Inside Logistics

LEARNING CURVE: Getting Everything Right

Focus on what you're good at


December 24, 2018
by

Tracy Clayson is director of client development at
In Transit / CPC Logistics Canada. t.clayson@callcpccanada.com

A company making great products that does not market them well will fail. You can’t buy what you’ve never heard about. A distributor who stocks great products and markets them well but consistently ships late will fizzle out too. Clients will lose their patience and start ordering from someone else. Then there’s customer service, fraught with the potential to upend any firm.

For your company to be successful in the long term, you have to get everything right. Getting everything right also means knowing your limitations. For example, if you have pinch points in your supply chain because you can’t source a resource efficiently or cheaply enough – and someone else can – you should outsource.

We know a company’s most important resource is its people. But what if one set of your staff was extremely scarce? And what if those you were able to find cost an awful lot to hire, train and retain?

Based on the trend over the last two years, and what is projected for the foreseeable future, shippers trying to hire truck drivers are going to struggle. Idle trucks mean lost money, but you can’t keep them moving if you can’t find drivers. And while those drivers are getting more expensive to hire and keep, it’s worth noting that truck drivers are more prone to injury and accidents than most workers, whether they’re driving, or physically handling heavy freight.

When workplace injuries take your drivers off the road for a long time, your clients see service disruptions. This also ratchets up your workers compensation spend. Poor handling of your employees’ claims can also lead to delays and bad feelings between you and your drivers, and even higher driver churn.

Consider that the pace of driver turnover at big motor carriers rose to 95 per cent in the third quarter of 2017, up 14 percentage points from the same period a year earlier, according to the American Trucking Association.

If you are getting the sense that the risks, costs and inconveniences associated with hiring your own truck drivers make it a losing proposition for most shippers, you are on the right track. But what can you do about it?

You could outsource. A good third-party staffer will already have drivers in its fold, ready to work. This will let you onboard those drivers quickly and eliminate the overhead costs and HR burden of constant recruitment and training.

If you want to keep drivers from jumping to any other fleet offering an attractive sign-on bonus, you need to make staying put worthwhile.

Driver turnover has been so high for so long that many companies have simply accepted it as a cost of doing business. Quality of service also suffers when a big percentage of your fleet is made up of drivers who have been with you for less than one year. And drivers are regulated in ways that the rest of your employees aren’t, which makes them a unique liability for your HR team

You really need to pay attention to their health, because the sicker drivers get, the less likely they’ll stick it out in such a physically demanding job. But it’s overwhelming for most companies to build those close relationships with people who work beyond nine to five, often in remote locations. Wouldn’t it be helpful to be able to hand off driver safety, your medical claims and benefits liability, and all other training to someone else?

It is important to bring wellness to drivers, since they are most in need and least likely to act. An external company could help your drivers identify and reduce unhealthy lifestyle choices, which translates to improved productivity and morale.

Workplace injuries and accidents aren’t just expensive for your business; they are horrible for your drivers. And their health, productivity, and morale will suffer if they even just feel that their work environment is unsafe.

Lost-time injuries can be the permanent kind. In 2016 there were 24.7 fatal injuries per 100,000 truck drivers, and 80 per cent of those resulted from motor vehicle accidents.

Outsourced driver staffing can also eliminate your legal liability for employment-related claims. On-staff legal counsel assume the legal responsibility and handle the legwork so you don’t have to worry about legal and compliance. This frees up your HR team for other important work.

A good company knows not to spend time struggling with a problem when a third party can handle it efficiently for a reasonable price. And that’s how a successful company gets everything right – inside and out.