Fleet Executive September/October 2015

MOTORTRUCK

SEPTEMBER OCTOBER 2015

CANADA’S BUSINESS MAGAZINE FOR FLEET OWNERS

Human Resources Managing millennials: What you should know

Digital Marketing Is your website helping you set the hook?

Equipment Behind the wheel of a self-driving truck

SPECIAL INSIDE Green transportation practices that add to your bottom line

FAST FORWARD DEBATING THE FUTURE OF TRUCKING

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Volume 84, No. 05

September/October 2015

contents 18

Cover Story 18 INDUSTRY LEADERS DEBATE THE INDUSTRY’S FUTURE

Trucking’s crystal ball is foggy as the industry struggles with a myriad of challenges from driver and technician shortages to adapting to new technologies and leadership strategies. How will it all come out?

Features 16 GENERATING VALUE Groupe Robert’s Gilbert Duquette on what shippers want, innovation, and the need for harmonization across borders

26 PUTTING THE DATA TO WORK FOR YOU How SmartWay benchmarking reports and data analytics tools allow small fleets to cash in on big data

28 IF YOU DON’T MEASURE YOU CAN’T IMPROVE

25 Departments 6 THE VIEW WITH LOU 8 MAILBAG

26

Inside Groupe Boutin’s leveraging of Smartway benchmarking to gain an accurate read on its performance in fuel conservation

30 MUTUAL BENEFITS Find out how Mutual Materials, working with Penske, is driving significant costs out of its fleet operations

32 CONSIDERATIONS IN THE “TARGET” – PART II Don’t jump into the M&A game without a game plan. A viable structural framework for acquisitions is critical

10 THE HUMAN EDGE

36 DRIVING THE TRUCK THAT DRIVES ITSELF

12 RISKY BUSINESS

Follow editor James Menzies on his quest to be among the first to be certified to operate autonomous trucks

36

13 THE BOTTOM LINE 14 TAKING CARE OF BUSINESS 38 INSIDE THE NUMBERS

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WHAT’S ON TRUCKNEWS.COM Brought to you by the editors of Truck News, Truck West and Fleet Executive

BLOGS

FEATURES

> C urrency concerns

The sagging Canadian Loonie was a hot topic at our Surface Transportation Summit and industry executives dissed on the good, the bad and the ugly it’s leading to.

ROGER MCKNIGHT Climate change and alternative energy I had a dream: It had to do with cooperation

>M ack throws a party

Until recently, Mack was outsourcing its own drive axles from American Axle Manufacturing. Read why the iconic truck maker has now decided to bring production back in-house.

>W hat a convoy!

The wind may have been howling but it didn’t dampen the spirit of drivers who decorated themselves and their trucks in pink to participate in the Convoy for a Cure.

> D riving the Mercedes Metris

Mercedes-Benz has a new cargo van, which it says has been right-sized for urban driving environments. We took it for a test drive to Toronto’s downtown to see if it fits the bill.

CAROLINA BILLINGS Why do people run away from conflict?

This is something that for the life of me I will never understand.

RAY HAIGHT Entry level driver training Will Ontario and the US get it right?

Web TV:

Transportation Matters THE KEY TO KEEPING DRIVERS HAPPY Industry leaders discuss retention strategies and how to keep drivers happy HOW TO MANAGE THE YOUNGER GENERATION You’ve beaten the odds and managed to attract next generation workers into your fleet. Now what?

STRAIGHT TALK How Challenger is tackling sustainability

SOCIAL MEDIA FIND US ON FACEBOOK facebook.com/trucknews

4 FLEET EXECUTIVE ❙ September/October 2015

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FOLLOW US ON TWITTER @FleetExecutive | @TruckNewsMag | @JamesMenzies | @LouSmyrlis @JuliaKuzeljevic | @KathyPenner | @SoniaStraface trucknews.com

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2015-10-06 1:35 PM 15-10-20 1:27

THE VIEW WITH LOU

MOTORTRUCK

When less is more

is written and published for owners, managers and maintenance supervisors of those companies that operate, sell and service trucks, truck trailers and transit buses.

SEPTEMBER/OCTOBER 2015

VOL. 84 NO. 05 PUBLISHER & EDITORIAL DIRECTOR

Lou Smyrlis (416) 510-6881 lou@TransportationMedia.ca

How a shorter work week could improve your office workers’ productivity Lou Smyrlis

GEARED UP EDITOR

James Menzies (416) 510-6896 jmenzies@trucknews.com FEATURES EDITOR

Julia Kuzeljevich (416) 510-6880 julia@TransportationMedia.ca

MCILT, Editor • lou@transportationmedia.ca

CONTRIBUTING EDITOR

If

you, like me, had a great Thanksgiving Day long weekend, and returned to work feeling more refreshed because of it, take the next step and ask yourself this question: Why are three-day weekends the exception rather than the rule?

That may be a controversial question in an industry where 50- and 60-hour work weeks seem to have become the norm for many of those with desk jobs. (We usually focus on the long hours put in by drivers, neglecting to appreciate the hours put in by those working in the office.) It’s also a controversial question in an industry where work hours have grown longer as staff sizes have become thinner. But it’s a question worth asking.

Decades of research shows that those long hours spent behind the desk come with a high price. Over time they present a ticking time bomb for your heart. Recently, The Lancet, a highly respected medical publication, published a meta analysis – essentially a study of studies – that examined the link between heart disease and overwork in more than 600,000 American, European, and Australian men and women. It found that employees working long hours – defined as 55 or more per week – had a 33% increased risk of stroke than people who worked less than 40 hours per week. The overworked employees also had a 13% greater risk of developing heart disease than their peers who worked fewer hours.

Those working more than 55 hours per week also got less sleep and had a harder time falling asleep, and were less likely to wake up feeling refreshed, which, of course, further contributed to how tired they were feeling.

Overworked people, operating on lower energy levels, are also found to be less likely to properly read the emotional signals and cues given by their co-workers. In other words, tired people are more likely to end up in office arguments.

Research shows that those working longer

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hours need more time to recover from their work than employees with workdays of normal length.

The first opposition to suggestions of a shorter work week is obvious: In an industry as fastpaced as trucking we can barely manage to get all that needs to get done in a five-day week, how could we possibly manage to do so in a four-day week?

Yet the paradox is that a shorter work week actually increases employee output. And this is something we’ve known for about 200 years.

In the 19th century, when factory owners were compelled to limit workdays to 10 and then 8 hours, management was surprised to find that output actually increased and accidents decreased. Improvement in safety performance on its own makes shorter work weeks worth a look considering the safety sensitive nature of transportation.

Back in 2009 Harvard Business School researchers studied the impact on a group of employees from a busy Boston consulting firm who were asked to take a day off in the middle of the week – no checking e-mail, no checking in was allowed. The experiment went on for five months. The end result? The firm’s clients reported an improvement in service from the teams who took the time off compared to the performance of the employees working their usual 50 plus hours per week.

And you may be surprised to find – as I was – that three day weekends are already becoming common in business. A recent report from the nonprofit Families and Work Institute noted that 43% of the 1,051 American employers surveyed were already offering compressed workweeks to at least some of their employees.

