Planning Logistical aspects of any business or supply need is a never ending process. It requires forethought, understanding of bulk purchasing, and average of the costs over time. Not to mention the many other aspects of end supply to the Planning Organizers Company. Planning is key.
Trucking companies are the main supply source for 75% of the United States freight. The last numbers seen stated that the 4.25 million trucks estimated in the US, with a bit over 3 million drivers. That is roughly 4.25 trucks and 3 drivers for every operating carrier in the states.
Considering that the largest shippers in the country are obviously the manufacturing bases that produce product, materials, or a combination of these. These hubs or centers are the majority of the 75% of all the US freight shipped. The balance of this total is scattered pretty evenly across the country.
Why is this important? Well, a carrier or future owner needs to understand where their primary sourcing of business is going to come. This is the most fundamental aspect of being a successful carrier. Knowing your market, and understanding where and how you can maximize full return and customer delivery; ensuring quality service, timely returns, and maximizing the payout from each desired customer retaining and returning to your pocketbook. Customers are hard to come by; much less a Great Paying Solid customer.
Are you seeing the potential here?!?
When you have the knowledge and the foresight to take the initiative to say hey “Mr Customer” let me help you schedule this portion of freight for the remaining year…..That my friends will make you top dollar and profits at the years end.
These shippers and recievers primarily use a centralized hub, or main corporate system; utilizing data from the regional facilities and known ratio’s for their traffic managers at each location. Historical data translates into known freight, known lanes, known price for shipping. They can also preplan to use other distinguishable modes of travel by preplanning and shipping for these modes given enough timing and production availability. Using outside sources like the railroad and aviation- they still use, for the most part-unless they have a rail stop or airport in their back lot-they still use and NEED trucks. Hence why it is vital for the carriers to know how they fit in. Inbound and Outbound lanes from the customers facilities.
What is the best way to maximize your returns as a carrier; and how to benefit the customer as well?
This is one of my best ways to lighten, the operational side of the carrier operation, ensure lowest deadhead miles, and keep the drivers loaded to the maximimum time. Delivery at a facility ensures, almost a 82% guarantee that the reciever is or may be a shipper as well. Given that most recieve more than one truck load at a time, it demands that even only recieving one truckload, they would have an outbound shipment needing moving almost immediately.
In order to place your carrier in the center of these necessary spokes is by calling and asking for any potential outbound lanes from the facility. The dispatcher is overlooking vital profits that could be realized if they are not requesting at least to see if one is available. Not only does this assist with a immediate truck for the potential customer, but also lightens their procurement department of the necessary time to fulfill another shipment, when they have one on site, requesting their load to fill their truck. Less time and savings says increase freight pricing without killing the customers average rates.
If only 1 out of 5 locations that you deliver to has an immediate or semi immediate load that books; a carrier utilizing this basic process improvement is standing to save on average of 250 miles per load booked, 6-8 hours of production potential-if not more, 35-50 Gallons of fuel per booked load at the reciever, not to mention each time you come in with one I bet you they will remember you and request you after the 2 or 3 time there. “Oh Yeah, they are the one that helps us with those extras when they deliver get them 2/3 extras if they can get some more trucks here quick!!”
The Procurement department will start searching out your trucks, paying your deadhead or at least portions of it; and almost always have you an outbound when you come in with the inbound delivery.
The other thing I want to mention is you must ensure that the driver pool, is watching your back, when it comes to onsite customer service. They are the key component in maintaining the customer to full satisfaction. It only takes 1 dumbass to ruin your customer. It will take you 10 -15 loads after that, if they give you more to return, to fix that one dumbasses mistake and attitude issue. Be mindful, let the bad apples stay to the roadside, ensuring that they do not mess with the client that is helping you and your drivers who maintain the best of service standards for themselves, and for the carrier paying them.
The differences and how to exploit the big carriers doing volume-
We all know that the big carriers all have several things the small guy does not readily have available most instances. The big carriers have their private jets, unlimited bank accounts, credit cards to the hilt, and trot down main street touting their big carrier names, raking those big carrier annual contracts. Their sales team does their job, but they underestimate the actual small guy because they all are in the volume business. They squeeze the profits so only the guys making $5 per truck per day, and have the 100k truck fleets will touch the shit. Blocking the little guys, and ensuring customer retention and loyalty due to the cost cutting they provide.
Now, they little guys, do not have that expensive salesman, nor do they have the extra $100k to pay him in the bank. For that money, the small guy can get another truck setup, with a driver rolling to at least get some more profit coming in to the business. Obviously, the small guy is a little disadvantage, since most small carrier’s owners actually work within the business daily, majority of them driving; and they cannot utilize the phone capabilities that dispatch should be, brokers better be, and that the other small carriers can’t get their team to do.
This is where a good dispatcher, independant or in-house, comes into play. Building the Carrier, to maximize their return as well as the Carriers profits. A good dispatch and good drivers will all try and reload at unloading, just to save time, save money, profit more through more mileage or pay percentage. They know and understand they must more freight as soon as possible, or they are a loss of asset to the carrier they work.
When you have drivers that have their own freight and can get freight like this; make sure that you compensate them at least half of a standard commission; for their service. The dispatcher can get the balance half, because they still are processing and invoicing, plus what ever else they do for the carrier. This keeps strong standing cohesive efforts, and acknowledgement to the professional who actually went over and above to find the load.
Do not be the carrier that just takes and expects everyone to give to the house…….That is the easiest recipe for a soon to crumble house.
In Conclusion, in order to maximize a carriers profits, they must know and understand where they can profit extra by saving the costs of deadhead, ie, time, fuel, wear, processing- you do this by helping the customer move freight more efficiently by dropping and picking from the same facility if at all possible; through prior arrangement to delivery; or by driver integrating with the facility staffing onsite–loosing those freight reigns by providing a easy solution button to their dreaded deadlines of shipping and finding trucks to move it outbound. This allows savings to the customer, while increasing savings to carrier and potentially increasing rates outbound—-through the appreciation of the management and staff, potential for more direct freight without the extra hassle, and haggle with outside vendors. Teaching the knowledge is one step, producing the wisdom, and procedure is the hard part. Keep pushing for a better more profitable tomorrow.