Idle trucks cost money. Whatever keeps them idle - lack of drivers, waiting to load or unload, or waiting for maintenance service - produces the same result. In a truckload fleet, if the wheels don't turn, revenue and profitability fall.
Dick Simon Trucking in Salt Lake City has not solved all the idle truck problems. On any given day, approximately 5% of the fleet may be sitting idle for lack of drivers, but equipment utilization as a function of available maintenance service ranks at the bottom of the list as a reason for idle trucks. Tractors with drivers move; maintenance provides no excuse for idle equipment.
Keeping equipment rolling is vital to a growing fleet. Dick Simon Trucking operates 2,346 tractors and 2,800 refrigerated trailers. The company just closed on the purchase of assets of Westway Express, which added 242 tractors and almost 600 trailers. In addition to the equipment purchase, Simon offered jobs to Westway drivers for unseated Simon tractors.
Dick Simon Trucking continues to grow, but not as rapidly as in the late 1990s. Revenue for 1999 was $209 million. In 2000, that jumped to $231 million, and revenue is projected at $255 million to $260 million for fiscal year 2001.
Declare War on Downtime Simon attacks downtime with a three-pronged offensive built around a short equipment cycle, extended warranties, and aggressive preventive maintenance. The company holds to a strict trade cycle of three years for tractors and five years for trailers and refrigeration units. In general, tractors log 500,000 miles in three years, although those in regional applications run fewer miles - roughly 380,000 in 36 months.
The company has negotiated extended warranties with Freightliner and Detroit Diesel to cover major components for three years or 500,000 miles, precisely the expected life cycle. During that short service life, equipment is subject to intensive preventive maintenance inspection. Simon keeps extensive records in its real-time maintenance computer system. As a result, equipment can be inspected every time it enters a terminal that provides maintenance services. These inspections keep road failures to a minimum while the recordkeeping eliminates service duplication sometimes inherent with frequent shop visits.
Dick Simon Trucking purchases an average of 800 tractors annually. The addition of equipment from Westway will alter that average slightly in 2001 when the company will acquire only 650 tractors and remove 445 from service. During the same time span, the trailer fleet will grow with 1,050 trailers purchased and 850 dropped from service. The standards for fleet purchases are Freightliner Columbia tractors with Detroit Diesel engines and Utility 3000R trailers with Thermo King SB-III SR refrigeration units. Almost half the trailer fleet still is equipped with SB-III Magnum units with screw compressors that were purchased in the late 1990s.
New Terminal Sets Standard The keystone to all this effort is a new terminal on the western edge of Salt Lake City. Barely four years old, the headquarters terminal sets the standard for Simon's six maintenance facilities. The huge, new terminal opened in 1997. The maintenance facility was completed and occupied first. Administration moved in later when the 60,000-sq-ft headquarters building was completed.
Designed for a fleet of 2,500 tractors, the terminal was completed when Dick Simon Trucking had just barely 600 tractors. It sits on a parcel of 55 acres of which 35 are developed. The remaining 20 acres are unpaved at present. When needed, the additional property can be prepared for vehicle parking.
The number of maintenance facilities within Dick Simon Trucking recently increased by two. In 2000, the company worked from the headquarters shop plus smaller operations in Atlanta; Fontana, California; and Tolleson, Arizona. These other maintenance facilities provide the same menu of services as the headquarters shop with the exception of heavy repair and body work, which is available only in Salt Lake City.
With the assets acquired from Westway Express, Simon picked up shops in Denver and Albuquerque. Plans call for permanent retention and expansion of services of the Denver terminal. The status of the Albuquerque terminal and shop will be evaluated after six months.
Three Maintenance Buildings The headquarters maintenance department occupies three of the six buildings at the Salt Lake City site. In total, five buildings are dedicated to driver services and maintenance. These include security, vehicle inspection, maintenance, truck washing, storage, and driver amenities. Vehicles enter the terminal through two lanes on each side of the security building.
Upon entering the terminal through the security gate at the rear of the property, all equipment is directed to a building constructed exclusively for preventive maintenance inspections. The only equipment allowed to bypass these inspection lanes is that used for local pick-up and delivery. Everything else gets an inspection, even if it has been through the terminal just a few hours earlier, says Mike Vanikiotis, Simon's maintenance manager.
The inspection building houses four lanes with lubrication pits and fuel dispensing equipment. The process is designed to move tractors and trailers through the inspection lanes as quickly as possible. If both the tractor and trailer need inspecting, two technicians work on the tractor, and two more handle the trailer. The company performs an average of 200 vehicle inspections a day in Salt Lake City. Average time required is 20 minutes for a basic inspection. If an oil and filter change is added to the inspection, a tractor and trailer still stays in the inspection lane less than an hour. Tractors and refrigeration units are fueled while the inspection is performed.
Long Life Components The goal within Dick Simon Trucking is to perform only preventive maintenance while keeping tractors three years. "We put a lot of effort into finding components that will last the life of the tractor," says Kelle Simon, president. "Those components may cost a little more to purchase, but they pay for themselves in reduced downtime. We want to inspect tractors and change the oil and filters. Everything else should be under warranty for the entire time we own a tractor."
