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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The driver shortage continues to make headlines.

http://www.dcvelocity.com/articles/20120213-solutions-to-driver-shortage-elusive/

We have a local angle on the situation, in case you missed it:

http://www.jsysoftware.com/blog/?p=191

Local driving takes some real skills, as our earlier blogpost says. The HOS and pay-per-mile issues that plague OTR carriers, as well as the quality-of-family-life issues so often mentioned, are less applicable on the local scene.

Keep your local drivers safe and busy and you will not have a driver shortage!

–The Editors

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Everyone is complaining about the driver shortage. But don’t make the mistake of hiring unqualified drivers.  As we have said previously, it is always worth waiting for the best driver to hire instead of panicking and taking the best available candidate on hand at the moment.  Your company will be rewarded with lower turnover, lower claims, and higher productivity.

In local pickup and delivery work, what are the top 5 reasons you would not want to hire a driver?  Here’s our list of best practices:

• Reason #5:  Securing freight. If a driver can’t use e-track or logistic straps, that driver shouldn’t work for you.
• Reason #4:   Liftgates.  Your drivers need to show you — not just tell you — that they can take a skid up and down.  Make every candidate do this in front of you.
• Reason #3:  Math.  Every driver must be able to count the number of pallets in a shipment, with no mistakes.
• Reason #2:  Hazmat. Don’t just look at the endorsement!  Make the driver take a written test.
• And the Top, #1, Most Important Thing in local P&D that a driver needs to do to make you money:  Backing and Spotting.  Make the driver show you his/her speed and accuracy.  When you’re making 20 stops a day, you can’t afford drivers who are slow at this.

Do the right thing.  Be patient, and be tough.  If you flunk between half  and 3/4 of your applicants, you have a good test.

–The Editors

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Local trucking sometimes involves the collection of small invoices.  Sending out bills is good;  but getting a new customer can be nerve-wracking.  Will they be happy with the service?  Will they pay their invoices?  Did they switch because their previous carrier cut them off?  References and credit checks only go so far, and that is not far enough.  Ultimately, it is always a risk to add a customer.  Here are some ways to lessen the risk.

Let’s suppose that your shiny new customer has failed to pay the first few invoices.  What to do now?  Legal action is very expensive, and you can never be sure of the outcome.  Here are a few ideas to try after your in-house efforts to collect are exhausted:

1. Invoice Other Parties to the Transaction:  There are numerous court cases and their rulings sometimes conflict, but there is enough case law out there to justify your taking this step.  Unless section 7 of the BOL is executed, you can try to collect freight charges from other parties to the shipment.  It may be the shipper, or consignee, or both if arranged by a third party.  Start with an apologetic call in which you inform them that, even though they may have paid for shipping already, they are liable to you for the charges because “……………” (whoever is not paying you) did not pay the freight invoice.  You can tell that other party that you are sorry, of course, to have to take this course of action, but the law is clear, and it was put in place to protect carriers like your company from situations exactly like this.  Gently suggest that they call the offending party and encourage the invoice to get paid, solving the problem.  This puts huge pressure on your customer, as now THEIR customer or vendor is angry with them.  If this initial call does not do the trick, go ahead and issue an invoice, and follow with collection calls to everyone.
2. Find a Specialized Attorney:  There are attorneys and firms that specialize in small collections and can be effective with claims under $1,000.  Typically they start with a series of letters and then go to lawsuit.  Here is a common arrangement:  You send the attorney copies of unpaid invoices (with supporting documents and any explanations).  The attorney will try to collect and, if successful, will charge you a fee between 20-30% of anything collected.  If this fails, you may be offered the choice to file a lawsuit by paying for court costs (different in every state, often over $100).  After this point the attorney keeps about 50% of anything collected.  The attorney may suggest you accept less than the amount owed, meaning you end up with well under 50% of the original charges.  What you’ll be left with is better than nothing, and in particular, the act of documenting the deadbeat customer will help future carriers make better credit decisions.  Word gets around.  Because some shippers are in the habit of stiffing local trucking companies on a regular basis, your taking strong action in this way will make it less likely that shippers will pick your company as a victim.
3. Settle:  It is unpleasant, but sometimes the situation calls for a business decision.  Try calling and asking what THEY think is the fair amount to pay–and then, when an amount is mentioned, just accept.  Better to get something rather than nothing. The process of settling is not only much faster but also probably yields the same amount (after fees) as a collection placement.  Make sure you have a system in place that prevents accepting more work from that party in the future.

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Getting a signed credit application from every customer is one of the most important actions a local trucking company can do to protect itself.  What is most important is NOT the bank information, or the references.  The important part is the fine print.

Somewhere in every credit app there should be statements that:

• The customer agrees to pay invoices within XX days
• If not paid on time, the interest rate is XX%
• Customer pays collection costs

If your credit app does not contain this verbiage, find one that does and copy the key sentences.

