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Delay time at a customer’s dock can be one of the biggest drains on profit for any size motor carrier.

Delay time has a direct relationship to the cost of operations, including:

  • Driver cost per hour,
  • Vehicle and equipment costs,
  • Fuel costs, and
  • Asset utilization costs.

Whatever the method, one fact is clear: When a driver and the equipment sit idle, costs rise, and revenues shrink.

Driver capacity

Some carriers are searching for answers on how they can add to their fleet to offset these costs, asking. “Does it make any sense to leave viable business on the table when all we need is another truck and a driver?”

Due to the driver shortage, demands on capacity continue to inch upward, causing many carriers to rethink their position in the marketplace and further manage their costs based on their capacity.

Reduce idle time

Given the need for carriers to maximize their drivers’ time, what is the strategy for curbing idle time — a wasteful, yet often accepted cost of doing business? Carriers ultimately hold the key to either tolerating it or developing an alternative that minimizes or eliminates the loss and must:

Know the costs. This is fundamental for any type of business. Making uninformed decisions without knowing the facts will jeopardize profits. Fuel costs alone vary from day to day, causing operational costs to fluctuate without warning. The way costs are stated is also of importance — cost per mile, cost per hour, vehicle costs per mile/hour actual vs. expected, cost per customer, cost per lane, etc. The point is to know your costs and where the boundaries lie between profit and loss.

Know the customers. Carriers should consider discussions with the customer on forming strategies that can benefit the business needs of both parties. Strategies such as appointment scheduling, load consolidations, or a combined input affecting logistical needs for customer and carrier can all help reduce costs. Consider what other alternatives exist to solidify supply chain connections.

Know the market. Carriers must always monitor changing economic and market conditions. Capacity constraints and driver shortages may generate trade-offs in the marketplace that both the carrier and the customer can strategize. In the meantime, the carrier must be prepared to answer: what are the customer needs, and does our service answer the voice of the customer?

Vigilance is necessary

Cost management has always been a focal point for successful companies regardless of the economic environment. Carriers must continue to scrutinize fuel, especially when this cost is on this rise as it is now. Driver recruitment and retention continue to be costly and a great concern for the industry. Equipment costs must also be monitored daily. And while rates may be on the increase now, margins can be threatened in any type of economy.

Managing costs to the operation, such as delay time at a customer’s dock, will involve collaboration between the carrier and the customer. But for collaboration to be effective, the carrier must know its costs, the customer’s needs, and the market driving the need.