Drivers: Key to Profitability

Trucking experts stress that drivers can help ensure a carrier stays in the black by limiting accident-related expenses and having less turnover.

Risk management consultant for Barksdale Bonding & Insurance, Bill Robertson lays it out bluntly for fleets: if you have an accident that costs you $25,000 and your profit margin is only 2%, then your operation has to generate an addition $1.25 million in revenue to pay for the losses associated with that accident.

“Accident prevention is critical to fleets, both in terms of reducing their overall cost of operations as well as their insurance costs,” said Robertson during the recent McLeod Software User's Conference. “What you are trying to do is stop accident occurrences from happening in the first place so they don't burden your fleet with additional financial strains.”

Fleets should consider paying additional attention to the driver hiring process, refocusing efforts on driver training, and making sure upper management fully supports all the policies put in place.

"From my experience, rewarding drivers for accident-free performance can be a powerful motivator," he said. “If you give them a per-mile pay raise for driving accident-free— and take it away if they do have an accident— you've given them something to strive for."

If fleets want to reduce turnover and retain more drivers, they must focus more on prospective drivers, according to one fleet recruiter.

"The driver interview is the key to knowing if the driver you are hiring is going to fit the job you have to fill," said Mitch Bookbinder, director of sales and recruitment for Louis J. Kennedy Trucking. "It's a two-way street: you have to level with them about what the job will require of them and they have to be honest with you about their driving and work history, job likes and dislikes, etc."

Bookbinder said the key is to listen to the applicant 80% to 90% of the interview time, getting a feeling as to how they feel about the job description you're offering.

"For example, at our company, our drivers have to deliver to all five New York City boroughs, are not allowed to have passengers in the cab, and must manage a 130-lb tarp to cover our flatbed loads," he said. "That upfront candor is a good thing -- it will let them know what the job is really like and whether they can live with that or not."

Bookbinder said, with recruiting and retention now costing the industry upwards of $7,000 per driver, it's wise to be as forthright and blunt as possible during the interview. "Let's say you have a 5% profit margin and your driver takes in $3,000 a week in revenue -- they'll have to bring in $100,000 in revenue, some 30 weeks or eight months of work, to cover the cost of recruiting and retaining them." he said. "That's only one reason why screening driver applicants thoroughly is so much more important in this industry today."

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