COMPANY:
RT&T Enterprises East Dubuque, IL
OPERATION:
Fifteen-year-old family-owned truckload carrier providing dry-van service throughout the continental United States
PROBLEM:
Founded in 1994, RT&T Enterprises is a family-owned truckload carrier providing dry-freight service nationwide via a fleet of 70 tractors and 140 trailers. Over the past 15 years, like many such trucking operations, its growing pains involved dealing with increased costs.
According to the fleet's owner, CEO Todd Colin, these costs had been largely driven by the expenses associated with having a high annual driver turnover rate and inefficient billing processes. Other costs included having to pay four-digit monthly interest on a revolving credit line required to offset cash flow needs caused by having a DSO (days sales outstanding) running 90 or more days.
RT&T Enterprises began to make a dent in its operational cost issues back in 2005 when it elected to implement McLeod Software's LoadMaster enterprise management system. Deploying that dispatching and accounting software got the fleet started on the road to improving its business processes. Yet the driver turnover, billings and collections, and cash-flow cost issues remained.
SOLUTION:
Determined to get those costs in line, in April 2008, RT&T conferred again with McLeod and determined it should integrate into its LoadMaster system the software supplier's DocumentPower Enterprise imaging, workflow and productivity solution.
“McLeod's DocumentPower Enterprise allowed us to realize a first-year return on investment of $136,593,” says Colin. “These savings alone paid for the document management system, LoadMaster upgrades, Rapid Log software and TripPak implementation, and hardware and financing costs in less than one year. So, ultimately, we made a $36,000 profit from our purchase — leaving subsequent years to generate significantly higher savings.”
According to Colin, the specific cost savings RT&T netted from its use of the DocumentPower solution alone include:
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Reducing the time needed to return log audits to drivers from 30 days to 48 hours. This greatly helped improve driver retention — dropping the annual turnover rate from 115% to just 38%. It also led to a 3% reduction in insurance premiums.
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Automating billing and improving collections procedures enabled RT&T to decrease annual billing costs by 47% and cut its DSO over 30 days by $192,000. That boosted cash flow by $392,000 annually.
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Increasing cash flow enabled the slashing of the company's line of credit from $500,000 to less than $100,000. That led to annual interest cost savings of more than $27,000.
“The LoadMaster and DocumentPower Enterprise solutions give us the time and resources we can use to make business process improvements that cut spending,” points out Colin. “Through automation, we've managed to eliminate overtime and reduce manpower, cut billing-related office supplies by 50%, speed up receivables by 21 days, and significantly increase cash flow. For us, these solutions are a profit center.”
