trucking profitability experts

KSM Transport Advisors (KSMTA) exclusively serves the trucking industry, providing freight network engineering and profit improvement services.

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Our carrier profitability assessments are designed to be self-funding, provide a thorough analysis of the current situation and create a roadmap so the identified issues can be quantified, prioritized and pursued.

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Our products are designed to support and improve carrier profitability, and are used within our assessments and implementations to provide the intelligence and knowledge for change and action.

KSMTA insights

Driver Recruiting is a Marketing Effort  

Dr. Philip Kotler revolutionized the marketing world in the early 1960s with a defined and simplified approach to the consumer marketing world by evangelizing the 4 P’s of Marketing: product, price, place and promotion. While this model has evolved over time, the 4 P’s are still the core of all consumer marketing; and I would suggest should be the core of your efforts to attract safe, productive and loyal drivers1 to your trucking company.

  1. Product

Consumer marketing: A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. An automobile is an example of a tangible good; your cable television subscription is an example of an intangible service.

Driver marketing: The product a truck driver is “buying” from a trucking company is complicated. It is the sum of the driver’s perception about the company: the quality and cleanliness of the truck to which he is assigned; the appearance, professionalism and friendliness of all the company’s associates including drivers, mechanics, operations folks, payroll, president, etc.; the cleanliness and quality of the company’s facilities including the facilities set aside for drivers; the verbal, written and electronic communication the driver receives from the company; the company’s home time policy and practice; etc. 

Perception is reality, and for a driver his or her perception is his or her reality. Further, first impressions or perceptions are very important. Make sure the driver’s perceptions are positive from first contact through termination; especially important is the perception during the first 90 days where turnover rates are the highest. It is critical that there is an expectation exchange prior to the driver getting in the truck; make sure the driver’s perception from recruiting, orientation and word of mouth is consistent with whet the company believes to be reality.

  1. Price

Consumer marketing: The amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well.

Driver marketing: Economics 101 states that markets are rational and that the market sets the price.  Attracting qualified drivers requires a competitive pay package starting with the base pay, pay for performance, tenure increases, insurance and other benefits. It is critical that carriers understand the competitive landscape and benchmark their “price offering” to prospective and current drivers.  An excellent source is the National Survey of Driver Wages  published by the National Transportation Institute.

  1. Place

Consumer marketing: Refers to providing the product at a place that is convenient for consumers to access.

Driver marketing: There has been massive change where the product is introduced to and analyzed/ reviewed by the driver. Today it is all about the internet. Carriers use all facets of the internet (e.g., websites, social media, messaging, etc.) as the place to display their product and entice drivers to take the next step and talk (e.g., email, message, voice) to a recruiter for more information and hopefully close the sale. Both drivers and carriers have become more sophisticated as the world has become more virtual.

One area that has not changed is the power of driver referrals. Referrals are very powerful as the prospective driver has an opportunity to preview the carrier’s product by talking to a current driver and possibly observing his or her tractor and trailer. Do not discount referrals; they should be a part of every carrier’s marketing mix.

  1. Promotion

Consumer marketing: All of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, sales organization, word of mouth, etc.

Driver marketing: Similar to the change in “place” above, the promotion of driving jobs has changed as our delivery of information has become faster and more frequent. Gone are the days of newspaper and truckstop magazine ads. Today’s promotion is direct to the driver’s smartphone, tablet, or laptop via Facebook, LinkedIn, Craig’s List, Instagram, recruiting portals, carrier websites, etc. 

Again, with all of the technology available, do not discount the power of word of mouth and driver referrals.

Carriers need to employ all four elements (product, price, place, and promotion) as they craft the marketing mix to create a balance of the four elements that provides the carrier the maximum return. This is not a “one and done” effort; carriers need to continually test and analyze their marketing mix and results and make  changes to improve their results on a regular basis. There is no one marketing recipe for success; carriers that adopt a marketing mentality, understand the elements and analyze cost/effort/results will achieve superior results.

1. The marketing concepts presented herein apply to all categories of truckload drivers: company, lease purchase, and owner operator. To simplify, all categories are referred to as “drivers.”

