Archive for May, 2015

Passing the Torch

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Passing the Torch

Justin decided today that he would search for an old style diner this evening instead of the fast food restaurants that were dinner fare at most truck stops. A quick search using his iPhone’s GPS showed Betty’s Family Cooking 15 miles up the road off Exit 46. As he was looking at the search results, the automatic rumble strips on his in-cab camera went off, warning him that he was outside his lane. He quickly corrected and looked up the road. Looking down at his instrument panel, he noticed that he was averaging 7 miles per gallon, not bad for a 30,000 pound load. He really liked his aerodynamic truck with the 13-liter engine and automatic transmission. His GPS now indicated that he had 13 miles to the restaurant and that he would arrive at precisely 8:56.

As the truck geared down the exit ramp, the GPS told him to turn right up County Road and go one mile to his destination. Suddenly, he heard another voice, this one from his mobile satellite tracking unit, “Warning, you have fifteen minutes left of on-duty drive time,” she said. “Timed perfectly!” he thought as he pulled into the parking lot. He parked and entered “Off duty” on his mobile unit. He reached in the back for his backpack. It had been a good day, he thought to himself.

Yesterday, however, was not so good. Justin had pushed it a little too hard. He had started to lose control of his tractor-trailer, but the anti-rollover system on his rig kicked into gear and kept him from a jackknife. The safety department back at the terminal had noticed the alert on their computer indicating that he was speeding and “hard braking.” He received a call warning him that he needed to slow down and leave more distance between himself and other vehicles. Justin remembered from driver training school the company’s progressive discipline policy. He had already had two problems and knew that a third would result in disciplinary action. But he wasn’t too worried about it. He could always go work for another trucking company. Since he finished his CDL two years ago, Justin had learned that it was easy to jump from job to job if things didn’t work out right. He kind of wanted to take the winter off anyway and spend a few months on the beach in Florida. As he climbed down out of his truck, he noticed an old big hood Peterbilt that said “Gertie” on the side. “What a dinosaur,” Justin thought, “that should be in the Smithsonian.”

Carrying his backpack, Justin walked across the lot and into the diner. It looked like something out of the last century. It had knotty pine walls, linoleum floors, and frilly half curtains on the windows. The tables had old Formica surfaces and chrome legs. The place looked like pictures Justin had seen on the Internet from an old “Life” Magazine. Justin sat down at a table and took his Mac out of the pack. He booted up his computer to check the weather and traffic, plan tomorrow’s route and fuel stop, and scan in his paperwork. He couldn’t find a WiFi signal so he plugged in his Internet card.

Outside, across the parking lot, Ralph climbed down from the cab of his 1998 Peterbilt 379 and lit a cigarette. She was a long nose Pete, with a 600-horse CAT, and 18-speed transmission. “I guess 1 ½ million miles was all that Gertie had in her,” he thought out loud. He had spent all of those miles with her. “Gertie, you were the best of them all,” Ralph said aloud to the truck. “Maybe it’s time for me to quit, too,” he wondered. He made his way slowly towards the diner entrance.

Justin was texting his friends when he heard the door open. He looked around the diner and saw the old man walk in. The old man coughed, took off his cap, and combed his hand through his gray hair as he walked over to the pay phone. He put a quarter in, dialed a number, and made his call. He overheard the old man say, “I’m done. I’ve run my last mile.” He then put in another quarter and made another call. When he finished, he walked slowly toward Justin and sat at the adjoining table. The old man wore cowboy boots, jeans, and an old flannel shirt. His face was wrinkled and weathered from many years on the road. He had gray hair and a mustache. Behind the reading glasses he had just slipped on, his steel blue eyes were heavily bagged and framed by crow’s feet.

Ralph noticed Justin as he sat down and thought he seemed about the age of his grandson. The lone waitress came to Ralph’s booth. “What are we having tonight, Betty?” the old man asked. “The special tonight is meatloaf, mashed potatoes and gravy, and peas,” she replied. “My favorite,” he replied, “No one makes meatloaf like you, Betty!” She smiled and scurried off to the kitchen. The old man pulled out his paper logs, the last one he would ever fill out. He actually filled out two, one for the company, and one for the DOT. He tore the second one up, though, as he realized that he would not be going through the scales anymore.

