The Spaghetti Ain't Sticking!

In 2008, the ATRI (American Transportation Research Institute) published a report on the impact of driver training upon safety. Among the factors considered and the metrics compiled in their research, the following data was made public:

 

"The selected driver population matched the national new entrant driver population in another key area; length of employment. Driver turnover is a critical issue within the trucking industry, with many carriers experiencing turnover exceeding 100 percent annually. Among the new entrants included in the study, slightly more than 25 percent were no longer employed by the carrier that initially hired them by the 60th day of employment. At 100 days, more than fifty percent of the new entrants had left and less than three percent worked for the original

employer on the one year anniversary of the date of hire."

 

This was four years ago, and we have come through the deepest part of a recession that was unprecedented since the Great Depression. In fact, this recession has come to be called "The Great Recession" by many.

 

As a driver recruiter for a major carrier in the years before and right up to March of 2008, I kept abreast of the turnover rate in the industry because I have always had a deep interest in the principles of retention, some of which are job satisfaction, employee engagement, and company culture. As is plainly denoted by the statistics in this report, even at the onset of the recession, drivers were frequently changing jobs.

 

The new entrants are perhaps the most revealing segment of the turnover phenomena. When less than 3 of every 100 recent driving school graduates remain with a company for one year, it should raise a number of flags; and it did! At about the same time as the country was slipping into the economic recession, turnover was an issue on the front burner. Unfortunately, the housing market collapsed and Wall Street had to be bailed out. That took its toll on the Trucking Industry as no recession before this one and after the Great Depression had ever done. That put the brakes on all turnover considerations because those who had jobs were holding on to them for dear life. That meant that retention would have to be considered later; if at all.

 

Companies were crashing and burning left and right. Drivers were being fired for over-idling their trucks; and for any other minor infraction that could be used to further reduce the driver force, since there was not enough freight to justify keeping them on the payroll. There were chargebacks for assorted reasons, and some drivers quit due to heavy-handed company policies that were meant to reduce the load on those companies that were trying to survive. Some drivers were returned to their terminals just to find out that it was time to clean out the truck because the company had shut down. In an atmosphere like that, what need was there for either recruiting or retention?

 

Having lived through other recessions in my life, I knew this one would either become a greater depression than the last one or turn around sooner or later in the future. In any case, I also knew that in all probability, things would have to start moving forward once again once this recession bottomed out. For that reason, I kept a close watch on economic conditions and especially on signs of the Trucking Industry showing signs of a return to forward movement. Those signs came when I saw the smarter players begin to move towards increasing their capacity. The call for driver recruiters increased exponentially almost overnight and class 8 orders suddenly grew as well. The job boards that had been devoid of any jobs in recruiting were suddenly posting jobs for recruiting managers.

 

This morning, I came across a statistic that confirmed for me what I knew would happen once the industry started its upward climb once again. Even with the overall unemployment rate at *8.1% nationally, trucking is now suffering 106% turnover according to a report from a trusted source. Imagine what it will be when the economy cranks up.

 

The WIA is funding training for new entrants on a level unheard of before the recession. There is money available for people to be trained for entrance into the field. But as the economy improves in other areas, and other industries start to recover, those who came from those industries into trucking as a means of keeping their bills paid will return to their industries of choice. Attrition will add to the shortage as some of those who reach retirement age decide to work part-time or not at all.

 

So it all boils down to this: Where 100 people used to stand in line for a chance at 10 jobs; trucking companies with a greater demand for capacity will now have to stand the scrutiny of those valuable assets we call professional drivers as to whether they are even worthy of being considered as an employer. What will these companies offer these drivers that others won't? What kind of hype will work in the trade publications in this new reality? How will they fare when they are examined minutely by the power of social media? How many drivers do not carry a smart phone yet; especially among the new and younger entrants? The old school methods will not work any more!

 

Change has come and more is coming yet! The aggresiveness of FMCSA rules enforcement and reporting will have its own impact on both drivers and carriers.

 

Now is the time to think outside the box. This is the right time to invest in innovative changes to recruiting efforts that provide not only for a 100% return on every dollar invested in recruiting; but most importantly, recruit with the principles of retention as an equally important part of every hire.

 

Let me put it this way: If your recruiting department is still banking on the old "spaghetti on the wall" methods of recruiting, and your recruiting team's idea of brainstorming is finding catchphrases to use in the trade publications; and their idea of effective recruiting is to send in an attractive woman (sex sells) or slick doubletalk Sam to promise them what can't and will never be delivered; then figure on needing some deep pockets, because at the present average rate of 106%, just multiply $8000 (average cost of each incidence of turnover; including Sam's salary) by the number of drivers you employ; and get an idea of what it will cost you to do it the "old school" way.

