AMONG truckload carriers, two operations within the Acklie Companies stand out with almost astonishingly low driver turnover rates. Since October 2002, Crete Carriers has posted a turnover rate of only 30.8%. Most recent turnover figures from Shaffer Trucking show a turnover rate of 46%. In contrast, turnover rates exceeding 100% annually are common among truckload carriers.
The slightly higher turnover rate at Shaffer Trucking can be attributed to the difference in hauling mostly refrigerated freight compared to the dominance of dry freight at Crete Carriers, says Ray Dunn, chairman of Shaffer. Drivers in a refrigerated operation are required to handle the freight at docks more than their dry freight colleagues. In addition, drivers must live with the sounds of the refrigeration unit starting and stopping during rest periods. Also, refrigerated loads tie drivers closer to the trailer for longer periods of time than non-perishable, dry freight loads, he says.
While turnover is different at Crete and Shaffer, the reason both companies continue to post such desirable retention rates is that a stable driver force is seen as a positive indicator of low operating costs. “Our turnover is low, because we work so hard to keep drivers once we hire them,” says Kerry Kearl, vice-president — company fleets at Crete. “We have high expectations for our drivers. We communicate clearly what those expectations are, and we hold drivers accountable for meeting those expectations. Having a lot of rules, which we have in these companies, does no good unless every one knows they must adhere to those rules.”
Most drivers thrive in such a structured environment. Knowing exactly what is expected makes following the rules easier. Not everyone, however, likes to live with rules. Roughly 28% of the drivers who quit do so because they disagree with the Crete system, Kearl says.
Four truckload carriers
The Acklie Companies are a group of four truckload carriers: Crete Carrier Corporation, a dry van and a refrigerated fleet based in Lincoln, Nebraska; Shaffer Trucking, a refrigerated fleet with operations in New Kingstown, Pennsylvania, and York, Nebraska; HTL Truck Line, a dry van operation in Council Bluffs, Iowa; and Hunt Transportation, a flatbed carrier in Omaha, Nebraska. Duane Acklie, chairman, began this collection of carriers with the acquisition of Crete Carriers in the 1960s. Sunflower Carriers and Shaffer were purchased in the early 1970s. This was followed by the acquisition of HTL and Hunt. As of January 2003, Sunflower and Shaffer were merged into a single operation under the Shaffer name as a division of Crete Carriers. Crete runs 3,200 trucks, including more than 160 in two refrigerated operations, while Shaffer has 1,530 tractors, all in refrigerated service. At present, Crete has 85 trucks for refrigerated operations with meat from the Midwest to the Northeast. As of June 2003, the Crete refrigerated fleet will increase by 80 trucks when it begins operations as the sole transportation supplier for the new Wal-Mart grocery distribution center in North Platte, Nebraska.
That new fleet should grow from 80 tractors to 130 fairly rapidly. In a complete departure from conventional truckload operations, the Wal-Mart fleet will use three-compartment, multiple temperature trailers. Drivers for the dedicated fleet all have been recruited in the North Platte area. The company received more than 200 applications for 80 jobs. All drivers for the new fleet have already been processed and their hiring approved, and 25% of them have already been hired. North Platte is in central Nebraska, roughly half way from Lincoln to Denver. The distribution center will serve Wal-Mart Supercenters within a 250-mile radius. Crete tractors will pull refrigerated trailers with Wal-Mart markings. Shaffer will take part in training the new drivers for refrigerated trailer operation, Dunn says.
The demographics of the available driver pool are changing rapidly, Kearl says. The availability of veteran drivers is slowly drying up as those drivers age and leave the work force. At the same time, the number of entry-level drivers is rising. That may be the result of job losses in the general, non-freight economy. Workers who lose construction jobs may choose to try trucking as a way to support themselves, he says. However, this has the built-in potential for a driver shortage when the economy rebounds, allowing those workers to return to their previous employment.
