Does excessive deadhead mileage really affect the bottom line?

I know, I know that’s a stupid question, but hopefully I got your attention. The answer is simple: "Yes! In fact, all deadhead mileage affects the bottom line not just excessive deadhead."

How do you track your deadhead mileage? Do you have an extensive spreadsheet that someone manually enters mileage information into from the driver’s trip envelope, logs or driver comments? Or, do you have all of your mileage information written down on a pad of paper or notebook that you go to each time a driver calls or you receive his paperwork? Perhaps you have software that tracks some of your mileages but not all of them? Or perhaps, you just throw up your hands and say, "This is such a headache, I just tell my drivers to do the very best they can at keeping the deadhead to a minimum!", and then report all of their odometer miles as loaded on your quarterly IFTA report?

So the real question is, “How do I eliminate or at least control the deadhead mileage my trucks are running?” The answer is simple, TM2000 by TruckMaster Logistics Systems. It is the perfect program for tracking and helping you reduce your deadhead miles.

TM2000 allows you to designate what legs of a trip are loaded or empty. With automatic route calculating, TM2000 determines a default route from any point in the US, Canada or Mexico to any other point or points in any of these countries. The software will even determine if there is a need for deadhead miles to be calculated between trips and give you the opportunity to accept or decline the suggested deadhead mileage. TM2000 allows you to set a maximum number of deadhead miles between trips and warns the dispatcher when any trip is scheduled for a truck that would force the truck to travel more than the maximum deadhead miles.

Since TM2000 lets you pre-plan trips for all of your trucks, it gives you the tools you need to monitor the deadhead miles between trips and help you make decisions that will minimize the amount of deadhead miles your trucks are forced to run.

There are a number of states in the US that now offer IFTA tax breaks for deadhead mileages. (Running empty on highways means less wear and tear, so these states are willing to share with the trucking company the reduced cost of road repair.) Since IFTA reporting is easy with TM2000, deadhead mileage is quickly identified and reported accordingly, saving you even more money on your IFTA reports.

Let your dispatchers do what you hired them to do – load trucks and make money. Take the guess work out of trip routing, deadhead calculation and IFTA reporting with the software package designed to help you make the best of transportation management – TruckMaster Logistics Systems’ TM2000. Call 888-891-9550 or visit our website today for a free demo. Let us show you how to take the worry out of all routing and deadhead mileage issues.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

Section 391 of the Federal Motor Carrier Safety Handbook explains the motor carrier's responsibilities with regards to hiring drivers, and maintaining legal records for the same. In addition to a myriad of pre-employment requirements, the carrier must keep track of current driver's license and medical card expiration dates, periodically test for drug and alcohol use, and perform annual reviews.

Although it's possible to keep up on DQ files manually, it's not recommended. A good trucking software package will make managing all of these requirements a breeze.

It should not be necessary for any part of DQ file management to be done manually. The software should automatically warn drivers of upcoming expirations on pay stubs or what have you. It should also have the ability to notify managers and dispatchers when any of these requirements have not been met or are soon to expire. There should be a means to block a non-qualified driver from being assigned.

There are new safety training and compliance training requirements regularly mandated by FMCSA that each driver must complete throughout the year. The trucking software should be flexible enough to add these new training requirements and monitor who has completed the training.

When existing requirements are changed, or new regulations are passed, you should ensure that your trucking software system provider can quickly modify their software to adapt to the changes.

In today's political and economic climate, we can all anticipate additional driver qualification requirements will be added. If you are manually tracking all of these requirements now, it's time for you to look at a trucking software system.

One of the best ones out there is the TruckMaster Trucking Software system. We have a system that is affordable for the small carrier, yet powerful enough for the large carrier. It gives you all you need to manage your business, including (but certainly not limited to) driver qualification management.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

Weathering Tough Times In The Trucking Industry

Merry Christmas & Happy New Year!