2. Source of consumer marketing: Wikipedia and Kotler, Philip. Marketing Management. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1984.  

.
Improve Operating Metrics and Margin with Time Management  

The trucking industry has always been challenged to be successful with very tight margins compared to many other service businesses. Historically, the truckload segment of the industry has measured itself primarily on revenue and revenue per mile. In more recent years the utilization and productivity key performance indicators (miles per truck, shipments per week, revenue per week, etc.) have become more important.  Two performance keys to being successful when the margin per transaction is small is to generate as many transactions as possible over a given time period and to shorten the time it takes for each transaction; in short, maximize the margin in a given time period.

Understanding how to recognize, measure and manage the factors that affect the time component of the productivity formula is important. The current capacity constrained freight market along with the driver shortage requires improved utilization (doing more in less time) to support carrier profitability.  More than five years ago, a publication by the Federal Highway Administration entitled Freight Story 2008 estimated a delay cost of $26.70 per hour for the transportation industry. Challenges such as the Hours of Service rules, increasing congestion on streets and highways, and accommodating driver quality of life needs such as time off can have a negative impact on available time; so attention needs to be directed to any area where unproductive time can be minimized.

Some of the areas affecting time to focus on include:

Pickup and Delivery Appointments

  • Make them early and be aggressive
  • Know your realistic estimated time of arrival
  • Know the locations’ receiving hours
  • Know the consequences of missing a scheduled appointment

Drop Trailers

  • Drop trailers at origin or destination can improve productivity by reducing time
  • Know the fixed cost per load of the trailer pool and compare that with the time saved
  • Utilize drop trailers to improve efficiency; not just for shipper convenience or for storage

Deadhead (Wait or Go) Decision

  • Understand the economics of deadheading immediately after unloading or waiting for a closer load
  • Getting the truck back into the network sooner may be worth more than the extra deadhead will cost

Hold Shippers and Receivers Accountable

  • Document arrival and departure times
  • Bill to recover detention charges
  • Use data for future rate negotiations

Weekends

  • Haul longer haul movements over weekends
  • Haul shorter haul moves during the middle of the week

Time is the denominator in many productivity metrics: Miles/Revenue/Margin per Day/Week/Month. Minimize the time and you will improve your performance. Understanding the cost of time places you in a better position to negotiate rates or lost time compensation with your customers.

.
Technology Helps Carriers Communicate Their Fact-Based Needs to Shippers  

 

A recent article published in Fleet Owner, “Projecting Trucking’s Future Pricing Path” builds on some of the key takeaways from last week’s webinar, “Freight Accessorials – Augmenting Revenue While Covering Rising Costs” presented by John Larkin of Stifel and Ben Cubitt of Transplace. Of particular interest is the last paragraph of the article, which states:

“Carriers still haven’t done the best job relating their needs,” Cubitt added. “Shippers and 3PLs are very data-based and data-driven, so carriers need to have more ‘fact-based’ discussions about the need for rates and accessorial charges. They need to ‘arm’ shippers with accommodating data to support their rate requests.”

KSMTA’s clients utilize our Freight Network Intelligence Platform and our Freight Network Engineering Process combined with TMW's IDSC Netwise® technology to create pricing that is compensatory to the carrier and competitive in the market. Our clients do not bid all lanes; they bid the lanes on which they know they can be profitable, competitive and provide superior service. This pricing intelligence combined with analytics about driver recruiting and retention and cost creep provide a powerful means for carriers to communicate their ‘fact-based’ needs to their shippers.

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Click on a logo to see what our clients have to say about us.

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We have worked with several consultants over the years, and KSM Transport Advisors (KSMTA) is truly a cut above the rest. While many consultants will try to “strong arm” you into buying into their recommendations, KSMTA most certainly doesn’t operate that way. In fact, I felt as though they became a fully integrated part of our team. They are able to leverage their industry experience and tools to deliver options that are well thought out, quantified, and most important, can be realistically implemented. They offer real-world solutions to real-world problems.

One example is their maintenance assessment. We felt confident about how we handled our maintenance practices, but they showed us innovative ways on how we could improve even further. The report they compiled contained metrics and analyses that were both thorough and easy to understand. We were so impressed that we engaged them to help us implement their solutions. I would recommend KSMTA to anyone who is interested in driving down their maintenance costs in order to maximize profits.


