Profitability is not a dirty word, says Ray Haight.
BRAMPTON, Ont. – Trucking is a difficult business, but it can be profitable. Fleets that benchmark their performance against peers in the Truckload Carriers Association’s Profitability Program (TPP) have proven that.
These days some of them are experiencing margins typically associated with the retail sector, adds Ray Haight, TPP retention coach.
During a seminar hosted by the Truckload Carriers Association, he offered a few secrets of their success:
“Add by subtraction” – Fleets need to find ways to eliminate redundancies, he explained. That leaves time for more profitable ventures.
Invest in intellectual property – Yes, you can ask a transportation management system supplier to take care of the software, but that means others will also have access to the same insights. There’s a value to investing in software developers, Haight said.
Consider dynamic pricing – Profitable carriers establish rates that depend on a customer’s circumstances, he said, stressing the value of using automation to remove human decisions from the equation. Heat maps, for example, can tell if you’ll be serving the slowest dock door in a facility. Couple that with delivery times when traffic congestion is highest, and a customer should face rate implications, he said.
Be a second-level thinker – Top performers look deeper than obvious issues to understand all the variables and how they interact, Haight explained. Do a deep dive.
Think like a manufacturer – On the factory floor, companies look for ways to eliminate redundant processes and tasks. The same can be said for trucking. Some fleets have encouraged drivers to help with this by offering a percentage of revenue, he said.
Offer employees flexibility – “Every sector in the economy is looking for people right now,” he said, noting how job openings now exceed the number of unemployed workers. “What can you do to try to compensate for that?” Amazon, for example, has established a CamperForce of retired or semi-retired people who move from one RV site to the next. “You can work for them as long as they want,” he says. “The days of, ‘Here’s what we pay, here’s where you run’ … flew the coop.”
Take a sophisticated approach to maintenance – Top performers are proficient users of maintenance software, work their warranties, and manage equipment lifecycles right down to an individual vehicle identification number, he said.
Tell your story effectively – Carriers often fail to tell their story, no matter how good it might be. “A lot of good carriers have good safety records but they don’t talk about it,” Haight said as an example. “That’s something you can’t buy.” Rather than using social media to announce that you need drivers, he says it’s better to showcase how the company interacts with its community, suppliers, and driver families. “Stories as opposed to want ads are much more effective.”
See the big picture – Haight stresses the value of joining together in advocacy efforts. As for those who don’t contribute to associations? “You deserve what you get,” he said.
Programs like the TPP make it possible to add margins without having to buy another truck, build a new terminal, or hire new drivers, Haight said. After all, a business leader can be good in one area, but may lack the expertise to realize opportunities elsewhere.