The Risks of Rebrokering

We received this from our friend Mark Stoyas at Basic Enterprise in Chicago.

http://www.ttnews.com/articles/basetemplate.aspx?storyid=31986&page=1

There are compelling arguments for maintaining a separate brokerage authority, as summarized here. However, don’t forget the simple fact that, if you don’t have a separate brokerage authority, a brokered load that is involved in a costly accident can bring down the rest of your trucking operation–and we believe that is too high a risk to take.

–The Editors

New HOS Rules Posted, Local Exceptions Retained

Here are the new HOS rules from the FMCSA:

http://www.fmcsa.dot.gov/documents/hos/Interstate-Truck-Driver-Guide-to-HOS_508.pdf

Note that the exception for 100-mile-radius trucking remains intact, which is good news for local trucking operations.  The 150-mile non-CDL exception is also preserved.  In either case logbooks are not required.   The exceptions are listed in detail on page 18 of the document.

–The Editors

How To Harness Big Data (When You’re Not That Big)

We read all the time about how Big Data will transform your life. We see headlines like this: “Big Trucking Company XYZ Saves $6 Million with Big Data.” You can read such an article here:

http://tinyurl.com/c6hu4bw

But what about the small-to-medium sized carrier?  Can a firm with 20 to 75 trucks use Big Data?

Of course you can.

For my customers — local trucking / cartage / P&D / intermodal carriers — I’ve seen the impact when my customers have tools to measure and monitor things like this:

  • Driver revenue per hour (hugely valuable for employee drivers)
  • Truck / route revenue, per day, week, month, quarter
  • Profitability of certain customers (am I billing a lot but losing money on that big customer?)

You won’t have as many data points as the big guys, but who cares? The important thing is that you can develop your own KPIs—Key Performance Indicators—and track them.  You don’t need expensive consultants to get your own powerful Big Data. You just need to know what is happening in your company every day.

And let’s not forget operational data – info we need to get every order done and every job billed:

  • Arrival / departure times and POD info as pickups and deliveries happen
  • Detention charges that you can actually document and justify
  • List of daily or weekly pickups that need to get schedule but aren’t yet scheduled
  • Complete rating information in one place so anyone can auto-rate on the fly

For more information, contact me.  Let’s work together to develop your KPI’s and get you the tools to measure them.

You can contact Jonathan Miller at 630-517-0705 or jmiller@jsysoftware.com.

 

Leveraging Technology to Accelerate Productivity and Profit

This article appeared recently in Inbound Logistics. While it focuses on tech issues for 3PL’s, the core issue is the same in local P&D, hazmat, air freight, and intermodal: how are you going to use technology to improve customer service and responsiveness, and what tools are you going to use to cut down on manual processes that introduce errors and slow things down for everyone?

http://www.inboundlogistics.com/cms/article/leveraging-technology-to-accelerate-productivity-and-profit/?goback=.gde_134135_member_219383066

Just substitute “local trucking company” for 3PL and you get it exactly right:

Services that increase a client’s productivity will help a [local trucking company] win new business, satisfy the needs of a more diverse client base, and rise above the perception of being a commoditized business….. By working even more intimately with client operations, [local trucking companies] can gain insight into other ways to help maximize/efficiency.

For example, [local trucking companies] can capitalize on clients’ expectation and need for real-time data by providing access to their own  … orders and even billing through a secure Web portal. This helps clients make informed decisions with real-time information and visibility of demand, order status, and potential/exceptions.

By offering these expanded, value-added services, [local trucking companies] can gain and retain a wider range of clients. The challenge for [local trucking companies] then becomes finding the most cost-effective technology infrastructure that can adapt to the expanded range of services it provides …  and – perhaps most importantly – correctly invoice clients for each service to ensure/profitability.

Thanks to Inbound Logistics for bringing these issues to everyone’s attention.

–Jonathan Miller, Editor

3 Ways to Make More Money in Local Trucking / P&D / Air Freight

There are three ways to make more money in local trucking and local air freight. You probably know them:

guy on pile of money

“Wanna make more money?”

  1. Get More Business
  2. Charge More
  3. Reduce Expenses

I’m going to try to persuade you right now that #3 — reducing expenses — is the single most important missed opportunity for most local trucking companies. It’s also the one over which you have by far the most control (you can do something about #3 today, unlike the other two).

1.  Get More Business

Let’s look at the first one – getting more business. Of course getting more business is a good thing.  It’s a tried and true strategy for local LTL — the logic is obvious.  Just add more customers and fill your trucks with freight, increase billings, and life is great.