Justin gazed over at the old man and the old man looked back. “Hello, son, my name is Ralph. I just filled out my last comic book and I won’t be going through the chicken coops anymore. Yes, you’re looking at a retired truck driver…and this time is the last,” he said with a twinkle in his eye. “I retired two years ago after driving for the same company for 50 years, but came out on the road again to save my marriage. I guess my wife, Judy, got used to being alone a lot after all those years,” he said with a grin.

Justin was incredulous. “50 years?” Justin asked, “…and with the same company? How did you do that?” He thought out loud, “we’re only truck drivers.” Just then his phone beeped and Justin started texting again. Ralph was just as puzzled.

When Justin looked up from his phone, Ralph looked at him and said, “Son, even though I’m only a truck driver, I have a lot to be proud of. I have a good family, my girls are grown and married now, and trucking provided a good living up until the last three years. I have delivered goods to people all over the country and driven millions of miles, but have never had an accident, all with the same company. And until lately, I enjoyed the freedom of being out on the road without a boss looking over my shoulder. But now they want me to learn to use computers and something they call smart phones. I don’t know how a damn phone can be smart. The company and the government have been breathing down my neck more and more each year.” He coughed again, and said, “And, I’m not as young as I used to be and neither is Gertie. She just blew her engine and I think it’s time for us to hang it up. It just ain’t like it used to be. I suppose Judy will just have to get used to having me around,” he said with a slight smile.

“How did you do it?” Justin mused. “Son,” said Ralph, “You don’t have to be able to jump over a ten foot pole to be successful in this business. What matters is whether you can jump over a one foot pole a hundred times a day. Take pride in being a trucker driver, stay constant, and I know you can do it, too. Here’s my phone number at home. Give me a call anytime.”

Ralph smiled, and went back to his dinner. When he was finished he laid a ten dollar bill on the table. Just then Justin saw the door open and an old lady came in. Ralph got up from the table, walked across the room to her. She gave him a big hug. “Honey, you’re finally home,” she said as she kissed him. Ralph was smiling, but Justin thought he noticed a tear in the corner of his eye.

The door closed and Justin unconsciously grabbed for his phone as it beeped again. He started to reply to a text from one of his friends, but then he stopped, hit ignore, and put it down. He was interrupted from his thoughts by Betty’s soft voice, “What are you having tonight?” Justin turned off the phone and thought for a minute. “I’ll have what he was having,” he replied as he stuffed Ralph’s phone number in his pocket. The smart phone would stay off until he called his dispatcher in the morning.

Happy Trucking! Tom

Sales, Miles and Pay

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In any trucking company, drivers are supported by a number of departments, all of which are necessary to get the job done.  One department that is overlooked and in many companies underfunded is sales.

Why is the sales function important?  The first and most obvious reason is that we all want freight and we all want miles, none of which happens without a customer.  I often tell drivers when stressing the critical aspect of good customer service, that ACT doesn’t give them any miles…the customer does.  So it naturally follows that if we want miles, we have to make the customer happy so the customer want to give us miles.  We also have to find enough good customers to grow our miles, especially in an economic downturn.  If we don’t make the customer happy, that customer can easily give those miles to someone else.  If we don’t have miles drivers are unhappy as are our owners.  Therefore, it behooves everyone in the company, driver or office, regardless of their function, to see it as their job to make the customer happy.  If you are not taking care of your customer, your competitor will.

Are all customers equal?  They don’t all pay the same.  Some have good rates and some are on a constant search for the cheapest rates.  Some have good fuel charge and detention schedules and some have bad ones.  Some have fair contracts and some have very one sided, “take it or leave it” attitudes.  Some are loyal to their good carriers and others don’t care.  These customers engage in annual bids, where carrier put rates in spreadsheets.  The customer picks the cheapest ones, which often are brokers who have no trucks.  Some customers are more driver friendly than others.  Some get drivers loaded on time and some don’t.  Some are flexible with appointments and some aren’t.  Some require more trailers than others.  There are many other factors.  Of course, we all want the perfect customer.  I don’t know if that exists, but clearly some are better than others.