As we close out 2008 with the holiday season, and look forward to the challenges of 2009, we have much to consider. Everywhere you look there is another trucking article or blog discussing the difficulties the trucking industry has gone through the last year, and the gloomy outlook for 2009. Although interest rates and fuel prices continue to slide, just about everyone seems to believe they are both going to go back up significantly in the months to come. Freight rates have fallen, as has freight volume in general. There have been a significant number of trucking companies that have gone out of business or laid people off. Even one of the largest truck stop chains filed for bankruptcy protection this week. Plenty of gloom and doom to go around.

Any professional athlete will tell you that if they are in a slump, the key to getting back to the top of their game is a return to the fundamentals. They go back to the very basics of their sport regardless of the level they are playing at and start there. That's because the fundamentals are the foundation that everything else is built upon. Currently the trucking industry over-all is in a slump, and this is a good time for us all to focus on our fundamental business practices.

Question Everything

When times are tough and the bottom line is thin, eliminating waste anywhere it is found is crucial. When you take the time and effort to evaluate your business practices you can often find hours of wasted time and duplication.

For instance, run through the life cycle of a shipment at your company. From the time the shipment is accepted, until the time the money is received for hauling the load and the driver is paid. Analyze each step meticulously, questioning each process for necessity and possible duplication of effort. Look for "holding patterns" where critical information may be caught, stopped, or lost, and see if there isn't a more stream-lined way of processing the data. Quite often, especially in companies that have either experienced growth or downsizing, there are processes being followed by personnel that have no idea why they are doing it. A process has just always been done that way so they continue, potentially wasting time and resources that could be redirected to better use.

When we install trucking software, one of the side benefits is a re-evaluation of the company's business processes. You would be amazed at what we occasionally find.

Once at a forty truck company we found two people filing the exact same information. They literally had dozens of file cabinets and more on order, filled with duplicated copies of freight bills. They had been doing it for years and never realized they were duplicating work for no reason. Something so simple and yet it was overlooked because noone bothered to analyze their business processes.

At another company, freight invoices were being held up for over two weeks for a freight auditing process that was not even taking place. The company had made a change in the way their loads were rated, removing the need for the freight audit process, but had failed to let the billing clerk know. This had gone on for a couple years.

Another instance occurred at a fairly large company that ran a regional operation. When we installed our trucking software we found that drivers were being paid hourly, but the log hours didn't come close to the amount of time for which they were being paid. In the end we found that over ten years prior the drivers had been provided standard block times for their regular routes. The drivers were filling out their pay sheets using these ten year old block times, despite the fact that new roads had been completed in that ten year period cutting transit times in half or more.

All of these companies had excellent people working for them, and each of these companies ran profitable operations. All of the people doing the work were simply doing what they had been told to do. However the environment around them changed and they failed to change with it because no one took the time to evaluate their business practices.

Prepare For Better Times

The second reason to evaluate your fundamental practices is so that you are prepared for the inevitable turn around in the economy. When everything is again running smoothly, you can quickly take advantage of the opportunities that will come available without having to worry about how things will be managed. Your fundamentals will be in place and rehearsed, so you and your team know exactly how to expand your business profitably.

One of the best ways to streamline your trucking business and improve your fundamental business practices is with a good, complete, integrated trucking software solution. In sales, I hear clients frequently say that they need to wait until they are busier before they can afford to get software. But truly that's a little backwards. It is before you are busy that you need to install trucking software and improve your business practices so that when you are busy there is less waste, confusion, duplication of effort, and you keep more of the money you earn.

When the economy turns around, the businesses with the tools, practices, and people in place are the ones that will experience sustainable profitable growth. Those who don't might benefit initially but if they can not profitably manage their businesses they won't benefit long term.

No doubt 2009 will be a long difficult road, it only makes sense that we invest the time and resources in our businesses now to ensure they are fine tuned and running at optimum efficiency.

Contact TruckMaster today, we can help you ensure your team is working with the very best tools in the industry, so that when the opportunities arise, as they will, you and your team will be ready.

Kurtis Brown
VP Sales
TruckMaster Logistics Systems, Inc
TruckMaster Your Trucking Company™

Trucking Industry EDI 101

What Is EDI?

In today’s business climate, leaders are looking for methods that will allow their businesses to operate faster, cheaper, and better. One tool that will allow you to achieve significant improvement in all three areas is Electronic Data Interchange, better known by its acronym, EDI.

