MISSISSAUGA, ON – Maximizing profitability in an industry where margins can be thin comes down to just one thing: time.
Panelists at the Surface Transportation Summit had differing views about where fleets could make the best use of their time to convert it into dollars and cents, but both agreed that the old adage is true: time is money.
“Time in trucking is a perishable commodity,” said Brian Abel, a freight network engineer for KSM Transport Advisors.
Abel and fellow panelist Mike Buck, president of MCB Management Consulting, spoke about different ways fleets could save time by being proactive and rooting out waste.
Buck presented ways fleets could capitalize on being proactive about maintenance, creating a schedule that would mean less downtime, would control costs, and would maximize the efficiency of equipment.
Buck said an ideal maintenance pyramid would resemble Maslow’s Hierarchy of Needs, a common sociological tool used to demonstrate a person’s needs for living in order of importance. The maintenance pyramid begins with selecting the right equipment during purchase, moves to engaging in proactive preventative maintenance inspections and procedures, and then focuses on regularly scheduled service and repair visits in the middle.
Ensuring the right equipment is chosen and the proactively maintained will ensure fleets are getting the best possible return on their investment, and will save them both time and money in the long-run Buck said.
Maintenance visits, whether proactive or reactive, shouldn’t just be about inspecting the truck. Buck said fleets should be taking the time to inspect the technician and shop as well.
Creating an in-house report card for repair technicians could save a fleet money by evaluating the quality of work done, the amount of unnecessary work suggested, and how efficient and timely maintenance and repair work is completed. Buck said the report cards give a fleet an accurate picture of the technician or shop over time, and the ability to see and eliminate a bad one, should it be necessary.
Poor repair shops are not the only thing that can over promise and under deliver. Abel told fleet owners they should identify and cut so-called “toxic loads” before they take a cut out of the bottom line.
KMS’ product Netwise compiles data and uses math to identify a fleet’s margin per day. Abel says loads or customers that routinely shrink or eliminate that profit margin should go, so a fleet can put its focus on more profitable loads.
Netwise takes a load’s revenue, cost, time to deliver, and network, and combines the data to make what it calls a yield. Abel said yield creates a metric that allows fleets to accurately compare loads for their profitability.
Loads that regularly experience delays in loading, unloading, or transit, causing flow and backhaul issues should be fixed or they should go away, Abel said. Eliminating these problems could save fleets as much as a dime per mile.
Abel said fleets should be proactive about finding ways to maximize their profitability, and not wait until they are desperate to increase their margins.
“It’s possible to meet the market. The best time to do that is when the market Is good and you have choices,” he said.