More research is required on the impact of a shorter work week on modern day office workers but I wouldn’t be surprised if it turns out that, as the Chinese proverb says, sometimes less is more. FE

Sonia Straface (416) 510-6890 sstraface@TransportationMedia.ca CREATIVE DIRECTOR

Ellie Robinson ellie@newcom.ca ADVERTISING CREATIVE DIRECTORS

Carolyn Brimer Beverley Richards CONTRIBUTING EDITORS

Ken Mark Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs ASSOCIATE PUBLISHER

Kathy Penner (416) 510-6892 kpenner@trucknews.com NATIONAL SALES MANAGER

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ACCOUNT MANAGER

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Jim Glionna Head Office: 8 0 Valleybrook Drive Toronto, ON M3B 2S9 Motortruck Fleet Executive is published by Newcom Business Media Inc. The contents of this publication may not be reproduced or transmitted in any form, either in part or full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent. Motortruck Fleet Executive is indexed by Micromedia Limited.

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MAIL BAG Boycott truck unfriendly towns Regarding your story “More truck parking coming to BC’s Lower Mainland” this is belated but good news. I live in Chilliwack and always see the lots full here. But the rest of BC needs a few stops too. One thing that has to be improved is pull-outs along the highways. By the time you get to one and see it in the dark you’ve already whizzed past it. Some are so small you might as well parallel park. And the small towns throughout BC need to grow a brain cell or two. Virtually all of them are extremely truck unfriendly with no place at all to pull over much less park for the night. On the radio I’ve suggested a general boycott of all deliveries to them for a week and see if they get the message.

That usually gets wide approval on the airwaves Rob Shaw

Finally reached the bottom of the barrel Regarding your story “Fleets experiencing sticker shock with low loonie” , the cost of class 8 vehicles has gone up along with fuel mileages , but that does not justify the rates that Canadian carriers are hauling for, especially the logistics companies. After 40 years in this industry through all of the ups & downs over the

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years, I am in disbelief at what we are making our drivers & owner-operators work for. We have finally reached the bottom of the barrel.

Charlie Bourgeois

Hot about HOT lanes Regarding your story “The cold, harsh reality of HOT lanes”, funny how all the studies failed to mention the increase in violent collisions instead of the usual ridiculous number of fender bender type mishaps.

All the ” success ” they refer to by saying the traffic wasn’t as bad as predicted and the HOV lanes worked, actually failed miserably in two key areas: One, they obviously were not running across the top of Toronto every day and feeling the added hour it took daily from only White’s Road to the 427 area. Secondly, they also really failed to realize that congestion was still brutal and they didn’t take into account the sheer massive number of people that just got out of the GTA all together and had planned to be away during the games for that very reason - to avoid the added congestion this would create.

Huge numbers of residents and commuters simply were

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not on the roads at that time anyway. Some were lucky enough to work from home, many planned holidays or took their vacation to coincide with the nonsense, and many more just aren’t on the roads in summer with school being out, summer holidays etc. So the volume numbers were already falsely reading low. One trip across town you would wonder just how bad it would have been had so many people not chosen to simply opt out of town or stay home.

All this is more nonsense, more nightmares ahead, and a way to generate revenue which will never find its way towards the goals they claim it is for. Highway repairs and infrastructure?

Please. Is anybody really buying into that? Oh yes, probably.

The same ones that looked the other way during all the other recent liberal scams.

Lee

Questioning fuel consumption report Regarding your story “PIT report finds ECM-generated fuel consumption data not precise”, there are many, many factors that affect the accuracy of the ECM fuel efficiency data and it requires constant attention and adjustment to the OEM’s cali-

brations to maintain this accuracy. It’s a moving target. So to state the numbers that you have in this article without clarifying which engine models were tested and which ECM calibrations were used in the tests renders this information as meaningless other than to say that it’s not perfect.

Also, you stated that you used the SAE Type II test procedure so I will assume that the test was conducted on a closed course as opposed to an open road which does not provide for real world data due to the fact that the engine is operated at constant speeds and loads. In other words, your data totally ignores the transient loads that an engine is subjected to in real world driving conditions and those transients also have a great effect on the ECM accuracy. The Type IV test procedure conducted on open roads would have been the preferred method to conduct this test along with an analysis of utilizing fuel economy data from fleets using each of the engines.

To read and comment on our industry blogs, visit blog.trucknews.com.

Congratulations to the 107 individuals who became CITT-Certified Logistics Professionals in 2015: Victor Alvia, CCLP, Brampton, ON Kevin D. Amezquita, CCLP, North York, ON Michelle Arseneau, CCLP, Mississauga, ON Jonathan Aubut, CCLP, Montreal, QC Mary Grace Avalos, CCLP, Winnipeg, MB Evan M. Balchen, CCLP, Spruce Grove, AB Jean Boudreau, CCLP, Dieppe, NB Sebastien Bousquet, CCLP, Calgary, AB Jonathon Brake, CCLP, Toronto, ON Isabelle Briere, CCLP, Montreal, QC Ioan Bunget, CCLP, Breslay, ON Roselyn Capistrano, CCLP, Winnipeg, MB Neil Chandoo, CCLP, Caledon, ON Rajan Mathew Chelleth, CCLP, Mississauga, ON Arnold Ning Chen, CCLP, Richmond, BC P.L Vivi Chu, CCLP, Stouffville, ON Graham Cook, CCLP, Stony Plain, AB Keith Peter Corcoran, CCLP, Saskatoon, SK Mike Crawley, CCLP, Gravenhurst, ON Franco Ming Cui, CCLP, Mississauga, ON Damon Davies, CCLP, Surrey, BC Steve Decoste, CCLP, Edmonton, AB Scott Dimond, CCLP, Calgary, AB Kurtis Dool, CCLP, North Vancouver, BC Ferdinand Aloysius D’Souza, CCLP, Mississauga, ON Clayton Essig, CCLP, Thornhill, ON Elaine Fan, CCLP, Toronto, ON Josie Felts, CCLP, Mississauga, ON Joseph Fernandez, CCLP, Brampton, ON Amy Fok, CCLP, Scarborough, ON Katarzyna Formicka, CCLP, Toronto, ON Joseph Gallello, CCLP, Etobicoke, ON Nelson F. Garcia, CCLP, Calgary, AB Rebecca Laura Garland-Zaleschuk, CCLP, Brampton, ON Thomas W. Giberson, CCLP, Oakville, ON Bonnie M. Gilbert, CCLP, Calgary, AB Jack Gilbert, CCLP, Etobicoke, ON Daniel Goldberg, CCLP, Montreal, QC