Averitt Express, Inc.

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Working with David Roush has been an invaluable experience. David worked with us in the details of our business, but also guided us at a higher, strategic level. In both instances, TransCorr was led in a better direction. David's experience in the trucking industry is vast, and he used that knowledge to help us in many different business scenarios. With KSM Transport Advisor's (KSMTA) help, we have been able to improve our LH/Mile by $0.14 within 12 months. And with David's guidance, we were able to more strategically develop a new market.

In addition, David is extremely personable and easy to relate to. He's been a reliable person to converse with for quick questions or for longer strategic discussions. I have greatly enjoyed the experience working with David and KSMTA and I look forward to continuing working together.

Michael Kuebler, Director – Business Intelligence
TransCorr

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We called on KSM Transport Advisors (KSMTA) to evaluate our company's recruiting strategy. We did not believe we were properly configured to achieve the performance benchmarks we'd outlined for ourselves, and needed assistance with improving our core recruiting methods to ensure we were bringing in the right people.

KSMTA brought decades of experience to the task and continues to play a large role in helping us to strengthen our recruiting group. The firm made several site visits and offered a series of recommendations regarding the metrics, advertising, and other tools we were implementing to attract new hires. In the past month alone, we've seen a 10 percent increase in seated trucks. Moreover, our new hires have been a great fit for our firm. I'd highly recommend KSMTA to anybody who wants to improve their driver recruiting results.

Chip Watkins, President, Transportation Division
Watkins Associated Industries

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Boyd Bros. hired KSM Transport Advisors (KSMTA) to evaluate our freight network. We had purchased and implemented TMW’s IDSC Netwise® software, but our use of the software was sporadic, and thus so were the results.

We do not use a lot of consultants as we have had several negative experiences in the past. Our experience with KSMTA was very positive.

We have implemented a systematic weekly and monthly review of our freight network based on the best practices shared with our team by KSMTA. We have integrated KSMTA as an integral part of our go-forward network design to ensure we continue to maximize our operating margins.

I highly recommend KSMTA and their Freight Network Assessment as a high value project that delivers real-world insights and solutions.

Richard Bailey, President
Boyd Bros. Transportation, Inc.

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Our company engaged the services of KSM Transport Advisors (KSMTA) after our board of directors determined that key ingredients to improving our overall operating performance were missing. KSMTA's challenge was to help our company create a business plan that was attainable, sustainable and would allow us to achieve our profit goals.

KSMTA hit the ground running. They visited every company location, conducted a complete review of our business plan and our existing resources. They asked critical questions about our revenue models and our personnel needs. They examined what our competitors were doing and looked at how federal regulations were affecting our business. They were proactive, results driven and impressed us with their knowledge of the freight industry.

Ultimately, they determined our company was heading in the right direction, but helped to sharpen our focus and make sure that our business model was both strategically and statistically sound. They met their deadlines, were competitively priced and were considerably more engaged than other consultants we've work with. We continued to work with David and KSMTA on various follow-up projects, and I would recommend KSMTA to any industry leader who is interested in improving operational efficiency.

Chip Watkins, President, Transportation Division
Watkins Associated Industries

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Our company, Kane is Able, had experienced significant change in our operations as the result of adjustments to the recession, as well as undergoing cultural change as the company transitions from a family-operated company to a company with non-family professional management. Additionally, we had made some management changes and I was assigned to "right the ship."

Fundamentally knowing that a strong foundation is critical to success and anecdotally experiencing a multitude of "system" issues, I hired KSM Transport Advisors (KSMTA) to complete their Systems Assessment. I felt comfortable from the start as the proposal was professional and thorough with a well-defined process and very specific deliverables.

The onsite team exceeded our expectations with a strong focus, organized methodology, and instantly apparent expert knowledge combined with industry experience on the carrier side. Our team was highly involved at the operation, administrative, and IT levels; daily briefings kept our leadership in the loop and provided short-term wins as well as made our system and use of the system world class.

