10 Actions Trucking CEOs should take to Survive a

[HardTimeTrucker]

Some interesting reading!

10 Actions Trucking CEOs should take to Survive a Recession

By Joe White
CostDown Consulting

Cost control has always been a critical success factor in trucking but in today’s environment, without capital to invest in new technology, trucking CEOs need to look inward at their operations and use analysis, creative thinking and new processes to improve financial performance.

Excess capacity, reduced freight levels and less accessible yet more costly capital have shifted the concerns of many CEOs from profitability to survival.

The following list represents internal steps CEOs should take to improve their chances of survival. Whenever objective analysis is used to identify internal opportunity, the chief executive must make it clear to the entire organization that paradigms, silos and ‘turf-protecting’ will not be tolerated. Use of an outside industry professional to conduct the analysis will help in this process as he/she will have no preconceived opinions about what the most effective operations improvement solutions are.

1. Audit operations
Carriers need to look internally for operational improvements that can be captured without expensive investments in new technology. A thorough and objective operations audit reviewing in detail how terminals manage drivers and equipment will almost always identify significant improvement opportunities. These audits focus primarily on driver control (headhaul, backhaul, productivity and home time assignments), fleet utilization and general cost control. Audit your operations and act upon the results!

2. Manage cash flow
Assign responsibility for reducing Days Outstanding performance of receivables. Identify high-risk clients that may end up in bankruptcy, negotiate faster payment terms and reduce your levels of business with those clients if necessary. Look to extend and/or re-negotiate your payment obligations to vendors where possible.

3. Technology review
Review all technology purchased in the past five years to determine if full value is being received from those tools. If not, call vendors that sold the technology and require that they come back with recommendations and support on capturing promised benefits. Make sure to include the personnel in your organization using that technology in defining current performance and needs.

4. Solicit vendors for price reductions
In addition to requesting more favorable payment terms, solicit vendors for price reductions. Send a letter out to all vendors explaining that tough economic times have forced you to require a 5-percent reduction from all vendors. Those vendors not willing to reduce their price will have their business put up for bid.

5. Reduce inventory
Inventory is cash sitting on the shelf or shop floor. Identify opportunities to reduce terminal inventories through both lower inventory levels at your locations and sale/return of obsolete inventory. Where possible, put the inventory burden on your supplier. Challenge office and maintenance staff to reduce inventory where possible. Focus on expensive items such as tires, batteries, fuel, etc.

6. Use sound performance management principals
Employees, particularly those that most influence cost and revenue, need performance goals. Review and assign aggressive performance goals within your organization. Drivers should have goals in terms of what makes sense for their particular application -- miles driven, hours worked, revenue. Driver Managers should have goals in terms of the productivity and retention of their assigned drivers. Effective performance management also requires that there is positive (bonus) and negative (coaching/discipline) consequences for individual performance to goals.

7. Improve driver caliber and positioning
Carriers, with driver turnover temporarily in remission, need to take advantage of the strategic hiring opportunities they now have. Get rid of and replace unproductive drivers that fail to respond to coaching and discipline. With more driver candidates available than there have been in years, now is also a good time to focus on hiring based on close proximity to assigned terminal to minimize empty miles associated with getting drivers home for scheduled days off and special family needs.

8. Train Driver Managers
Driver Managers, based on the number of drivers assigned, run a $2-4-million business. They make literally hundreds of decisions each week that influence the cost and profitability of every mile run within their individual driver groups. As a result, driver managers need to be professionally trained in all areas of their responsibility including: Driver productivity, driver retention, service and general cost control.

9. Review equipment assignments
Review all equipment assignments to make sure every asset is placed in the best application for its particular profile. Trucks equipped with auxiliary power units should be on runs with the most frequent overnight stays. New trucks should be on two-shift operations to minimize night breakdowns. Older, high-maintenance equipment should be on shorter runs and assigned to terminals that have shop locations.

10. Analyze your freight network
Networks are dynamic and need to be analyzed constantly, especially during times of low revenue. Terminal interaction should be monitored constantly to make sure load exchanges are performed to maximize company, not terminal-laden, mile performance. Have each terminal submit a Laden Mile Improvement Plan complete with improved laden mile performance goals and new actions to support those goals. Review and scrutinize the plans, make revisions where needed and then require managers to implement and manage their plans.

Joe White is chief executive of CostDown Consulting, a trucking consultancy that provides Operations Audits, Driver Manager Training, Driver Retention Programs and SmartWay Consulting. Headquartered in Grayson, Ga., he can be reached at [e-mail].

