need that lane. Their business fills a need. But my goal is to get paid for what we deserve in this industry.”

“I believe strongly that you hire your problems. There’s a lot of average and above average guys we’ve turned away because they don’t believe in our safety philosophy.”-Jeff Digby

How big is too big?
Part of getting what Voyager deserves from customers has to do with size, Digby says. Smaller fleets – those with a handful of trucks – have difficulty forming partnerships with shippers because they can’t offer the range of service bigger fleets can, he says. One of Digby’s goals with Voyager was to get to a big enough size quickly to achieve critical mass and form partnerships.

“We had some fast growth,” Digby says. “I don’t know if that’s good or bad, right or wrong. I wanted to be big enough to go into a customer and really sell a package whether I had 13 trucks or 26 trucks. To me it seemed more difficult – at a small size – to sell a shipper in a partnership.”

But Digby also didn’t want to grow too large, worrying that owning a big fleet like his father’s or uncle’s would ruin the small business feel to which he has grown accustomed. While Digby’s first goal is to be profitable, his second is to have a good relationship with his employees, vendors, customers and community.

“If I get so big and distracted where I miss out on some of that, then it’s not worth it to me,” Digby says.

At 84 trucks, Digby is trying to decide how large he wants Voyager to grow. Originally, he envisioned a fleet of several hundred trucks, but today he’s leaning toward getting more revenue from Voyager’s current fleet.

Digby studies his company’s books carefully. Once a week , he sneaks off to a small local library to crunch numbers undisturbed by office staff or phone calls.

“It’s important to know that stuff,” Digby says. Trucks are “a rolling asset and sometimes we lose sight of that.” When a company adds trucks quickly, it might let a truck sit in the shop for two months when it could have been fixed quickly. “Where’s the profitability in that?”
Digby is considering adding warehousing services and a shop. But he has to make sure the numbers justify the investment. Indeed, Voyager didn’t invest in an award-winning safety program just to be a good corporate citizen. Digby learned long ago that safe trucks and drivers earn money for a trucking company.

Location: Denver
Principal: Jeff Digby
Equipment: 76 Volvo VN 660s with Cummins N14 engines and Eaton 10-speed transmissions; 223 Utility 53-foot dry vans. In addition, Voyager uses eight owner-operators.
Freight: Dry van, paper, beverage
containers, food items
Challenge: Turning a safety program into a profitability tool
Solution: Creating a rigorous training and review system for drivers, insisting on no-touch freight and enforcing delay penalties with shippers

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