Our team was in unanimous agreement that this was a great investment and I would recommend KSMTA and its Systems and Assessment to any carrier who would like to better understand how to configure their systems immediately and in to the future.

Steve Buckman, Vice President Operations
Kane is Able, Inc.

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Bestway engaged David Roush and KSM Transport Advisors (KSMTA) to evaluate our freight network and it was a very positive experience.

KSMTA delivered exactly what they promised and more. Their entire approach was professional and designed to deliver maximum value with minimal effort on our part. They quickly understood our unique and proprietary concepts and issues and “dialed” them into their analysis and presentation. We learned more about the profitability of our customers and lanes in a day and a half with their team than we had in all the time prior to the visit.

The solutions resulting from their work were easy to understand and actionable as promised. We began immediate implementation resulting in a nice increase in our rate per mile. Our rate per mile has increased nicely as a result of this process, and our operating ratio has declined accordingly. That increase far exceeded our investment in the project.

Terry W. Croslow, COO/CFO
Bestway Express, Inc.

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In today's highly competitive truckload industry, regulatory concerns, driver turnover issues, and a generally soft economy are impacting carriers' profitability. We turned to KSM Transport Advisors (KSMTA)'s Freight Network Assessment (FNA) to better equip ourselves to manage through these challenges. KSMTA's data-driven work products and processes support and leverage the power of the TMW IDSC Netwise® Technology.

KSMTA team members went above and beyond in helping us understand how to use advanced analysis to improve our overall operational efficiency. They analyzed every aspect of our revenue stream to allow us to close profitability gaps and find new revenue opportunities. They even provided us with an in-house analyst to manage the FNA technology until one of our own people was fully trained to do the job.

We were impressed with how well KSMTA's people understood the truckload industry. They instilled us with confidence as they guided us through the analytical process. On top of their experience, the KSMTA team members were great to work with – humble, willing to roll up their sleeves on our behalf, and completely focused on our success.

Matt Anderson, Senior Vice President, Sales & Marketing
Landair Inc.

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Our initial goal was for KSM Transport Advisors (KSMTA) to provide an overall analysis of our entire truckload freight network, provide specific deliverables for the project, and to make recommendations for future improvements. Having worked with KSMTA on previous projects, we were very confident that they would bring the same level of enthusiasm and expertise to the network analysis project. We were not disappointed.

The team from KSMTA brought real-world industry experience and a proven track record of success to our project. Their approach is very systematic, thorough and results-driven. We continue to refine our processes and overall approach to our freight network management based on the systems and logic implemented through our engagement with KSMTA. We began to see positive results from the very beginning, and a favorable trend has continued during the six months since launching the project. I would recommend KSMTA to anyone who is interested in analyzing their freight network in order to drive improvements in yield and margin.

Danny Crooks, Vice President, Corporate Transportation
Averitt Express, Inc.

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When our company engaged the services of KSM Transport Advisors (KSMTA) we had completed an acquisition, but we did not have the opportunity to perform an in-depth evaluation of the freight network. The initial goal was for KSMTA to provide an overall analysis of our entire truckload freight network, provide specific deliverables from the project, and to make recommendations for future improvements.

We made strategic decisions regarding certain segments of this fleet – including where to hire drivers and which markets to grow. We turned to KSMTA to provide the analysis and support to confirm our thoughts, assure this effort would be successful by providing a plan for attaining our objectives within a given timeframe, and provide follow-up measurements to report progress. They responded timely with tools and analysis that supported this effort.

We continue to refine our processes and overall approach to our freight network management based on the systems and logic implemented though our engagement with KSMTA.

I would recommend KSMTA to anyone who is interested in analyzing their freight network in order to drive improvements in yield and margin, and ultimately overall profitability.

Terry A. Wallace, President
Transco Lines, Inc.

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I have spent 20 years helping truckload carriers all across North America with the problem of identifying which shippers and lanes at various rates and volumes make up the best freight mix; yield management. One of the most valuable lessons learned over my years is that there's both a science and an art to freight mix optimization.

Understanding the science is the easier of the two: what data do you need, what's the proper math to apply, and how do you read the resulting information? There are few commercially available yield management systems designed for the truckload industry. These systems are wonderful tools for taking vast amounts of raw information and very quickly producing objective business intelligence. The problem with these systems is that they can lack direction. Lack of direction often leads its users to a condition known as “analysis paralysis” resulting in very little realized improvements.