A company with just 500 units with solo drivers that experiences this level of turnover annually is hemorahging money to the tune of $4,240,000 each year. And as the 800 pound gorilla in the room would say, "But what do I know?" New reality; new paradigm! Tudaloo and Happy Trails!

Francisco H. Gomez                                            *7.8% as of 10/05/2012
Commercial Driver Liaison Services
www.procdldriver.com

It is the first day of Fall 2012. The economic outlook has improved as of last week due to reports of an increase in housing starts and in sales of existing homes, but the desired downward trend in unemployment has not been dramatic; that is, unless we take into consideration that the Trucking Industry is already booming. If that were not so, the turnover rate would not be back up to 106%. The competition is getting fierce; and it's just starting!

As a leading indicator of change in the economy, trucking will always be the first to experience those changes due to its position between manufacturers and consumers. You know, what someone means when he or she says, "everything we wear, drink, eat, drive or even throw away as garbage; arrives at its destination by truck probably 95% of the time". Even when it is shipped by rail, more often than not, it will be transported to its final destination by truck.

So if we take all that into account and wax optimistic, because there is no percentage in waxing pessimistic, the figures should tell us that even at a slow, and somewhat fractured pace; the economy may suddenly come to be suprisingly robust for another round. Of course, those who are genuine pessimists will "hold down the fort" until they can find something other than the economy to be pessimistic about. All I can say is "Keep on Trucking!"

What does this mean for trucking? More loads, a need for more equipment, a need for more drivers, and unless all companies have now discovered the legendary "fountain of retention", the headache of having to deal with a new wave of turnover that threatens to take the industry to much greater averages than in the past. If at present, while the country is still complaining of high unemployment, the turnover rate in trucking is so high; what will it be like when all those who are coming on board just to keep food on the table get an opportunity to return to their field of choice?

Oh, maybe you thought each one of the new people coming into the industry is a die-hard, responsible, dedicated, and truck-loving professional driver who will accept the rigors of trucking; especially in OTR (what I like to call the big leagues, because it isn't the same running out to the oil patch or hauling sand and gravel to construction sites as it is running from CA to NY or Seattle to Miami). 

For some companies, as I wrote here over two years ago, this will be a greater challenge than the one they faced just trying to remain solvent during the height of the recession as others were folding up their tents. Some of these are now returning to the old habit of "throwing spaghetti at the wall and waiting to see what sticks", while others are still sitting and waiting for the economy to get better before even turning their attention to a greater recruiting effort. I feel for those few employees that were left in recruiting as the rest were layed off during the recession. They now have to bear the brunt of the work as the field heats up. They groan under the heavy load while their CEOs read the tea leaves searching for some assurance that the economy will get better before investing in human resources (of the professional driver genre) acquisition.

Now, figure social media, and the power it wields, into all that; and every company's past reputation has the potential to either place it in the running to reap bountifully or die slowly and painfully. One thing is for sure: This is not the Trucking Industry we came of age with. It is an industry being reshaped through pressure from all sides by government, the economy, human nature, technology and instant information, and even the instability of  world conditions.

So what is the key to success in the emerging Trucking Industry environment? Success will mean different things to different components of this industry. To the CEO, it will mean greater profitability and growth. To the middle manager, it will mean more resources of all kinds. To the professional driver, it will mean job satisfaction that creates a desire to stay even when offered more money someplace else.

If this were just about finding drivers and convincing them to join the company, it would be hard enough considering the effects of attrition combined with all other factors already mentioned. This is about finding the right drivers and the perfect paradigm to decrease turnover and hiring costs while increasing profitability. There is a way to do it, but it does not involve throwing spaghetti at the wall! Tudaloo and Happy Trails!

Francisco Gomez
Carrier/Driver Liaison
Commercial Driver Liaison Services
www.procdldriver.com

Enforcement on the Move!

FMCSA 18-12

Friday, July 13, 2012

U.S. Department of Transportation Orders MTI Transportation, LLC,to Shut Down

FMCSA finds Alabama-based truck company to be imminent safety hazard

WASHINGTON - The U.S. Department of Transportation's (DOT) Federal Motor Carrier Safety Administration (FMCSA) today ordered Alabama-based truck company MTI Transportation, LLC, to immediately cease all transportation services based on evidence that it was a chameleon operation for two unsafe truck companies previously shut down by the agency.

“We must keep our nation’s roadways safe for drivers and passengers,” said U.S. Transportation Secretary Ray LaHood. “This case sends the message that we will shut down unsafe truck companies that attempt to illegally operate.”

