There seems to be a trend in several states of inspecting a driver and not giving him or her clean inspection paperwork. Everyone has seen the drill: You get pulled over because you were allegedly doing 64mph in a 60mph zone. The officer looks at your bills, CDL, med card and log book. You are clean, but you get a warning for “speeding”. What has actually happened is that you got a Level 3 roadside inspection and our safety record did not get credit for having a clean one. If that happens to you, ask the officer for the clean Level 3 inspection ( the speed “warning” doesn’t matter if it’s not a citation). If he refuses, POLITELY ask for his name and badge number and forward that information to me, along with that day’s log (showing the time and location of the stop). I protest each of these in the DOT Data Q system. Bad inspections hurt our safety record and make everyone’s PrePasses and Norpasses go red. We need the credit for the good inspections. The same thing applies at ports of entry. If they just weigh you or look at your bills, it’s no inspection. If you’re required to show logs and driver credentials along with the bills, it’s a Level 3 inspection and we should get credit for it. PS……We don’t NEED any more bad inspections. Drivers who cannot produce their previous seven day logs and are cited for that or any other log violation do not need to be trucking at Mercer. Remember, the annual CVSA Roadcheck is June 2-4. WE NEED CLEAN INSPECTIONS.
Yesterday, our TQM group met for our monthly meeting. Our TQM (Total Quality Management) group, consists of several people from our Truck and Freight Operations departments. We meet monthly to increase communication between the two departments. If Truck Ops. and Freight Ops. are working well together, then the success of our Owner-Operators is directly effected, and improved.
Today, a representative from our freight department pointed out that the percentage of our freight that is brokered to other companies, is increasing. The question is, why are Mercer drivers hauling less of our available freight? This may be a surprise to some of you, but if we had to choose between moving a load with a broker, or moving a load on a Mercer truck, we choose the Mercer truck every time. We can rely on our permanent trucks to be safe compliant, and on time! Plus, brokering also leads to back solicitation, and we don’t need these other companies hauling our customer’s freight, and trying to back door us.
Every driver has their reasons for passing freight. Too much deadhead, bad destination, commodity sucks, and last but not least, it’s too cheap! I know that we could get in a huge argument about rates. Truth is, right now the industry may be the most competitive it has ever been. There are an estimated 360,000 trucking companies in the country, and they all want a piece of the action. I will leave other companies names out of this, but I will assure you that they are aggressively pursuing our customers, and they are trying to under-rate us everyday. Should we just “Let ’em have the cheap stuff” ? Those companies can’t make it too much longer hauling the cheap freight, can they? It’s no secret what kind of condition the Trucking industry is in right now. I have tried to post some articles on this blog over the past couple of weeks, that show how almost every company is struggling right now. The fact is, those companies under-cutting us, will keep hauling the cheap freight…because they have to.
100% Owner Operator. That statement is our claim to fame. My idea of an O/O, is the most experienced, most compliant, safest driver on the road. We have the ability to approach customers and tell them that we have the best of the best working for us, and assure them that we are their safest option. Just last year, we were setting records, and customers were paying top dollar for our services. Now they want the cheapest rate they can get. In fact, many of our customers are shifting to computer-based load offering systems, which award their freight to the lowest bidder. Our safety, compliance, and reliability, are low on the priority list for our shippers these days. We are cautious about booking every load that we can, because we don’t know if it is going to be covered. Trucking companies that have company drivers can easily book anything. They can force dispatch, and they can quote cheaper rates. They pay their drivers flat rates per mile, so they can make some good money off of some customers, and they can quote cheap, and break even with others. We have to get the highest rate possible on every load we book, because if we book a load, and quote it cheap, maybe all of our drivers pass the load, and then we have to broker, or give the load back to our shipper. I can tell you that our agents are working with the mentality of book everything. We want to book freight, even if our rate is somewhat cheap, and have an opportunity for our contractors to be offered a load. We also don’t want to turn down any freight from our shippers, even if it is a cheap load that goes to a bad destination. I can almost guarantee that if we don’t cover a shippers marginal freight, they will never reward us with “good” freight.
I am not writing this to talk you into freight that doesn’t make you money. As an O/O, you have to keep a good handle on what your expenses are. I talk to guys all of the time that can’t tell me what their cpm to run the truck is. Think about that. How can you say a load is cheap, when you don’t have a clue what your costs are? And how can you adjust, and control your expenses, when you don’t know what they are? Our most successful contractors here, are some of the best business people that you will ever meet. I’m not pointing that out to belittle anyone. I want all of our contractors to be the best. If you don’t know what your running costs are, then I guarantee you that you are passing freight that will make you money, because you think that it won’t. One example is the way many drivers figure deadhead into a load. Most drivers that I have talked to take the miles of deadhead and add those miles to the load miles, and re-figure the rate. For example, you are in Louisville, KY and a load comes up out of Columbus, OH, going to Charleston, SC. The load pays $1.35 cpm, on 636 miles, which equals $858.60 to the truck. You take 636 miles, add the 215 mile deadhead, which is 851 total miles. Take truck pay, $858.60, and divide 851 miles, and get $1.01 cpm. Most of you probably pass that load, right? This formula is just not logical to me. It doesn’t represent the actual cost to haul this load. Take 215 miles deadhead, and say that your truck gets 6 miles per gallon, 215 divided by 6 is 36 gallons. 36 gallons x 2.50 (avg price of diesel) = $90. So it will cost you $90 in fuel to deadhead to get that load. Take that $90 out of the truck pay ($858.60), and you get $768.60. Now take $768.60 and divide by the loadedmiles (636), and you get a rate of $1.20! I bet there are quite a few of you that would change your mind about hauling the load now. The first formula only really focuses on the miles involved. The second focuses on the money. Money is all that matters. The moral of this is, don’t talk yourself out of freight that makes you money. You not only hurt your profit, but you also hurt our chances in covering freight with a customer that we desperately need.
My deadhead formula is just the tip of the iceburg when it comes to figuring your actual expenses. If you need any help at all, I know several great contractors that can help, or I can hook you up with our friends at CBS truck tax. They can give you a month by month breakdown of all of your expenses, and show you exactly what your profit-margin is. We want to give all of you the tools to succeed here, so never hesistate in calling Heidi, and I. Be the best you can be!