Stable drivers sought
Although faced with hiring entry-level drivers, Crete and Shaffer would prefer to employ workers with strong, stable backgrounds. According to company definition, any driver with less than two years experience is considered entry-level. “The best driver I can hire is the one who isn't looking for a job,” Kearl says. “That's the driver who already has a job and hears about our companies from one of our satisfied drivers. We have a lot to offer those drivers. If we can recruit those stable drivers and keep them for 90 to 120 days, we'll have more satisfied drivers who can help us find more good drivers.”
This heavy concentration on retention means that Crete and Shaffer start working to keep drivers beginning with their first contact with the company. “We can't ever say that driver problems happen by accident,” Kearl says. “If we have a problem, it's because we hired our own problem, so we work extra hard to keep that from happening. First and foremost, we are in the trucking business. To be successful in the trucking business, we must hire truck drivers — people who know how to drive trucks. We hire and train professional drivers. Once we get past the driving part, we can teach them the things they need administratively to succeed in this company.”
The necessity to hire at entry-level has led to the development of an extensive training program. For those with no experience at all, training is conducted through a 10-week, Professional Truck Driver Institute certified course at Southeast Community College in Lincoln, Nebraska. The course is built around 144 hours of classroom and practical driving instruction. Crete has been cooperating with Southeast on driver training since 1985. The attraction of a PTDI-certified course of study is that it can be transplanted from Southeast to any community college in the country if the need for substantially more drivers becomes necessary, says Jeff Friesel, Crete's director of driver training.
The program at Southeast is run by three instructors who conduct four classes per year with 12 students each. Two classes meet daily from 7 am to 1:30 pm. A third class per day meets from 1:30 to 8 pm.
Autonomous college program
The community college program operates at arm's length from Crete in most respects. Students are on their own during the college portion of training and personally pay tuition and living expenses. They receive no reimbursement from the company upon completion of the program. Tuition for the 10 weeks is $500 for Nebraska residents and $600 for non-residents. Depending on accommodations, living expenses run $200 to $400 per month plus meals. Cost of the entire program usually comes to about $1,200, Friesel says.
Students entering the college program with the intent to drive for Crete or Shaffer do so with the understanding that they will be hired upon successful completion of school. “We pre-qualify everyone who goes into Southeast at our suggestion,” Friesel says. “They are ready for hiring and entry to our on-the-job training immediately following graduation. The only thing left for students to do before becoming a Crete or Shaffer driver is to take the DOT drug screening test and a company road test along with filling out all the company paperwork.”
Qualification of applicants who have never driven a truck or who have only done local delivery includes careful explanation of what driving for a truckload carrier entails. “We lay out the prospects available from the job in detail with particular attention to potential pay and time away from home,” Friesel says. “We don't hire drivers who need to be home every seven to 10 days. They just would not survive in our operation. Our Crete drivers average getting home every 17 to 21 days. Drivers at Shaffer stay on the road for a comparable length of time.”
Meeting driver needs
Crete and Shaffer give fleet managers a driver profile that allows them to plan driver time off to fit the driver's individual preference. Drivers can request time at home for special occasions such as graduations, weddings, or other family celebrations. “We don't guarantee that we will get them home, but we are successful more than 70% of the time,” Kearl says. “If it is a family emergency, we show no hesitation about getting a driver home and covering the load with other equipment.”
The community college program is not quite as hands-off as it might seem. For instance, students who need financial help to complete school can work part-time at the Crete terminal in Lincoln if work is available. In addition, Crete provides tractors, trailers, fuel, tires, and vehicle maintenance to support the students it steers toward Southeast. The company provides five tractors. One of the three college instructors pays special attention to Crete students and monitors their progress for the company. Friesel pays a visit to Southeast every Friday to check on student progress.
Students begin the course with a classroom introduction to truck driving followed by several days of learning vehicle control systems. The next step is immediate training in how to back a tractor/trailer combination and vehicle operation on the school's one-acre backing range with a 5/8-mile perimeter track. Within the first 16 days of training, students have progressed from the private range to real world driving on public streets and highways. In those first forays off campus, many student drivers are reluctant to run as fast as the posted speed limits, says Dave Grant, a Southeast instructor who came to the program after retiring from Roadway Express with 28 years of experience.