The art is finding the right blend of real-world transportation experience and the objective measurements to form actionable tasks. It takes many years at various positions and levels within a trucking company for an individual to gain the necessary experience needed to identify actionable opportunities presented in the analytics. Intuitively you know you can't take what a mathematical model says to do 100%; but on the flipside, you can't exclusively rely on an individual's subjective experience either.

I've seen carriers attempt yield management by applying science or art, always with less success than when both are applied. Done right, yield management will bring huge improvements to the bottom line with very little disruption to operations and sales.

Our industry is small with a very small number of yield management experts. David Roush and his team at KSM Transport Advisors (KSMTA) are truly among the best. They use software to produce objective business intelligence and possess a rare wealth of industry experience needed to guide actions. You won't find a better blend of art and science. KSMTA is a professional group passionate about what they do. I've seen their success firsthand and would recommend them to anyone and everyone.

Ben Murphy, President
BJM Advisors, LLC

 

KSMTA insights

Driver Recruiting is a Marketing Effort  

Dr. Philip Kotler revolutionized the marketing world in the early 1960s with a defined and simplified approach to the consumer marketing world by evangelizing the 4 P’s of Marketing: product, price, place and promotion. While this model has evolved over time, the 4 P’s are still the core of all consumer marketing; and I would suggest should be the core of your efforts to attract safe, productive and loyal drivers1 to your trucking company.

  1. Product

Consumer marketing: A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. An automobile is an example of a tangible good; your cable television subscription is an example of an intangible service.

Driver marketing: The product a truck driver is “buying” from a trucking company is complicated. It is the sum of the driver’s perception about the company: the quality and cleanliness of the truck to which he is assigned; the appearance, professionalism and friendliness of all the company’s associates including drivers, mechanics, operations folks, payroll, president, etc.; the cleanliness and quality of the company’s facilities including the facilities set aside for drivers; the verbal, written and electronic communication the driver receives from the company; the company’s home time policy and practice; etc. 

Perception is reality, and for a driver his or her perception is his or her reality. Further, first impressions or perceptions are very important. Make sure the driver’s perceptions are positive from first contact through termination; especially important is the perception during the first 90 days where turnover rates are the highest. It is critical that there is an expectation exchange prior to the driver getting in the truck; make sure the driver’s perception from recruiting, orientation and word of mouth is consistent with whet the company believes to be reality.

  1. Price

Consumer marketing: The amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well.

Driver marketing: Economics 101 states that markets are rational and that the market sets the price.  Attracting qualified drivers requires a competitive pay package starting with the base pay, pay for performance, tenure increases, insurance and other benefits. It is critical that carriers understand the competitive landscape and benchmark their “price offering” to prospective and current drivers.  An excellent source is the National Survey of Driver Wages  published by the National Transportation Institute.

  1. Place

Consumer marketing: Refers to providing the product at a place that is convenient for consumers to access.

Driver marketing: There has been massive change where the product is introduced to and analyzed/ reviewed by the driver. Today it is all about the internet. Carriers use all facets of the internet (e.g., websites, social media, messaging, etc.) as the place to display their product and entice drivers to take the next step and talk (e.g., email, message, voice) to a recruiter for more information and hopefully close the sale. Both drivers and carriers have become more sophisticated as the world has become more virtual.

One area that has not changed is the power of driver referrals. Referrals are very powerful as the prospective driver has an opportunity to preview the carrier’s product by talking to a current driver and possibly observing his or her tractor and trailer. Do not discount referrals; they should be a part of every carrier’s marketing mix.

  1. Promotion

Consumer marketing: All of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, sales organization, word of mouth, etc.

Driver marketing: Similar to the change in “place” above, the promotion of driving jobs has changed as our delivery of information has become faster and more frequent. Gone are the days of newspaper and truckstop magazine ads. Today’s promotion is direct to the driver’s smartphone, tablet, or laptop via Facebook, LinkedIn, Craig’s List, Instagram, recruiting portals, carrier websites, etc. 

