Key Takeaways from the 2019 Transplace Carrier Advisory Board Meeting
By: Karen Sage, CMO, Transplace
One of the great things about an advisory board, one where you have encouraged the participants to be open and communicate freely, is that you can get the scoop on the real issues facing an industry. This was the case at our recent Transplace Carrier Advisory Board, held in conjunction with the 2019 Transplace Carrier Symposium. While the symposium is all about education and honoring our 32,000+ carriers, the advisory board is by design a much smaller venue to allow more informal feedback. Our goal for talking with a small group of about 20 select carriers is to help us grow and learn how to be better partners. Throughout the meeting, there were several consistent themes, a few which I will share below.
By far, the most significant issues heard around the room were about the severe shortage of drivers, poor driver retention rates, and concern about a lack of quality in the driver applicant pools. Several carriers mentioned that that they had gone through multiple rounds of pay raises last year in an attempt to both increase the number of applicants and to retain drivers already on board. However, many also mentioned that the pay raises didn’t necessarily equate to the expected benefit of driver retention. While there was an increased driver applicant pool due to the increased rates and sign on bonuses, the drivers in that larger applicant pool were often the job hoppers with low performance scores. But the collective wisdom of the group prevailed – carrier peers advised that putting structure around pay was much more effective than overall pay increases.
Importantly, carriers leveraging driving rates dependent on such things like the total number of miles a driver drives or the number of days they are on the road vs. off the road have seen a positive benefit. Implementing a multifaceted pay structure tends to incentivize the right behavior at the same time as providing flexibility to retain good drivers perhaps not as incentivized by pay rates. While one might think that better rates would be an incentive for drivers to drive more, it actually turns out that drivers are somewhat bifurcated. While some older, more established drivers prefer the long hours and higher pay, younger drivers were often more willing to give pay up for a better quality of life to spend time with their family. Others touted things like health insurance made a bigger impact than rate increases. One thing is clear; a company culture where drivers are valued, heard and respected as individuals was resoundingly an important theme throughout the meeting.
Indeed, several mentioned the need to retool culture as their companies have grown. Others said it is about maintaining the culture the way it is today through selecting drivers that have a shared similar culture profile. Some carriers mentioned using personality tests like Myers-Briggs type indicators to instruct managers and dispatchers how to best communicate with drivers. Others use these and other types of tests to determine if a particular applicant will fit within the culture. While one might question the wisdom of narrowing the applicant pool through restrictive testing, especially during a time when there is such a severe driver shortage, the unintended benefits stated range from strong correlations to high retention rates to even better adherence to compliance and other safety measures. In general, those who said they used testing were very supportive of its return on investment.
Other means of improving culture centered around listening to drivers, including programs like driver advisory boards where driver interests are communicated, and where feedback given is then acted upon. Several carriers mentioned leveraging driver mentors for new drivers and others discussed open-door policies. Another interesting technique was the use of social media in helping drivers feel heard. At the meeting, I learned about a new platform provided by Facebook called Workplace. About half of the room had never heard of it, and the other half affirmed it as a primary means of keeping communication open in the workplace with drivers. Of course, after the meeting, I had to check the platform out, and it equates to a private posting board for companies. The carriers that did use Workplace said it provides many benefits. That said, carriers warned the others interested in it that the platform required having staff to keep on top of driver responses. In fact, every time someone brought up technology it seemed like the new tool came with a comment about how technology required more people to manage it. Even a seemingly simple technology like SmartDrive, a video-based safety program and transportation intelligence platform, resulted in additional staff. One carrier cautioned that in order to truly benefit from SmartDrive technology, you need to staff additional resources to comb through the driver reports. This extra effort was necessary, because once you did have the ability to get the data, taking action on bad drivers is needed for future driver accountability.
In general, technology generated a lot of discussion. For example, visibility was a huge topic of interest. Some carriers expressed that monitoring resulted in little benefit to the carrier and worse resulted in a significant amount of overhead. Frustrations were that additional staff was needed to enter a lot of the status update data for the many tools required. The proliferation of visibility vendors and shippers’ preferences for different vendors has created a need for inputting data into multiple systems and applications, none of which talk to each other. One carrier questioned the need for monitoring at all.
The carrier’s point was that nothing has changed regarding the actual delivery to improve it, just now they have more people monitoring it; the only time this particular carrier felt monitoring matters is the 1% of the time where there is an issue, otherwise monitoring is simply overhead. One carrier suggested that monitoring did have benefits (again, others in the room disagreed), and compliance was best achieved by driver education. If drivers understand what the data is being used for and why the collection of it matters, they are much more apt to support it through their work effort. Not all technology was vilified, however. There was a lot of talk about automation and how it has paid huge dividends but there was some concern about accuracy of the automation. The resounding tip was that you need to get the technology out of IT’s hands and make sure it is designed by your operations folks who are the ones who really understand the workflow being automated. Along with technology, data was also a key discussion point during the meeting.
Carriers want to see benefit from the massive data they are helping shippers collect. Moreover, carriers want to see more data about the shipper’s performance. Just as shippers have a carrier scorecard, carriers wish for a shipper scorecard. Specifically, they would like to understand how accurate a shippers forecasting has been year over year. How many bids have they been awarded that have failed to launch? How close have they been to volume they have committed to get the rate they were offered by the carrier? Another key observation mentioned was that detention has come back in a bad way. Surprisingly this was a comment from many of the carriers.
All in all, I find these discussions very useful and this advisory board did not disappoint. The key takeaways from the meeting were profound. There is a lot of useful information we can digest including how to provide more data to carriers and educating shippers on the pain carriers feel. For the most part, similar issues around drivers, culture, and technology were shared equally amongst the large carriers and the smaller carriers, with prime difference being in scale of the problem. I learned a lot in the meeting and appreciated all that participated.