The heavy-duty truck transportation fleet industry continues to deal with a host of challenges, including driver shortages, logistical changes and asset management hurdles that continue to affect bottom lines. Just like transportation companies spec a new truck to make sure it fits their operational needs, transportation companies should spec their business practices. (For those outside the trucking industry, that means to evaluate them to ensure they meet a specified standard.) Here’s how:
Spec’ing driver recruitment and retention methods: Driver shortages are among the most challenging issues for the industry. Transportation fleets will most likely continue to experience a shortage of professional drivers because the underlying causes are showing no signs of stopping in the coming year. The International Road Transport Union (IRU) documented shortages in a survey of 800 transportation companies in more than 20 countries. It revealed that about 20% of positions went unfilled in Europe and Asia last year. It also predicts that the truck driver shortage will increase by 40% this year in that region. The American Trucking Associations reported a shortage of 80,000 drivers last year.
Surrounding this challenge are a few policy and strategy areas that need to be spec’d to ensure they are properly supporting driver recruitment and retention:
- Company culture: Leading fleets are realizing that they can recruit and retain more drivers by building a culture that acknowledges safety and driver input. Progressive-minded organizations continuously include their drivers in specification conversations and even poll drivers for input during the process so they feel like their voices are heard.
- Safety: Including drivers in the conversations about safety initiatives and acknowledging their input is especially important for retention strategies. As more fleets replace aging trucks with newer, safer equipment on the roads, it is important to listen to what drivers need to be safe on the road and make their jobs easier. In addition, companies can unlock additional savings from reduced accident and litigation costs, as well as lower maintenance and repair expenditures for a new vehicle.
- Pace with the latest trends: Another reason for the driver shortage has been the average age of drivers, which has been climbing for many years now. This reinforces the need to build a fleet replenishment plan around shorter trade cycles whereby trucks are increasingly spec’d for newer, advanced safety features that keep drivers safe while returning them home to their families more frequently.
Spec’ing approaches to sustainability: Younger drivers — who are notoriously more difficult to recruit — want to drive trucks that are more sustainable and environmentally conscious. This movement reflects the broader population’s desire to pay closer attention to climate change, which is a leading reason why fleets are implementing environmental, social and governance (ESG) goals while promoting sustainability through shortening asset life cycles and optimizing vehicle specifications to be more fuel-efficient. These organizations are specifying lighter components that allow for longer maintenance intervals, which in turn reduces environmental hazardous materials waste disposal. Companies also are supporting their social criteria by operating the newest and safest trucks, which helps to further attract and retain a greater pool of diverse drivers and other staff.
Spec’ing your residuals: Although this new focus on ESG is now a major business strategy, paying close attention to the bottom line still is a significant need for many organizations, which is why they are not only spec’ing for safety but also spec’ing with residuals in mind. Fleets that operate a life cycle asset strategy of between three-to-five years lower their total cost of ownership and enhance each truck’s residual value.
Spec’ing your long-term asset management philosophy: Fleets are leveraging the power of data analytics to improve their asset management and procurement processes. In many cases, they are finding that flexible lease solutions and financing options such as sale-leasebacks and temporary extensions are the best way forward. These can satisfy short-term needs without damaging long-term procurement goals because of build slot limitations. Furthermore, the cost savings from a sale-leaseback can give companies more capital to raise driver salaries or issue bonuses. For many, the key to success will be staying the course paved by data analytics to maximize asset management efficiency.
Although today’s transportation challenges often are driven by external factors, companies must make sure their internal procedures are engineered to mitigate risk and drive success. Spec’ing these areas will set any transportation company on the road to more successful operations.
Learn more about engaging and retaining employees at the Engage and Retain Employees by Giving Them Meaning educational session at the 2022 ASCM CONNECT Annual Conference on September 18 – 20.