So how does a trucking company get driver friendly freight and good rates and enough freight?  This can only be done by investing in a robust sales organization… and they aren’t cheap!  To improve your rates, and the quality of the freight, we need lots of opportunities from lots of customers so we can pick the good ones and replace the worse ones.  It’s a lot like culling fish.  You have the salespeople bring you lots of opportunities to price.  You then make sure your trucks are busy and when they are, start replacing your worst freight with better, thus making constant improvement.  Over time your basket of freight improves, your rates improve (which translates into higher driver pay) and you can create density in your lanes.  This in turn allows for more engineered lanes and helps get drivers home more often (hopefully with a load!)

Many companies our size and smaller do not invest in sales.  They have a dominant customer, usually from their local town, who gives them shotgun freight (no lane discipline).  Because the trucking company is dependent on this dominant customer, they do whatever they want.  They have no other option because they don’t have a sales team bringing other deals to the table.  So now they are spread out over 48 states and brokering their way back.  This always translates into live loads at cheap rates and often unfortunate surprises.

ACT has invested in a sales team.  We have four full time sale people for 300 trucks.   We also have sales support staff to keep those salespeople hunting for new business instead of being bogged down in maintaining existing accounts.  We track our freight and rate growth and are always looking for feedback from drivers.  If we see driver unfriendly freight trends, we will attack it.  That is easy to do when you have options, impossible if you don’t.  Many carriers have customers who represent up to 50% of their business.  We don’t let any customer get over 10%.  That allows us to maintain leverage and protects us from drastic problems if a customer leaves.  We do very little broker freight because we don’t have to.

There will always be times of the week, month, year or economic cycles when freight is very strong and when it is very weak.  This is true at ALL trucking companies and drivers should plan for this.  However, those who do best in slow times or when customers change are those, like ACT, who are forward thinking enough to make the investment in a sales organization.

We are proud of our sales organization.  I think the investment has paid off and made us better than most carriers.   Help us out by appreciating what they do and taking good care of the customers they bring us.

Thanks and Happy Trucking!  Tom

 

 

ACT’s Enchilada

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(Continuation of The Whole Enchilada with ACT’s Recruiting Responses)

When someone considering a new job evaluates pay, often they look at the “rate” of pay and don’t look at the entire package.  This is especially true when a driver looks primarily at a “sign on bonus” or mileage pay that a trucking company advertises.  If you are not careful, you will fall victim to a “bait and switch.”

Tunnel vision could cause you to miss many important elements of pay.  Look beyond what is advertised.  Your pay consists of many items that, all put together, comprise your total compensation package. Make sure you get the whole enchilada.

There are a number of questions you should ask the recruiter.  Be sure to get a pen and paper to write the answers down from each company and compare notes. If you don’t understand the answers, ask again.  If they can’t answer the questions, run!  Pay shouldn’t be ambiguous.

If you are a good driver with a good record, the question is not whether you can get a job. The question is whether you will get the job you deserve. Recruiters are highly commissioned to get you into their orientation. Ask the right questions.  Do your homework to make sure you get what you deserve for your skill and experience.

Questions for Recruiters

1. What is the rate of pay? Starting Pay can range from .39 to .45 depending on years of experience and hazmat endorsement.  Drivers can earn up to .50 based on tenure with the company.  Is this for northeast? No, actually, we only go northeast of Pittsburgh less than 1% of the time.  Is this for certain operations? No Is it tiered? Yes (see above) Does this vary by length of the haul? No If so what is the average rate per mile? We pay the same per mile.  Short haul operations tend to have higher rates but fewer miles.  Long haul operations tend to have lower rates and higher miles.  One trick is that if you are dealing with a publicly traded company, you can research their SEC filings online and learn their average lengths of haul and average miles per week per truck.  This is public information for these carriers.
2. If you are talking with someone who advertises “guaranteed pay,” what is in the fine print”? We don’t have any guaranteed pay programs.  Our commitment is to keep you moving so you can maximize your pay. Some may advertise this but won’t pay it if lists of conditions are not met.  What is that list?  N/A
3. What are the average miles a driver in your fleets gets per week? 2,324 miles per working truck in 2014.  What is the average per year? 124,800 What was the average W2 pay of your drivers last year? $53,167.30   What was the high? $65,797.67
4. What is your per diem allowance? .11cpm single .14cpm team  (An amount that is deducted to represent road expenses to save taxes)
5. What benefits do you offer?  Health insurance? Yes Dental? Yes Vision?  Yes Long term Disability? Yes Short term disability? Yes Group Life Insurance? Yes Legal Protection Insurance?  Yes  What does each cover?  Varies by policy type  What does each cost? Differs based on insurance type, age, personal, spouse, family, smoker, nonsmoker, coverage amount. Please see the Drivers Weekly contributions schedule for specifics.
Some medical plans look inexpensive but do not cover much.  What are the co-pays?  Varies by policy Deductibles? Varies by policy What is the charge for family coverage?  Varies by policy  If you are divorced, will this insurance meet your obligations to your children under that decree?  For health insurance, confirm that it is actually insurance and not a health plan. We have real insurance offered through Blue Cross Blue Sheild.  If you end up in the hospital, the maximum out of pocket in-network is $3,000.  That is a highly competitive medial plan.   Some inexpensive products look like insurance but are really not.  These offer a schedule of a very limited coverage.

