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What Trucking Companies Should Do To Solve The Technician Crunch

We’ve been spending a lot of time talking about the truck driver shortage, but what about the technician shortage? The fact remains, trucking needs to do a lot more to fill its truck shops with qualified technicians.

According to the Department of Labor, between 2014 and 2024, the country will need an estimated 76,900 bus and truck mechanics and diesel engine technicians. This need is expected to cover both growth and replacement.

But before you tell yourself the technician you are looking for doesn’t exist, consider that annual graduates from private and public schools should number around 10,000. You should be able to make up that number. So where are all the technicians?

The Case of the Missing Technicians

With 10,000+ medium and heavy truck technicians graduating each year, one must ask, where are all these qualified workers going? Should trucking be doing more? The short answer is yes.

There are three main reasons why graduates aren’t ending up in fleet shops:

  1. The schools aren’t teaching what the industry needs the graduates to know. Fleets should be involved with what local schools are teaching their graduates.
  2. Many trucking companies don’t have mentor programs in place for new techs. It is unrealistic to expect a brand new technician to be super productive as soon as they start.
  3. Other industries are stealing potential new recruits. Without strong recruiting efforts, industries like wind power generation and oil and gas are scooping up qualified graduates.

So in the end, the real question is this: Is there really a technician shortage or is the industry simply not doing enough to catch those who are graduating today.

Recruiting a Generation

Today’s trucking industry faces a challenge in how it recruits young people. Although trucking has not failed to innovate, there is a difference in thinking between the generation of today and yesterday’s generations.

The old way of doing things taught us that the only thing that matters is what people are paid, but Millennials are disproving that. Younger generations want more than money, they want meaning.

They want to feel like they are part of the family, they want to feel needed. When they do well they want to be recognized for a job well done. They don’t want participation trophies; they want real recognition.

It’s a Good Career

Another area the trucking industry could improve upon is how well they promote being a technician as a desirable career. Most of today’s youth think that they have to go to college and get an expensive degree to have a satisfying career, but that isn’t always the case.

Many a director or vice president got their start on the shop floor. These are people that are passionate about trucking and have worked in the trenches. It’s a career that eschews the typical career ladder.

There are also a number of different positions and fields you can move into from starting out as a technician. The career offers flexibility that others cannot offer.

Work to Do

The problems facing trucking companies and their drive to find qualified technicians are entrenched. They run deep. We now live in an environment where there are no more shop classes in high school. Young people aren’t learning basic hands-on skills.

Perhaps the local business communities within those regions need to be more active if they had industry advisory committees putting resources into developing new programs and making outreach.

It’s not just about finding the right people; it’s about making sure the right programs are in place to ensure they are taught what the industry needs them to know. You can put more students in a classroom, but they need to be more than just a warm body, they need to be capable.

Impact of Commercial Truck Drivers Shortage

It’s no secret that there is a shortage of qualified truck drivers in the United States. Truck drivers are retiring, drivers are choosing local driving positions over being on the road for long periods of time, and stricter regulations are taking many truck drivers out of the running for jobs.

Economic Impact

With fewer drivers to move loads from manufacturers to stores, businesses are having to wait longer for the shipments they need. This causes frustration for the stores, the manufacturers and the customers. This frustration is expected to increase as we enter the holiday shopping season.

Another issue is that trucking companies are having to raise the rates they charge for hauling goods. The increase in shipping costs is passed on to the customers who purchase the goods. According to a report by DAT Solutions, a company that analyzes and provides data to the transportation industry, the rate per mile that companies charge to haul freight has increased about eight percent from August 2014 to August 2015. It is now at about $1.80 per mile for long-term contracts between manufacturers and shippers.

Some trucking companies are going out of business because they cannot afford to pay the drivers as much as it takes to keep them from leaving for better opportunities. Changes in the hours-of-service regulations have meant that trucking companies must hire more drivers to move the same amount of freight. Smaller companies who are unable to increase freight prices often have trouble keeping up with the costs of driver pay and benefits, forcing them to close their doors altogether.

What Trucking Companies are Doing

Although there are some causes of the truck driver shortage that are out of the hands of companies, most companies are taking steps to keep the drivers they have and attract new ones.

Pay increases are at the top of the list. Drivers know that the shortage of qualified drivers on the road makes them more valuable. They are also likely to switch companies when they see that they can get thousands of dollars in the form of a sign-on bonus.

Truck drivers are also looking for more time at home, and companies are generally obliging. More companies are offering drivers the ability to be at home several times each month. Some companies are even offering their drivers home time every week.

Partially due to the shortage of qualified drivers, the American Trucking Association is actively facilitating military veterans who are interested in becoming truck drivers in meeting their goals. In fact, the ATA committed to hiring at least 100,000 veterans between the end of 2014 and the end of 2016.

