Embracing the Trucking Transformation: Strategies to Adapt to Rapid Technological and Regulatory Change
by Ken Gillies and Rob Kooken November/December 2015
Element Fleet Management’s Ken Gillies and Rob Kooken provide an update on key issues affecting the trucking industry, including fuel costs, emissions regulations, the driver shortage and regulatory compliance. They share strategies that fleet operators can adopt in order to address these concerns.
Ken Gillies, Commercial Lead (Truck), Element Fleet Management
Rob Kooken, Director Truck Excellence, Element Fleet Management
While the fundamental issues in the trucking industry remain the same, today there are new concerns and developments that are altering the landscape. Technology and regulations are changing at a rapid pace and there is the ongoing, nationwide truck driver shortage that will likely get worse before it gets better. It’s important that fleet operators of both private fleets and common carriers understand how to successfully deal with these concerns.
Fuel Costs & Emissions Regulations
Some of the biggest impacts on the trucking industry today are related to fuel costs and emissions regulations. With gas prices stabilized at lower levels, the fuel surcharge levy has also been reduced, motivating carriers to work on further improvements in fuel economy and overall cost management in an effort to maintain profitable operations. Improving MPG by one-tenth of a mile may seem insignificant, but multiply that over millions of miles of travel and the savings become meaningful to a company’s bottom line. Wanting to achieve better fuel economy is one of the primary reasons behind the shift to automatic transmissions. Driver recruitment and retention levels are improved as well. Opting for wide-base tires with aluminum wheels can also offer better fuel mileage and increased payload since the truck’s empty weight is reduced. By taking advantage of aerodynamic designs in tractors and trailers, a fleet operator can further improve fuel economy.
Fleet managers also need to be aware of changing emissions regulations. Earlier this year the Environmental Protection Agency released a proposal for a new set of heavy-duty vehicle emissions standards, focused on lowering greenhouse gas emissions — primarily carbon dioxide output. Some states, like California, already have regulations in place specific to tractor-trailer combos.
SmartWay Transport Partnership Program
We suggest determining if a fleet customer could benefit by joining the EPA’s SmartWay Transport Partnership Program, which helps the freight transportation sector improve supply chain efficiency. The goal of SmartWay is to reduce transportation-related emissions that affect climate change, decrease environmental risk for companies and increase global energy security. While participation is voluntary, SmartWay certified trucks and trailers are required for operation in California, regardless of where the vehicle is registered. Fleets with 53-foot or longer box-type trailers (dry-van and refrigerated-van) and the tractors that pull them are responsible to comply by using aerodynamic tractors and trailers that are also equipped with low rolling resistance tires.
Advances in technology make it possible to monitor idling time, vehicle speed, tire pressure and provide insights into driver behavior. Equipping vehicles with tools such as telematics offers numerous benefits, including increased fuel savings, more efficient vehicle tracking and routing, and the ability to set a virtual perimeter for user-defined geographic areas.
For example, one of the biggest contributors to poor fuel efficiency is idling, followed by hard acceleration and speeding. Telematics can track these factors and provide fleets with almost immediate results and cost reductions. The technology can also track risky behind-the-wheel driving behaviors, such as failure to use seatbelts, speeding and harsh braking, which delivers a longer-term provable payback in reduced accident rates and associated costs.
Another major challenge facing the commercial trucking industry is the well-publicized driver shortage. The American Trucking Associations estimates there will be a shortage of between 35,000 and 40,000 truck drivers this year, as baby boomers retire and fewer new drivers enter the profession. The turnover rate among truck drivers today is more than 95%. Trucks move almost 70% of the inland freight, and this labor shortage is adversely impacting businesses and consumers across North America as cargo sits idle with no one to move it to its final destination.
