MISSISSAUGA, Ont. – Large carriers don’t have a monopoly on the secrets of success. Just ask the managers of smaller operations like Sutco Transportation Specialists, Paul Quail Transport, and Liberty Linehaul, who participated in a panel discussion at the recent Surface Transportation Summit.
“Just because we’re a smaller carrier doesn’t mean we can’t come up with a solution that works for us,” observed Leanne Quail, the operations manager at Paul Quail Transport, an Ontario-based hauler specializing in automotive freight.
After all, whether it’s a need to increase rates, find and retain drivers, or introduce new technologies, the underlying challenges and lessons will seem familiar to fleets of every size.
- Be transparent when discussing rates and charges
The laws of supply and demand have clearly led to higher rates for many operations this year. Sutco, for example, added just under 10% to the rates for its LTL and truckload shipments.
How times change. “The customers were beating us to death,” Liberty Linehaul president Brian Taylor said, referring to earlier rate pressures. No matter what business case was made, bosses always seemed to be telling their negotiators to demand 10% cuts.
“Right now there’s too much freight for the amount of equipment,” he said, adding that today’s industry could easily absorb a 5% drop in the market.
But even in today’s favorable pricing environment, open conversations are needed to ensure customers don’t look elsewhere for someone to haul their freight.
“They have to understand why it’s going up,” said Douglas Sutherland, vice-president and general manager of Sutco, which is involved in logging, heavy hauls and general freight.
So, too, are shippers looking for ways to keep costs under control. Taylor has had conversations with several Fortune 500 companies that are openly looking for ways to be better customers.
“At the end of the day they’re surprised with what we come up with,” he said, referring to the increases in efficiencies that have been gained through things like night deliveries, which freed up the bottlenecks during daytime hours. Shippers will also accept accessorial charges based on issues they can control, Taylor added, referring to the example of daily fees for holding trailers.
“We’ve always been able to see issues. We get a lot of feedback from our drivers.”
- Train and retain your drivers
Those drivers, after all, are the secret for every fleet’s success, even if they’ve become harder to come by.
“The driver shortage, it’s not going away,” Taylor said. “Every year we have more drivers retiring than we can get into the industry.” One of the only advantages is that the shortage has prevented many carriers from expanding too aggressively and leaving themselves at risk during an eventual downturn.
“The strategy for growth right now will be driven by acquiring drivers. The trucks and trailers are easy to grab,” said Leanne Quail, the operations manager at Paul Quail Transport.
Finding the right personnel is no small task. Gone are the days when youth learned how to drive like she did, taking grain trucks through agricultural fields. A good Class AZ licensing course can also cost $8,500, which can be prohibitive to those exploring a second or third career, Quail said. “You’re kind of established in your financial responsibilities at that point.”
Her fleet has responded by hiring and onboarding would-be drivers before they even begin their training, basing decisions on attributes like character and how well they’ll fit with the company. It’s when they’re still completing Ontario’s mandated 103.5 hours of mandatory entry-level training that they complete the fleet’s health and safety training and fill out all the paperwork required for traditional new hires.
“Retention is up. Skill level has definitely gone way up,” Quail said of the experience. “I have to pay them for the training anyway.” Only one of the first five drivers left.
“We’ve got to do a better job communicating how trucking has changed,” she added. “It needs to be viewed as a profession. I call them professional drivers. I don’t call them truck drivers.”
Efforts to retain such drivers are ongoing.
“We still do a lot of things that companies have given up,” Taylor said, referring to everything from Christmas parties to a pension plan. “I want them to retire with some money.”
Sutco has introduced something as simple as birthday gifts to reinforce that it’s a great company to work for, Sutherland added. “Profitability will come.”
- Focus on retaining customers, too
While every business needs to grow, successful fleets are also able to retain the relationships with existing customers.
In other words, don’t chase new business at an existing customer’s expense, the speakers agreed.
“The economy is going to be cyclical. It’s going to go up and down,” Sutherland said, stressing the need to support those who remain with the fleet during challenging points in the business cycle. “There’s a lot of people asking for us to do business now, and I think you don’t want to chase that.”
- Embrace change and technology
Meanwhile, one of the great equalizers for fleets of every size will come in the form of new technologies – and they aren’t limited to those with the biggest budgets. In fact, smaller fleets can prove themselves to be more nimble and adopt tech more quickly and effectively than their larger counterparts.
“I’ve been a proponent of technology for a long time,” Sutherland said, noting how Sutco introduced GPS tracking in 2009 and electronic logging devices (ELDs) in 2012. “When you need to change, sometimes it’s easier to change 100, 200 than a few thousand.”
Once systems are in place, though, Quail stresses the importance of putting available data to work. “It’s really a huge missed opportunity [if] that money you’ve invested in technology is not being put to good use.”
Admittedly, there are some challenges to being an early adopter of technologies. Sutco learned that when it jumped at the chance to fuel trucks with liquefied natural gas (LNG).
“Sometimes we’ve gotten bitten,” Taylor admitted, referring to prices of different options that have dropped after a purchase. But tools such as transportation management systems can still deliver a return on investment in just 24 months, he said. What are other fleets waiting for?
- Invest in safety
Safety-related investments may realize the biggest returns of all.
“Striving for that 100% compliance was always part of what we did, and I’ve seen that pay off time and again,” Quail said.
For its part, Liberty Linehaul has supported a commitment to safety by rethinking vehicle spec’s. It has selected disc brakes since 2008 and installed collision avoidance and lane departure warning systems on all its trucks, eliminating reports of rear-end collisions in the process. It’s a different story for other fleets that participate in the same insurance captive – 38% of their claims involve rear-end collisions.
“I’m sure my guys are every bit as distracted as their guys,” Taylor said, referring to the role of the technologies.
Granted, some technologies can be distracting in their own right. Drivers face the ongoing pull from smartphones, electronic logging devices, collision-avoidance warnings, and alarms. “All the stuff in the truck is a distraction,” Taylor agreed. But the fleet reinforces things like the importance of taking a few minutes before every trip to get seats in the right position and put coffee cups within reach.
Fleets shouldn’t be contacting drivers to discuss distractions while they’re still on the road, he quipped. “You have to live, breathe and walk that line.”
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