KISSIMMEE, FL. There are many ways to run a successful trucking company. But there are certain traits that all the top-performing companies share.
For 14 years, the Truckload Carrier Association’s (TCA) Best Practices Groups have been sharing knowledge and networking. Using that history and other observations, Chris Henry and Jack Porter of TCA’s Profitability Program (TPP) broke down the habits and tactics of the top-performing companies into nine key traits.
“Regularly companies will come up to us and say, ‘We want to know the secret sauce,’ and some are bold enough to say, “We want to know XYZ’s secret sauce’,” Henry said during a roundtable discussion at the 80th annual TCA Convention: The Future of Truckload. “Obviously that’s not something we can share – even though we may know some of that. That’s off limits.”
As a compromise, using anonymous benchmarking, they came up with this list of nine traits of high-performing trucking companies, focusing on companies in the TPP Index. The index, which was recently created by TCA, includes the top 20 members based on gross margin.
1. Adding by subtraction
Top performing trucking companies are constantly looking for things to get rid of, Henry said. “I’m very much enlightened on how much manual work your staff are doing to make your customers happy – and I don’t think a lot of companies are going back to the customers and saying, ‘Are you actually using that information?’” he said. “So the top performers are actually going back to the companies and saying, ‘Hey, if you’re not using that information, we can use our time in better ways.”
Porter noted: “The reality of it is, we’re no longer selling trucking, we’re selling driver services.”
When you’re in a good market, the costs carry on with the revenue, he said. “What happens is, we get in a comfort zone as far as what that net profit should or shouldn’t be – and this marketplace is really starting to test that.”
They noted that many companies are doing redundant tasks every day and suggested that before you add tasks for your employees, make a list of things you are going to stop doing.
2. Invest in both tangible and intangible assets
“A lot of the members in the program are investing in both tangible – the equipment and replenishing their fleet – but they are also looking at the intangible – that is primarily software,” Henry said. “There are a lot of companies saying, ‘If we need to look at those different elements that we have to deal with, we need some smart people on staff.’ With smart people, you can build smart things and get competitive advantages.”
During these good times, Henry said, the smarter fleet owners are re-investing in their business rather than blowing their profits on a new vacation home, for example.
Intangible assets also include the driver community, Porter said. “If we can have our drivers run less and paid more and we make a profit on that whole scenario with our shippers then that’s what the business is all about.”
3. Build a skilled workforce
Henry said that it’s important to find out and build on your employee’s career aspirations: “Whether they want to stay in the driver’s seat forever or if they want to build up to an executive level, they know they need to develop them.”
If you have people who want to learn, it’s a low investment, Henry pointed out. He suggested using Massive Open Online Course. “For the top performers, that is a common trait: They want to keep building and becoming more sophisticated as a workforce.”
Training and bench strength has been one of trucking’s long-running challenges, Porter said. “Trucking’s idea of training is put water wings on them and throw them in the deep end and see if they last until Friday,” Porter said. “But that’s not getting much traction with millennials and the younger people coming into the organization.”
He also noted that trucking needs to diversify.
“This industry has a great family orientation, etc., but how many women drivers do you have? How many Hispanic drivers? We have a client who does really well with Hispanic drivers – 40% of his driving force is Hispanic and probably 40% of his fleet managers. And almost all his people are bilingual – and his trucks are full,” Porter said.
4. Get out of the whirlwind
“Work on your business, instead of in your business,” Henry said. “It’s very difficult if you’re on the floor to really contemplate what your next step is.”
He said that the top trucking leaders know it is an investment to get out. “One of our members makes it a point to do strategic planning meetings while walking,” Henry said. “You might not be able to do that all the time in one of the northern states or provinces – but they get out and talk and they think that helps lead to better decision making.”
5. Idea meritocracy
Citing Bridgewater Associates founder Ray Dalio’s book, “Principles” and his philosophy of a meritocracy-based business, Henry said it’s important to seek ideas from everyone – not just the top of the company. The top-performing companies capture the best ideas from throughout their company and implement them. “If you don’t have that, that should probably be the No. 1 priority,” Henry said. “You have smart people and sometimes they don’t get a chance to voice their opinion – everyone in your business should have a way to voice their opinion and come up with good ideas to improve the business.”
It doesn’t matter where good ideas come from, he said, it just matters that the ideas are good
6. Listen more
The leaders with the most valuable ideas and suggestions typically are quiet for most meetings. “You’ll see in some of the group meetings there are people who are on the sidelines not saying anything but as soon as they talk, the room goes quiet and everyone gets their pens out,” Henry said. “I think we can kind of correlate it to best performers: They spend a lot more time listening than speaking.”
7. Value Time
There is direct and indirect expense related to time.
“It can be as little as making sure that when you do have meetings, they are on point and within a scheduled time frame and not going over,” Henry said. “If you get 30 people in a room and they are all making $70,000 to $200,000 a year, that’s a big hourly rate for a meeting. So you basically have to come out with some action items and get some results from those meetings. If there are no results, what’s the purpose of the meeting?”
8. DisciplineTalking does not equal acting, Henry said. “It’s important to have the discipline to implement and keep moving the ball forward: Lots of bunts and walks – as opposed to moonshots – is a common theme.”
9. Get 1% better every day
While wild goals are important, daily and weekly performance measurement is more important, Henry said. He suggested establish leading indicators and to scorecard your drivers, fleet managers, maintenance and admin staff.