Demographics in the truck driver-training program run the gamut of age and background. Recent classes have included students as young as 20 and as old as 60. Of the 29 students presently enrolled, six are women, Grant says.
Tractors used by Southeast all are equipped with sleeper berths for instructional purposes rather than sleeping. Instead of a bunk, sleepers have two bucket seats that give students a clear view of the driving compartment and a relatively good look at the road ahead. Driving sessions are set up with at least two students and an instructor per vehicle.
Nine school tractors
In addition to tractors provided by Crete, Southeast has nine tractors and trailers for student use. The trailer fleet includes eight vans and one platform trailer. All trailers are at least 48 ft long and all are 102 inches wide. All tractors are equipped with either nine- or 10-speed manual transmissions. “We have considered automated mechanical transmissions,” Grant says, “but decided that not all our students will find jobs in fleets with automated equipment so we had better teach them how to shift gears.”
Crete and Shaffer can place up to 10 students in the college course for any given quarter. This obviously limits training at Southeast to 40 new drivers per year. Based simply on fleet size, most students go through training for Crete. However, at least two classes per year train some drivers for Shaffer. The relatively low number of students trained at Southeast places Crete and Shaffer in the position of hiring entry-level drivers from a number of schools throughout the country.
Within Crete, 33% of new drivers are considered entry-level and are placed in the company's on-the-job training program. Another 22% are classified as drivers with limited experience — those with six months or so of driving in an agricultural setting or for another carrier. These limited experience drivers are placed with a company trainer to complete their transition to the Crete way of operation. Crete has one other training category: its experienced driver development program where workers from outside the Crete system are placed with a trainer for 10 to 21 days to learn the details of truckload carrier operations, Kearl says.
School graduates make up the smallest percentage of newly hired drivers. Of the 51 drivers hired for on-the-job training at Crete since January 1, 2003, 7.84% are new school graduates. Of the 575 new drivers hired so far in 2003, 8.8% are in the on-the-job training program.
Standard driver qualifications
All drivers at Crete and Shaffer — students included — fill out the same application and go through the same background checks. The starting point for all applicants is a minimum age of 23. Experienced drivers must have at least two years of highway experience. The company spends about four days processing applicants with three days spent on background checks and another day dedicated to a physical examination, drug screen, and company road test. “Obviously, it takes less time to run the background checks on a driver with a stable work history than one who's had six jobs in the past five years,” Kearl says.
Following graduation, new drivers are placed with one of Crete's 80 driver trainers for eight weeks of on-the-job training. At Shaffer, the proper title for senior drivers in the training role is “driver evaluator,” Dunn says. Trainers have all spent two days in a strict train-the-trainer program. They apply for the program after successful integration into the Crete system. In addition to the application, trainers must have a perfect safety record, Friesel says.
The eight weeks of training is designed to produce a nearly finished truck driver, not to increase tractor mileage by operating with a team. “The trainee drives and the trainer trains,” Friesel says. “Trainees are paid $400 a week for this eight weeks. The trainer is paid our standard mileage rate based on experience for every paid mile the tractor runs. Usually after the first couple of weeks, the trainer relaxes some control of the trainee and tractor mileage increases slightly.”
Weekly trainee evaluations
During the eight weeks of extended training, trainees are evaluated carefully on their ability to maintain control of the tractor, shifting gears properly, backing the trailer correctly, paperwork preparation, and interaction with customers. Friesel gets a weekly report on all trainees. “Our primary concern during this eight weeks of training is basic control of the truck and safety,” he says.
In addition to producing a more nearly finished truck driver, on-the-job training is intended to provide trainees with an accurate picture of the life that professional drivers lead. Not all trainees make the transition successfully. In 2002, Crete lost 10% to 15% of new drivers during training — some at the company's request and others because the trainee decided that trucking would not provide the desired lifestyle.