Corey W. Gordon, CCLP, Milton, ON Roy Gunpat, CCLP, Mississauga, ON Rob Wayne Hall, CCLP, Elmira, ON Shariq Hameed, CCLP, Richmond Hill, ON William Heinrichs, CCLP, Winnipeg, MB Terry Robert Holland, CCLP, Keswick, ON Kelly Hou, CCLP, Toronto, ON Michelle Husain, CCLP, Port Hope, ON Lalitha Joseph, CCLP, Brampton, ON John Kaps, CCLP, Brampton, ON Jim Kawli, CCLP, Toronto, ON Pierre Kitts, CCLP, St-Lazare, QC Lorraine Koehler, CCLP, Etobicoke, ON Maxim Kopyshov, CCLP, Woodbridge, ON Marina Koval, CCLP, Woodbridge, ON Teresa Lam, CCLP, Brampton, ON Gary D. Lamb, CCLP, Whitby, ON Christina Laskaris, CCLP, Mississauga, ON David A. Lawlor, CCLP, Regina, SK Kalli Leventis, CCLP, Toronto, ON Tracey Loewen, CCLP, Saskatoon, SK Candace Markin, CCLP, Calgary, AB Lorie Miller, CCLP, Brampton, ON Lisa Molinaro-Dayboll, CCLP, Mississauga, ON Anil Krishnanunni Nair, CCLP, Calgary, AB Elton Ng, CCLP, Mississauga, ON Lyndon S. Noronha, CCLP, Pickering, ON Naomi Ogino, CCLP, Ville St-laurent, QC Ricardo Pacheco, CCLP, Brampton, ON Florina Papuc, CCLP, New Westminster, BC Shawn Patola, CCLP, Mississauga, ON Michael Pell, CCLP, Winnipeg, MB Mercy D. Po, CCLP, Mississauga, ON Trevor Price, CCLP, Edmonton, AB Geoff Reguly, CCLP, Thunder Bay, ON Larissa Rosu, CCLP, Oakville, ON Grace Sammarco, CCLP, Bolton, ON Dhivakar Santhanamoorthy, CCLP, Brampton, ON Steven Saunders, CCLP, Brampton, ON

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Kathy Schmidt, CCLP, Quispamsis, NB Erin Serack, CCLP, Calgary, AB Nihleen Sharma, CCLP, New Westminster, BC Shaun J. Shaw, CCLP, Calgary, AB Dennis Slater, CCLP, Delta, BC Mansi Sood, CCLP, Brampton, ON Neil Andrew Sookdeo, CCLP, Toronto, ON James Benjamin Sothmann, CCLP, Calgary, AB Jack Harold Stewart, CCLP, Saint John, NB Geng Sun, CCLP, Burnaby, BC Tichawona D. Tamanikwa, CCLP, Edmonton, AB Richard Tang, CCLP, Scarborough, ON Rosemary Terek, CCLP, Waterdown, ON Kevin Thompson, CCLP, Brantford, ON Adam E. Todd, CCLP, Leduc, AB Olga Tsareva, CCLP, Edmonton, AB Andry Tulsie, CCLP, Brampton, ON Trevor Tung, CCLP, Richmond, BC Zayan Ul Bari, CCLP, Mississauga, ON Fern VanderWilk, CCLP, Edmonton, AB Chris Warren, CCLP, Washington, DC Bradley Watkins, CCLP, Burlington, ON Steven Wishnowsky, CCLP, Chambly, QC Joyce M Ning Xu, CCLP, Mississauga, ON Na Yi, CCLP, Coquitlam, BC Jefferson Yoro, CCLP, Mississauga, ON Ronald Andrew Yule, CCLP, Calgary, AB Hong Yin Zhang, CCLP, Mississauga, ON Zequan Zhang, CCLP, North York, ON Michael Zhiltsoff, CCLP, Thornhill, ON

To see The List of all Current CCLPs, visit www.citt.ca/CCLPs To learn how you can become a CCLP, visit www.citt.ca/routefinder September/October 2015 ❙ FLEET EXECUTIVE 9

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THE HUMAN EDGE

Managing Millennials A new generation of workers might require some new approaches in your workplace

By Angela Splinter

M

illennials — the demographic group born between the early ‘80s and 2000s -- represent the largest workplace cohort since the baby boom. They are generally considered to be technologically savvy, community-minded, environmentally aware, and resourceful multitaskers.

Given attributes like these, there should be little question why forward-thinking fleets want millennial employees, particularly as aging boomers approach retirement. By 2020, youth born in the 1980s and ‘90s will represent an astounding 40% of the Canadian workforce.

Consider these factors that can offer a competitive edge when looking to recruit and retain this group.

Positive, digital feedback Millennials expect constant feedback, but unlike their older counterparts they are reportedly just as happy to receive information electronically as through face-to-face discussions. The workplace collaborations that they crave can be fed through email messages, texts and social media, or using just about any available digital platform.

“They are masters of digital communication,” Leigh Buchanon observed in her study, Meet the Millennials.

That said, the tone of these messages will matter a great deal. Millennials also balk at harsh criticism. They have been labelled the “trophy” generation because they were often praised simply for showing up, and in many cases grew up insulated from failure.

The most effective feedback will encourage, coach and mentor, presenting opportunities to enhance available skills. Negative messages might require a little finesse to help soften the blow.

The work-life balance The youngest members of the workforce value a work-life balance more than any generation that came before them, but this sense of balance is not limited to vacation time and flexible hours. They are also looking for meaningful social connections in the workplace itself.

“They are primed to do well by doing good,” Buchanon adds. “Almost 70% say that giving back and being civically Angela Splinter engaged are their highest priorities.” is the CEO Many of the trucking industry’s leadof Trucking HR ing employers have already established Canada 10 FLEET EXECUTIVE ❙ September/October 2015

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a commitment to charitable giving. Each of the 22 fleets recognized in Trucking HR Canada’s 2015 Top Fleet Employers program is involved in charitable activities. Collectively they have made $3 million in charitable gifts, and supported more than 100 initiatives from community-based organizations to national programs.

It is about more than financial gifts, too. Organizations enhance the sense of teamwork by engaging employees directly in social initiatives, whether offering time off to fill a volunteer role, or organizing awareness campaigns. Each opportunity will enhance soft skills and even improve the company’s brand.

Millennials can also be attracted by commitments to environmental sustainability, as reflected through a fleet’s introtrucknews.com

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Learning and development Every worker values the chance to learn new things, but this is particularly true to a group that believes promotions should be based on skills rather than seniority.

The learning doesn’t need to be limited to manuals or online courses. Many millennials have been exposed to formal mentorship programs in school settings, and this has primed them for similar training models in the workplace.

One additional advantage is that they are also eager to put any new skills to work.

the need for these extra steps, but those who stay set in their ways will pay a price. Valuable millennials will end up working for competitors, or even in other industries. FE

portunities, career paths, the chance to travel, the job’s autonomy, and the chance to participate in work that matters.

Some fleet managers will dismiss

HE PO AL WE TH RE Y DB FL Y EE T

duction of new equipment or training in fuel-saving driving techniques.

Focused recruiting messages Millennials often begin job searches with high expectations, and will carefully study a potential employer’s reputation before walking through the door.

Given their extensive use of social media, there should be no surprise that a positive online presence for any employer is crucial. Fleets can use this to their advantage by actively engaging millennials in recruiting efforts. Testimonials from peers in the same age group will always carry a lot of weight.

It isn’t the only way that social media will play a role. The generation of workers who are familiar with having information just a point and click away could be dissuaded by cumbersome application processes. Anything on a website that is more than three clicks away might as well be hidden from view.

The messages in successful recruiting ads will speak to the generation’s mindset as well. Materials which emphasize access to cutting-edge technologies, opportunities for growth, and commitments to social responsibility and sustainability will speak the loudest.

Trucking HR Canada’s Today’s Youth, Tomorrow’s Drivers report emphasizes the value of messages about earning op-

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RISKY BUSINESS

Job descriptions Think you’ve got more important things to do than write them?

Here’s why you should rethink that.

By Rick Geller

A

s the competition for qualified drivers heats up, there is a growing realization that the trucking industry must take steps to have driving recognized as a profession. Entry level training standards, revised national occupational standards, apprenticeship programs and increased government funding are all valuable initiatives designed to increase trucking’s ability to home-grow drivers.

