Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: https://read.dmtmag.com/i/85369
E scalating fuel prices and an ongoing driver shortage remain top worries for motor carriers nationwide. Even if com- panies are able to fill empty seats, fuel prices north of $4 per gallon threaten to decrease profitability. American Central Transport is no different than other carriers in this respect, and these issues remain top concerns for the Liberty, Mo.-based dry van carrier. But developing novel approaches to combat these problems is part of what earned ACT Commercial Carrier Journal's Innovator of the Year Award. By analyzing company driver performance, developing an innovative pay structure that incentivizes good driving be- havior and creating a recruiting strategy focusing on former drivers returning to the industry, ACT has set itself on a path for success for years to come. A better way to pay Like most carriers, ACT was faced with an entitlement men- tality among much of its company driver work force. The longer drivers had been with the company, the more they expected to earn. For years, that's exactly how ACT operated, providing incremental cent-per-mile raises to longer-tenured employees. But at the height of the recession in 2008, ACT imple- mented driver scorecards to better monitor individual driver performance. The effort yielded some surprising results: Some of the company's highest-paid drivers were some of its worst performers, and some of its lowest-paid drivers actu- ally were the most profitable. ACT staff immediately began coaching poor-performing drivers to improve their scores, but they lacked a way to rec- ognize and incentivize the best drivers to continue perform- ing at a high level. In 2010, company management devised a new perfor- mance-based pay program to tie driver pay to driver score- card performance. The program was rolled out in January 2011; based on scores from the previous six months, drivers would be paid between 36 and 45 cents per mile for the next ABOUT THE AWARD Commercial Carrier Journal's editors recognize innovators throughout the year and select one for special recognition as Innovator of the Year. Innovators considered for the current award were those recognized in the magazine in 2011. Innovation in any aspect of the operation is eligible for recogni- tion. To qualify, the carrier must operate at least 10 power units in Classes 3-8 and maintain a satisfactory safety rating, if rated. Selection of innovators for recog- nition is at the sole discretion of CCJ's editors. This year's award was announced and presented at the CCJ Innovators Summit, a networking event for current and previously recognized innova- tors held Feb. 8-10 at the Hawks Cay Resort in the Florida Keys. Representatives of innovative trucking operations updated one another on their initiatives. The CCJ Innovators program is sponsored by PeopleNet, Castrol, J.J. Keller and ACS. For more infor- mation on the program and links to previously recognized innova- tors or to fill out the online nomi- nation form, go to www.ccjinno- vators.com or contact Jeff Crissey, CCJ editor, at 800-633-5953. COMMERCIAL CARRIER JOURNAL | APRIL 2012 45 six-month period. Quarterly midterm reviews would provide drivers a chance to see areas where they needed to improve in order to maintain or elevate their pay. ACT's performance-based pay program for its roughly 90 company drivers is measured by five key metrics – all designed to improve driver performance and accountability. Fuel-related expenses comprise 40 percent of the program's score weighting – 30 percent for fuel economy (average miles per gal- ACT INSTALLED A STATE-OF- THE-ART MAINTENANCE FACILITY AS PART OF AN OVERALL COMPANY EFFORT TO CONTROL COSTS AND IMPROVE EFFICIENCIES. lon) and 10 percent for route compliance (prescribed routing and fueling solutions). The remaining 60 percent of score weightings are split among three other metrics: safety perfor- mance (roadside violations, crashes and incidents), utilization and on-time pickup and delivery. In its first year, ACT's performance-based pay program has how you get there – that's what makes you money." – MIKE HEINTZ, MAINTENANCE COORDINATOR yielded impressive results. In 2010, more than 75 percent of ACT's company drivers earned less than 40 cents per mile; as of this January, almost 75 percent of company drivers now earn 40 cents per mile or more, and one in three drivers make the full 45 cents per mile. Overall, the company average has increased nearly 3 cents per mile in that time. "I want to pay all my driv- "It's not where you're going, but