There are so many factors that affect the driver shortage in the United States that there are no easy solutions. It’s likely that drivers will keep retiring, with fewer qualified applicants to take their places. This likely means that the prices of goods will go up to compensate for the necessary increases in driver pay and benefits. The good news is that high pay is likely to attract more people who may not have previously considered truck driving as a career option, and the shortage will likely be reduced in time.

How To Start A Trucking Business? Part 1 – Plans and Regulations

With the nation’s economy still growing, and freight demand still rising, the need for capable trucking companies has never been greater. The marketplace is growing, and commercial goods need to be moved from city-to-city and state-to-state.

This need creates new opportunities for savvy entrepreneurs who enjoy both their independence and hefty paydays. One thing for people to remember, however, is that competition is steep.

Although starting a new business is never easy, maintaining a profitable trucking business requires a few extra steps other small businesses would not. You’ll want to thoroughly research the industry you plan to enter before dipping your toe in.

Over the next several weeks, we are going to take a deep look at every aspect of starting a trucking business. Today, we’ll start with the type of business you want to start and forms and regulations you’ll need to be aware of to do it.

Two Fleet Types

The first step in getting your trucking business off the ground lies in determining what kind of business you plan to operate. Trucking companies operate by bidding on and fulfilling freight hauling contracts.

The vast majority of trucking companies operate in two ways, with the main difference between the two being who drives the trucks and how accounts and contracts are fulfilled.

First, you can operate as a privately-owned fleet. In this scenario, you privately run your business and all the operations. You likely own your own equipment, pay higher insurance premiums, and operate a fleet of truck drivers. While you have total control over the operation, this option requires quite a bit more initial start-up money and costs more over the long haul.

The second way still leaves you to operate your own company, but instead you don’t have your own employees. As a sub-contractor, you hire independent operators to handle driving responsibilities. While you receive the contracts, your drivers are not actual employees of your company.

In this set up, you can expect lower start-up, insurance, and equipment costs. On the flip-side, you will have less control over the truck drivers and your company profits won’t be as hefty.

Whichever business model you go with, remember that figuring out the truck driving model is just the first step. After picking a direction, focus on all of the traditional steps one would take in starting a business.

Rules and Regulations

As with any new business venture, it’s important to understand what it takes to get a new business off of the ground. Once you’ve settled on the type of trucking business you want to run, brush up on your business basics. Although trucking is unique, consistent threads flow through running a successful business.

Next, you’ll need to take a close look at all of the trucking-specific licenses, forms, and tax and permitting regulations. Depending on the type of business you are trying to start, there are several important requirements.

The Federal Motor Carrier Safety Association and IRS need special documents and forms from you filled out and acted upon before you hit the road. Specific decals will also need to be placed on your vehicles. We’ll cover which exact forms you’ll need and how to register in Part II of our series, so stay tuned!

Company Business

In addition to these steps, if you plan on employing private drivers, they will need their own special permits and endorsements. Each state has their own portal to provide in-depth information on commercial driver’s license requirements, permits, safety information, and rules and manuals.

In case your eyes start to cross trying to make sense of all the compliance information, you may want to hire a compliance professional to help isolate any requirements you might miss.

Remember, these are just the beginning steps. Depending on your business type and range of operation, there may be more steps than we’ve outlined here.

Next week, in Part II of our series, we will take a look at the forms you’ll need, how to fill them out, and insurance and equipment requirements. Does it seem like a lot? Well it is, but don’t be discouraged, the opportunities in trucking are endless.

How Small Trucking Companies Survive: Part One

We are in an era where operating a trucking company is becoming more complex, more expensive, and more difficult to navigate with all the regulation change. Some are beginning to wonder if the small guys can survive in this era of big mergers and fast acquisitions.

Is it true? Will for-hire carriers that count their fleets in double digits thrive in the trucking of tomorrow? In fact, many small trucking companies are finding creative ways to find and secure long term business contracts.

In this two-part series, we are going to look at a few ways small trucking outfits are measuring success in a changed landscape. First up is how the little guys are finding big openings.

Find a Niche

Many small for-hire trucking companies are starting to look for niches that only smaller, more flexible companies can fill. As competitors diversify into other services, focusing on just one job allows for a laser like focus. After all, if you excel at making pizza, why would you open a dog grooming company?

Some operators are finding that the flatbed is proving to be a lucrative niche. On over-length loads, such as steel beams and pipe, there’s still room for market growth.  The absence of the large carriers is some markets creates openings for smaller carriers.

In some regions, such as the frozen Northeast, many large carriers have almost entirely exited the scene. Food hauling on short-haul regional Northeast routes is some of the hardest trucking in the country. An average length might be 525 miles with multiple pickups and deliveries.

