Addition by subtraction
I’m confused. That should surprise no one, but let me explain what confuses me this time. First, I need to re-iterate how my mind works. I don’t have much post-secondary education, and have not completed any business or accounting classes.
In high school, I only took the basic three Rs: reading, writing and arithmetic. For that reason, I try to bring every situation to its simplest, basic, level, which is in my comfort zone. I don’t follow projections and predictions by industry experts, because too much of what they say is, honestly, over my head and what I do understand seems to rarely come true.
I sometimes think this is an advantage. Smarter people than me often overthink, or over-analyze, a situation. I heard a joke 30 years ago that sums this up perfectly. A truck is wedged under an overpass. Police, the truck owner and even an engineer are debating how to dismantle the trailer and unload it without danger to anyone. Even lifting the overpass from its moorings is debated. A seven-year-old boy, watching from his bicycle, walks over, tugs on the cop’s jacket, and says “Hey mister, why don’t you just let the air out of the tires?” Often, the simplest approach works better than high-tech or detail-oriented plans.
So with your tour of the murky minefield of my mind complete, I’ll attempt to explain my confusion.
We have a driver shortage, which has been described as “serious.” I prefer to call it critical, and this in a sunken economy, where not as many trucks are on the road as in the past.
Most small carriers would agree that good, safe drivers are almost non-existent, because our standards, if not personal then insurance-driven, are much higher than at some large carriers where an A/Z licence and a pulse could qualify you as a top candidate. Should the economy ever revive to the point of needing many more trucks on the road, who will safely drive them?
Even smaller trucking companies are seeing earnings below desired levels. Many large carriers, if the revenue was reviewed on a per-truck basis, are working very cheap in an effort to maintain cash flow to keep their massive overhead covered. I’m not going to argue with the experts, who claim the economy is rebounding, because in my position I just don’t see it, except in a select few sectors. I’ve yet to find a small business owner, either in manufacturing or service, who disagrees. To summarize, even in a time of slower, less profitable demand for our services, we have poor, or no, availability of good, qualified, front-line staff.
Here’s where my confusion shifts into overdrive. Why do we have so many trucks? Look at your own operation, whether you have 12 trucks or 1,200 – what is the percentage of drivers that you’re not happy with? Ten per cent, maybe 20%? Calculate the cost of the damage they cause, extra fuel consumed or their lack of productivity. Now compare that to your profit line. Could you eliminate those drivers, and see no change, or maybe even an increase in net profit?
Now, do the same exercise with your customers. Who pays too little, too slow, or has higher service demands than their freight charges realistically justify? Could you eliminate a substantial piece of your workload, and still maintain a comparable net profit?
Headaches and hassles increase proportionately with the numbers of equipment or employees we have. If profits don’t increase proportionately, why are we still striving to grow?
As I’ve always said, growth is necessary, but it has to be profitable, sensible growth. I expect that most, if not all, trucking companies could reduce their size without affecting net profits.
This industry is too willing to bend over backwards to make sure there is no freight left unmoved, but really, that’s not our problem. If a manufacturer in Toronto wishes to ship to Columbus, Ohio and has only $800 allocated for freight costs, it’s not our responsibility to make it happen. It should be their responsibility to either come up with more freight funds or a much closer customer. Our job is to move freight safely and efficiently, at a price that’s profitable for ourselves and our employees, period. Yet we know that somewhere, they’ll find a carrier to do it. See why I’m confused? It’s not our duty to help other companies profit, at a loss to ourselves. Let the market sort itself out. That’s how the free enterprise system is meant to work.
We, like most of you, have customers shipping product 1,500 miles or more. When these shipments are regularly scheduled, consisting of the same product on every load, I have a one-word solution: Rail. Even if an occasional truck is required for inventory adjustments, the bulk of such long-distance, regularly scheduled identical loads shouldn’t be on a truck. Chances are good that freight rates for loads such as this are lacking anyway. Think how peaceful the highways would be, if they were cluttered with 20% fewer trucks, trucks that may not have been profitable, necessary or operated safely in the first place.
Bill Cameron and his wife Nancy own and operate Parks Transportation, a flatdeck trucking company. Bill can be reached at email@example.com.
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.