If you are not currently using EDI in your business, you may think that it is too complex and costly for you to implement, or is not applicable to your situation. With an understanding of EDI basics, however, you should be able to find ways to streamline many aspects of your business.

What is EDI? Basically it is the electronic exchange of business documents in a standardized format. In the EDI world, these business documents are called "transaction sets", and the customers and carriers with whom you do business are "trading partners".

The Old Fashioned Way

In order to better understand what EDI transaction sets accomplish, let’s first look at a non-EDI information flow example:

The customer, Acme Widgets, has a load of widgets that need to be delivered to the receiver, Wiley Coyote General Store. The logistics manager (LM) at Acme creates a load tender document and either faxes, mails, or phones the carrier, Birdflew Express.

Birdflew’s dispatcher receives the load data from Acme, faxes or phones an acceptance to Acme, and manually enters the information into his trucking software. We’ll assume the information he received and enters in his trucking software matches the information on the original load tender at Acme, but often there are input errors in the manual process.

Birdflew sends a truck to pick up the product at Acme. After the load is picked up and the dispatcher notified, the truck proceeds across the desert to Wiley’s. Later that day, Wiley runs out of widgets and calls Acme to find out when his shipment will arrive. The Acme LM calls the dispatcher at Birdflew, who calls the driver. After 10 minutes of niceties with the driver, the dispatcher calls Acme back with the current location of the truck, who in turn notifies Wiley.

After the truck arrives at Wiley’s and is unloaded, the signed delivery documents will start their journey back to Birdflew, typically with the driver, who may not be headed home immediately. Meanwhile the sales person at Acme wants to make sure Wiley received his widgets. He calls the Acme LM, who calls the Birdflew dispatcher, who calls the driver. Eventually Acme finds out their product was delivered.

When the signed delivery documents finally arrive at Birdflew, the billing clerk prints an invoice and mails it to Acme. Days later, Acme receives the carrier invoice, enters it into their system (hopefully with no additional errors), and ages the invoice for a couple weeks before issuing a check. The billing clerk at Birdflew calls Acme multiple times to check on the status of her check, which eventually arrives at Birdflew and the transaction is completed.

The EDI Way

Now let’s take the same example and watch the information flow using EDI.

There are 5 transactions sets that will be normally used by the Trucking Industry:

204 – Load Tender
990 – Response to Load Tender
214 – Carrier Shipment Status
210 – Carrier Freight Invoice
997 – Acknowledgement

The LM at Acme sees the order for Wiley on his computer and assigns Birdflew to it. In a single keystroke, a digital copy of the order is sent from Acme’s computer to Birdflew’s trucking software via a 204 "Load Tender". Birdflew’s trucking software immediately returns a 997 “Acknowledgement” to Acme indicating that the 204 was received intact. An order is automatically created in Birdflew’s trucking software and the dispatcher is notified. When he accepts the load, a 990 “Response” transaction is returned to Acme indicating that acceptance. If the load is declined, the LM can quickly assign another carrier and send out a new 204 to them.

The driver arrives at Acme to pick up the load. He sends a check-call to the trucking software via his on-board mobile device. The Birdflew trucking software sends a 214 to Acme’s computer letting them know the truck has arrived. This 214 "Status" automatically updates the Acme system so that the sales person can see the order status immediately. (Additionally, Acme could send a 214 to Wiley at this time, if desired.)

As the driver picks up the load and is rolling down the highway, his on-board unit sends in periodic location updates which automatically generate additional 214s. When the load arrives at Wiley’s, a 214 will be sent to Acme notifying them of the arrival and unloading times.

When Birdflew is ready to invoice Acme, instead of printing and mailing an invoice, they send a 210 "Invoice" directly to Acme. Acme’s computer updates its payables and marks the invoice ready to be paid.

When using EDI, the pickup-to-paid time is typically reduced significantly as you can see by these examples.

What Is Required To Get Started?

The only thing you need to implement EDI is trucking software that can send each of the various transaction sets in the standard format agreed upon between you and your trading partner. There is an American National Standards Institute (ANSI) standard called “X12”, to which all EDI in the USA should conform. Most trucking software packages have the ability to send and receive EDI in this format.

