The trucking industry is filled with examples of innovative business practices, but all too often they go unnoticed beyond a small circle of employees, customers and close competitors. As a magazine dedicated to and written for the industry's executives and managers, FLEET OWNER is inaugurating its Fleet of the Year Awards to bring wider public recognition to the very best of those efforts.
Our goal is to honor the most significant achievements in a way that unequivocally places excellence in fleet management above all other criteria. To that end, we haven't asked for nominations. Instead, the editors spent the past year searching for potential candidates as they researched assignments and attended various trucking events, meetings, shows and conferences.
Since trucking is really a collection of many different businesses rather than a single industry, FLEET OWNER has divided the Fleet of the Year Award into three separate categories with one honoree in each. However, while the operating challenges for vocational, private and for-hire fleets are clearly quite different, our inaugural winners all share the common attribute we honor with FLEET OWNER's first Fleet of the Year Awards — true innovation in truck fleet management.
2002 For-Hire Fleet of the Year
CONTRACT FREIGHTERS INC.
Whether it's sponsoring highly modified racing tractors, moving quickly to take advantage of NAFTA with carrier partnerships in Mexico or becoming the first common carrier to earn ISO 9000 registration, Contract Freighters Inc. or, as it's more commonly called, CFI, has a long history of following its own road to excellence.
The economic slowdown has made the last two years difficult ones for all for-hire operations, but this truckload carrier has used the time to fine-tune business practices, tighten up operations and generally put itself in position to quickly take advantage of the economy's recovery. And even in the midst of its financial efforts, the fleet still found time to develop an intensive three-day program to train operations personnel on how to effectively deal with drivers by building and maintaining a team.
READY FOR BETTER TIMES
“In 2001, we basically battened down the hatches, watched costs, let operations shrink a bit and retired debt,” says Herb Schmidt, president of the privately held company. With fleet failures reducing capacity and freight demand increasing earlier this year, “you can't sit on your hands too long,” says Schmidt. “We have the opportunity to clean up our rates and make sure we're being adequately compensated for our services,” he adds. “We've taken the initiative to recover some of what we lost when freight was soft.”
The result is that CFI, which operates 2,200 tractors, expects to see revenues rise to nearly $340 million this year from $302 million in 2001. “It won't be a large percentage because the first three or four months continued (last year's) softness, but revenues have grown considerably in the last five months and margins will also certainly be better,” Schmidt says. More importantly, CFI is positioned for an even better 2003. “If the economy up-ticks, we're in for a great run,” he says.
IMPROVEMENT NEVER STOPS
The team-building program is another example of CFI's constant striving to improve. Envisioned as an ongoing process, all CFI dispatchers will go through the three-day course, followed by customer service representatives and anyone involved in fleet operations.
“You can sit there and stare at the driver turnover problem, or you can do something about it,” Schmidt says. “This program is intense and challenging, and represents a big commitment of time and money, but we see it as an opportunity to really reduce turnover.”
And even in the midst of these major initiatives, the fleet continues to fine-tune every aspect of its business, whether it's developing a performance “dashboard” for managers, introducing performance-based bonus incentives for dispatchers or re-examining its relay system.
The only thing immune from change at CFI is its commitment to innovation and success.
2002 Private Fleet of the Year
BOISE CASCADE CORP.
Recognizing that Boise Cascade Corp. could turn to common carriers for its trucking, the giant paper manufacturer's private fleet operation has recast itself as a profit center that not only earns 40% of its revenues from outside customers, but also offers services that can only be provided by an in-house fleet. Mixing new technology with careful cost control and nearly perfect service records, the fleet is constantly evaluating its productivity and profitability as it has crafted an indispensable role for itself within Boise.
Operating as BCT Inc., a wholly owned subsidiary of Boise Cascade, the fleet of 245 leased operators, 70 company trucks and 650 trailers hauls from Boise paper mills to distribution warehouses and customers, runs local drayage around seven terminals and operates a heavy-haul fleet carrying wood chips to a paper mill in eastern Washington.
