Life on the Road – Trucking News Blog

I was looking through some data on cargo theft and wanted to share it with you. Although not all states report cargo theft in the same details as others, and some it is very difficult to get anything from, it appears that the incidents of cargo theft rose in the 4th quarter as compared to the 3rd quarter of 2009.

Looking at the data I have, it appears that the states in which cargo theft is the most frequent are California, Texas, Georgia, Illinois, New Jersey, and Florida. Most theft occurs at truck stops and carrier facilities. There is an increase in the number of thefts that occur at ‘secure’ facilities that would seem to indicate better organized criminals or criminals that are more willing to take chances. Cargo theft, as expected, occurs the most frequently on the weekends. Incidents of theft that occur during the week are relatively small as compared to the weekends. Commodities most stolen are electronics, clothing, building supplies and automotive parts.

Certainly the best way to reduce theft is to not stop. This is unrealistic, therefore we must find ways to reduce the likelihood of cargo being stolen. One basic step is not to separate your truck from your trailer. Cargo theft is much more likely to occur if the trailer is not attached to the truck. Do not park in isolated areas such as an abandoned truck stop or shopping center. Be very carful in high risk states such as California, Texas, and Florida, try not to stop there if at all possible. Understand what commodities are the most likely to interest thieves. Understand that the longer you are away from your truck the more likely the cargo will be stolen.

Although there has been an increase in thefts at secure areas, you should still only park overnight at those locations. Ideally it should be a location with a fence, restricted access, video surveillance and a security patrol. These locations are very difficult to find so you have to decide what tradeoffs are acceptable based on where you are and what your commodity is.

Remember to ask questions of shippers and other drivers, the sharing of information can alert you to potential problem areas. We have had shippers tell us not to stop at certain truck stops close to their plant because of previous thefts. This is very valuable information! Other drivers can tell you about truck stops or other parking areas that are high risk. They can also help you find safer areas to park.

James Dawson
The Mason & Dixon Lines
www.madl.com

Contractor and driver retention is extremely important to the transportation industry. Many factors lead to drivers leaving a company. Certainly one of the first ones that come to mind is the driver is not making enough money. This is one of the major issues which increases driver turnover, but it is not the only significant one.

Through driver exit interviews throughout my career it has become apparent that other issues which lead to a high driver turnover rate are that the driver feels like no one cares about them, they get no respect at their current company, and there is no support or recognition of the drivers. I think that companies sometimes forget to treat drivers like business partners and sometimes treat them like a tool for revenue generation.

One thing I really focus on with my employees is to treat the drivers with respect and like partners in the company. Without the drivers, none of us would have a job. Something I think we forget sometimes.

I would appreciate your input on why drivers and contractors change companies and your personal experiences.

James Dawson
Vice President
The Mason & Dixon Lines

I had a couple of problems come up last week that could have been easily resolved if the parties involved communicated with one another. Therefore, I wanted to share with you the ‘speech’ I gave concerning communication. I do not necessarily think that the lack of proper communication skills are any more prevalent in the transportation industry than any other industry; but we certainly do seem to have our share of it.

What one thing is essential to success? Communication.

Communication is the building block on which success is built, without good communication skills for a foundation you will never achieve your full potential.

Good communication skills are key whether you are a company driver, dispatcher, owner operator, customer, clerk or management. Most problems arise because of poor communication and can be avoided with proper communication. As a manager one thing I constantly preach is communicate, communicate, communicate.

Communication consists of being able to express ones thoughts, ideas, desires, concerns and instructions in an appropriate manner that encourages the person you are communicating with to listen and respond in a desired manner. Communication is both expressing yourself and listening to others express themselves. Communication is a two way exchange of information and a mutually beneficial experience even if you disagree. Effective communication includes seeing things from the other person’s point of view and working toward a mutually beneficial solution where possible.

Communication is not yelling, attacking, ignoring, or ordering. Communication is not being defensive or refusing to listen to the other person’s point of view. Being able to communicate does not always mean agreement, only that each person is able to express themselves. Sometimes an agreement cannot be reached because of outside influences or because of the different ultimate goals of the individuals involved, but you can disagree in a professional manner.

One of the questions I am frequently asked is, “How can I be a successful owner operator?” The simple answer is to run your truck like a business. The more difficult question is, “How do I run a successful business?”

The first thing I encourage an owner operator to do is to set up a separate checking account for your trucking business. Do not mix your personal money with your business money. This is the first simple step to success as an owner operator.

Next, you should hire an accountant. There are a few owner operators who have the experience to do their own accounting, but for most it is better to hire someone. Look for someone with experience with transportation who can also do your taxes for you. You will never be successful if you are not aware of what your income, expenses, taxes, and profit/loss are.

Pay yourself a salary. DO NOT just take what is left in the checking account each week and deposit it into your personal account. I would suggest that you pay yourself on a per mile basis, keeping your expenses on a mileage basis makes it easier for you to determine what it takes per mile to be profitable. Use all miles in your calculations, not just loaded. You truck expenses are based on every mile you travel. I would suggest you pay yourself about $.30 per mile on all miles.

You should identify all your major expenses: fuel, truck payments, and maintenance. Fuel can be easily calculated, just take the current price per gallon and divide by your miles per gallon (MPG). If fuel is currently $3.00 per gallon and your MPG is 6, then your fuel cost is ($3.00/6) $.50 per mile. As fuel prices change or your MPG changes you will need to recalculate this so you always have an accurate fuel cost per mile.