There are two basic methods for your computer to send or receive EDI transactions with your partner’s computer: direct communication, and Value Added Network (VAN).

To communicate directly, you and your partner must agree on a communication protocol (FTP, SMTP, XML, or Dial-up via modem). If you each prefer a different communication protocol, then you will need to use a third party “translator”, a VAN. The VAN will accept your transaction sets using any communication protocol you have chosen and then send it out to your partner in whichever protocol they have chosen. The VAN charges a fee for its services, so if you can communicate directly, you will save money.

Don’t have trucking software that supports EDI? Take a look at the TruckMaster Trucking Software system.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

In our trucking industry blog, I just posted an article discussing my thoughts on whether or not diesel fuel prices will continue to trend down, and how a trucking company can prepare for a possible upward trend in diesel prices.

This article is meant to further expand my thoughts specifically on trucking software's role in assisting a trucking company to manage fuel purchases and fuel surcharges.

Suggesting Fuel Purchases

A good trucking software system should be able to suggest truck stops along all of your routes. It should factor in the current diesel price at each truck stop, how far out of route it is, what the net cost per gallon is after road and fuel taxes. It should be capable of sending the fuel stops to the driver via mobile communication device right along with dispatch information. It's also nice if it can allow drivers to select truck stops with amenities that they desire, on demand. The TruckMaster Fuel Finder can do this for you for free, should your software not be capable.

As an alternative to this, a trucking software system should at least be able to interface to an external fuel optimization service. These services can be expensive, but can also take into account the optimal fuel level to achieve the highest mpg, typically at the cost of the driver's ability to choose his actual stop.

Monitoring Fuel Purchases

Trucking software should allow a trucking company to assign fuel card numbers to each tractor and/or driver. It should be very easy to change a fuel card assignment to another tractor or driver as often as the need arises.

There should be a stable interface to your fuel service provider, whether that be Comdata, MultiService, EFS, or whatever service you choose to use, that downloads fuel purchase information in real-time, or at least daily. The trucking software provider should have interfaces with all of the major fuel service providers, and the ability to add more as more are introduced to the industry.

When the information is received from the fuel service, it will include the diesel and/or reefer purchase, advances, sales tax, oil, winter charges, etc. All of this data should directly flow into the accounting portion of the trucking software so that it doesn't need to be double-entered, thereby reducing opportunities for keystroke errors.

The trucking software system will be able to match up the transaction with the tractor and/or driver by the fuel card that was used, and should also be able to determine the particular trip to apply it to, automatically, although you need to be able to manually override the trip selection due to overlapping trips, prior entry errors, etc.

The trucking software system should maintain a constant rolling average mpg for each tractor, as well as each driver where a driver may be assigned to multiple tractors. Any drastic variances in mpg should be flagged to the entry clerk, as it could indicate tractor engine problems, dumped fuel, etc.

The trucking software should be able to inform the entry clerk of out of route miles, specifically when pertaining to visits to truck stops. You would be amazed at some of the cases we've seen over the past 18 years of miles racked up by drivers visiting truck stops for that special amenity or café waitress. This needs to be identifiable, even if not specifically disallowed by the trucking company.

Fuel Surcharge Management

Trucking software should make it easily identifiable which customers do, and which customers do not, have fuel surcharge agreements in place.

It should be extremely easy to maintain these fuel surcharges, to the point of having the fuel cost average indexes automatically updated where possible. It should allow multiple customers to use the same fuel surcharge settings, as well as multiple surcharges for one customer.

The software should have safeguards to prevent wrongly calculated surcharge amounts, and more importantly missed surcharges on invoices. Wrongly calculated surcharge amounts are sure to slow down your revenue collection, and there is no better way to lose your profit than to forget to include surcharges when billing a load.

TruckMaster trucking software of course does all of these things, and much more.

These are my thoughts on how trucking software should help a trucking company manage their largest expendable commodity, diesel fuel.

I welcome your feedback on my thoughts. I hope you find my post accurate and relevant.

Greg Dodson
President
TruckMaster Logistics Systems, Inc.
TruckMaster Your Trucking Company™