Individual companies need to come to the party by creating written job descriptions for drivers that identify essential functions and requirements, as well as the knowledge, skills and abilities required to perform the job successfully.

As a business owner or manager, you may think that you have a million more important or useful things to do. Nothing could be further from the truth.

Job descriptions are essential to the efficiency and continuing success of your company. They form the foundation for postings, recruitment, selection, retention, setting expectations, compensation, training, and performance management.

A well-crafted job description enables people to link their job to the overall mission of the company. This becomes essential to prevent operating divisions from focusing solely on their own silo, creating profit leaks in the process.

Job descriptions can be used for: Rick Geller, CRM, serves on the board » Recruiting & Selection of Drivers – The current practice of relying on minimum of directors for both number of years of experience coupled the Truck Training with the maximum number of violations Schools Association and/or demerits creates ambiguity. of Ontario (TTSAO) Especially when the criteria fluctuates and the Professional depending upon the number of unstaffed Truck Driving trucks. Creating recruiting and selection Institute (PTDI). He criteria based upon the knowledge, skills is also the incoming and abilities required to perform the job chair of the Toronto provides a fixed benchmark by which to Chapter of the Fleet measure candidates.

Safety Council, as well as an » Training & Development – Written job executive committee descriptions provide a solid benchmark by which to measure knowledge, member for both skill and ability levels. This facilitates the Ontario and appropriate individual training plans as Toronto Regional well as career development plans. You Truck Driving can also use them to create tiers and Championships.

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outline job promotions so that drivers can pursue training, classes, seminars and other career development activities.

In terms of career development, there are limited opportunities for drivers to move from the truck to the desk.

And not every driver wants to make that move. Job descriptions can be used to create tier levels for drivers, ranging from entry level to elite level, based upon the increased skill levels demonstrated by the individual. » Performance Management – You can use the job description to identify core activities and set measurable goals based on those duties. Then coach drivers to meet these goals. » Recognition/Rewards – In addition to providing a baseline for performance, a written job description can be used as a tool to encourage “above and beyond” performance. When setting measurable performance goals, identify the baseline measurement and what drivers can do to exceed the baseline standard. » Discipline – An important part of any progressive discipline process is the ability to demonstrate that the employee is not adequately performing the job function. Written job descriptions can eliminate ambiguity and enable companies to illustrate exactly how job requirements are not being met. » Return to work programs – Written job descriptions can help companies prepare for light or modified duty options to allow for smoother transitions for employees returning back to work. » Job Requirements – Written job descriptions have become increasingly important by providing details on the essential functions of the job. This is helpful in determining “reasonable accommodation” for employees with disabilities. The job description can contain prerequisites for positions such as educational requirements, employment experience, physical requirements, supervisory responsibilities, and certificates or licenses needed.

A key requirement for written job descriptions is flexibility.

You can accomplish this by emphasizing expectations and accountabilities, rather than specific tasks. This encourages employees to focus on results rather than simply the job duties.

For assistance in developing written job descriptions, carriers can refer to www.onetonline.org . This website has sample job descriptions for a vast number of occupations, including truck driving.

In order for the trucking industry to achieve the goal of having truck driving recognized as a profession, it is critical that the industry create written job descriptions for drivers. There is no recognized profession that does not have them! FE trucknews.com

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BOTTOM LINE

Unique impressions How to make them with your website

By Mike McCarron

P

eople are more impatient than I thought. I’ve been working on a website project and was floored to learn that 50% of visitors spend less than 10 seconds at a site before moving on. The good news is that 67% hang around for almost an entire minute!

For all the effort that goes into site design, prospects sure don’t give you much time to set the hook.

Knowing how to draw people to your site and convert them into customers is far from an exact science. Every expert has a different opinion about it, and these days everyone seems to be an expert.

However, there are some basic principles that every website needs in order to keep visitors engaged.

You don’t have to be a designer to appreciate these principles. But if you’ve hired a website designer, or you’re looking at samples of a designer’s work, here are some things you should consider:

organized? Are there typos and careless mistakes?

Why do visitors go there? If it’s to place an order or reach customer service, is the process easy and intuitive?

Bad design is a turnoff. Strategic, thoughtful design is worth the investment.

Not Slow and Steady

Shakespearean Silliness

Nothing makes me bail faster than a site that takes too long to load. Time is critical: 40% of visitors will leave a page when it takes more than three seconds to load.

Many factors can slow a site down but ones you can control include inefficient code, oversized files, and fancydancy graphics that no one cares about. In most cases you’re going to need an expert like Dr. Techno to figure out why your website moves like a rail car in the winter.

No one wants to read a treatise bragging about great service.

When you’re writing text for your site, embrace my Napoleon principle: short paragraphs, sentences, and words.

Put away the Thesaurus and the three-syllable words. Write the way you speak. I’m also a fan of bullet points. They get referenced and remembered more than wordy paragraphs.

Your website is not the place to let the world know you have a degree in English. That’s sheer injudiciousness!

Mike McCarron is the president of Left Lane Associates, a firm that specializes in the “monetizing” of transportation companies.

A 30-year industry veteran, he founded MSM Transportation which he sold in 2012. Mike can be reached at mmccarron@leftlaneassociates.ca or at 416-931-7212.

Orange & Green Don’t Match Since I have to ask my wife every morning if my shirt and tie match I’m probably the wrong person to give an opinion on colors. However, I do think too much time is spent fretting over web color schemes.

Is there really such a thing as a bad color? Sure, color is important. But doesn’t it really boil down to common sense and personal preference?

Keep it simple and in line with your brand identity. Using too many colors or using ones that don’t match creates toxic eye candy that will lead straight to the exit button.

First Impressions

Every Page is a Landing Page

When it comes to first impressions, people pay more attention to visual cues than to the writing. They judge a site’s usefulness and credibility on its look and feel before they ever process the content they came for in the first place.

Google studied eye movements as people scanned web pages and found that the logo, navigation menu, search box, and main image are viewed before the text.

You may not be a designer but you should be constantly questioning your design choices. Why is the menu over there? How can we make this page load faster? Why did we pick that image?

Ask yourself what the look of your site says about your business. Is it crisp and

People spend more time designing their homepage than any other. Why? Because they assume it’s the first page visitors will see.

In reality, when visitors find you through search engines and links from other sites, they land on other pages within your site. Therefore, make sure every page contains key information, a clear value proposition, and a call to action.

You never know which page is going to be called on to make your first impression. Make them all count!

Developing a website is not a static project. It’s a moving target that needs constant measurement, manipulation, and makeover.

Putting in the work to get it right after the project is completed is as important as the work you put in getting it started.

Mike McCarron is the president of Left Lane Associates, a firm that specializes in the “monetizing” of transportation companies. A 30-year industry veteran, he founded MSM

trucknews.com

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mmccarron@wheelsgroup September/October 2015 ❙ FLEET EXECUTIVE 13

15-10-20 1:32 PM

TAKING CARE OF BUSINESS

What’s your brand challenge?

Facts on modern branding you can use to build your business

By Mark Borkowski

A

re you in the process of creating or managing a corporate brand? Do you want to learn as much as possible to succeed? We spoke with Boris Tsimerinov, a seasoned investment banker, advisor to private and public companies and a member of the Advisory Panel of Prolific Wisdom, a Harvard Alumni Business Book Club.

