TruckExec

Driver Shortage: Operating Strategies for Trucking Companies during a Driver Shortage

A new webinar has been added to CostDown Consulting's website library that overviews what trucking companies should do to offset the impact of a driver shortage.  Here's the link:

 

 
 

 

NOW is the time for Driver Retention

Yes, in a bad economy with driver turnover at historical lows; driver retention is as important, or possibly more important, than when freight levels are strong and good drivers are hard to find.

Driver retention performance is a direct result of driver loyalty.  The more loyal drivers are to your company, the more likely they are to stay with your employ.

Keeping the loyalty/retention relationship in mind, think about driver perceptions at your company today during these challenging times.  Many are likely laid off; perhaps many more are working at less than full productivity (translation: lower wages) due to depressed freight volumes. 

Trucking during a recession requires making hard decisions like layoffs.  Without question the loss of wages, either in full or part, damages employee loyalty to the organization.  So what can an organization do to partially negate the damage?  Here are some suggestions:

1. Keep in touch with laid off drivers.  Use monthly home mailings from the top (CEO or President level) and weekly calls from Driver Managers to let drivers know you care, how business is going and when (if you know) they might be able to come back to work.
2. Communicate with your drivers regarding other actions taken as a result of the recession.  Non-driver staff reductions, equipment sales, etc - let them know that the situation is serious and that the pain is shared.
3. Rotate drivers in and out of layoff  if work rules permit.  A month on- month off rotation will provide at least some income to junior drivers.
4. Offer work opportunities at other terminals to laid off drivers in the system.  Even if the opportunity is not a personally viable one (NJ based driver offered work in OK), drivers will appreciate the offer.
5. Encourage laid off drivers to visit the terminal periodically.  You don't want them to lose the sense of family you have taken so long to build.

When the economy improves, the driver shortage will return and eventually worsen.  Truckers fortunate enough to survive the recession will be looking forward to the opportunity of higher freight levels and rates brought on by tight capacity.   That will be a tough opportunity to capture if once loyal drivers start looking elsewhere for their employment.

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--Joe White - -TruckExec Publisher/ CEO CostDown Consulting

Top 10 Trucking Critical Issues

In October, the American Transportation Research Institute issued results for their 2008 annual survey of Top 10 Critical Issues for the Trucking Industry.  The results are provided in the table below along with the results from the previous 3 years.

Comparing annual results provides the following insights:

1. The 'Economy' debuted as a critical issue for the first time in the 4 year history provided by the study.  Of even greater significance is the fact it debuted as critical issue #2.
2. 'Fuel' and 'Driver Shortages' were in the top 3 concerns for all 4 years.
3. 'Government Regulation' continues to move up as a critical concern for the Industry.  In 2008, it was ranked as #4.

Full survey results can be viewed at the following link:  ATRI 2008 Top 10 Critical Issues for Trucking.

--  Joe White -- TruckExec Publisher / CEO CostDown Consulting

National Truck Driver Appreciation Week

Once again trucking companies across the nation will honor their drivers during National Truck Driver Appreciation Week (August 24th – 30th) through cookouts, letters of appreciation and gifts ranging from free T-shirts and flashlights to drawings for large screen HDTVs.

This week, as we honor the 3.5 million men and women that ‘Deliver America’, I would like to suggest that we need to have an appreciation of not only What Truck Drivers do but How they do it.  The demands, frustrations and skill sets of truck driving have changed tremendously over recent years.  Consider the following:

• Traffic Congestion - according to the ATRI, in 2004 congestion accounted for 243 million hours of lost productivity.  By 2025, congestion is expected to increase another 72%.
• Highway Speeds – adding to driver lost productivity (and frustration) is the Industry wide governor set backs that reduce average top speeds by 5 mph or more.
• Technology – today’s drivers are inundated with in-cab computers, programs, OBRs and mobile communications that require technical training and data collection activities unheard of 10 years ago.
• Fuel Conservation – MPG goals restrict where drivers fuel and eat, how often they have to stop for fuel, minimize opportunities to take the truck home and require idling performance that often make drivers feel guilty about keeping cab temperatures comfortable during overnights.
• Service – shippers require more exacting service than ever before due to lean practices and a demand for ‘just in time’ deliveries; requiring drivers to manage departure times, breaks and even off duty time to make inflexible delivery times.
• Driving Techniques – yes; now we’re even telling our drivers how to drive and monitoring their acceleration and braking habits in hopes of reducing fuel consumption.

I can’t think of any other occupation besides Truck Driver that has a national appreciation week but I also can’t think of any other occupation that places the level of demands and frustrations on their practitioners that trucking does on its drivers. 

What are Drivers Saying About Your Company?

If you aren't aware of Internet based Truck Driver Forums, you should be.

These electronic forums serve as opportunities for drivers to post their thoughts (and more importantly read the thoughts of other drivers) concerning the good and bad points about working for current and past trucking company employers.

Not important?  Think again.  Some of the recent posts on The Truckers Report (Link to Truckers Report) concerning trucking companies have approached 100,000 views.  That's a lot of potential drivers influenced towards or away from your company.

In this forum, there are two areas of particular importance:

• Report a Bad Company here
• Discuss Your Favorite Trucking Company here

Without revealing to which area a particular company was listed, here are some of the stats:

• Swift - Views:   76,859
• TMC Transportation - Views:  97,799 
• Schneider National - Views:  66,979
• J B Hunt - Views:  44,054
• etc...

Virtually every large carrier can be found at this and other forums.  So what should a carrier do?   If you are sincerely interested in improving Driver Recruiting and Driver Retention, here's my recommendations:

1. Monitor Driver Forums on a regular basis.
2. Respond to those posts that are inaccurate.  Be honest and up front with forum members.  Identify yourself as a company official wanting to 'set the record straight'.
3. Be honest and up front with yourself.  Take note of the consistent complaints and find ways to fix them.

Driver Employment Strategy

Trucking companies wishing to maintain adequate driver staffing levels need to have in place an effective Driver Employment Strategy.

There are two pieces to an effective Driver Employment Strategy - a Driver Retention Program and a Driver Recruiting Program - and together these programs work in concert to maintain optimal driver staffing levels while requiring the minimal amount of resources (capital and personnel).

Think of a Funnel.  The large end is your Recruiting Program, the small end is your Retention Program.

The relationship between the two ends is important to understand.  Increasing investment in the large end of the funnel does not improve Retention performance.  It simply opens up the funnel wider to increase the flow of applicants into the company.  When faced with high Driver Turnover, many companies respond by investing additional money in their recruiting efforts hoping to increase applicant flow to the point that offsets the flow of drivers out of the company.

On the other side of the funnel however, increasing investment in your Retention Program can have a significant impact on your Recruiting costs.  The more effective your Retention Program becomes, the less resources your company needs to invest in recruiting.

Many companies that become strapped for drivers throw more money at recruiting and ignore the powerful impact Driver Retention has on stabilizing the work force and reducing overall costs (recruiting costs and costs associated with driver turnover).   

To successfully compete for scarce driver resources, companies need to place as much or more emphasis on retention as the do recruiting.   That requires having a formal, funded Driver Retention Program that assigns high level accountability for Retention.