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Training boosts retention

Extensive driver training results in safer motor carrier operations according to safety directors. At least one safety director, Bruce Wrinkle at Southern Refrigerated Transport in Ashdown, Arkansas, is convinced that training helps with driver retention as well. That belief is so deeply ingrained at SRT that operations personnel do not receive their quarterly bonuses until all their assigned drivers complete a module of quarterly training.

SRT is relatively large for a company not yet 20 years old. It started with 10 trucks in July 1986, expanding rapidly, says Tony Smith, president. Just two years after startup, the company purchased A & P Truckline, boosting capacity to 80 trucks. By October 1998, growth had reached 200 tractors and 300 refrigerated trailers. Currently, SRT runs 510 tractors and 900 trailers with growth projected to 600 tractors by the end of 2006.

Rapid growth has been accompanied by solid performance, Tony Smith says, such posting an operating ratio of 87 in 2005 on revenue of $88 million. Revenue for 2006 is projected to be $110 million.

Operations are based on long lanes across the southern tier of states from California along the Interstate 10, 20, 30, and 40 corridors across Texas to the Carolinas and the Mid Atlantic states and south into Florida. Volume from the Pacific Northwest into the upper Midwest is increasing, Tony Smith says. Average length of haul is 1,200 miles, and tractors with solo drivers average 130,000 miles a year.

New location planned

Ashdown sits in the middle of the main freight lanes roughly halfway between Dallas and Little Rock off Interstate 30 a few miles north of Texarkana. By mid-June 2006, the location will shift south 17 miles to a new terminal under construction on the interstate in an area shortly to be annexed to Texarkana, Arkansas.

Many employees are looking forward to the move for personal as well as professional reasons. Texarkana — half in Arkansas and half in Texas and all just miles from Oklahoma — enjoys special status under Arkansas law; residents of Texarkana, Arkansas, do not pay Arkansas income tax, a mirror of the law for residents of Texarkana, Texas, where there is no state income tax. However, Texarkana, Texas, residents working in Ashdown are subject to Arkansas income tax. Following the move to an official place of employment in Texarkana, Arkansas, headquarters staff members residing in Texarkana, Texas, will be exempt from the Arkansas tax.

Perhaps oddly for a truckload carrier with substantial freight revenue originating in California, SRT hauls little fresh produce. In fact, the company makes active efforts to find freight other than produce, says Justin Smith, director of operations. “We try to concentrate on long-term shippers who can provide relatively steady traffic year round,” he says. “In our case, we move a lot of frozen and processed foods out of California.”

Substantial refrigerated volume

Although SRT hauls a significant percentage of dry freight to fill its lanes, the company works hard to maintain its refrigerated tonnage at 65% to 70%. “We call our company Southern Refrigerated for a reason,” says Tony Smith.

The business is set up to run without dependence on any one customer. Like many carriers, SRT get about 80% of its freight from its top 20 customers. However, no single customers accounts for more than 10% of company volume, Tony Smith says.

Expansion at SRT has come mostly from internal growth; although, the company made one acquisition early in its history. In the future, growth will again probably result from acquisitions. Tony Smith projects a fleet of 1,000 trucks sometime in the next five years with most of that growth resulting from the acquisition of other profitable carriers. Doubling the size of the present company with internal growth would be harder than through acquisition, he says, because the current business climate makes finding enough drivers and properly qualified administrative staff difficult.

Finding drivers who meet company standards already poses a problem. For instance, to meet its requirement for drivers with a current hazmat endorsement, SRT takes in about 650 applications monthly. Perhaps 200 of those qualify, but only 15 to 30 actually are hired.

Guaranteed home time

SRT hires drivers all along its traffic lanes. “We find that it actually works better to hire drivers who live near the end of the lanes rather than here in the middle,” Tony Smith says. “Most drivers get to Ashdown about once a month, but they are guaranteed time at home at least once every 14 days. We give drivers one day at home for every seven days on the road.”

Almost all drivers run solo, logging an average of 130,000 miles annually; only 8% of company trucks have teams. SRT has few (19) owner-operators and no lease purchase program for drivers. “We think companies tend to lose control of their operation when they depend on lease contractors,” Tony Smith says.