FMCSA placed MTI Transportation out of service after safety investigators discovered the company was transporting goods for the former BM&L Trucking, LLC, and IDM Transportation, Inc. On May 11, 2012, the FMCSA issued an imminent hazard out-of-service order against both BM&L Trucking and IDM Transportation for serious federal safety violations in the areas of vehicle maintenance and driver drug and alcohol testing compliance.

The agency’s safety audit of MTI Transportation found that three of the company’s drivers were previously employed by BM&L Trucking or IDM Transportation. Additionally, MTI Transportation used two commercial vehicles still registered to BM&L Trucking or IDM Transportation. The May 2012 imminent hazard out-of-service order now also applies to MTI Transportation.

"The practice of unsafe companies quickly reincarnating as chameleon companies to continue operations is unacceptable. Our agency is constantly doing everything within its current legal authority to keep one step ahead of these illegal actors,” said FMCSA Administrator Anne S. Ferro.

A copy of the imminent hazard out-of-service order can be viewed at http://www.fmcsa.dot.gov/documents/about/news/2012/MTI-Transportatio-IH-Order.pdf.
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Contact: Shashunga Clayton • Tel: (202) 366-9999

U.S. Department of Transportation | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000

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I would be interested in learning how many units this company had altogether. Also, it would be interesting to find out whether those trucks and the drivers previously employed by BM&L and IDM are in any way related to each other. Are these drivers company or O/O?

Respect

I recently read a post by someone who sees the issue from the standpoint of the Insurance Industry. Below is my response to his sales job on EOBRs. The comment that evoked this response is as follows:

"EOBR's, a form there of is in each and every one of the new automobiles on the road today. The electronic communications that major auto companies have in their cars and trucks keeps track of you no matter where you are and or if you have the service turned on or not. GPS's check your speed, max speed, time running, fuel, mpg, and more.

EOBR's can help, and they can help the company using them. Currently we are asked by the insurance carriers we write with, does your client have GPS's on all trucks, do they have EOBR's on all trucks. Some carriers are offering free camera programs to go into certain types of commercial vehicles, and the result is a free camera, lower insurance costs, and a stonger commercial client.

It makes the insurance carriers happier, due to yes a lot of answers will come in from those devices, but it also shows that the owner of the company has a strong desire to maintain an efficient and safe company.
Now do I like all of this on board check and double check equipment stuff that the car makers are putting in vehicles and we have no choice about it, no.

Is it coming anyway, yes. Will it change the dynamic of how people operate their vehicles, yes. Will it help with insurance costs and company expenses, yes."                  

Posted by: Curt A Crapo (Craypo)

My Response:

Well, we know that the Insurance Industry is on board with EOBRs (pun intended). They will be happier; and of course, that just thrills us.
From the facts that Mr. Crapo has just given us; we gather that:

1. A "form" of EOBRs has already successfully been sold to consumers via their new autos. What is that form? Could we be referring to navigation systems that also monitor the auto 24/7 as a service that provides help or assistance when needed and monitors vehicle components and functions? As a customer, I can choose to pay for that service or turn it off. As a commercial driver, if EOBRs are mandated and funded, (which I personally hope never happens because of the amendment now headed for the Senate) the EOBRs in trucks will become the whip of those who sit behind a desk for 8-12 hour shifts and have the convenience of going home and forgetting about trucking until their next shift. If improperly used, EOBRs will make sure a driver is accessible to the operations department anytime; including off-duty or sleeper. It will become the favorite tool of the micro-manager; who can't or won't do the job a driver does, but wants to tell the driver how to do it. Nothing said about how this will be addressed or even if it should be. Comparing EOBRs to what is sold in personal vehicles is like comparing apples to oranges.

2. EOBRs help the company. That's pretty cut and dried. But that says nothing about how it helps to resolve the problem in item 1. So it seems as though the idea is to help the company secure better control over the driver without taking the driver's needs into consideration at all.

3. EOBRs and an owner's desire to run a safe and efficient company are not married to each other. That is something married in the sales pitch made for the implementation of on-board recorders by mandate from those who are licking their chops at the potential profits. How many loads are safely delivered each day? What is the ratio of these to the ones lost to accidents?

In summary, we should heed the alert sounded by the Insurance Industry as to the impending mandated implementation of EOBRs. After all, that industry has successfully legislated itself into every aspect of our everyday lives. It should know which way the governmental wind blows.

But let me say this to every driver out there who physically pays the price to move America; If it must be, let it be! But do not sell your services cheaply. It is a seller's market and the occupation has sufficient numbers to effect changes in the pay structure of all commercial drivers via the same legislative channels.