The only times large carriers may be seen in the region is if they are coming in with long-haul loads. These operations are less inclined to stick around, which creates openings for the small guys. The next area where small business trucking excels matches other industries, because when it comes to customer service, size matters.

Focus on the Customer

It’s no secret that smaller organizations are much better at addressing the needs of customers than larger ones. Smaller fleets are better able to build a reputation for excellence and trust. Having greater flexibility allows them to respond to a customer’s needs quickly and efficiently.

As a result, many smaller carriers are counting the calls they receive from customers looking for service after having problems with larger carriers. These calls amount to a steady business stream. In this way the growth of the company relies on level of service, attention to detail, and effective communication with its customers.

In some cases, small fleets depend on a single customer for a majority of their business. While this presents service rewards, it does come with survival risk. The key to success is to not be too reliant on any one customer.

Retain Talent

Finding and keeping the right people is a key aspect of running any successful company. For smaller trucking companies, this is a crucial strategy. When the leader is closer to the front line, they are more likely to know each face in the organization.

It’s not just about managers, it’s about truck drivers, mechanics, service managers, safety guys, and even janitors and clerks. The idea that a team makes up a whole is especially true for small trucking companies.

In what may be the ultimate way to make lemonade out of lemons, the recession put a lot of well-qualified people out of a job. The talent is out there. Luring and retaining it should be at the top of every fleet manager’s list.

While these may be the top three ways that small fleets are staying competitive, they aren’t the only. Join us again next week for part two of How Small Trucking Companies Survive!

How Small Trucking Companies Survive: Part Two

Last week we introduced part one of our three part series covering how small trucking companies survive. This week we are going to take a look at two more crucial aspects of small-outfit survival in the land of the big guys.

We’ve covered the important topics, from finding a niche and focusing on customer service to finding and retaining top talent. While those are important aspects, they don’t complete the puzzle. The next two pieces are arguably just as important as the first three.

Safety and Compliance

It can be argued that this should have been first on the list. The Federal Motor Carrier Association (FMCSA) has been putting fleets that don’t meet the new safety standards out of service. Look hard enough and you’ll see that most of the fleets getting chopped are small operations.

Some might assume that they aren’t subject to the same regulations large fleets are exposed to, such as drug testing and maintenance programs. Unfortunately for them, this belief is far from the truth.

In some cases smaller fleets just don’t have the personnel they need to maintain a rigorous safety compliance program. For carriers with five to ten trucks, keeping a proper safety headcount presents a serious challenge.

Third-party companies who handle these services on an outsourcing basis are now hitting the scene. For a nominal fee, these companies can handle drug testing, qualifying drivers and keeping truck driver files organized and up-to-date.

As shippers increasingly look to CSA scores and safety records, the threat of loss of business or even lawsuits is all too real. Staying on top of safety and compliance issues is now more important than ever.

It’s also important to remember that safety and compliance are not always the same thing. Small trucking companies maximize safety potential by having the latest and most advanced safety technology, from disc brakes to anti-rollover technology and stability control.

Compliance is met behind the office desk. Small trucking companies may need a fleet of very smart people to help keep up and comply with the ever-changing regulatory environment. By having qualified people in the right places, companies should be able to ride out any regulatory storm that comes their way.

Revenue and Costs

The nature of complex operations makes it easier for medium- to large-companies to better manage cost versus revenue stream. Smaller operations are looking at a smaller cash-flow. Operating margins and expenses seem larger than life when you start removing zeroes from the bottom line.

Small trucking companies need to be treating each truck and driver as an individual profit center. It’s vital to know what the actual costs for each dispatch is. Without this information, it’s difficult to determine what can be done to maximize profit and minimize loss.

Companies should be getting financial statements regularly. If a company is only parsing out the cost on a yearly, quarterly or even monthly basis, they aren’t adjusting fast enough.

Some small carriers participate in buying programs that offer discounts as part of an association membership. Certain state, federal and private trucking organizations can offer discounts on fuel, equipment, supplies and more. And unlike the old days, carriers don’t have to be huge to take advantage of bulk discounts.

The personal nature of small trucking companies also helps in negotiating prices on equipment, from tires and rims to mechanical work on the trucks. Since the overall equipment costs are always rising, having an edge is important to keeping the bottom line in black.

The final aspect of costs relate to maintenance. Smaller companies can manage things like tire programs more effectively. In some cases technicians can even salvage fuses from junkyards because taking the truck to a dealer for fuse problems can be quite expensive.

Now we have a more comprehensive picture of how today’s smaller fleets make it work. Find a niche, focus on the customer, hire and retain top talent, maintain safety and compliance and manage revenue and costs. Next week, in our final part of this three-part series, we will take a look at how smaller fleets can master technology to their advantage, invest in quality equipment, and practice smart growth principles.

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