As most will attest, the life of a truck driver isn’t easy. It involves long hours without great compensation and constant separation from home and family. Another difficult issue faced by many drivers is empty promises from employers. If a company is looking to improve driver retention rates, it’s crucial that the operator is upfront with drivers from day one. In an effort to attract drivers, many companies overpromise and under deliver. It’s an unfortunate practice when drivers are led to believe they will be home every weekend when in reality, they will be driving routes where that’s nearly impossible. Or a driver accepts a position thinking they will earn $60,000 annually, but later learns that he or she must be away from home on a continual basis to actually attain that pay. The practice by some carriers of assigning a new (or nearly new) truck to a recent hire and then switching the driver to an older truck after a few months is another significant contributor to high turnover rates. Unfortunately, the industry has earned a bad reputation for not being truthful with drivers.
Improving Driver Retention
Being honest with employees from the start about home/family time, health offerings and pay will help build a relationship of trust and loyalty that can help keep drivers behind the wheel at a company. Drivers want time with their families, meaning they are most interested in regional routes that keep them relatively close to home. Use of third party logistics or intermodal services for longer routes can also reduce the time away from home pressure on drivers by reducing the number of runs that require multiple days and nights on the road.
A fleet operator should consider offering sign-on bonuses drivers can actually achieve and incentives like best miles-per-gallon and accident-free awards, both of which can improve morale and keep drivers engaged. Keeping incentives realistically attainable is important. Strive for a good balance between setting critical goals and making those goals attainable.
Companies that pay for downtime, like load swaps and break downs, are also viewed more positively by drivers, as are those with newer equipment featuring comfort options. It’s also crucial to show drivers that their health and safety matters. Some companies are now providing concierge service for drivers to handle issues not directly related to driving, while others provide drivers with places to catch up on sleep and even gyms for working out. While the trucking industry has been somewhat slow to adopt new technologies, people are now seeing the value of using technology to enhance driver experience and to improve the carrier’s visibility into vehicles’ needs via trouble codes. Ensuring a fleet operator’s ability to receive and act upon the information reported will also have a positive effect on the driver.
Another concern of utmost importance to today’s trucking industry is regulatory compliance. CSA — Compliance, Safety, Accountability — is a safety measurement and reporting initiative of the Federal Motor Carrier Safety Administration (FMCSA). Under CSA, almost all aspects of the U.S. commercial motor freight industry are subject to new, increased safety reporting and enforcement measures. The initiative aims to improve safety and reduce crashes, injuries and fatalities related to commercial motor vehicles. It’s important to note that these new measures affect drivers and shippers as well as trucking companies. Previously, drivers weren’t directly measured or affected. Now, driver scores move with the driver from job to job, meaning drivers have more skin in the game, which can lead to a greater sense of responsibility. Maintaining good CSA scores are a fleet’s best defense from being fined or audited by the Department of Transportation.
Companies are rated by the FMCSA in the following behavior, analysis and safety improvement categories (BASICs):
Controlled substance and alcohol
Hazardous materials compliance
By knowing the rating of a client’s company and drivers, you can gain a clear understanding of its operation and suggest a plan to stay or get back on track and avoid potential audits, lost business and — most importantly — accidents.
As the industry shifts toward more personal responsibility for drivers and their employers, the forthcoming mandate for electronic onboard recorders (EOBRs) shouldn’t come as a surprise. For decades, commercial truck drivers have recorded their hours in paper logbooks to demonstrate compliance with hours of service (HOS) regulations. In a world of all things digital, the paper-based system is outdated and easily manipulated. While some may balk at the change, it is long overdue and will provide better control with hours of service compliance. EOBRs offer a positive change for the industry, opening the door for driver support centers capable of “seeing” drivers and their vehicles. These types of centers can alert drivers when they will soon run out of hours, if their vehicle needs an oil change and many other insights. Support centers can take the burden off of the driver and help prevent delays, which is a plus for the shipping community.
It’s undoubtedly an exciting time for the trucking industry, filled with changes that will alter the landscape for decades to come. Understanding the latest mandates and regulations, utilizing ground-breaking technologies and the resulting information can empower fleet operators to better serve clients. Embracing the current transformation will help lead to a smarter, safer and more tech-savvy trucking sector.
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