6. What do you offer in terms of holiday and vacation pay? Yes  How long do you have to work at the company to qualify? 1 year for vacation, holiday pay is immediate  Does it increase with tenure? Vacation Yes, 1 yr/1wk, 2-6yrs/2wks, 7+yrs/3wks, holiday pay does not increase with tenure
7. Do you offer layover pay? Yes How much? $100 in layover pay for a load wait time of 24 hours, $50 additional layover pay will be paid for each 12 hours of load wait time following the original 24 hours. How do you define a “layover?”  A layover occurs anytime a company driver is away from home and sits without a dispatch for a consecutive 24 hours, has drive time available, or their truck is in the shop for repairs.  Layover is not paid if a driver refuses a dispatch, is at home, or if there is an Act of God causing the layover (weather, earthquake, etc.).

8. Do you have driver loading or unloading? Very very minimally. How often? Very minimally. What is your pay for this? $100.00 for a tire load of 100 tires or more. $50.00 on any Goodyear loads under 100 tires  $75.00 for driver assist on some insulation loads Do you reimburse for lumpers? Yes
9. Do you pay detention? Yes  How much free time before you pay? 2 hrs. What are the conditions? $10.00 per hour, with a maximum of $100.00 paid for the first 24 hour period. Drivers must send in all required messages (macros) for the load in a timely and accurate fashion.  This includes:  Arrival at Shipper, Loaded Call, Arrival at Stop and Stop Departure on a multistop load, and finally an Arrived at Consignee, and Empty Call. Must be on time for pickup and delivery. Must get the BOL signed with time in and time out.  Detention Pay will be paid after paperwork is audited for errors or missed steps. Detention Pay will not be approved if any errors or missed steps are found.  We must have all of this information in a timely and accurate way in order to notify and bill our customers timely and accurately. Do you pay detention regardless of whether the customer pays you? Yes  How quickly is it paid? After paperwork audit
10. Do you pay for tolls? If on route, they are reimbursed
11. Are there other opportunities to make money, such as recruiting? Or training? Yes, recruiting, MPG quarterly and yearly bonuses, pay differential for hazmat endorsement, clean roadside inspections
12. Do you have a 401(k) retirement plan? Yes  What is the match? Dollar for dollar up to 4%
13. Do you charge drivers for anything? No What?  N/A How much?  N/A
14. Do you pay anything for taking a trailer in for repair? $25/occurrence plus mileage pay on dispatch miles.
15. Do you pay for a short shuttle? On loads with dispatch miles totaling 150 miles or less,  we pay $25/load plus mileage pay on all dispatch miles.
16. What is your cap on mileage pay rate? .50  Is it based on performance, tenure or other items? Yes What are they?  Mileage, years of service, endorsements, and fuel compliance to our fuel and route system
17.  Are there bonuses?  Yes What are they based on? MPG and clean roadside inspections How often are they paid?  Quarterly and yearly (2 different bonuses) for MPG, after each clean roadside inspection What percentage of your fleet actually earns the bonuses? The top 25% is eligible for the quarterly MPG bonus, the driver with the best overall MPG for the calendar year is eligible for the annual bonus.  All drivers are eligible for clean roadside inspection bonus pay

Happy and Profitable Trucking! ~Tom

 

 

 

The Whole Enchilada

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When someone considering a new job evaluates pay, often they look at the “rate” of pay and don’t look at the entire package.  This is especially true when a driver looks primarily at a “sign on bonus” or mileage pay that a trucking company advertises.  If you are not careful, you will fall victim to a “bait and switch.”