Tsimerinov shared some of Prolific Wisdom’s takeaways from the book, The Brand Challenge, which draws on knowledge from some of the world’s leading experts in the field.

Some Facts About Modern Branding: • The Battle For Your Mind: It is a misconception that branding is only about market share as it really deals with emotional attachment, respect and “mind share”. Brands work to align with people, their values and their psyche. It is all about creating mental associations which take.

• Top 2 or 20% Dominate: Many markets are dominated by two leading brands; 20% of the brands often attract 80% of the profits.

• Local First: In most cases, brands develop locally, acquire heritage and prove themselves, before spreading globally.

• You Can’t Hide: Consumers share faster and in greater quantities than ever. Brands must be nimble to adapt and prosper.

• Marketing Gets Technical: Gartner predicts that by 2017 Chief Marketing Officers will spend more on IT than Chief Information Officers.

What Should One Consider in Their Branding?

• Use Actual or Verbal Visuals: “Focus on a single visual and then use it to hammer your words into your consumers’ minds.” The leaning tower of Pisa sees more visitors than the Pantheon in Rome. It’s a simple message to tell someone visually or by creating a visual image with words. Also, think about engaging senses other than sight - some Mark Borkowski is the president of highly effective branding is done by enMercantile Mergers gaging hearing, smell or touch. & Acquisitions Corp. Mercantile is • If They Go Right, You Go Left: If you are not the market leader, be the coma mid-market M&A brokerage for the plete opposite (e.g. Redbull vs Monpast 32 years. ster - standard energy drink vs. an 14 FLEET EXECUTIVE ❙ September/October 2015

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extra large out-sized can; iOS vs Android - closed system vs. open system). Some will love It, some will hate it - that’s OK. Be prepared to alienate some people in reaching out to your key demographic.

• Focus: Brand managers used to apply unique selling points to position the brand by analyzing competitors and identifying as many gaps as possible. Now, it is believed better to focus a brand and/or its messaging to be narrow and then expand, if necessary (e.g. Volvo / Safety, BMW / Driving Experience, Subaru / 4 wheel drive vehicles.)

• Trademarks Are Identity Beacons: Great trademarks are the tips of great identity icebergs. They need to be distinctive when conceived, continue to make sense and be carefully managed over time.

• Brands Can Inspire: Brands can become a reflection of customers uniquely shared values. Brands can encapsulate an irresistible idea and help channel it: (e.g. Nike swoosh is about confidence). Brands exist outside of forprofit-business. Brands have the power to change the world, not just to sell products and make profits.

• How Does the Brand Help People Do Better? Rationally What does it enable customers to do? Comparatively Why does it enable them to do it better? Emotionally How do people feel about the brand as a result? Connect these three to your purpose for your brand and articulate it in a memorable way.

• Don’t Interrupt! Tell Stories: Interruption advertising is dead. Now you need brand resonance by telling stories that are relevant and timely to engage people during and beyond their purchase point and drive advocacy.

• Be Careful With Brand Extensions: Before extending your brand, carefully consider the brand innovation journey, the sequence of which can ensure success or failure.

• Evaluate: What do you do better than anyone else to deliver value and impact? Define your unique leadership position and set out your promise. What do you do best now and what can you do best in the future? How are you different from competitors? What space could you own?

What do key audiences and stakeholders value?

Boris Tsimerinov is Vice President with CCC Investment Banking and an Advisory Panel member with Prolific Wisdom, the Harvard Alumni Business Book Club. He can be reached at boris.tsimerinov@gmail.com FE mark@mercantilema.com | www.mercantilemergersacquisitions.com trucknews.com

15-10-20 1:32 PM

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LEADERS

GENERATING VALUE

By Julia Kuzeljevich

Groupe Robert’s Gilbert Duquette, vice president, business development and sales, on what shippers want from their 3PL, innovation as a top priority, and the need for more harmonization across borders.

FE: EARLIER THIS YEAR GROUPE ROBERT WAS NAMED TO THE PRESTIGIOUS LIST OF CANADA’S 50 BEST MANAGED COMPANIES. YOU SERVE A WIDE VARIETY OF SECTORS AND INDUSTRIES. IN WHICH SECTORS ARE YOU SEEING MORE GROWTH? WHAT TRENDS ARE REFLECTING THIS AND HOW ARE YOU AS A COMPANY PLANNING AROUND THIS GROWTH?

his employees, partners and in the entire industry. Innovation is always at the top of our minds. Embracing sustainability and reducing our carbon footprint are tops on our list of priorities. We want to be innovative and allow our clients to take advantage of the benefits.

DUQUETTE: We see growth in distribution centers, value added services and logistics solutions. As a 3PL, we observe that clients want, as a supply chain partner, a company that will be able to provide them multiple services. They want a one stop supplier to help them reduce their costs and increase their efficiency.

FE: WITH REGARD TO THE EXTENSIVE IT SOLUTIONS YOU OFFER, WHAT ARE SOME OF THE BEST PRACTICES AND STRATEGIES YOU EMPLOY TO STAY AHEAD OF THE GAME WHEN IT COMES TO KEEPING UP WITH VARIOUS REGULATORY REQUIREMENTS, CHANGING CUSTOMER DEMANDS AND EVOLVING TECHNOLOGICAL TRENDS?

FE: WHAT ARE YOUR MORE CHALLENGING MOVES? HOW DO YOU COLLABORATE TO CREATE SOLUTIONS AROUND SOME OF THE MORE CHALLENGING PROJECTS?

DUQUETTE: We have to focus on solutions that generate value for our customers. For specific projects, we usually create a committee with the client that meets on a regular basis and we make sure to address challenges and work together to find solutions.

FE: ROBERT HAS ALWAYS BEEN AHEAD OF THE GAME IN MAKING INVESTMENTS AND PARTICIPATING IN TESTING OF NEW TECHNOLOGIES TO IMPROVE ON FUEL USE, DRIVER PERFORMANCE, AND GREENHOUSE GAS EMISSIONS. CAN YOU DISCUSS THE REASONS BEHIND YOUR COMMITMENT TO THE TESTING OF TECHNOLOGIES AND MAKING INVESTMENTS OF THIS KIND?

DUQUETTE: Our president Claude Robert really believes in innovation and stimulates the passion for innovation in all 16 FLEET EXECUTIVE ❙ September/October 2015

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DUQUETTE: Recently, Groupe Robert decided to invest in new WMS and ERP systems to replace our legacy systems.

These implementations will allow us to be more efficient and agile. Also, we’ve implemented, over the years, a structured approach to operational excellence focusing on: Day-to-day performance management (KPIs), Proficiency in problem-solving techniques, Continuous flow and just-in-time concepts and Involvement of operational teams in the process (suggestions and improvement projects).

FE: TRAINING AND EMPLOYEE ENGAGEMENT IS AN IMPORTANT COMPONENT AND A PRIORITY FOR MANY COMPANIES WHO ARE THE “BEST MANAGED”. YOU OFFER AN EXTENSIVE ARRAY OF TRAINING OPPORTUNITIES FOR YOUR STAFF. WHAT FEEDBACK DO YOU RECEIVE ON WHICH PROGRAMS ARE THE ONES THEY LIKE BEST, OR FIND MOST VALUABLE? HOW ELSE DO YOU GET EMPLOYEES INVOLVED, AND ENGAGED, AT THE COMPANY? (I.E. REWARD PROGRAMS, METRICS, ETC.?)