The Customer Store smallBut is growing your customer base easy? As if you could say, “Sure, I’ll just go down to the Customer Store and pick out a few good ones”? Heck, no. If it were that easy, everyone would be doing it, and fewer P&D companies would be shutting down or struggling. But what I hear every day is just the opposite.

It can take years to cultivate a significant new account, especially these days. And if you’re seeking new ways to take control of your business, adding new customers is out of your control, even with the best service and the best sales team. You can’t control the economy, and you can’t control when a prospect is going to pull the trigger and give you a try in a small or big way.

So adding customers might work, but it’s not the answer for everyone. Of course, you can never stop selling. But if you’re looking to take charge of your business in a way that allows you to predictably make more money every week, there are other methods.

2.  Charge More

What about charging more?   If I raise my rates and keep my weekly expenses the same, I make more money at the end of the week.  But… most people are afraid of it.

Afraid to raise rates

“Raising rates? AAAAAHHHHH!!!”

I hear it all the time:

“Jonathan, my customers will bolt if I raise rates.”

“Jonathan, I’m losing money with my rates where they are today. How can I go higher when the one-man shop down the street does truckloads for $200?”

“Jonathan, my fuel could be higher, but I don’t want to piss people off.”

If your service is so good that you can charge more, then hey! more power to you. But for most trucking companies right now, raising rates is pie-in-the-sky. It’s just a pipe dream, that is, if there is no corresponding improvement in service.

PIck 2A side note:  At some point, when we end up working together, I’m going to make you so efficient in the office, and I’m going to enable you to give such great service, that you can justify higher rates with no complaints from your customers. But that’s a little ways down the road. In the meantime, we have to finish our three-item list.

3.  Reduce Expenses

So adding more trucks isn’t always the right tactic, and charging more is mostly not going to happen. What’s left?  Spend less. 

If you are billing the same amount every week, and spending less overall every week, then every week you have more money left over. That’s good math.

Some people glaze over when I bring this up.  “I don’t know what you’re talking about. I can’t lower costs.“ Others get annoyed. “But I can’t spend less. I can’t lower the price of fuel, and my lease payments are fixed. After drivers and fuel, there’s nothing left.”  I hear that a few times a month.

Here’s where most people stop, give up, and resign themselves to the slump.  Don’t give up!  I feel your pain – really I do – and I want to help you do something different so you can get different results in your business.

But How?
(Hint:  It doesn’t take a genius.)

Einstein

“Are you doing the same thing over and over and expecting different results?”

Albert Einstein once said that “the definition of insanity is doing the same thing over and over and expecting different results.” If Einstein is correct, then you have to do something different if you don’t want to stay stuck.  Hopefully you have an open mind about this.

So…. if we want to cut costs and are truly open to anything, what can we spend less on?

Office payroll is a relentless expense. What are we getting for it?  Sometimes we are getting redundancies.

Would you put a two-man crew on every truck? 

Most people would not.  So why do you have people do the same thing twice in the office, like entering order details in Excel and again in QuickBooks?  It’s the same sort of waste — it’s just less obvious, so we often miss it.

We can spend less on office payroll by using tools that allow us to do repetitive things right the first time, and only once.  For every ten minutes you can free up for someone in your office, that’s ten minutes they can spend doing something that actually makes you money — quoting a new job, for example. That’s ten minutes you don’t have to pay anyone any more. It adds up quickly.

Here’s the secret:  Dramatically boost the productivity that you get from the people in your office, and watch your revenue per payroll dollar go way up. 

A couple of examples show the sort of thing I encounter on a regular basis. Take a look:

  • If you’re rating by hand, you’re wasting payroll dollars.  Do you have a rating book that looks something like this?

Rate Book 5

The excess time it takes to do rating with a book like this, or paper rate sheets, is huge.

  • If you’re dispatching in Excel, you’re wasting payroll dollars.

Why?  Because you’re double-paying – you’re paying someone to enter dispatch info in Excel, and someone (usually someone else) to enter order details on an invoice every order and every invoice.

Would you put two guys on every truck?

treadmill

  • If you’re dispatching with T-cards, you’re wasting payroll dollars.   Ditto.
  • If you’re using software–however you got it–that’s a poor fit with your business, forcing your staff to double-enter data, you might as well just go flush your money down the toilet.

Why? Because double-entry leads to errors that are even more expensive to fix.

(1) It costs you office payroll time to catch and correct the error.

(2) It could cost much more if the error snowballs. If it’s a missed pickup, then you also have driver time to pay all over again.

(3) If it’s an angry customer (let’s call her Zelda) who was invoiced incorrectly, then you have to research the error, fix it and re-invoice.

(4) Then there’s perhaps the most time-consuming task of all, which is taking the time (sometimes more than one person’s time in your office) to unruffle Zelda’s feathers and salvage the customer relationship.

