Opinion: For 2012, Invest in Teamwork

CEO

CostDown Consulting

This Opinion piece appears in the Jan. 16 print edition of Transport Topics. Click here to subscribe today.

Slowly but surely, trucking is emerging from recession, and trucking company leaders all over the country are anxiously watching the bottom line, determined not to falter now that the sun is finally coming out. The challenge is to identify opportunities that deliver the greatest return per investment dollar.

Most available investment options focus on improving trucking’s primary cost and performance metrics such as:

• Miles per driver per week.

• Empty miles.

• Cost per mile.

• Idling time.

• Out-of-route miles.

• Revenue per truck.

• Driver turnover.

• In-network fueling.

Most of us involved with trucking would agree that improving even one of these metrics would result in noticeable financial improvement. So imagine what would happen if you could take advantage of an investment opportunity that would improve the performance of most, if not all, of these metrics.

Surprisingly, that opportunity does exist. It is not an investment in technology nor is it an investment in equipment. Instead, it is an investment in people: those employees in your organization who most influence your company’s cost and productivity performance. The investment is called a “driver manager team performance management program.”

A driver manager team, or DMT, is the group of employees who manage the dispatching, planning and customer service functions. Typical DMT employee titles in this group are driver manager, load planner and customer service representative.

“Performance management” refers to the training, team process integration and monetary incentives provided the DMT to enable improved operational and financial performance.

Each of the above-mentioned metrics are performance areas a DMT influences or controls. Think about that for a minute. This key group of employees controls or influences every aspect of your company’s driver and fleet productivity and has more ability to influence costs than any other employee group in your company.

Trucking companies readily spend hundreds of thousands of dollars on equipment or technology to improve just one of those eight metrics. Examples include auxiliary power units for reducing fuel costs, GPS tracking to monitor off-route miles, and software to generate driver productivity scorecards.

However, regardless of what technology or tools you acquire, if your driver management team has not been trained effectively, if their processes aren’t tightly integrated and they have not been provided attractive monetary performance incentives, your financial performance is never going to reach its true, full potential.

Let’s look at a couple of examples of how effectively a DMT performance management program can work to tackle one of trucking’s perpetual problems — empty miles.

Our DMT performance management program begins by providing load planners with training and processes on identifying and reporting re-occurring empty lanes, and by giving them the ability and direction to provide monthly summary reports to marketing while also providing daily lists to the customer service representatives. The CSRs, who are trained to solicit daily unassigned load reports from their shippers, “bump” these load opportunities against the load planner’s empty lane list to see if they can fill some of those lanes. Processes also require that CSRs consolidate and forward their unassigned loads reports to marketing, where the report will be used to determine if there are consistently unassigned lanes with volumes sufficient to bid on as permanent business. Working together within these established processes, the DMT matches unassigned loads with empty lanes daily, while providing marketing important network opportunities to work into their sales plan.

Now for another example of how DMT training and integration could reduce empty miles. A driver calls his driver manager to report his load was cancelled. The driver manager notifies the CSR, who then reviews that day’s unassigned load list for possible freight alternatives. If that activity is unsuccessful, she next calls shippers that have loads originating in that same area but scheduled for later pickup to see if early pickup might be possible.

The driver manager also consults with the load planner to see if substitution with another assigned load makes sense based on driver No. 2’s anticipated arrival time and the potential for receiving a replacement load for driver No. 2. If the efforts of the CSR or load planner fail to provide a load solution, procedures next require the driver manager to contact freight brokers and review Internet load boards for a load.

In this example, DMT training and integrated processes resulted in four coordinated activities initiated to reduce empty miles — reviewing the unassigned load list, requesting early tender of loads, consideration of reassignment of a planned load and researching broker and load board opportunities. Not discussed, but the driving motivational force ensuring that these activities are initiated, is a financial incentive plan for each member of the team.

A driver manager team that is properly trained, has integrated processes and is motivated by financial incentives will have a greater effect on bottom-line performance than any other investment a carrier could possibly make. We looked at just two small examples of how an effective DMT Performance Management Program works. Imagine having your driver manager team developed to the point where they can manage every situation as effectively.

If you are looking for the largest possible return for your 2012 investment dollars, look first at the significant opportunity of a providing a performance management program for those employees who control your drivers’ productivity, your fleet’s utilization and your company’s operating costs.

Based in Grayson, Ga., CostDown Consulting provides trucking company owners and executives with analysis, process and training designed to reduce the cost of trucking.