DUQUETTE: We encourage our staff to pursue professional detrucknews.com

15-10-20 1:32 PM

velopment opportunities. Employees who wish to do so can work hand in hand with their immediate supervisor to come up with a career plan focused on their professional goals and the means they plan to use to achieve them. Groupe Robert employees have access to a broad array of workplace training opportunities. This can include conferences, seminars and other activities held by professional associations. We also give managers the chance to attend workshops and presentations designed to fine-tune their knowledge and managerial experience. The feedback is really good and our employees feel that they can grow along with the company.

FE: YOU ARE CANADA AND U.S. CUSTOMS BONDED, WHICH ALLOWS YOU TO MOVE BONDED MERCHANDISE BETWEEN CUSTOMS WAREHOUSES. YOU ARE ALSO EXPERT USERS OF THE PRE-ARRIVAL PROCESSING SYSTEM (PAPS), AMONG VARIOUS OTHER PROGRAMS. AS CANADA AND THE US MOVE CLOSER TO HARMONIZATION OF THEIR CUSTOMS REGIMES, AS AN EXPERT USER OF THE VARIOUS TECHNOLOGIES AND PROGRAMS, WHAT DO YOU FEEL MOST NEEDS TO BE ADDRESSED FOR FUTURE EFFORTS BETWEEN THE TWO COUNTRIES?

DUQUETTE: The two countries must continue to work on solutions to facilitate the transportation of goods between the countries. We need to be more efficient and minimize

the delays. Also, they need to work on multiple regulations between the two countries. There are a lot of regulations and they vary from one country to another. FE

Let’s continue the conversation More than 25 industry leaders spoke at our sold-out 2015 Surface Transportation Summit this Oct. 14 at the Mississauga Convention Centre. To download the presentations go to www. surfacetransportationsummit.com, click on the Presentations tab under Agenda, enter the password STS2015. Also look for video highlights weekly on www.trucknews.com

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September/October 2015 ❙ FLEET EXECUTIVE 17

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COVER STORY

T FORWA I N D U S T R Y L E A D E R S D E B AT E T H E F U T U R E

18 FLEET EXECUTIVE ❙ September/October 2015

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©Thinkstock

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COVER STORY

rucking’s crystal ball is foggy. That shouldn’t come as a surprise though, since the industry is struggling with a myriad of challenges. Amongst the driver and technician shortage, the lack of leadership skills across the country, and the recession, no one really knows what to expect. All this, mixed with the cuttingedge technology on the horizon, such as autonomous trucks, it’s no wonder industry leaders gathered at the “Fast Forward: An Inside Look at the Future of Trucking” forum agreed the future of trucking is uncertain but exciting.

The event was sponsored by Mobil-Delvac, with the support of M-O Freightworks and the CITT Toronto Area Council and featured seven panellists who got to share their thoughts on what the future holds for the Canadian trucking industry.

The panel was comprised of Jason Libralesso, the senior director transportation at Sobey’s; Jonathan Wahba, chief operating officer at Kriska; Elias Demangos, president of Fortigo Freight; Al Goodhall, professional driver; Guy Broderick, driver trainer at APPS Transport; Angela Splinter, executive director, Trucking HR Canada; and Chris Iveson, director of maintenance, Challenger Motor Freight. Moderating the roundtable discussion was Lou Smyrlis, publisher and editorial director of with Newcom Business Media.

To kick off the discussion, Smyrlis asked the panellists to explain the kind of leadership style each of them encountered when they became a new employee in the industry.

“I’ll rewind back to 1984,” said Iveson. “I can tell you from a maintenance point of view there was no shortage of technicians to come into the business, so the leadership style was very militarian. They didn’t really lead for the future and there was a big pool of people.

Often managers were just managers. They weren’t good, strong leaders. They didn’t have a lot of background. They were never educated in leadership or how to grow the business forward.”

WARD

RE

OF TRUCKING

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COVER STORY

“I think we have to differentiate leaders and managers. They are not the same thing. Managers can distribute work, but you can have leaders that are not managers and aren’t in a position of authority.

Those are the people that are building the business.”

All of the panellists agreed with Iveson, with Libralesso adding “I found that the leadership was very linear” and Goodhall, a driver, saying, “Well, in a word, horrendous.”

Splinter, an expert in HR practices and leadership shed some light on why the leadership decades ago was so poor, saying that this new generation learned from their bad experiences and tried to make the workplace more open with all levels of employees.

“The workforce is changing, the younger generation that we do have coming in, they’re communicators, and they want that open communication within the workplace,” she said. “What I found interesting listening to all of the comments about that militant sort of leadership style that I grew up with as well at home. With our parents, I think we learned from that and picked out from that what we don’t want to do as a leaders. So I think that has lent from that sort of style we’re seeing today.”

Libralesso noted that it’s important to distinguish between managers and leaders.

“I think we have to differentiate leaders and managers,” he said. “They are not the same thing. Managers can distribute work, but you can have leaders that are not manag20 FLEET EXECUTIVE ❙ September/October 2015

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ers and aren’t in a position of authority. Those are the people that are building the business.”

When discussing the younger generations, the panellists also agreed on why young people just aren’t interested in the industry and why there is a truck driver shortage – because trucking just isn’t a “sexy and glamorous occupation” as Libralesso noted and because of the lack of education kids get about the industry as a whole.

“When I was an OTA Road Knight I found…one of the most difficult tasks was to talk to young people…because they’re not interested in trucking at all,” said driver trainer Broderick. “They don’t want to be gone for four weeks at a time because that’s the mentality people (have). (They believe) truck drivers are gone for months at a time, but it’s not always like that. And it wasn’t just educating kids, but educating the educators. The amount of problems we would have going into schools, and the guidance councillors knowing nothing about the transportation industry. They were totally lost. I think programs like the Road Knights… should be rolled out across the country. It’s a great program to educate the educators.”

Iveson echoed Broderick’s observations on the shortage and related it to the current technician shortage that is strangling the industry as well.

“Unfortunately, there’s not a lot of kids coming out of high school wanting to be a technician,” he said. “Not long ago I used to spend most of my time talking at colleges, but I’ve actually taken it down a level and I’m spending more and more time at high schools talking to kids, talking to guidance councillors and co-op trying to get some interest back in the trade. Toronto wages for truck technicians are nearing $45 an hour. It’s pretty hard for people to get out of university after four years and come out and make $45 an hour. Selling that is one of the things we have to do.”

Splinter said she believes to resolve the driver shortage in Canada, the occupation needs to gain the recognition it deserves. “I think (what) we as an industry (have to) make happen is increasing the skill recognition for the drivers,” she said. “I think this is very important about respecting drivers and recognizing it for the skill that it is. Until it’s there I think (the driver shortage is) going to remain a problem.”

Libralesso agreed with the education standpoint, and added that the industry needs to work on engaging people into the industry by highlighting the positive aspects of the job, while Goodhall said to attract more drivers, he thinks the pay issue should be addressed.

“We talked a lot about hourly pay over the years and it would be great to be paid for every hour you’re on the road,” he said. “But that’s not going to happen, that’s not the reality. But you need to be paid for everything that you do…even if you are sitting waiting and babysitting a load.

You should be paid.”