All of this takes office time, and all that office time costs you money. 

So double entry ends up costing you more than just double the hours. It costs you triple or quadruple, or worse.time is moneyNow given what most people in your office get paid, you may not give much thought to the benefit from ten minutes saved here or there. But here’s the other part of the secret:  when you do hundreds of orders a week and save time on every order, then something really cool happens…. a cycle gets going where your employees stop spending so much time repeating things and start spending time on things that create great service.

If you want to learn more about how this plays out in real life, shoot me an e-mail and I’ll send you a case study about how this played out at one of JSY’s customers. The time saved using our software has been unbelievable, except that it’s true. In the meantime, I encourage you to think carefully about which of the three options I’ve discussed here is best for your business. Call me at 630-517-0705 if you want to talk about it, especially if you are interested in exploring where “no more double-paying in the office” can have an impact for you.

And since this blog is intended to stimulate dialogue, feel free to post a comment on what you’ve read. I look forward to hearing from you.

Posted by Jonathan Miller, Editor

You can reach Jonathan at jmiller@jsysoftware.com or at 630-517-0705.

 

 

Leveraging Your Current IT Investment In Local Trucking

If you’ve survived the recession, you have probably made some IT investments over the years. You are probably using QuickBooks. You might have GPS. Your drivers might have smartphones.

But without a back-end system that is designed to tie together your other IT investments, you might be wasting time and money in one or more of the following ways. Do any of these ring a bell?

  • You write up quotes using rates that are on paper or in a binder.
  • You dispatch with T-cards.
  • You dispatch in Excel.
  • Your drivers have GPS or smartphones.
  • You do invoicing in QuickBooks.

All of these things are fine. People use them for good reasons. But each of them has limits and liabilities. If you use one of these, you are throwing away payroll dollars every pay period. And if you use more than one, chances are good that your office payroll is a sinkhole.

You may be thinking, “Come on, be serious.” We are completely serious. This is the #1 area where local P&D companies fail.

Why Rating By Hand Wastes Money

Rating with binders or rate sheets usually mean that only one person can rate at a time. What happens if that person is away, on vacation, or sick? What happens to your quoting activity? All the staff time it takes to rate and quote, not to mention finding old paper quotes – you are pouring money down the drain in the form of office payroll.

Why Dispatching with T-Cards Wastes Money

Using T-cards often means that some essential information about an order – accessorials, arrival/departure time, upcharges, changes to the order – could get missed when the order goes to billing. That’s money you leave on the table.

Why Dispatching in Excel Wastes Money

If you dispatch in Excel, someone has to type order information at least twice – once to dispatch and once to invoice. Sometimes it ends up being entered three times. Once again, think of all the wasted time in the office and what that costs you.

Why Driver Smartphones Waste Money

It’s great to have drivers be equipped with technology. Does your smartphone connect to your back-end system? If not, someone in your office is probably doing double-entry of arrival and departure times. Your dispatchers are still taking time (=your money) talking to drivers. And if you’re not capturing POD information in real-time, your customer service people will spend too much time on the phones answering calls that ask, “Is it there yet?” All that time costs you.

Why Invoicing in QuickBooks Wastes Money

If you invoice in QuickBooks, you have serious limitations on searching for old invoices, and what happens if someone disputes an accessorial or detention charge? It can take hours to research and resolve the issue – and you’ve probably then paid more in staff time than the disputed charge was worth anyway.

There’s a better way. Now we’re sure you love the people in your office and you don’t want anything bad to happen to them. What would your life be like if your office staff could handle all their current responsibilities in half the time? That’s what the right TMS does for you.

On-Site or In-House? Hosting Your TMS Data In the Cloud

A number of TMS providers now offer local trucking companies a variety of alternatives to the traditional in-house installation. In the more traditional setup, both the software application and your TMS data reside on a physical server in your company’s office building. For many local P&D companies, this method of hosting data in-house may still be the best one.

However, there are some other newer options for TMS hosting that you may want to consider.  They include the following:

1.   Data in the Cloud, an App on your Desktop (“Managed Hosting”)

In this scenario, you would launch your TMS by clicking on an icon on your desktop, just as if you’re launching Excel.  The TMS application appears on your screen, just as it would if your data lived on your local. The only difference from the traditional in-house model—a difference that is invisible to the user—is that your data lives offsite, hosted by your TMS provider or one of its trusted providers such as Rackspace.

2.  Data in the Cloud, App in the Cloud (an “All-Cloud TMS)

With this alternative, the TMS application itself lives “in the cloud” and is a web-based application.  You get to it by going to a website and logging in there.  You may already have experienced something like this if you use an offsite login to get access to your Exchange e-mail server.

