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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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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We found this article on TruckingInfo.com that discusses the possible options and benefits of deploying GPS in a smaller fleet:

Click here to see the full article.

Depending on what works best with your TMS, there are a variety of GPS packages that can give you the functionality you need.  In addition to watching GPS “breadcrumbs” on a screen, dispatchers can benefit from systems such as Actsoft’s Comet Tracker, which has simple drop-down forms for drivers to enter arrival and departure times; this can be used as an alternative to geofencing.

Keep in mind that EOBR rules that usually apply for OTR fleets are waived for local trucking because of the 100-mile exemption.

–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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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 here at the Local Trucking Blog have been hearing about increasing difficulty hiring qualified, experienced local CDL drivers.  Everyone agrees the CSA initiative (click here to see more) helps in weeding out unsafe candidates, but that is only part of the equation.  Certain skills are much more important to a local operation.

It is no big deal if a truck takes 15 minutes to spot a trailer after traveling five days cross country.  It is a very different story when you expect productivity of 20 stops a day.  This is why your test drive should include plenty of backing and spotting exercises.

Do you carry hazardous materials? Don’t count on the Hazmat license endorsement to tell you anything about what the candidate knows.  You should have a written test.

Same for other important skills, such as routing and emergency procedures.  A few math questions will help determine if they can accurately count a multi-pallet shipment.

Liftgates? Make them take a skid up and down.

E–track or logistics in your trucks?  Make them secure some freight.

Expect at least 50%, and possibly 80% of your driver candidates to flunk the test.  This is good.  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.

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