Splinter agreed, but warned that from an HR perspectrucknews.com

15-10-20 1:33 PM

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COVER STORY

“One of the things we’re doing at our current facility… is we have a gym. And when I tell people that they say, ‘Oh just a couple of weights and a bike?’ and I say ‘No, it’s a full 1,700 square feet, (and it has) pretty much everything in it, plus a personal trainer.’

You can go in there for sessions, and he can design a meal plan for you, so things like that to help drive the health issue for drivers.” tive, compensation is just one piece of the puzzle.

“You can pay really well, but you can have a toxic work environment. People leave managers, they don’t leave jobs,” she said.

One way Jonathan Wahba is trying to manage his company better is by treating drivers better.

“We are willing to go further than we’ve gone today,” he said when asked how far he is willing to go to make the life of drivers better. “The focus this year has been ‘How do we reach out and do what we do at our facilities and at our customers’ facilities?’ Our drivers start their day or week at our facilities and they can enjoy the amenities but then they’re gone for days or weeks and they’re at the mercy of whatever is on the highway. We can’t control truck parking in the States, but what we can do is work with our customers. The best place for them to shut down is at our custom22 FLEET EXECUTIVE ❙ September/October 2015

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ers’ facility, but many large customers don’t let drivers sleep in the yard. We’ve been pushing to say that ‘Hey, if you want to be a shipper of choice….then you should offer our drivers your washrooms, showers, and have a resting area.’”

Broderick says Apps Transport is making the lives of drivers better by showing an interest in driver health.

“One of the things we’re doing at our current facility…is we have a gym,” he said. “And when I tell people that they say, ‘Oh just a couple of weights and a bike?’ and I say ‘No, it’s a full 1,700 square feet, (and it has) pretty much everything in it, plus a personal trainer.’ You can go in there for sessions, and he can design a meal plan for you, so things like that to help drive the health issue for drivers.”

One thing that could be getting younger people in the door, noted moderator Smyrlis, is the promise of new exciting technology coming to trucking, like autonomous vehicles.

Goodhall said the biggest factor in determining whether this will attract or deter people is the public’s reaction to the technology.

“I say bring it on and see what happens,” he said. “It’s whether the public is going to accept it or not. That’s the biggest issue. But you raised a great point there about the driver shortage, 20 years down the road, this type of technology maybe means we’re not going to have a shortage.”

Demangos said he believes it will attract more people into the industry, but that if and when it does, drivers need to be referred to and paid as much more than just a truck driver.

“I think it would allow us to attract a smaller number of drivers, but I wouldn’t call them drivers, I would call them engineers,” he said. “It’s like the pilots of a plane. You always look left when you get into a plane to make sue they’re old enough, and can handle the plane, but ultimately the plane can do the plane’s job without the two of them. But I would be walking right out of the plane if there was nobody sitting in those two seats, so I think the public is not ready for a driverless truck, but I think what we can offer the new driver or engineer, whatever you want to call them, is something more than just driving. You can play on Facebook now, you can program the truck from a mechanical standpoint and make it proactive -- that you can’t do when you’re just driver.”

Though autonomous trucks could be the “sexy” factor that attracts people into the industry once and for all, Splinter warns that with new technology comes new responsibility from industry leaders.

“I think it will be a matter of staying on top of what those new skills sets would be (for drivers in autonomous trucks) and make sure we’re training people and preparing them for it. But whatever that skill set is, there’s always going to be a skilled worker needed so let’s make sure we’re on top of what it is and make sure it’s replenishing itself.”

As far as what the future holds for trucking, no one knows, but the panellists all agree that truck driving needs to be a skilled trade before the industry can start seeing newer, younger people interested in the occupation. FE trucknews.com

15-10-20 1:33 PM

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VOLUME 6

STRAIGHT TALK SMART STRATEGIES The latest update on GHG regulations and the most effective fuel saving practices • Learn how to get your drivers onboard with fuel efficiency programs

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15-10-20 15-08-12 1:33 9:25 PM AM

GREEN ŠThinkstock

Inside the latest fuel efficiency programs and practices.

Learn how to drive results to your bottom line.

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GOLD

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Brought to you by the editors of Transportation Media

15-10-20 1:33 PM

GREEN GREEN to toGOLD GOLD

PUTTING THE DATA TO WORK FOR YOU SmartWay benchmarking reports and data analytics tools allow small

B

ig data is changing the face of the trucking industry, but for small and mid-sized fleets, the concept can be intimidating. Now, there’s a way to effectively add a data department to any-sized company - at absolutely no cost.

Since 2013, SmartWay has provided its Canadian carrier fleets with benchmarking reports that allow them to see how their performance stacks up against fleets of similar operations and body types on six different metrics: fuel-efficiency; capacity utilization; idle-time; percentage of empty kilometres; average payload; and average kilometres travelled per truck. The report shows Canadian SmartWay member fleets how they compare to fleets in the US and Canada across those six categories, giving them insight on where there’s an opportunity for improvement. This year, benchmarking

26 FLEET FLEETEXECUTIVE EXECUTIVE ❙ September/October 26 ❙ September/October 2015 2013

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reports were also made available to logistic companies.

One carrier that has used the SmartWay reports to drive further efficiencies is Salaberry-de-Valleyfield, Que.-based Andy Transport. Camelia Burlec, project manager for Andy Transport, says she uses the benchmarking reports to gain a better understanding of how Andy’s equipment and drivers are performing relative to other carriers. Before the SmartWay benchmarking reports, the company could only compare performance internally as it had no way to accurately evaluate the efficiencies of competitors.

“The way I’m using this is no sort of magic; we compare our results with other participants,” Burlec explained. “We also follow the news regarding green best practices, what’s new on the market, and then we analyze our conditions from a financial point of view, safety, and operational performtrucknews.com

©Thinkstock trucknews.com

15-10-20 1:33 PM

flee

mall

GREEN to GOLD

create and maintain a safe workplace, while we operate in a way which protects the environment,” he added.

The company has also invested in a driving simulator and has loaded it with software to train drivers on fuel-efficient driving practices. Burlec analyzes the fleet’s fuel efficiency weekly and is developing a driver incentive program to reward top-performing drivers.

Feedback from SmartWay partners like Andy Transport revealed they valued being able to compare their numbers against their competitors but still wanted to make additional comparisons. Now, in addition to the benchmarking report, SmartWay is offering a new data analytics reporting tool that allows its Canadian truck partners to run customized reports and drill down to compare their fleet to others on over 20 different variables.

For other companies, one of the areas of greatest interest early on has been idle time, with SmartWay fleets running reports to see how their idling compares to that of other fleets within their region.

For instance, if a fleet finds its idling time is higher than average, SmartWay can arrange for a qualified FleetSmart driver trainer to conduct in-class or incab driver training at no cost to the carrier.

Fleets have also been using the tool to see how they measure up in terms of: average truck age; fuel efficiency; and percentage of empty kilometres. If fleets identify an area of weakness, SmartWay offers further expertise to help address those issues.

Fleets can run separate reports on divisions within the company by fleet category, type of fleet, equipment type, vehicle class and geographic region to find out how they perform compared to other similar SmartWay member fleets.

Fleets also learn how they compare to their peers in terms of emissions, including NOx, particulate matter and CO2.

In both Canada and the US, SmartWay divides fleets into 13 categories (ie. LTL, truckload, auto-hauler, etc.) to ensure that similar fleets are compared to each other. And with data from over 650,000 trucks belonging to over 3,000 fleets in Canada and the US, SmartWay partners have up-to-date data to make better business decisions.

