Truckload fleets are coughing up more and more dollars to recruit and retain drivers. At the same time, their profit margins remain slim enough that paying for this investment is burdensome, to say the least.
However, at least one expert contends trucking can escape this scenario. Duff Swain, president of Columbus, OH-based Trincon Group, a consulting firm that advises owners and top managers of transportation firms, argues in a new white paper he's authored that there is a sensible, cost-effective way out of this Catch 22.
Swain's solution is not radical but commonsensical. He says trucking could afford to end the driver shortage with higher wages if it would boost truck productivity with nothing more exotic than good old-fashioned slip-seating.
Unfortunately, years of chasing drivers with all the bells and whistles that can be put into or hung onto a truck cab has led drivers to think of the trucks they use as theirs. “The trucks belong to the company and truckers need to realize it,” Swain writes.
He points out that certain trucking segments have long slip-seated trucks with great success. “UPS, FedEx and the LTL industry have been doing it for years,” he notes.
Swain allows that the drivers working for these firms are different than truckload drivers. “They are more interested in their jobs as a source of income, benefits and a career path,” he states. “The average truckload driver is more interested in lifestyle than job security and we not only allow it, we created the environment” in which this kind of thinking can flourish.
Old arguments aside — like “drivers won't like it” — Swain says slip-seating should be tried wherever it makes economic sense.
Once that idea is entertained, Swain says another wrinkle must be ironed out before slip-seating can indeed be instituted. Such a major change in fleet operations would of course have to be cost-justified, he explains.
Sadly enough, Swain goes on to say, most trucking companies can neither define their costs nor measure the profitability of their various pricing and/or operating strategies.
But he says this cost justification can be arrived at if fleets would use “activity-based cost accounting, a type of cost analysis that manufacturing industries have used for years.”
Swain relates that a software program dubbed TruCosting, which was developed jointly by Swain and others, can be used to examine the “profit impact” of slip-seating trucks
In general, he explains that activity-based costing can measure the effect of increased utilization of an asset because it separates variable and fixed expenses and measures the variable expense as a function of mileage. He goes on to show how this might pan out using several examples of different types of fleet operations.
When all is said and done, Swain points out that this approach reflects the need for trucking management to simply work smarter.
“The talent is in place,” says Swain, “but we need to train these capable people to combine their knowledge and experience with available technology.
“Management has to change its way of thinking and look at new ideas,” he adds. “We have to stop saying, ‘That's how we've always done it.’”
Or, perhaps, by not changing their thinking, managers will risk not getting to do it anymore.
To read Swain's “Increased Truck Productivity: The Only Answer,” go to his firm's web site, www.trincongroup.com, and click on the “White Papers” menu.