IN THE DETAILS
Innovation at BCT lies in its attention to detail in every aspect of its business. For example, it maintains a 98.5% on-time record — even though it takes time-sensitive, multi-stop loads that for-hire carriers wouldn't handle, says general manager Roger Olds. It publishes a monthly newsletter for drivers that openly shares its financial performance “because they know we need to be profitable to succeed,” he says.
Technology is also viewed as an opportunity to strengthen that profitability. “We're always willing to try something, and if it works we adopt it across the fleet,” says Olds. For example, after a successful pilot with Aether System's wireless communications system, the entire OTR fleet was moved to wireless dispatch and automated log-keeping.
What's most impressive about Boise's innovative spirit, though, is that it extends beyond its own operations. Last year, the fleet paid to have a cost-benchmarking study conducted for members of the National Private Truck Council.
“NPTC had discontinued its benchmarking, so we offered to help them conduct a new study,” says Olds. “Sharing ideas is important. That's why we belong to both state trucking associations and NPTC. The study also let us judge if we're really as competitive as we think we are.”
SEARCHING FOR OPPORTUNITIES
The next step for this aggressively progressive fleet is expanding to fill the company's logistics needs. Recently, BCT has begun to broker and buy transportation services for some company locations, essentially acting as an asset-based logistics provider.
“We felt we could do a better job than a 3PL, so why pay an outsider?” Olds says. “We're investing in the optimization software right now to expand that service.”
It's just one more step in turning a private fleet into an indispensable asset.
2002 Vocational Fleet of the Year
RIVER METALS RECYCLING LLC
Most people would be surprised to hear that scrap metal is just-in-time freight with major penalties for missing tight delivery windows. Not only are schedules unforgiving, but the scrap yard environment is tough on both equipment and drivers, especially if you're the largest recycling company in Kentucky moving millions of tons of steel and non-ferrous metals every month. In little more than a year, though, River Metals Recycling has restructured its entire fleet operation, dramatically improving both vehicle utilization rates and safety records while continuing to meet vocational operating demands.
It's taken a three-pronged management approach involving new equipment, information systems and safety initiatives to achieve such a transformation.
When Barry Parks came aboard as transportation manager last November, the company had 55 tractors and trucks to haul 300 trailers and 1,000 roll-off containers to three company scrap yards, and from there to steel mills and other customers. Some trucks were sitting idle, so Parks sold those that he could and scrapped the others. He also began getting rid of power units that weren't properly spec'd for the fleet's operation.
“We've invested in new trucks that are spec'd for more severe applications,” Parks explains. The fleet has also moved to longer wheelbases and tag or pusher axles to help with bridge-formula compliance.
The result is a more flexible fleet with greater capacity that's allowed River Metals to improve vehicle utilization by more than 15%. “We're not running as many trucks now, and we've been able to move more to second and third shift work while reducing downtime for repairs,” says Parks.
Safety improvements are coming from a new emphasis on driver training, as well as new equipment such as tarping systems for the roll-offs. “Drivers in this industry have a lot more responsibility,” says Parks. “When they pick up a roll-off, they don't know what it weighs or how it was loaded. We try to leave drivers on the same accounts now so they can get familiar with those loads. We've also worked with drivers to improve pre- and post-trip inspections, and asked the state DOT to inspect all of our vehicles when they cross their scales. We've cut our out-of-service rates in half.”
Quantifying fleet improvements requires detailed information, so the fleet has just made a major investment in new wireless data hardware and upgraded its fleet management/dispatch software. The system will be completely paperless with drivers using handheld devices to scan bar codes on containers as they pick them up to update service records in real time. Not only will major customers have Internet access to routing and shipment location information, but River Metals will be able to track fleet productivity by vehicle, customer, commodity, driver and any other measure it requires.
“We'll be able to put our fingers on where every dollar is coming from and going to,” Parks says. “That may seem a bit extreme for a waste hauler, but our customers are demanding, and we need that information stream to serve them and turn our fleet into a true profit center.”