Maintenance depends on a variety of factors including the age of your truck. I would suggest you use between $.05 and $.15 per mile to estimate your maintenance costs. If you have been in the business for a while and have actually yearly maintenance costs then you can determine your own. Just remember to always allow more than your actual cost. You have to have to build a reserve in the good years to pay for the bad years when you loose an engine, transmission or turbo. Put left over maintenance money into a separate account or if your company has a repair and maintenance escrow that is a good option.

Your last major expense will probably be your truck payment. I would suggest using the payment itself to determine your cost per mile. Your accountant will tell you that the entire payment is not actually an expense since some of it is interest and some of it pays down your bank note. However, the payment is an actual outgoing cash expenditure therefore I would use it to calculate your cost per mile. This way you do not have to have a separate depreciation calculation which is not an actual cash outgo anyway. If your monthly truck payment is $1,200.00 and you average 11,000 total miles then your per mile expense is ($1,200.00/11,000) $.11 per mile.

With just these major expenses, let’s see what you are spending per mile:

• Fuel: $.50
• Salary: $.30
• Maintenance: $.10
• Truck Payment: $.11
• Total/Mile Expense: $1.01

Keep in mind that this does not include smaller expenses such as tags, taxes, parking, meals, telephone, etc… So you will need to make some allowances for those. Based on the numbers above and your smaller expenses, I would estimate you would need to average about $1.11 to the truck (including fuel surcharge) on ALL miles to break even. Usually you can cover your minor expenses by adding about 10% depending on how many miles your run per month.

Each month you would need to adjust the numbers based on your experience and expenses. You will find that if you can increase your MPG and find the cheapest fuel possible, you can make a HUGE difference in your overall expenses.

James D. Dawson
Vice President
The Mason & Dixon Lines
www.madl.com

It is important that we realize what exactly the government will be measuring with the CSA2010. The seven BASIC or Behavioral Analysis and Safety Improvement Categories are unsafe driving, fatigued driving, driver fitness, controlled substances/alcohol, vehicle maintenance, cargo, and accidents. Data from these seven areas will be collected on each company and driver and entered into the database. Carriers will receive a rating in each area from the government. Drivers will also receive a score, but will not be rated by the government.

1. Unsafe Driving – Operation of commercial vehicle in a dangerous or careless manner. Examples: speeding, reckless driving, unauthorized passenger, failure to obey a traffic control device, improper lane change and inattention.
2. Fatigued Driving – Operation of a commercial vehicle by drivers who are ill, fatigued, or in non-compliance with the hours of service regulations. This includes violations of regulations surrounding the complete and accurate recording of log books as they relate to hours of service requirements. Examples: Hours of service, logbook, and operating while ill or fatigued.
3. Driver Fitness – Operation of a commercial vehicle by drivers who are unfit to operate the vehicle due to lack of training, experience, or medical qualifications. Examples: invalid commercial driver’s license and being medically unqualified to drive, non-English speaking driver, no medical certificate.
4. Controlled Substances/Alcohol – Operation of a commercial vehicle by drivers who are impaired do to alcohol, illegal drugs, and misuse of prescription or over-the-counter medications. Examples: use or possession of controlled substances or alcohol.
5. Vehicle Maintenance – Commercial vehicle violations due to improper or inadequate maintenance. Examples: brakes, lights, and other mechanical defects, and failure to make required repairs.
6. Cargo – Commercial vehicle violations resulting from shifting loads, spilled or dropped cargo, and unsafe handling of hazardous materials. Examples: improper load securement, cargo retention, and hazardous materials handling.
7. Accidents – Histories or patterns of high crash involvement, including frequency and severity. It is based on information from state-reported crash reports.

Above data taken from: Safety Measurement Systems (SMS) Methodology
Version 1.2, April 2009
John A. Volpe National Transportation
Cambridge, MA 02142

It is very possible and probable that you may be good in some areas and bad in others. By breaking the violations down into individual areas, it will help carriers and drivers determine what areas they need to focus on. Because the new system uses all write ups at roadsides, do not be surprised if you thought you were fine because you have not had many out of services to find out that under the CSA2010 you have deficiencies.

James Dawson
Vice President
The Mason & Dixon Lines
www.madl.com

One key aspect of the CSA2010 is the compilation of safety data on individual drivers. The safety data will be maintained in a nationally accessible database which is available to transportation companies. In order for a transportation company to access a driver’s data it will be necessary to obtain permission from the driver. This permission will probably be obtained just as permission to run a MVR is obtained during initial sign on.

What does this mean to the driver? Unlike the current system where safety data is only complied on the transportation company, now this data will also be assigned to the drivers. When drivers change companies, their new company will be able to see the past twenty-four months of safety data for the driver. Companies will be able to determine a potential drivers safety record based on this data. Drivers will no longer be able to go to a new company with a clean slate. Under the CSA2010 the drivers past follows them to the new company.

This data will be critical in a carrier’s decision to employ a driver. Carrier’s will be more selective in their hiring decision and drivers with bad safety data will find it increasingly more difficult if not impossible to find employment.

What can a driver do? Simple, follow Department of Transportation rules and remember, the CSA2010 does not just look at out of service violations – it looks at ALL write ups on a roadside inspection and assigns a point and severity rating to each write up with the more current violations more heavily weighted.

James Dawson
Vice President
The Mason & Dixon Lines
jdawson@madl.com