The Local Trucking BlogWelcome to the online community for local trucking, cartage, and P&D companies in North America

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

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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.

The 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.

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There was an interesting question posed by Deborah Lockridge, editor at Heavy Duty Trucking, early this week, which sparked a discussion thread:

http://www.linkedin.com/groups/What-tips-do-you-have-134135.S.107106598?qid=44123cd7-93fa-474f-9c4e-55590cc41bbd&trk=group_most_popular-0-b-ttl&goback=.gmp_134135

While some people commented on fuel efficiency, reducing accidents caused by sloppy backing up, and so on, we feel strongly that having the right TMS is the #1 way to cut costs in local P&D, by reducing bottlenecks and redundancies in the office environment and by making drivers more productive.

If your staff never had to put people on hold to answer a POD request, how much time would that alone save you, not to mention how much your customers would appreciate it?

As one person commented in the replies:  “The wrong software is wrong, even if free, and the right TMS is golden, no matter the cost. The money spent is insignificant compared to the personnel savings and increased productivity of the drivers.”

—The Editors

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More and more shipments, including local delivery, are being controlled by freight brokers or their fancy-named cousins, logistics providers.  There are many considerations for doing business with brokers–but first, you must get the freight offered to you.

How do you successfully solicit shipments from freight brokers?  The first step is to contact a prospective broker.  Most brokers do not have a specific dispatcher assigned to local pickup & delivery.  Each dispatcher generally has a personal local resource list. You can understand a dispatcher sometimes wanting to guard that list against revealing to other dispatchers.  The trick is to gain a beachhead with one dispatcher and then leverage that relationship to get introduced to other dispatchers that may need local services.

Once you have interested a broker in your services, the next step is to fill out an information sheet.  This rarely asks the questions that pertain to local P/U & delivery, such as:  “Do you have straight trucks?” or “Do you have liftgates?”, etc.  Often you are asked to simply list states in which you do business.  It is difficult to define a metropolitan area.  All these questions are barriers to local operations.  The information you provide is usually entered into a spreadsheet format that has no room for “explanations.”  You must consult with your prospect to determine the best way to enter information such that it is visible to other prospective users.

The path is difficult, but the rewards are worth it.  You must “sell” each dispatcher as if s/he were a separate customer.  Keep in mind that dispatchers often change jobs and usually bring their “stable” of customers and resources with them, potentially providing you with fresh dispatchers to solicit.  Resist the urge to get the work thru price reduction.  Brokers use one-truck operators, unregistered carriers, etc. who can all undercut your rate.

Do not try to match rates;  concentrate instead on work that would be profitable for you if you got it.  Accept the fact that 90% of freight is going to the lowest price and you are competing for the remaining 10%, which is often the only work worth doing.

There are many other consideration for doing work with brokers, some of which will be examined in future blog posts.  In the meantime, do not ignore this potential rich source for future business.

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With fuel costs skyrocketing, and customers resisting additional fuel surcharges, it is all the more important to find areas to save money. Your decisions about how trucks are fueled can have a significant effect on your profitability. There are three choices for local operations:

1. Fueling off-site
2. Fueling at on-site facility
3. Contract for wet fueling

Each method presents positives and negatives, costs and benefits. By analyzing the variables, you can arrive at the best solution for your business. Let’s examine each one in turn.

1. Fueling off-site: This includes fuel card programs, off-site fueling facilities, etc. The direct costs are minimal, just the administrative cost of handling the cards and receipts. You will be paying retail price for the fuel, with some ability to shop around for a lower price, although sometimes the extra travel time eats up the savings. Many fuel card programs offer excellent reports for fuel tax purposes.

Indirect costs can be high. Consider the amount of time it takes a driver to fuel. There is (a) the added travel time to and from the fueling location, (b) the time spent dispensing fuel, (c) the time spent purchasing items from the convenience store, and perhaps (d) the time spent talking with other drivers who are fueling at the same time.

Example: you find it takes 10 minutes, on average, to detour for fuel. It takes 8 minutes to dispense the fuel, the driver averages 2 minutes in the store, and 2 minutes taking to others. This totals 22 minutes total. For a driver earning $15 per hour this costs the company about $20 after benefits and insurance (not including overtime). The 22 minutes cost $7.33, adding 18 cents per gallon to a 40 gallon fill.

2.  Fuel at on-site facility: The direct costs are large. The capital cost must be calculated and amortized. If you build a fuel station costing $35,000 and expect to spend $15,000 in maintenance and interest over five years, your per-year cost is $10,000 or $27.40 per day. In addition, there is either the time it takes a driver to fuel and chat, or the expense of having another employee do the fueling. Administrative expenses include administering the fuel station, sales and fuel tax reporting, etc. The up side is you can obtain fuel at wholesale, saving perhaps 20 cents per gallon off retail. You must calculate your expense and translate into a cost per gallon, then compare the expense to expected savings. If the cost/benefit analysis looks good, check into local laws concerning on-site fueling facilities before proceeding.

3.  Wet fueling: This refers to hiring a fuel supplier to fuel trucks parked at a single facility, usually at night. The direct and indirect costs are minimal. The supplier will provide details of how much fuel went into each truck. You will have no expenses for labor. The downside is that wet fueling usually, but not always, means a higher price per gallon. The price is usually expressed as a markup over a published, “wholesale” price. The markup could range from 10 to 30 cents per gallon. It is possible that this price, for larger fleets, could be less than average retail price. Even if price is higher, you must calculate your labor savings and compare to the added cost per gallon.

You may be surprised at how much savings can be realized with the wet fuel option. There are many other factors to consider. Some fleets have drivers pre or post trip their vehicles while fueling. Your municipality might not allow on-site or wet fueling. You may forge a great relationship, and discount, with a nearby retailer.

What’s the best fueling option for you?  Performing a cost analysis on the three methods will help guide you to the most cost effective choice.  Take a serious look at all three options, and you can not only make a good business decision but also know that you really looked at it from a number of angles.  Tell us in a comment what your experience has been with any of the options listed above.  We’d like to hear from you.

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Welcome to The Local Trucking Blog. This blog is the hub of an online community that speaks to the interests of local trucking companies, their owners and managers, and the wider community that they serve.

Depending on your part of the country, local trucking can have different names. We publish content that is designed to meet the needs of:

• local trucking companies;
• local cartage firms;
• local companies with in-house trucks;
• and local pickup and delivery (P&D) companies.

We invite you to check back frequently. Our posts cover a wide range of topics, including:

• management issues:  legal, tax/accounting, delegating succession planning, and more
• insurance issues:  liability, worker’s comp, and more
• software and hardware:  what to look for in a TMS, in power units and trucks, in smartphones, and more
• legislative matters:  HOS, EOBR, and more

If you’re an owner, GM, or manager in local trucking, we want to be the one-stop online resource for your concerns.  Click “subscribe” to join our community and receive notification of new postings.  Please check back often, feel free to post comments, and be sure to tell us if we’re covering what matters to you most (and if we’re not).

Thanks, and welcome!

–Jonathan Miller, Editor

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