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Changing to survive and thrive

March 24, 2010
“There ain’t no way … but the hard way … so get used to it!” –Airbourne I dropped by Mercer Transportation this week to talk with Dale Corum (seen below), the carrier’s general manager, about how things are going in the long haul business these days. ...

There ain’t no way … but the hard way … so get used to it!” –Airbourne

I dropped by Mercer Transportation this week to talk with Dale Corum (seen below), the carrier’s general manager, about how things are going in the long haul business these days. Needless to say, things are a lot better than they were at this time in 2009, but Mercer – like everyone else in the trucking industry – took some heavy pounding.

In the space of three weeks – in late February through early March last year – Mercer had to let go 217 of its owner-operators. In Dale’s words, that was simply “a gut wrenching moment.” Over the rest of 2009, Mercer dropped a further 250 truckers from its ranks – while laying off 50 of its employees – reducing its fleet to right around 1,700 units. “For every 40 trucks we lose, we lose a person from the administrative side,” Corum told me.

The company also stopped all its recruiting efforts as well as it hunkered down to ride out the global economic recession sweeping the U.S. and domestic freight markets. “We aimed this whole effort at providing opportunity for our best drivers, the folks out there hitting it hard every single day,” Corum explained to me. “We were obligated to thin our fleet to support them.”

Despite all the pain and suffering of 2009, though – what Dale calls “a truly awful year” – Mercer learned a lot as well. And the company is taking these lessons to heart, embarking on a restructuring of its “freight mindset,” if you will, so it can maximize the advantages of its 100% owner-operator fleet.

“For starters, we’re going to hit recruiting hard in the short term – there are a lot of good, experienced drivers out there right now,” Corum said. “But we also know that most of the trucks we lost last year aren’t coming back. A lot of good, veteran drivers were on their last truck before the downturn because of all the changes going on in trucking.”

For example, mileage is continuing to decrease in the long haul flatbed market, and that’s forcing changes to how Mercer looks for freight opportunity. “We’re starting to look at more regional and dedicated lanes now – stuff most of our drivers would not have looked at 10 years ago,” Corum said. “We’re getting into the [dry] van market too, because that requires less physical work than flatbedding, giving us a chance to keep some older veterans on with us for a longer stretch.”

To date, Mercer has about 150 of its trucks running dry van trailers today and expects to see more of its drivers pulling them. “We’re going after this aggressively – by this time next year, we hope to have 250 dry vans in operation,” noted Corum.

Regional and dedicated runs appeal to both younger and older drivers, said Dale, because it gets many of them home every night and its freight that allows drives to stay busy in lanes almost year-round, regardless of the weather. But in the flatbed market, more “localized” flatbed freight has some drawbacks, namely because it is far more labor intensive.

“You’re talking about tarping, chaining and strapping down a load maybe once a day for a regional or dedicated haul, compared to maybe every three or five days in a long haul lane,” Dale said. “These tarps weigh 300 pounds, and that’s before you consider the weather – like shaking off two inches of snow and folding half frozen tarps back up. It’s just exhausting.”

Yet Mercer is going after this freight for its owner-operator corps, as many shippers that once operated their own fleets to handle it are looking to outsource it to someone else. “We think it’s a good fit for our owner-operators because they are all about service – on-time, consistent delivery day in and day out,” Dale stressed. “These are small business owners, not just drivers, so they have a bigger stake in making sure the job gets done and gets done right.”

That kind of focus on service pays big dividends as well. Mercer analyzed 367 lanes where it hauls 15 loads or more and found that, 87% of time, its rates were the highest – while tying or coming in just under the highest mark for the remaining 13%. “That shows us we can offer drivers a good opportunity,” Dale said.

Overall, the company is "cautiously moving ahead at full steam," he added, as it tries to figure out if the increasing freight levels its seeing is just an uptick in seasonsal demand coupled with a decline in trucking capacity, or the beginning of a true sustainable economic recovery.

Another change Mercer is tackling involves its brokerage operation. Corum noted that the company is now focused on building better relationships with other brokers and especially other trucking companies so it can build up a more stable and consistent pool of freight on that side of the business.

“Our goal is to get our brokerage freight up to where it could support 500 to 600 trucks,” he said. “That way, if times get tight again, we can feed that back into our own system to support our people.”

Another new tactic is getting drivers to be more “self-managing” when it comes to selecting loads. Out of its 1,700 current operators, over 1,400 have laptop computers, said Dale, giving Mercer more “rapid response” capability.

“We’ll put the loads into our system and our drivers will select them; we’re not having to call each one to see if its fits them – they do that on their own,” he explained. “As we venture more into regional and dedicated opportunities, being connected through technology lets us tap all of our drivers quickly if an opportunity comes up. For example, in the case of shippers outsourcing their hauls, we can rapidly pull together a mix of drivers that could take those loads. It’s those technology connections that helps all of us think outside the box to a better degree.”

These are just some of the changes Mercer – like many carriers out there – is engaging in so it can survive and thrive in the years ahead, both for itself and its owner-operators.

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