LTL Outbound, No Return Arrow Illinois Simplifies Operations, Driver's Job

Multi-stop LTL delivery makes life tough enough for drivers without including the usual rowing of a 10- or 13-speed transmission shift column back and forth in congested urban traffic. Arrow Illinois Company, a small LTL carrier with headquarters in Chicago and operations in Whiting, Indiana, can't take away all the frustrations of LTL work such as traffic and appointments, but it has taken away the fatigue of shifting the transmission.

This is all part of a move to simplify operations. The company recently signed a lease with Penske Truck Leasing for seven new Freightliner Century Class tractors equipped with Eaton Roadranger automated manual transmissions. The lease takes Arrow Illinois out of the truck maintenance business and allows it to concentrate on customer service. The tractor specifications relieve drivers of the responsibility for shifting the transmission, allowing them to concentrate on safe driving.

Arrow Illinois was already 25 years old when it was purchased by Richard Aardema in 1985. A year later, he purchased Nightway Transportation, a 40-year-old carrier. Both were extremely small. Randy Harkema was hired as general manager in 1987, and he has since merged operations of the two companies-one unionized, one nonunion; one truckload, one LTL-into a single smooth functioning, nonunion carrier of LTL freight.

70% Frozen Freight The freight mix has changed as well. When the two companies merged, roughly 60% of the traffic was fresh with the remainder frozen. Now more than 70% of the freight is frozen. Arrow Illinois moves mostly frozen bakery goods, frozen meat, and fresh meat. On its shorter delivery routes, frozen and fresh products can be handled at the same time, with the fresh products loaded in a second compartment behind an insulated bulkhead.

The result, however, is still relatively small. The company runs a fleet of 15 tractors, including four independent contractors. "We find that to be fairly typical," Harkema says. "Carriers of refrigerated LTL tend to be very large like FFE with 1,000 trucks or pretty small with 50 trucks or less. We don't see many medium-sized LTL carriers with 350 trucks. Those fleets all seem to concentrate on truckload freight."

Harkema has built annual revenue to roughly $2.25 million from freight outbound from Chicago that delivers within 300 miles to the east or south. Typical destinations are St Louis, Indianapolis, Louisville, and Cincinnati. The fleet ran 419,000 miles in the first six months of 1999 and will end the year at more than a million miles. "We run a little freight into Detroit," Harkema says. "Except for the Chicago suburbs, we don't go west or north at all. Milwaukee is not a destination for us."

500 Active Customers The company has built up an impressive customer list over the years. Since 1994, it has probably served 6,000 different customers, Harkema says. Around 500 of those are active and most ship at least once a week. "Monday and Wednesday are our heavy days," he says. "One recent Monday, we handled 559,000 pounds of freight. In an average week, we'll move 1.5 million pounds with an average shipment weight between 4,000 and 5,000 pounds."

Arrow Illinois concentrates so heavily on holding to promised outbound schedules that equipment typically returns to Chicago empty to be available in time for the next route. Fleet size has a role in this as well, Harkema says. "Most of the freight that might be available for return loads would be truckloads," he says. "We don't have enough equipment to spend the extra time waiting for freight that moves at low competitive rates. Our outbound freight pays extremely well. Even with all our empty mileage figured into the total, we generate an average of $2.67 a mile."

Success for such a small fleet must be built on service-doing a job that larger competitors can't do or avoid doing. While large carriers certainly deliver refrigerated LTL on time and in good condition, they do not always do so in a way that meets customer needs. "A big carrier will pick up a shipment and move it to a terminal for consolidation with other freight," Harkema says. "That consolidated load may become part of a peddle run, or it may move to a second terminal before delivery begins. All this takes time. In contrast, almost all our freight moves completely through the system within 24 hours, and virtually nothing remains undelivered after 36 hours. In addition, we handle the administrative side of the freight business with the same dispatch. Our invoices go out within 24 hours of freight pick-up."

City Trucks, Highway Trucks Arrow Illinois accomplishes this feat by running two fleets within its small operation. While the larger portion of the fleet is on the road delivering freight, four tractors remain in the Chicago metro area gathering shipments for the next day's routes. These four Mack CH613 conventional daycabs make several trips a day picking up large shipments that Arrow Illinois breaks into smaller orders for delivery by the road drivers. Small shipments are part of the mix as well. The truck that picks up small lots may make as many as 12 stops a day.

Although the company has a few extra trailers, the preferred method of operation is to have the inbound tractor and driver wait while freight is unloaded at the Arrow Illinois dock. With this unloading time added to the work day, two pick-up routes is the maximum that any driver can handle in Metro Chicago.

This breakbulk service is a great value to shippers, Harkema says. A shipper might have 40,000 pounds of product that needs to be split up between 10 to 15 receivers. One way of handling this could be using load-to-ride carriers where each shipment is picked up in delivery order by the carrier. However, this process ties up the shipper's dock again for every separate shipment. "With our service, the shipper gets all that freight off the dock at once with the assurance that it will be delivered the next day," Harkema says.

The Arrow Illinois terminal has four dock doors and could handle all four city trucks at once, although this rarely happens. The terminal crew starts breaking down bulk shipments into separate orders around 4 pm and has the delivery routes ready to roll by 4 am.