How to Decide?

As usual, there are advantages and disadvantages to any setup. For example, some add-on TMS options (such as GPS or route optimization) require you to have an in-house TMS, so that its database can talk to your TMS’s database.  In some cases, the cloud-hosted database works just fine with third-party vendors.  Check with your current and potential future vendors and see which is the best option for you.

Happy Shopping from the Local Trucking Blog!

–The Editors

Succession Planning in a Family-Owned Trucking Company

Why do so many people in local trucking feel like it’s impossible to retire?

Commercial Carrier Journal (CCJ) writes:  “Experts say that more than 40 percent of family-owned businesses will experience a change in ownership in any five-year period. Of those, only 4 percent have a formal succession plan.” See  http://www.ccjdigital.com/education/ccu/manuals for a little more info.

Is this you?

When we talk with customers and prospects, a recurring theme comes up:  there is often only one person in the company who knows critical things about the business.  In one example, only the owner knows the ins and outs of every special customer rate – and when the owner is away, orders get billed incorrectly. The results are embarrassing phone calls, damage to the customer relationship, and much more time and energy to fix the problem than it would have taken to bill the correct rate the first time.

The problem is not that the owner knows the rate; the problem is that nobody else does.

CCJ also notes that 65% of family-owned businesses don’t make it past the first generation.  Information is power, and perhaps you, as an owner, are afraid of giving away too much power. However, founders and owners in all sorts of businesses shoot themselves in the foot by being stingy with information that could help everyone. In your company, who is there that you can trust to run the shop when you’re not around?  Who can do things the way you would do them? Who can remember the special rates that you and only you have authorized? How will all the stuff that’s “in your head” get into the brains of the people who work for you, so that you really can enjoy that margarita at the pool without having your cell phone ring all the time?

There are a number of ways to lessen the risk of having only one person know everything about certain aspects of your business.

  • Some CEOs gradually “spin off” parts of their jobs, training one key person in that essential skill and another key person in another skill. If this happens, then piece by piece, the owner no longer is indispensable. Over time, this allows the business to survive the “what if Tim gets hit by a bus?” test.
  • Some companies cross-train everyone, so that multiple people know how to rate, dispatch, and bill, and so on. Small businesses and even some smart government agencies do this as well, so that no single person knows procedures that nobody else can replicate.
  • Some companies invest in software. Great software captures all essential order and rate information as soon as anyone knows about it. Great software gives everyone the ability (within reason) to retrieve it, so that nobody has to say “hold on, let me get George…. Oh, whoops, he’s out to lunch…. Can you call back in an hour?”

It’s a lot easier to contemplate handing over the reins when you have a place to download all the expertise in your brain so that others can use your wisdom. While no software package can replace experience and intuition, the best TMS software distills wisdom from decades of trucking experience and puts it to work for you.

At JSY, we make it our business to create easy-to-use tools that address exactly these issues of “who knows what,” reducing the need for anyone to hoard information.  Our customers tell us how much better it is when everyone has the same information and can share it with customers on demand.

–The Editors

 

Cut Down on Driver Communication by 90% in Local Trucking

We hear all the time that communication between dispatchers and drivers is a huge problem in local trucking.  This is what our customers are complaining about:

  • Most handheld devices are prohibited while driving.
  • Driver/dispatcher communication is a huge bottleneck in the office.  When only one person knows critical ETA or POD information, customers don’t get the info they need when they need it.
  • Drivers aren’t reliable in reporting arrival and departure times.

reduce dispatch to driver talkingThe best way to manage your communications between dispatchers and drivers is to eliminate the need for so much talking.  Now you can cut down dispatcher-to-driver talk and still provide superior customer service.

OneTerminal TMS from JSY Software eliminates risky talk in the following ways:

  • It updates actual arrival and departure times for each pickup or delivery with no talking to drivers.
  • It separates pickup from delivery so that you have accurate data for each action.
  • It lets everyone on your network see all POD information in real time.
  • You simply push out updates (like new pickups) to drivers with a click.
  • Best of all:  no talking required.

You will be able to get every job done safely without talking to drivers when you are using OneTerminal TMS.

For your free hands-on consultation, fill out the short form below, or contact us at jmiller @ jsysoftware.com (Jonathan Miller) or 877-540-0030.

[contact-form] [contact-field label=”Name” type=”name” required=”true” /] [contact-field label=”Email” type=”email” required=”true” /] [contact-field label=”Website (optional)” type=”url” /] [contact-field label=”Comment” type=”textarea” required=”true” /] [/contact-form]

 

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