Drivers take two road tests before becoming a solo driver at Crete and Shaffer. The first test is administered at the end of school, before the start of on-the-job training. The second test occurs at the end of training, just prior to the company's two-day orientation.
In a sense, orientation begins before training. Trainees are issued a copy of the company handbook and asked to sign a receipt for it. The contents of that handbook are covered during orientation along with more information on basic paperwork preparation, company safety policies, rules for logbook preparation, and hazardous materials handling. Drivers also complete their employment paperwork such as insurance and profit sharing enrollment during orientation. That profit sharing plan really is important for drivers who stay with the company for an extended period. It is 100% company-paid, and in 2002, Crete put $2.3 million into the fund, Kearl says.
Two weekly orientation classes
Orientation is scheduled in two classes a week with about 40 drivers in each class. In addition to a deluge of information, drivers are given a Crete baseball cap, an insulated coffee mug, and a canvas bag for paperwork, complete with examples of completed forms. “We hold orientation to two days to get new drivers on the road as soon as possible,” Friesel says. “To make sure that we are providing the information drivers need, we have them fill out an orientation evaluation at the end of the second day. Our area of biggest emphasis is to let new drivers know where to turn for help. Everybody leaves orientation with the phone number of someone to call who can answer questions.”
“Orientation is our stage for setting out company expectations,” Kearl says. “We use it to explain the role of a truck driver in our companies. We let them know exactly what we expect and we stress the value of communication throughout the company. We pay quite well, and as a result, we expect top performance from drivers. To ensure that orientation is always the same, we hold it in a central location — Lincoln for Crete and York for Shaffer. Drivers are paid $60 a day for orientation. They can take orientation pay as a ComCheck cash advance for their first trip, or it can be included in their first paycheck.”
In a sense, training goes on after on-the-job training is complete. New drivers are put into a “starter” fleet based in Des Moines, Iowa, where their performance is carefully monitored. New drivers stay in the starter fleet until their first log audit, which generally happens after 60 days. Logs are audited tightly to ensure that new drivers are following company policy.
Not every driver accepts the discipline required by Crete's expectations. Sometimes, they make their discomfort known by dropping out of orientation. “We probably have at least two drivers fail to complete orientation every quarter,” Kearl says. “If we lose a driver during orientation, or on the first day of training following graduation from Southeast, that driver is counted as part of our turnover rate. We don't hide anything; these numbers are as accurate as we know how to make them.”
As hard as the company works to retain drivers, it also seeks to find out why they leave. An exit questionnaire is sent to every driver who quits. When returned, surveys are added to the drivers' personnel files with a notation on whether they are eligible for rehire. The most common reason for leaving the company is a change in family situation.
High driver pay
Crete does not reimburse students for the driver training course, because it considers its pay scale high enough to make this unnecessary. After the eight weeks of on-the-job training, new drivers go on the payroll at 30 cents per mile. After a driver logs 75,000 miles, pay is increased by one cent per mile. Another cent is added to driver pay at the end of the first year of employment. These two pay raises are intended to encourage drivers to stay with Crete for six months to a year, because the company has found that most turnover takes place in the first 120 days, Friesel says.
Drivers are expected to run a minimum of 9,500 miles monthly. That produces 28,500 miles per tractor per quarter. Above that target level, drivers become eligible for a mileage bonus that tops out at $1,000 per quarter for running 33,500 miles. Adherence to company safety policies is a requirement for receiving the bonus. By meeting quarterly mileage targets and qualifying for bonuses, the average driver at Crete earns $52,400 per year.
Although good, driver retention is not an end in itself, Kearl says. With the cost of recruiting, screening, and hiring a driver at or above $5,000 per driver, retaining a stable labor pool provides a method for cutting costs and improving productivity. Everybody in the company has a stake in retention. Company administrators are paid an incentive based on retention and revenue per tractor per day. “Working with drivers is a little like raising children,” he says. “They may not like all the rules, but they appreciate knowing what their boundaries are. If our retention continues the same as it has been for the past six months, our results will be extremely good.”