Again, with all of the technology available, do not discount the power of word of mouth and driver referrals.

Carriers need to employ all four elements (product, price, place, and promotion) as they craft the marketing mix to create a balance of the four elements that provides the carrier the maximum return. This is not a “one and done” effort; carriers need to continually test and analyze their marketing mix and results and make  changes to improve their results on a regular basis. There is no one marketing recipe for success; carriers that adopt a marketing mentality, understand the elements and analyze cost/effort/results will achieve superior results.

1. The marketing concepts presented herein apply to all categories of truckload drivers: company, lease purchase, and owner operator. To simplify, all categories are referred to as “drivers.”

2. Source of consumer marketing: Wikipedia and Kotler, Philip. Marketing Management. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1984.  

.
Improve Operating Metrics and Margin with Time Management  

The trucking industry has always been challenged to be successful with very tight margins compared to many other service businesses. Historically, the truckload segment of the industry has measured itself primarily on revenue and revenue per mile. In more recent years the utilization and productivity key performance indicators (miles per truck, shipments per week, revenue per week, etc.) have become more important.  Two performance keys to being successful when the margin per transaction is small is to generate as many transactions as possible over a given time period and to shorten the time it takes for each transaction; in short, maximize the margin in a given time period.

Understanding how to recognize, measure and manage the factors that affect the time component of the productivity formula is important. The current capacity constrained freight market along with the driver shortage requires improved utilization (doing more in less time) to support carrier profitability.  More than five years ago, a publication by the Federal Highway Administration entitled Freight Story 2008 estimated a delay cost of $26.70 per hour for the transportation industry. Challenges such as the Hours of Service rules, increasing congestion on streets and highways, and accommodating driver quality of life needs such as time off can have a negative impact on available time; so attention needs to be directed to any area where unproductive time can be minimized.

Some of the areas affecting time to focus on include:

Pickup and Delivery Appointments

  • Make them early and be aggressive
  • Know your realistic estimated time of arrival
  • Know the locations’ receiving hours
  • Know the consequences of missing a scheduled appointment

Drop Trailers

  • Drop trailers at origin or destination can improve productivity by reducing time
  • Know the fixed cost per load of the trailer pool and compare that with the time saved
  • Utilize drop trailers to improve efficiency; not just for shipper convenience or for storage

Deadhead (Wait or Go) Decision

  • Understand the economics of deadheading immediately after unloading or waiting for a closer load
  • Getting the truck back into the network sooner may be worth more than the extra deadhead will cost

Hold Shippers and Receivers Accountable

  • Document arrival and departure times
  • Bill to recover detention charges
  • Use data for future rate negotiations

Weekends

  • Haul longer haul movements over weekends
  • Haul shorter haul moves during the middle of the week

Time is the denominator in many productivity metrics: Miles/Revenue/Margin per Day/Week/Month. Minimize the time and you will improve your performance. Understanding the cost of time places you in a better position to negotiate rates or lost time compensation with your customers.

.
Technology Helps Carriers Communicate Their Fact-Based Needs to Shippers  

 

A recent article published in Fleet Owner, “Projecting Trucking’s Future Pricing Path” builds on some of the key takeaways from last week’s webinar, “Freight Accessorials – Augmenting Revenue While Covering Rising Costs” presented by John Larkin of Stifel and Ben Cubitt of Transplace. Of particular interest is the last paragraph of the article, which states:

“Carriers still haven’t done the best job relating their needs,” Cubitt added. “Shippers and 3PLs are very data-based and data-driven, so carriers need to have more ‘fact-based’ discussions about the need for rates and accessorial charges. They need to ‘arm’ shippers with accommodating data to support their rate requests.”

KSMTA’s clients utilize our Freight Network Intelligence Platform and our Freight Network Engineering Process combined with TMW's IDSC Netwise® technology to create pricing that is compensatory to the carrier and competitive in the market. Our clients do not bid all lanes; they bid the lanes on which they know they can be profitable, competitive and provide superior service. This pricing intelligence combined with analytics about driver recruiting and retention and cost creep provide a powerful means for carriers to communicate their ‘fact-based’ needs to their shippers.

.

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