Roeth: Private fleets and improving efficiency

I recently returned from attending the National Private Truck Council’s (NPTC's) Annual Conference and Exhibition, and I think private fleets are among the most modest and data-driven groups in trucking. They rarely brag about their accomplishments, and yet every year or so, private fleets have to justify their existence to members of the C-Suite who are more concerned with the “real business” of their company, whether that is making furniture, widgets, or some other product.

Many companies say they operate their own fleet rather than use for-hire carriers because they want more control and a better service level. But even after the decision is made to operate their own trucks, the fleet manager constantly must prove that having a fleet of trucks adds value to the company.

As a result, managers of private fleets tend to be very focused on the bottom line and on trying to operate as efficiently as possible. They are continually looking for ways to get more miles per gallon of fuel and effectively manage the routes their trucks run. They don’t have the luxury of being able to add a fuel surcharge when diesel prices soar, so they tend to make investments in technologies that improve efficiency. Furthermore, private fleets usually keep their equipment for the duration of its life, which reduces concerns about residual value.

Recently, I have noticed that they have been focusing on operational practices that make them more efficient, such as eliminating empty back hauls. Obviously, on outbound trips, they are hauling their own goods from the manufacturing facility to various distribution centers. But coming back to the manufacturing facility, the trailers are often empty. And we’ve all heard the saying, “nothing is more expensive to ship than air," which means empty backhauls are costly. So, these private fleet managers are looking for backhauls that can help their bottom line without affecting their own outbound freight. It can be quite a balancing act.

Private fleets are using a plethora of old and new tools at their disposal—telematics devices, raw data, and data analytics—to be as efficient as possible and, in essence, to justify their own jobs.

NACFE led two workshops during the recent NPTC meeting in which we shared findings from Run on Less – Messy Middle operations and total cost of ownership reports. We also had some very engaging data-driven cost per mile discussions with show attendees. Dean Bushey, NACFE’s director of programs, who attended the show with me, and I discussed later that these were some of the best conversations we have had in months.

Those conversations are beneficial to NACFE staff because they help ensure we stay on track with providing all facets of the industry with the data they need to make thoughtful and well-reasoned decisions about which technologies make the most sense for their operations. This is true whether we are chatting with a for-hire fleet manager, owner-operator, or one running a private fleet.

In many ways, all carriers face the same challenges. The one difference is that the private fleet manager spends some portion of their time explaining just why the company needs them. And from what I have seen, those private fleet managers are doing a darn good job of making sure their trucks are operating as efficiently as possible.