O-Os Deliver Long Runs Not only does Arrow Illinois split its fleet between pick-up and delivery functions, it has a division of labor on the delivery side as well. The seven company tractors handle the shorter routes, usually staying within 150 miles of Chicago. Four independent contractors handle the longer routes to the most distant points such as Louisville, Kentucky, or Evansville, Indiana. Almost all outbound freight delivers to wholesalers. Less than 5% of deliveries go directly to the store door. "When we have a store door delivery, we pay the driver extra for taking the freight inside," Harkema says.

Drivers on the longer routes make two runs a week. They go out with deliveries for Tuesday and Wednesday, and again for Thursday and Friday. Arrow Illinois is closed on weekends, and Friday is a cleanup day at the terminal. Freight is not held over the weekend.

Everything about the delivery operation is as standardized as possible. Drivers are assigned to a specific tractor and trailer. They are kept on the same routes as much as possible to help build strong working relationships with receiver personnel. For repetitive freight, Arrow Illinois has standing delivery appointments with receivers. While that helps speed delivery, it does not eliminate the need to call the receiver to confirm the appointment before every delivery. "We have to call every receiver every time to provide purchase order numbers if nothing else," Harkema says.

Headquarters Handles Delays In general, freight is unloaded quickly, because it is all on pallets. However, delays still creep into the system. "We have some standing delivery rules for drivers," Harkema says. "If they have to wait more than 20 minutes after arriving for their appointment, we want them to call headquarters. By that, we mean 20 minutes without any activity that would lead to unloading. They call us and we handle the problem. That usually means talking to the dock personnel. We also notify the shipper that the delivery is late and why. And we call the rest of the receivers on the route to reschedule appointments."

Loads are fairly stable, but the number of stops required for delivery varies. If a load contains several different shipments for a single receiver, the truck may make as few as six stops. Loads with less consolidation may require as many as 12 stops. In all cases, drivers-company employees and independent contractors-are paid a percentage of the revenue rather than a mileage rate.

Just as operations revolve around tightly scheduled delivery routes, the Arrow Illinois fleet is built for the convenience of drivers and mangers. The new lease from Penske has eliminated the need for managers to worry about equipment maintenance and downtime. In fact, the possibility of putting a tractor in the shop for service and getting it back within hours, coupled with the guaranteed availability of replacement vehicles, were primary motives for leasing. In addition, the lease gives Arrow Illinois access to extra refrigerated trailers when needed.

Penske Provides Trailer Maintenance Penske has more involvement with Arrow Illinois than just the seven leased tractors. It is one of the contract maintenance services that maintains company trailers and the four local pick-up tractors. Penske also provides fuel any time an Arrow Illinois driver needs to fuel on the road. This is rare, however, because tractors carry two 150-gallon tanks that are filled regularly from a pump at the terminal. Limiting purchases to Penske and terminal fuel eliminates potential problems with fuel quality, particularly in winter, Harkema says.

The leased tractors are based on Penske's recommended specifications and incorporate a few special requests from Arrow Illinois. They are 1999 model Freightliner Century Class C12064ST air-suspension conventionals with a 48-inch midroof sleeper. They are powered by Detroit Diesel Series 60 engines rated at 430 horsepower. Running gear and drivetrain includes an Eaton 12001 front axle, Eaton DS404 tandem drive axle, and Eaton RTAO-16710-AS transmissions. These automated mechanical transmissions require the driver to use the clutch only for starting and when coming to a complete stop.

Less Driver Fatigue The automated transmissions result in much less driver fatigue and can help drivers avoid shoulder injury from repetitive shifting motion, Harkema says. "The automated mechanical transmission does not need a standard shift column," he says. "The control console looks much like an automatic transmission shift lever in an automobile. The gearbox is smooth and shifts itself much faster than a driver can change gears. We've even had a test driver from Eaton tell us that drivers using this transmission exhibit lower blood pressure while working than drivers in trucks with conventional transmissions."

The new Detroit engines also benefit drivers and management. They have an optimized idle routine in the electronic fuel controls that starts and stops the engine during deliveries to save fuel and to maintain proper engine temperature. Without optimized idle, the engines shut down after 10 minutes when the tractor is not moving.

Engines can be programmed to recognize proper driving behavior. If the controls sense a pattern of responsible behavior, they will allow a higher governed road speed up to a preset limit.

Trailer Replacement Soon Arrow Illinois is just about ready to replace its trailer fleet, which are Great Dane Classics 48 feet long, 96 inches wide, and only 13 feet high. "We specify the lower overall height to make sure that we can get under most of the bridges in Chicago," Harkema says. "These 1988 model trailers don't fit the modern definition for high cube vans, but they have plenty of cube for an LTL operation that hauls a lot of meat.

"Actually, we are neither cube critical nor weight critical. Few of our loads reach the 80,000-pound gross weight limit, so the fact that the Great Dane Classic is a little heavier than some trailers is not an issue. However, we are impressed by the ability of these trailers to withstand years of floor abuse from fork trucks."

The trailers have 21"2 inches of sidewall insulation and extruded aluminum duct flooring and are cooled by Thermo King SB-II refrigeration units that have logged a little more than 20,000 hours. If not for the empty return trips, this would be much higher for units that are 11 years old.

When trailers are replaced, Harkema says, width will be increased to 102 inches. The company is considering a wedge configuration to increase interior cube while maintaining the same overall height. New trailers will probably have thicker sidewalls to help with temperature recovery after doors have been opened at a delivery stop, he says.