The Role of Transportation in Supply Chains and Business

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They have a lower cost per unit than any common carrier, any dedicated contract provider, any of their competition's fleet. They have the best safety record. They have the lowest damage ratio. They have the highest productivity. They have the best customer service and their industry is such that if they outsource it probably the customers would think that they were abandoning them. So they should keep that fleet. It's not even close. So I asked Carlos one day, I said how do you do this? He said I do it by taking care of the drivers. The average tenure of a driver in their fleet is 13 years and it's a promotion to go from the warehouse to be a truck driver. If you have a meeting at BP the first issue that comes up is safety. They have a safety briefing. I used to think it was a silly thing, but no they take it very seriously. So if you're a truck driver and you work for them and the first thing that's addressed in every meeting is safety, what message does that send to you? They care and they do care. It's not a hokey bunch of nonsense. They really care. The thing that really got me though is he said the way they structure their routes and schedules is such that the drivers can be home with their families every weekend. So then they get the cream of the crop and they feel like they're taken care of. That's how you run a fleet. That's how you take care of a driver shortage issue. It's a lifestyle issue. There's another interesting phenomenon though. If a truck driver is not driving a truck, what is the next most likely job they would have? Anybody want to guess at that? Construction. And so if there's a housing boom going on at the same time there's a transportation boom, now you got a problem. But the best way I have seen a company deal with the driver shortage and turnover issue is to offer a very good place to work because you're competing with all types of other options. At one point it got so bad that in Nashville for every six loads that needed to go out of Nashville there was only one driver and truck available to take it. All right are you depressed yet? Number three is a pressure on profits for truckers. Where does that come from? Anybody remember the old transportation exchanges? You could go on the internet and compete for prices and bid out lanes and all that good stuff. What does information about pricing do to pricing? The more information you have about prices the lower the prices get. And so over time you combine that with the big upshot in the price of fuel and you just put a lot of these companies in serious jeopardy. And so some companies are still in the business of beating these carriers up and it's not a good business to be in because they may be your livelihood. What goes around comes around maybe you've heard that expression. So you got to be careful when we do carrier bids for our clients we try to be very careful with that to make sure that there's a fair profit that's on the table. Because if the carriers can't stay in business

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