The reason this is so important is that, without this language, a court may rule that the customer never promised to pay and therefore does not have to!  Without a formal contract, the credit app is the only document wherein the customer promises to pay you.  This is very important if any collection effort is needed in the future.  If there is not a provision for interest, the court will not grant any interest!  Finally, it is very expensive to take a customer to court–and unless the customer has agreed in advance to pay for this expense, the court WILL NOT award collection expenses!

You never want a prospective customer to think about these issues, so present the document in a non-threatening way.  Say “I know you have not decided to use us, but I want to set up an account just to be ready.”  If they do not want to give a bank reference, or even customer references, NO PROBLEM!  The most important thing is the signature anyway.  We recommend wording, in big bold letters, that signing the credit app DOES NOT obligate the prospective customer to ever use the local trucking services.  Point to it when asking for them to fill out and sign the credit app.

Your local trucking business will benefit from following the simple steps above for a credit application with teeth.

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We thought this was worth your consideration:

California Supreme Court Decision

Check it out.

–The Editors

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The Internal Revenue Service today advised truckers and other owners of heavy highway vehicles that their next federal highway use tax return, usually due Aug. 31, will instead be due on Nov. 30, 2011.

Because the highway use tax is currently scheduled to expire on Sept. 30, 2011, this extension is designed to alleviate any confusion and possible multiple filings that could result if Congress reinstates or modifies the tax after that date. Under temporary and proposed regulations filed today in the Federal Register, the Nov. 30 filing deadline for Form 2290, Heavy Highway Vehicle Use Tax Return, for the tax period that begins on July 1, 2011, applies to vehicles used during July, as well as those first used during August or September. Returns should not be filed and payments should not be made prior to Nov. 1.

To aid truckers applying for state vehicle registration on or before Nov. 30, the new regulations require states to accept as proof of payment the stamped Schedule 1 of the Form 2290 issued by the IRS for the prior tax year, ending on June 30, 2011. Under federal law, state governments are required to receive proof of payment of the federal highway use tax as a condition of vehicle registration. Normally, after a taxpayer files the return and pays the tax, the Schedule 1 is stamped by the IRS and returned to filers for this purpose. A state normally may accept a prior year’s stamped Schedule 1 as a substitute proof of payment only through Sept. 30.

For those acquiring and registering a new or used vehicle during the July-to-November period, the new regulations require a state to register the vehicle, without proof that the highway use tax was paid, if the person registering the vehicle presents a copy of the bill of sale or similar document showing that the owner purchased the vehicle within the previous 150 days.

In general, the highway use tax applies to trucks, truck tractors and buses with a gross taxable weight of 55,000 pounds or more. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold.

For trucks and other taxable vehicles in use during July, the Form 2290 and payment are, under normal circumstances, due on Aug. 31. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply to vehicles with minimal road use, logging or agricultural vehicles, vehicles transferred during the year and those first used on the road after July.

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As of this writing, 34 states, the District of Columbia, and Guam have adopted laws prohibiting texting while driving. These laws cover all drivers, not just truck drivers.

Click here to see a table of all current state texting laws.

Illinois, Texas, and Arkansas also ban any use of cell phones in school and construction zones.

Don't Text and Drive Your Truck!

Also, for just over a calendar quarter now, no truck driver in the nation may text while transporting hazmat.  Click here to read more.

What is your experience with local trucking and the new texting laws?

–The Editors

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Many local trucking companies have been confronted with contracts containing an Indemnity clause.  It typically states:

“CARRIER shall at all times indemnify, defend and hold harmless BROKER, its parent, subsidiaries and affiliates, and their respective directors, officers agents and employees against and from any and all claims arising from the services provided hereunder (including, without limitation, claims for personal injury, death and damage to property, clean‑up costs from commodity spills and damage to the environment, whether or not caused by (a) by any agent or employee of CARRIER or (b) by any other person or entity.  The provisions of this Paragraph shall survive cancellation, termination, or expiration of this Agreement.”

This means that even if an accident is caused by the broker’s negligence, or shipper’s negligence, or by any reason whatsoever, the carrier is responsible to pay legal fees, claims, and judgments against the broker. Of course, this is very unfair.  The problem has been that carriers are rarely given a choice.  The attitude is typically, “sign this or forget about getting work,” and, because of business pressures, many sign.  Some insurance policies would not pay such a claim, so the carrier is risking its very existence by signing such a document.

Well, help is at hand in most of the USA.  During the past two years, most states have passed, or are considering passing, an “anti-indemnification” law.  The law invalidates any clause that forces the carrier to indemnify the broker.  If you live in a state that has passed “anti-indemnity” laws, you can safely sign contracts that contain the clause and know it cannot be enforced.

WARNING! If the contract states that it shall “be construed under the laws of …….”, with a different state filled in, make sure THAT state is one that has passed an “anti-indemnity” statute or you WILL NOT be protected.

To see a map of states which have passed “anti-indemnity” statutes, click here.

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We came across an interesting approach for keeping trucks connected to docks and preventing injuries.

Click here to read the complete article.

While it’s written by a biased source (the author works for a company that makes RIG-based and wheel restraints), the issues are worth exploring, and you can’t argue with improving safety and reducing injuries.

Who out there has experience with restraints of these types?

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