Wherever they live, drivers are the most important assets the company has. “We work hard to promote a driver-centric culture that makes them feel important to the company,” he says. “That shows in an annual turnover rate well below the national average. For the past several years we have managed to hold turnover below 100%, posting a 91% rate in 2005. Our goal for 2006 is to drop turnover to 75%.”

Drivers fit profile

Cutting turnover starts with selecting drivers who fit the company profile as well as qualify to do the job, says Joe Self, director of recruiting and driver relations. Driver qualifications are relatively simple. Applicants must already have a Class A commercial driver license and at least six months experience as a highway driver. They must be at least 23 years old and a graduate of a formal truck driving school. School graduates with less than six months experience who otherwise qualify and fit the company profile can be hired as trainees. SRT has a student tuition plan for recent driving school graduates to help ease the burden of paying for training. Obviously applicants must pass a physical and a drug screen and have a good (not necessarily perfect) driving record. Finally, applicants must meet or exceed all federal state, company, and insurance carrier policies and rules.

Qualifying to drive for SRT is not a one-way street. The company tries to make sure drivers succeed, providing long lanes that pay well and working to secure no-touch freight so that trucks spend their time rolling, not sitting at a dock waiting to load or unload. Qualified drivers get a bonus when they sign on as well as quarterly bonuses for meeting safety and mileage standards. The company wants more drivers just like the ones already working, so it pays $500 for every new driver a current driver recruits.

In addition to guaranteeing time at home frequently, SRT also offers paid vacation. After meeting company standards, SRT drivers can take family members along on the road. Medical and dental insurance through Blue Cross-Blue Shield is offered for drivers and their families along with disability and cancer coverage. Insurance also helps cover the cost of medication. To encourage driver retention, SRT buys life insurance for drivers and matches employee contributions to a 401K retirement plan.

Pay plus bonuses

SRT gets experiences drivers, because it pays for them, Tony Smith says. Drivers earn 40 cents per mile in base pay plus 3.5 cents per mile in fuel economy and safety bonuses. In addition, drivers always know where they stand at SRT. Every time a tractor goes through the Ashdown shop for a maintenance inspection, data is downloaded from the electronic control module on the engine. “We are particularly looking for hard braking events and engine overspeeding, because those two factors have the most impact on safety and equipment life,” says Justin Smith. “If drivers need to change behavior, we let them know and offer the training necessary to improve. If they need training, but are good enough to keep in the company, we need to let them know that. Counseling doesn't have to be negative. It's certainly possible to correct driver behavior in a positive way and have the driver feel good about it.”

“We go through a driver performance review every time the truck is in Ashdown,” Wrinkle says. “If a driver is doing well, we say so. Every interaction we can have with a driver seems to improve retention, because the driver begins to understand that the company cares and places a value on the relationship. One way to keep the counseling sessions positive is to look for the root cause of a problem that a driver might be having instead of focusing specifically on the event in question.”

Those same review sessions provide valuable information about the interaction between SRT drivers and customers. “If we learn about problems between a driver and a particular shipper or receiver, we start by checking with other drivers to see if they are also having problems,” Self says. “We know that we can't always assume that a complaining driver is right, but neither can we assume the driver is wrong and ignore the situation.”

Safety approves hiring

SRT takes in about 2,500 applications monthly for driving jobs and hires an average of 62 per month, Self says. Drivers from truck driving schools must show that they graduated from an accredited program that put them through a minimum of 160 hours of classroom and behind-the-wheel training. Once the recruiting team is satisfied that an applicant meets company requirements, applications are turned over to the safety department for final approval.

Drivers begin orientation once recruiting has approved their application. Safety continues to process applications during orientation, following up on references and other background checks. Orientation is orchestrated by the safety department, but actually conducted by personnel from departments throughout the company. SRT runs one class weekly for four days. That actually is a fairly recent change. “We found that running two orientation classes a week required new drivers to absorb too much information too fast,” Wrinkle says. “Driver retention seemed to be suffering, so we slowed the process down and worked to fill it with quality information. During orientation, safety completes all the administrative tasks associated with qualifying drivers, and they are officially hired on the last day of class.”

