All companies, regardless of size, will continue to grapple with the abysmal driver turnover rate. This trend, which can devastate an individual company and threatens to undermine the entire industry, must be stemmed. Better management techniques need to be employed to appropriately train drivers to address not only the turnover rate, but also the driver shortage. Currently, many drivers don’t feel they are considered a part of the team. Owners must seek ways to convince drivers they are an integral part of the company team and that they add value to the organization. Companies must work to make drivers feel appreciated by recognizing their efforts. Failure to address driver discontent properly makes unionization a greater threat to the company. Equally concerning is the issue of fuel consumption. While fuel consumption is a major component and concern of the entire transportation industry, the truckload segment of the industry has not, on the whole, done an adequate job of fuel management. Successful management of a trucking company must include appropriate monitoring and management of fuel. Companies will need to address these issues, using available technological tools, and adopt appropriate management strategies to deal with them.

What the Industry Must Do

Change is essential. Weaknesses within the industry will devastate companies that fail to make the necessary adjustments. Some companies learned the lesson early and invested time and money in people and processes which allowed them to identify their markets, utilize technology as a management tool, develop talented management teams, demand greater accountability, and use appropriate strategies to control their markets. These companies, such as Schneider, J.B. Hunt, and Werner, successfully transitioned from family-owned, entrepreneurial companies to larger, well-run industry leaders. As companies that have always been conscious of the need to make a profit and invest in talent, these savvy organizations have become leaders and innovators. They have learned to operate a capital-intensive business using talented managers and good information management. This process has helped them learn how to market themselves where they are most effective. Their actions have allowed them to control the market and competitors have been forced to respond to their moves. We can learn from their example.

Change #1: Develop an effective strategic marketing plan – Work to understand the basics of strategic marketing. Research to determine a market niche you can serve. Develop the necessary resources to do so. Don’t try to compete where you are weakest. Define your niche market strength.

Change #2: Change the operating culture – Abandon the service culture and adopt the asset utilization and profitability culture. Determine your maximum truck utilization, know your costs, manage your assets, and demand accountability from all involved in the process.

Change #3: Make human resource management a priority – Learn the basics of human resource management. Become familiar with patterns and problems. Identify situations, processes, procedures, or finances that sabotage success. Plan for successful employee retention. Start communicating. Listen and learn. Communicate expectations. Recognize achievement. Honor and value the individual to help fight the threat of unionization.

Change #4: Improve company communication – Use improved company communication to support all other initiatives you undertake. Infrequent, improper, or lack of communication all hinders success. Successful organizations communicate well, communicate fully, and communicate often to ensure that essential elements of company strategies are understood and implemented, both internally and externally.

Change #5: Manage with information – Make technology your management partner. The technology which allows you to generate payroll, process data, or invoice customers also provides information that can help you identify trends, monitor activity, or discover untapped markets. Use this management tool to increase your chances for success.

Change #6: Create an environment of recognition and accountability – Set goals for all management, staff, mechanics, and drivers. Communicate expectations clearly and often. Measure success and share the information. Recognize accomplishments, both large and small, throughout the company. Reward success but also hold people accountable for failure. Assist people in recognizing their failures and support them as they work toward future success.

Change #7: Expand your niche horizons - Examine all niche opportunities. Identify, market to, and serve a suitable market niche to increase profitability and decrease competition. A number of niche possibilities exist.

* Motor carriers length of haul
* Special products
* Time-sensitive freight
* Special attention/special handling

The length of haul niche recognizes the simple truth that the further you go from home base the more you expose your company to competition. The smaller the carrier, the shorter the haul should be. Special products such as bulk, chemicals, or hazardous waste require more attention to detail and offer another profitable niche more easily served by the flexible, smaller company. The time-sensitive niche offers smaller companies an opportunity to partner with larger companies, allowing greater profitability for both entities. The larger company can deliver regionally while the smaller company can make the local (up to 250 miles) leg of the journey. The special attention niche involves transporting goods that require special equipment, special training, or special information, such as the distribution of perishable products. Providing equipment or training not generally available in the marketplace decreases competition and increases profit potential.