The inspection building also contains an alignment bay with a Bee Line machine for tractors and three bays for tire service. In one of those, Michelin provides a dedicated recapping operation that generates 125 tires a day. These are used exclusively by Simon under a fixed cost agreement that pays Michelin one cent per mile for each tire. Michelin owns all the tires in the Simon fleet.
Fuel is pumped from Simon's own little tank farm. The largest tank in the system holds 40,000 gallons of tractor fuel. Other smaller tanks hold gasoline and untaxed diesel for refrigeration units.
The largest maintenance building on the site houses eight bays for trailers, 17 bays for tractor repair, eight bays for body work, one bay for painting, and the company parts department. Inventory control for the parts department is computerized, and the company is working to develop a system that will allow Simon to track parts costs using vendor bar codes.
Vendor Staffs Engine Repair The repair building includes three bays dedicated to engine service and repair. Unless an engine is damaged in an accident, all engine repairs are performed under warranty. As a result, the engine repair bays are staffed by technicians from the Salt Lake City Detroit Diesel distributor. Having engine mechanics from the vendor on-site usually saves a full day when repairs are required, Vanikiotis says. "We can get a truck in and out of the shop with an engine repair on the same day now," he says. "Compare this to our previous operation when making an appointment and moving a tractor from our shop to the Detroit Diesel shop and back usually took most of a day plus time for the repair. We figure that letting a truck sit idle costs at least $150 a day without including the amount of freight revenue lost during the downtime."
Another time-saver is participation in the SmartLube program from ExxonMobil. In this program, the fleet uses ExxonMobil XD-3 Extra heavy duty motor oil and undergoes an oil analysis that optimizes oil change intervals. In one year of the SmartLube program, Simon has extended its engine oil drain interval from 35,000 miles to 45,000 miles. Depending on tractor utilization, this has eliminated one to two oil changes per tractor per year, Kelle Simon says.
The Salt Lake City terminal is designed for highly efficient oil changes that usually take about 35 minutes. The same work can take an hour and a half at other terminals. All this time is accounted for at a base labor rate of $52 an hour.
Saving $700,000 a Year "We save a lot of money by cutting the number of oil changes," Kelle Simon says. "An oil change carries an average labor cost of $75 plus 14 gallons of motor oil at $3.50 a gallon, and a filter kit that we buy for about $25. By eliminating two oil changes a year for the entire fleet, we cut maintenance costs by more than $700,000."
SmartLube applies only to tractor engines; refrigeration units are not involved. Nor is gearbox lubricant part of the program. In fact, transmissions and drive axles are never opened during three years of normal service in the fleet, Vanikiotis says. Simon uses Eaton AutoShift 10-speed transmissions and ArvinMeritor drive axles.
In Salt Lake City, the maintenance department is open 24 hours a day, seven days a week. This schedule soon will be implemented in Denver. Technicians work four 12-hour days. The schedule is Sunday through Wednesday or Wednesday through Saturday. Not only do technicians have three days free every week, the schedule ensures that every employee has one weekend day off, says Kelle Simon.
Staff Totals 150 Salt Lake City terminal operation requires 85 diesel mechanics plus technicians for trailer and body repair. The total staff including support personnel and body shop is 150.
Dick Simon Trucking is in the process of converting its vehicle washing operation to an automated system. Presently, 90 trucks a day are washed manually. "We say it will be automated, but no truck washing process is ever fully automated if the goal is get the vehicle completely clean," Vanikiotis says. "Some hand work is always required. However, some new cleaning solutions have been introduced recently that make the automatic wash process much more effective."
Dick Simon Trucking houses management for maintenance operations in the maintenance buildings. The company provides advanced computer and telecommunications systems for all management personnel. The shop buildings contain offices for the maintenance manager, the trailer shop manager, and personnel supervising over-the-road maintenance. In addition to maintenance managers, the permit department, the accident claims manager, worker compensation coordinator, log auditors, the maintenance payroll department, and the maintenance department information systems personnel are housed in the maintenance buildings.
Maintenance administration is paperless. A computer is placed at each work station and technicians do their own data entry. The result is real-time information control and elimination of duplication among company shops. "Before computers were installed at the working level, we were doing work order entry after the fact," Vanikiotis says. "The result could be a delay of a day or two before completed work appeared in the system. With that much delay, we could do an oil change in Salt Lake City on a truck bound for Southern California. Tractors would arrive in Fontana and the computer system would still show an oil change due. Fairly often we would do two oil changes within 24 hours simply because of a delay in work order entry. That doesn't happen anymore."
Driver facilities at the new terminal are designed for convenience. The lounge areas include a large screen television and a game room plus private rooms for telephones. Drivers are provided with five washers and dryers at no charge. The driver building contains 21 private showers and 17 bedrooms for drivers who need to spend the night at the terminal. Many drivers travel with pets, so Dick Simon Trucking included seven outdoor dog runs in the driver facility. The driver area also contains a restaurant and a company store where drivers can purchase, shirts, hats, and other accessories.