And let me say this to every company on behalf of drivers who are not just "steering wheel holders". I would love to drive a truck by the letter of the law always and professionally administer my duties as a Professional Driver; even if it means having to spend an inordinate amount of time away from my family because my work week is 14-21 days long. And you're welcome to monitor my every move because I'm out here to get a job done in a safe and timely manner. I have nothing to hide.

But don't expect to have your cake and eat it too. Do not bank on hiring quality drivers under the current pay structure. Drivers are a determined breed. That's what makes us who we are and makes us willing to do the things others wouldn't even try because they want to be home where it's safe; and not out stranded in some snowstorm, traffic jam, construction, accident, or spending hours or maybe even days waiting for a load. But I, and those who think like me, would rather turn our skills elsewhere if the pay system doesn't change; because as much as we love trucking, when you succeed in turning it into a menial job to be dreaded, the only way you're going to get us is to pay us for every minute we spend in the cab of your truck!
R.  E.  S.  P.  E.  C.  T.; tell you what it means to me!

Remote Control Drivers

I think big companies and associations who are in favor of EOBRs think this will cull the competition due to the prohibitive costs; and force drivers to submit to greater control due to a lack of options. They're probably banking on a global supply of drivers that they can import if necessary; something they've been experimenting with for a few years now. That's why some of the drivers who pull up to a warehouse can't understand the English language or be understood when they try to speak it. But those who are pulling for EOBRs are probably considering EOBRs their "one, two" punch.

What they don't realize is just how negatively this will affect their recruiting and retention efforts. I believe the opposite effect will be achieved. The whims of those CSRs, planners, shop managers, fleet managers and safety officers who are afflicted with a dictator complex; and use the data generated by EOBRs to "browbeat" drivers, will result in more and greater dissatisfaction among drivers in general. It will be the equivalent of "walking on eggshells" lest the machine say that the brake was applied too suddenly or the fuel feed was not applied gently enough. Even though a driver's time is cheaply bought under the pay-per-mile system; questions will arise as to stopping too often, etc. Under the guise of accountability, every driver will become a prisoner in his or her own truck.

Disengagement will occur much sooner in new recruits. Service records will suffer and accounts will be lost as loads are habitually late at pickup and delivery due to drivers adhering to the "letter of the law" in retaliation for the disrespect they feel subjected to. "Freedom of the road" will be a thing of history as every driver comes under the watchful eye of "big brother" back at headquarters who thinks he or she knows how to drive that truck better than the driver. Armchair drivers will be calling the shots!

Because drivers are by nature independent minded, retaliation will occur that creates more turnover and greater unrest among the company as a whole because a company is not the sum of its trucks, computers, or other assets. A company is the sum of its people; and people who are continually pissed off make terrible workers!

Anytime opression is used to control people, the results are always negative. Just ask King Louis XVI how the French Revolution turned out. Think I'm stretching it a bit? Take a ride across this country and take time to assess the overall spirit among drivers out there. I have; and it's a far cry from even just a decade ago. Some very good productive people are running around angry all the time because they sense the loss of their due liberties and the low value the industry places upon their contribution when it compensates them for just a portion of the time it requires of them and tries to make robots out of them.

The late and great Sam Walton said, "We are all working together; that's the secret." Think it's just "touchy feely"? Ask about driver turnover at his organization. Tudaloo and Happy Trails!                   

Time, Timing, and Trucking

A company is the sum total of its components just like a watch. If any one of those components fails, the whole watch is affected in its ultimate function. All the components are important to the task; but each component is individual in its function.

Just over a hundred years ago, Hans Wilsdorf capitalized on Swiss watch movements by registering the name Rolex and using those movements to power his watches. The rest is history. The quality of the movements gave credence to the brand name on the watch.

Trucking has been trying to do the opposite for many years. They have been advertising at very high costs and seeking to hire recruiters who care only about "making the sale" in order to bring in the necessary numbers. They have established a paradigm of trying to build a quality brand while ignoring the actual quality of what they're trying to sell.

This has resulted in the chaos caused by turnover and the costly instability it creates. Maybe trucking ought to take a hint from Mr. Wilsdorf. After all, who wouldn't want to be the Rolex of trucking companies?

This is where a Retention Specialist who knows the industry from the ground up becomes very useful; but only if the company is willing to do more than pay mere lip service to recommendations made after a thorough assessment of the company's operations. Hiring a specialist just for the sake of advertising the fact that "we can appear to care" is just another way of exacerbating the problem.