[petedabroker]

Good article in abbreviated form.
One of the most important aspects of running a efficient business is client management, customer care, customer relations.
No, your clients are not gods. They are clients. Clients are people, short , fat, bald ones, tall , dark, handsome, mean, nice, and everything in between. Learn how to push a button with them.
You cannot go into a meeting , asking for an increase, to an old mean traffic manager. Forget it. Been there done that. You need to schmooze him/her. Sort of like showing them, OK, we are higher priced, but we also deliver on time every time, without exception, your products are to market quicker, your cash flow overall is better by using us, and initial cost means nothing if the shelves are bare. Plus remember there are several ways to skin a cat, and just because your price is higher, never means you will not be awarded their business. It just means your price is higher.

I will give you a story related to nasty traffic managers. I had a client named , National Can Corporation out of Chicago, who's traffic manager was a guy named Fred Suzi. Fred was absolutely the most vulgar, mean, nasty, cigar stinking S.O.B. that ever existed. I was 23 at the time and my boss asked me to get a better rate on the Puerto Rican business, since we never got ocean freight commission from the lines calling P.R.. I flew to Chicago, just on time for my appointment, his secretary called me into the outer office, announced me, I entered his office, and he said immediately, SIT DOWN!. I said OK. Next words were , what are you here for? Knowing he was a no B.S. kinda guy, I came right out with the need for higher payments on the P.R. business.
He jumped up from his chair, shouting the whole time, you little f..king a.s.s.hole, you come in here, never even said hi, never asked about my wife or kids, then you proceed to ask for a raise in your fees. Get the f..k out of my office and never come back here again, he opened the door, took me by the arm, ran me past the secretarial pool, yelling to take this d.i.c.k. head and send him back to Baltimore.
I went to the elevator and out pops John Moosburger, his assistant, who dealt with me each day. He said come into my office. He closed the door and said , what the hell was that all about. I explained, and he started to laugh. I said , now feeling a little ballsy, "What the F..k is so funny. He said, you bill me for Puerto Rico on a flat fee of $75.00 right? I said , yes, he said, you also bill me for mailing, prep fees, handling, insurance, and a whole host of other s.h.i.t.. I said, yes. So why don't you just add , whatever you want to those items. He never looks at those items. He only looks at the Forwarding Fees.
OK, problem solved.
I returned to my office the next day and was summonsed to the owners office. He said , well how did it go? I said it went perfect, Suzi was nice, everyone was really great. He said, well did you get the raise in fees? I said yep, but I need to bury it into other parts of our bills. He said great, Oh, by the way Mr. Suzi called and apologized for calling you a f..king a.s.s.hole yesterday.
I said to him, oh, I was a f-in a-hole, but I got friends in low places. That year , I was awarded the key supplier award from my client, gave us all their business and not just the cans, but all the machinery that another forwarder was handling, and my boss gave me a $20,000/yr. raise to boot. So bottom line is anyone who wants to call me a f..king a-hole, I take no offense anymore.

In review, bill your clients to the degree of service, and if you fail to service, you will lose those clients. Service, service, service, and more service is the name of this game, always was and always will be. Make yourself so indispensable they will never seek another to handle their business. I have taken that philosophy to every other firm I worked with and to my owned companies and it has never failed me yet.
You might think drivers are not important to customer service, think again. I had a clown working for me as a driver, really he was a part time clown in his spare time. He went to make a container delivery at a cast iron distributor. He saw a lady struggling to get out of her auto with packages, during a icy storm. He stopped the truck, escorted her into the building and left. About a hour later I got a call from the company owner, who said , do you have a driver named Jerry Witmeyer. I said yes, why? Well my man that driver just got you all my firms business. That lady he helped to the door was my mother. His business totaled $1.4 million in gross sales that next year. So don't believe for one moment a driver cannot get you business. I gave the driver a $10,000 Christmas bonus for services rendered, which was the bonus I paid to our salesmen. See that is how business should work, but I guess seldom does. So if you are a business owner , and reading these statements, take care of the ones who take care of you. It comes back ten fold.

[petedabroker]

I am sorry, I am sort of on a roll here and wish to make one more statement about being greedy. That is the worse of all traits in mankind. It over shadows all things nice.
Most Americans believe Islam is for terrorist. Why, because that is all the TV reports upon. It could not be farther from the truth. In the Islam religion, and wishing to be right with God, you are required to give 15% of your earnings to charity. Ask yourself this question, in all the TV you view related to Saudi, Kuwait, Egypt, Syria, etc, etc. have you ever seen a person begging on the streets? Seldom is that the case. The neighborhood takes care of those people. They provide them with money, nourishment, and kindness. One other thing I bet you did not realize, there God is the same God of Christianity. No difference. They do believe that Jesus Christ was a prophet and not the son of God. That is one major difference there. Yes, there are others, but you would not believe how close both religions actually are. Do you know why the Sunni and Shiite have a problem? Because on believes that Mohammad was the mistaken receiver of knowledge. So that is where that conflict comes from. I am Christian, but I have dealings with many Arabs, who are the most kind, and nicest of any people you would ever wish to meet. So please never associate terrorist with Islam, its simply not true. As you should never of blamed Christians or Protestant's for the problems in Ireland. Both have extremest.