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Part ll....Carriers Behaving Stupidly…… Driver Loyalty and Productivity Issues

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A smart carrier manager: “When you’re are not making money we are not making money” Eric Stoner , Government Section, Panther Exediting

 The New Paradigm For Rewarding Contractor Retention and Productivity:

Let me first start the conversation based on my ten years experience as a Wall Street stockbroker. In many ways O/Os and drivers are very much like stockbrokers. They get a tax form 1099 at the end of each year which makes them self-employed and entrepreneurs. They both work on a productivity basis; in that their level of compensation is based on the fruits of their labor. The ones who work the smartest and hardest in running their businesses make significant amounts of money. Also 30% of the stockbrokers and 30% of the drivers produce 70% of their respective firms’ revenue. Those 30% in the brokerage business are called “Rainmakers”. While on the topic, I was never a “Rainmaker” and I’m a much better trucker than a stockbroker. Oh and so much happier too. But, in the financial services world, the Rainmakers are coddled, pampered, and rewarded with significant bennies and "training" opportunities to Maui. If a firm is going to spend money to increase productivity, spending it on the Rainmakers is where the leverage of resources and cost/benefit is most fully realized.

To Brad Jacobs lament, “Why are drivers flipping carriers for a 5 cents/mile?”; because they don’t know how, when, or where their next nickle/mile is going to post. Though I’ve only worked for one carrier for over five years, I have to assume other carriers are similar in the driver compensation models, because, if not, they’d be making a big deal of their pay plan. Compensation plans seem to be inflexible and cloaked in secrecy. Carriers, let’s start rewarding and recognizing driver loyalty, safety, and productivity with a transparent comp plan. As an example, I would love to know at certain benchmarks of production, performance, and time in service that I would receive a nice bump in my cents/mile plus other imaginative benefits and bonuses in recognition for a job well done.

For carriers paying on a $/mile basis, let’s say at the end of each year of quantified performance, A driver will receive a three cent/mile increase in my base contract rate with annual increases peeking out in seven years. This is a concept that brains larger than mine can embellish, but this kind of format would certainly encourage my loyalty and performance, and would be a recruiting tool that would have me coming aboard.

Now let me conclude with recognizing and maximizing the Rainmakers' productivity. Panther has a unique program in the industry called "Panther’s Premier Driver Rewards Program". Before I go into the details, let me first say that though I'm a Panther driver this is no Panther/Gary love fest. Over the years we have both threatened to terminate each other more than once (without extreme prejudice), but cooler heads prevailed and we continue to have a cordial professional relationship. As in any family relationship, we have our spats but mutual respect and appreciation has developed over time and I foresee a long career with this carrier.

In a brief summary, the program tracks a driver's loaded miles, loads, and on time deliveries for a six month period. Those that attain certain bench marks in loaded miles and/or loads with one or no delivery time failures receive significant cash rewards and other nice bennies. On average, the top 20% of Panther drivers on semi-annual basis qualify for recognition.

Below are the bench mark bogies used for the first six months of 2013. Again, a driver gets recognized for either loaded miles or loads produced as a team in this case, but each team driver is recognized and receives separate cash rewards and extra goodies

Team Goals ( 6 months)

                   Bronze          Silver        Gold

Miles         49,000          55,000       63,000

Load            75                  84                94

Now remember that 30/70 rule I've been squawking about for several blogs. With the press of a key, the CEO/COO now has in hand his or her top producers. This is where carrier managers can start getting creatively smart with increasing driver productivity and retention. Barb and I have been able to attain the Silver goals over the past year, but the Gold level continue to allude us. This is where I would love the opportunity to hand out with some Gold Teams and pick their brains on just what they are doing and we are not, or Panther would put together some behavioral insights on the operations of the best of their best. Now driver, how do you measure up?

 "Check your mirror and keep'r between the lines"

 gary and barb

hotshotchronicels.com

 

 

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Gary Shade

Gary Shade Prior to becoming an expediter, Gary worked in the financial services industry. During that tenure, he worked as a stockbroker for a major Wall Street firm. Gary was always in awe of the big rigs. Between jobs, Gary took a sabbatical and obtained his CDL and drove OTR. He still thinks it's one of the best career choices he's made.
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