At the end of orientation, new drivers are assigned to a company trainer until they have accumulated 240 hours of actual driving time and have driven through all parts of the country. The post-orientation training program takes six to eight weeks to build up the required number of driving hours. “At the end of the initial training period, we bring in the new driver and the trainer for debriefing,” Wrinkle says. “They are asked to evaluate each other.”

Following time with a company trainer, two new drivers are assigned to run as a team for a minimum of 30 days. At the end of this transitional training, the team normally splits up and both members begin to run as solo drivers.

Continuing driver education

Making it through the two probationary periods following orientation does not end driver training at SRT. As soon as drivers go into regular service, they begin a quarterly training program. SRT uses TREAD-1, an interactive computer program currently built around 35 training modules with full-screen video with animation, graphics, and sound. The system uses iMac, Apple Macintosh, computers supplied by TREAD-1. Subscribers pay for the service based on the number of lessons used, not for the hardware or other services such as high-speed data lines. The system was developed by Instructional Technologies Inc of Vancouver, Washington. TREAD is an acronym for TRucker Education And Development.

SRT drivers must complete one instructional module every quarter. The training is used to maintain a high level of driver awareness, Wrinkle says. In addition to quarterly training, drivers must complete an additional specific training module following an accident. TREAD-1 is verifiable, because each training topic must be answered correctly before a driver can move forward in the program. The system records driver results. Training sessions are designed to require an hour of driver time. In practical terms, training may take an hour and a half or may be completed in as little as 30 minutes. SRT has three computers available for training, and all instruction takes place in Ashdown.

Driver feedback from the program has been good, Wrinkle says. The system is entertaining and easy to use. “Our sense is that drivers view the continuing training as an indication that the company places a high value on their services,” he says.

Something has to be working to provide retention, because 70% of SRT drivers have been with the company for more than three years. Some have been driving for the company for 19 years, Tony Smith says.

The number of drivers with long tenure probably would be higher if the company were not growing so fast. Rapid expansion cuts down the percentage of long-term drivers, Self says. “However, keeping a driver for 90 days gives us an opportunity to prove the worth of the company to new drivers. We see most of our turnover in the first six months of employment, and we think we should never lose a driver who has stayed on the job for a year.”

SRT is committed to providing new, high-quality tractors for its drivers, Tony Smith says. While tractor specifications are not the top concern for drivers, they remain high on the list of job satisfaction criteria. Most tractors are Century Class Freightliners with Detroit Diesel engines. To keep abreast of development at other vendors, SRT recently ordered a number of International tractors with Cummins engines. All tractors are equipped with Eaton Super 10 Roadranger transmissions.

Short trade cycle

Tractor service life is based on trading trucks every 36 months, which means that senior drivers get a new tractor about every 18 months. If drivers have been in a tractor for 12 months, they are eligible for a new one. In addition, teams get new tractors every year as do company trainers. Tractors have logged between 430,000 and 450,000 miles at trade. SRT has 332 tractors on order for 2006, with 260 of those slated to replace older equipment and 72 intended for fleet expansion.

Most of those tractors have engines rated at 500 horsepower with the minimum power level in the fleet at 430 hp. Road speed is set at 68 miles per hour for some trucks and goes as high as 70 mph in others. “We get a few driver complaints about the speed setting, but not much about not having enough power,” Tony Smith says.

He is a firm believer in the proposal made by ATA earlier in 2006 advocating that all commercial trucks be limited to 68 mph straight from the factory. “We have too much traffic on the roads for fast driving to be safe,” Tony Smith says. “The best solution would be to limit all trucks to 68 mph, and then high speed would not be an option.”

The new terminal is designed to support up to 1,200 trucks without expansion. New facilities include a 40,000-sq-ft, two story office building, a free standing wash bay, and a 38,000-sq-ft maintenance facility on 44 acres. An entire section of the headquarters building is dedicated to drivers with showers and relaxation areas. Filling the new facility to capacity could take seven years.

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