Tunnel vision could cause you to miss many important elements of pay.  Look beyond what is advertised.  Your pay consists of many items that, all put together, comprise your total compensation package. Make sure you get the whole enchilada.

There are a number of questions you should ask the recruiter.  Be sure to get a pen and paper to write the answers down from each company and compare notes. If you don’t understand the answers, ask again.  If they can’t answer the questions, run!  Pay shouldn’t be ambiguous.

If you are a good driver with a good record, the question is not whether you can get a job. The question is whether you will get the job you deserve. Recruiters are highly commissioned to get you into their orientation. Ask the right questions.  Do your homework to make sure you get what you deserve for your skill and experience.

Questions for Recruiters

1. What is the rate of pay?  Is this for northeast?  Is this for certain operations?  Is it tiered? Does this vary by length of the haul?  If so what is the average rate per mile?  Short haul operations tend to have higher rates but fewer miles.  Long haul operations tend to have lower rates and higher miles.  One trick is that if you are dealing with a publicly traded company, you can research their SEC filings online and learn their average lengths of haul and average miles per week per truck.  This is public information for these carriers.

2. If you are talking with someone who advertises “guaranteed pay,” what is in the fine print”?  Some may advertise this but won’t pay it if lists of conditions are not met.  What is that list?

3. What are the average miles a driver in your fleets gets per week?  What is the average per year? What was the average W2 pay of your drivers last year?  What was the high?

4. What is your per diem allowance?  (An amount that is deducted to represent road expenses to save taxes)

5. What benefits do you offer?  Health insurance? Dental? Vision? Long term Disability?  Short term disability?  Group Life Insurance?  Legal Protection Insurance?  What does each cover?  What does each cost?  Some medical plans look inexpensive but do not cover much.  What are the co-pays?  Deductibles?  What is the charge for family coverage?  If you are divorced, will this insurance meet your obligations to your children under that decree?  For health insurance, confirm that it is actually insurance and not a health plan.  Some inexpensive products look like insurance but are really not.  These offer a schedule of a very limited coverage.

6. What do you offer in terms of holiday and vacation pay?  How long do you have to work at the company to qualify?  Does it increase with tenure?

7. Do you offer layover pay?  How much?  How do you define a “layover?”

8. Do you have driver loading or unloading?  How often?  What is your pay for this?  Do you reimburse for lumpers?

9. Do you pay detention?  How much free time before you pay?  What are the conditions?  Do you pay detention regardless of whether the customer pays you?  How quickly is it paid?

10. Do you pay for tolls?

11. Are there other opportunities to make money, such as recruiting? Or training?

12. Do you have a 401(k) retirement plan?  What is the match?

13. Do you charge drivers for anything?  What?  How much?

14. Do you pay anything for taking a trailer in for repair?

15. Do you pay for a short shuttle?

16. What is your cap on mileage pay rate?  Is it based on performance, tenure or other items?  What are they?

17. Are there bonuses?  What are they based on? How often are they paid?  What percentage of your fleet actually earns the bonuses?

Keep in mind that time is money.  Wasted time takes from your compensation since you are paid by the mile.  Ask some questions around time.

Do they haul many food products?  If so, you are likely to spend a lot of time at grocery warehouses, which often live load and are notorious for delaying drivers.  Ask how many trailers per tractor they have.  If they have 3 to 1, they are probably likely to be a drop and hook operation predominantly.  If it is 2 to 1 or less, there is probably a lot of live loading involved.  Live loading eats into your compensation.

Ask about their CSA scores.  Good scores tend to get a green light at the scale houses more often, while bad scores insure that you will spend a lot of time at the scale houses.

Ask about the average age of their equipment.  Older equipment tends to spend more uncompensated time in the shop, especially with EPA requirements on exhaust systems.

There is a lot more you could ask but this is a good starting checklist.  Prepare before you call.  To truly understand your compensation, you must take the time to ask the right questions, listen to their answers and take notes so you can compare the offerings.  This is the best way to find your long term career.

Check back in on Tuesday for ACT’s answers to these questions.  If you look at the package ACT offers, I think you will find that here, you get the “Whole Enchilada.”

Happy and Profitable Trucking!  ~Tom