The only way to repair a non-working watch is to open it up and examine its parts. An experienced watch repair person can have it ticking on time again if the owner is willing to pay the cost to have it repaired. If the owner just wants a "patch" job, it may not be long before the watch breaks again in the same place.

We need to understand that this is no longer "our grandfather's" Trucking Industry. Also, we need to realize that this is a new era altogether for all industries. If we do so, we can get ahead of the pack in securing and retaining the best talent out there in the fields our industry has. If we fail to, we will watch the Wildorfs of the Trucking Industry put their brand on movements that we could have branded as ours. Even so, this is more than just about time; it is about timing! It is about being early rather than late and emulating that proverbial bird that gets the worm. Tudaloo and Happy Trails!

Social Media and Trucking

One of the attributes of a professional driver is that he or she is "seasoned". That means he or she has learned that driving for a living isn't all joy. There are negatives to contend with and contingencies that one may never see coming.

Seasoned drivers deal with these on a daily basis without blaming and "flaming" the carrier they work for unless the carrier has a tendency to expect the driver to make up for those negatives and contingencies. Theoretically, a 62mph truck should average 682 miles in an 11 hour period. And if the driver could keep the "pedal to the metal" all 11 hours without ever stopping or slowing down; that would be an accurate calculation. But given that many things can, and others must, occur in 11 hours, which will diminish that average, a true average is about 45mph on a bad day and 55mph on a good one.

There are still companies out there that expect a driver to "fudge" or "get creative" with his or her logbook to negate the effects of unexpected contingencies on runs. Those who do are hailed as "runners" and those that stick to the rules are hailed as "whiners." The punishment for "whiners" is to be relegated to a list of drivers that gets only loads with excessive time to deliver; or, short loads only. Worse than that, is having to pick up a load with good miles on it, just to turn it over to another driver who supposedly needs a load home or to a team that has complained because they are not getting enough miles. Teams are "golden children" with OTR carriers. With driver pay being based on miles driven, this can really affect one's pay negatively for that week.

When there was no recourse for these and numerous other inequities that exist is the Trucking Industry, drivers just got frustrated and moved on to another company that operated much the same regardless of the fact that all their "hype" in their advertisements in trade publications promised that they were the ones who would respect the driver in the morning.

Today, the driver that is connected to an entire virtual community is not the exception; but the norm. One of the things new entrants are asking on forums is, "What is the best technology to stay connected while on the road?" That means drivers are interacting online in real time. They are capable of posting actual events almost as they happen and can not only document them with still pictures but also with video.

Every driver can now post his or her comments to any number of social media outlets. Here is the clincher: These are drivers from distinct companies perhaps facing the same inequities. It is worse yet when too many drivers from the same company complain about the same inequities. This can either form a consensus that there is a problem in this area; or it can be ignored while retention takes a seat at the back of the bus.

Does social media matter? Not as much as it will in the near future! With the transparency that social media provides for all entities; all entities should be fully conscious that bad driving habits, as well as, bad company culture, will not remain hidden for very long. In that respect, social media is a double-edged sword. It sort of acts like a lock; it keeps honest people honest! I fully believe that social media will make or break drivers and trucking companies of today and tomorrow once it becomes fully recognized for its potential.

Professional Driver 2.0

With the advent of better educated drivers must come the realization that those of us who have taken the time and made the effort to better educate ourselves will look at the ROI of our time on the truck. We will figure all the related costs of this occupation and calculate the overall compensation being offered. If the entity wants to govern their equipment for fuel savings, then it should be willing to take into consideration the time and inconvenience it will cost me and compensate me for it. Whether I am OTR , regional, or local, from the time I step into that truck, I am on duty and should be on company time. That is a disadvantageous situation for OTR drivers who work in a setting that keeps them out for 14-21 days at present. They are actually gambling that they will be provided with loads that will make it possible for them to defray the costs of being out there and still bring home a living wage.

The present Trucking Industry paradigm is not conducive to less turnover. If anything, it is the perfect setting for greater turnover than ever seen before if the demand for capacity increases. The better educated professional driver isn't going to settle for giving away his or her valuable time. In the end, the industry will have no choice but to change its operating model in a way that lowers its costs, ensures optimum compensation for those doing the work at the level where the rubber meets the road, and creates greater profitability by reducing the enormous cost of high turnover.

Those who do so before the peak of crisis will be the survivors that move on to the next level. The time of the dirty, foul-mouthed, ecessive speed junkie, druggie truck driver is over (thank God and all the changes being brought about by the implementation of CDL, CSA, & Drug Testing for that), but you get what you pay for; and there is no caviar on the menu at the price of a cheeseburger!