SmartWay companies can also quickly determine how their performance is trending by comparing it to previous years. For example, fleet managers can generate easy-toread reports and graphs, then print them off or distribute them via e-mail to company executives.

While some large carriers may employ someone to sift through reams of data, until now most small fleets have been at a disadvantage when it comes to accessing big data and converting it into actionable results. Now they have a user-friendly tool they can use to put big data to work for them, regardless of the size of their operation.

SmartWay is now offering a new and free data analytics reporting tool that allows its Canadian truck partners to run customized reports and drill down to compare their fleet to others on over 20 different variables.

fleets to cash in on big data ance. Then we decide what we will do for the next period.”

Most recently, after analyzing the benefits of new equipment in terms of reduced emissions and improved fuel efficiency, Andy Transport purchased 65 new Volvo trucks, representing approximately 25% of the fleet. “Our choices in specs for this new equipment (light weight, full aerodynamics fairing, SmartWay tires, and disc brakes) will also help us reduce the impact on the environment – in keeping with our ongoing SmartWay focus” said Burlec.

In its pursuit to maintain a state-of-the-art fleet and provide safe and efficient transportation solutions, Andy Transport also acquired 80 new trailers, fully SmartWay equipped.

“Andy Transport’s credo for a sustainable business is the preservation of the environment and the enhancement of a safety culture. Our recent investment works both ways; we trucknews.com

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GREEN GREEN to toGOLD GOLD

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IF YOU DON’T MEASURE YOU CAN’T IMPROVE Benchmarking is one of the advantages of SmartWay participation for Groupe Boutin

s a transportation provider, it can be difficult to determine how your company’s best practices compare to those of your peers in the industry. For Groupe Boutin, getting involved with the SmartWay program allowed the company to do just that. Bernard Boutin, president of Groupe Boutin, said that as his company went through the process of becoming a SmartWay member, it was also able to determine how it was performing against industry norms. It was an unofficial exercise in benchmarking.

“When you are a manager, you want to be compared, and when you get compared, this is the way you can improve your own numbers,” Boutin said. “If you never compare your business with others, you cannot work to improve it. You are able to improve what is measurable. If you aren’t able to measure, you aren’t able to improve.”

Becoming a SmartWay partner required the company to examine its performance in fuel conservation. There were some surprises learned through the process and also some vindications.

“Yes, I was a bit surprised about some of the data in SmartWay’s benchmarking report,” Boutin said. “In general, I think we are doing well. We’ve received some prizes in the province of Quebec for the way we manage our fleet. But when SmwartWay compared us to other fleets I was surprised in some aspects. For example, the use of the capacity of the fleet. I think that we were not great in this area and we were a little disappointed. And we were positively surprised in some other areas. But the good news is, as soon as you get compared to other com-

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GREEN to GOLD

N

cient as far back as 1995 and was ahead of its time in this regard. panies, you can work to improve and get better.”

Groupe Boutin runs a diverse fleet with three divisions haul- It was even applying the principles of downspeed powertrains ing everything from LTL, truckload, tandem vans, to the US and before downspeeding became the buzzword it is today.

“At that time, (the mid-90s), we concluded that we had to multiple-axle trailers in Quebec and Ontario. This made it challenging for the company to implement solutions that would be reduce the rpm on these trucks,” Boutin said. “We were considered crazy people from leadership and from manufacturers effective across its entire operations.

Boutin said the SmartWay program does a good job of issu- because the trucks were running over 1,600 rpm - like 1,650 or ing reports that take into account the realities of the applica- 1,700 - and we decided to get that down and we saved a lot. tion. For example, it doesn’t compare Groupe Boutin’s tandem Since that time we have spec’ed our trucks similarly.”

Groupe Boutin equips highway tractors and trailers with air van fleet to its quad-axle fleet expecting similar results.

“The reports I am getting are for each company and for each deflectors and is running wide-base single tires where applicoperation,” he said, referring to Transnat Express and Frontenac able and has a full-time employee dedicated to tracking fuel Express - which also fall under the Groupe Boutin umbrella – economy and generating reports. Each week, the person in charge of training meets with drivers to go over the reports and and referring to an LTL and a TL operation per corridor.

One of the most significant changes the company has made since becoming a Groupe Boutin SmartWay member is to install satellite systems in each of its tractors that provide operates 270 tractors and about more than just GPS location data, but also 700 trailers. It has a network of eight report back the weekly kilometers per unit, the driver’s location, and the actual fuel terminals in Ontario and Quebec. consumption of each vehicle, compared to It operates four divisions, V. Boutin Express, Transnat Express, having this last data every month.

“It’s going to give us a lot of additional Frontenac Express and Transport Jean Beaudry and boasts data related to fuel consumption,” Boutin a diverse fleet of equipment including vans, flatdecks, and predicted. Two different systems were chosen: one for the LTL city trucks and anroll-away trailers. The company provides truckload and other for the highway trucks. less-than-load transportation between Quebec and Ontario and This tracking means the company will be able to more easily identify the vehicles and into the US. The company was founded in 1945, two generations drivers that are underperforming, and to before, when Valère Boutin purchased a seven-unit fleet from provide more training where required. It also means drivers are under increased scruRichard Transport, a company located in Plessisville, Quebec. tiny, which could of course result in some pushback if not carefully implemented. But Boutin said for the discuss ways to improve their performance. This is an ongoing process throughout the year, every year, Boutin explained. “It’s most part, drivers accepted the change.

“Some drivers were asking ‘Are you going to watch me on a constant battle,” he said.

The company promotes its involvement in SmartWay everything I am doing now?’ They felt a little bit cheeky because you have Big Brother sitting in the same truck. But we’ve through its marketing materials and this has resonated with also had some other drivers that were telling us ‘I spend my some customers. “Some customers like to know, in what types life telling you that I am doing a good job. Now you will have of programs are we engaged and how we are taking care of the proof that I am doing a good job.’ And also in the case of the environment,” Boutin said, noting some shippers even inan accident, I know the majority of people like to have the clude such considerations in their request for proposals.

However, the greatest benefit to belonging in SmartWay, tools to prove what happened,” Boutin reasoned. “In general, it is very well accepted, but this is not automatic. You have to according to Boutin, is to find out exactly how your company stacks up against others. do it one step at a time and speak to your personnel.”

“I think the most important thing is to be compared,” he The trucks themselves have not changed drastically since Groupe Boutin became a SmartWay carrier; it was already said. “It is a great way to improve your own company. If you spec’ing aerodynamic tractors and had won awards for doing so. are not afraid to get compared, I think this is very positive for The fleet was looking for ways to make its trucks more fuel-effi- your organization.”

PROFILE |

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GREEN to GOLD

Mutual benefits

Mutual Materials, working with Penske, has joined the SmartWay program and driven significant costs out of its fleet operations

E

ven before Mutual Materials management knew the SmartWay program existed, they were taking aggressive steps to reduce their fleet’s fuel consumption. The Bellevue, Washington-based manufacturer and distributor of masonry and hardscape products, which runs a fleet of 42 trucks in the Pacific Northwest and up into Canada, began in 2010 to take a hard look at its fleet and the emissions it created as part of a broader environmental initiative.

“It really began with our president, Kendall Anderegg, back in 2010 following a collaborative strategic analysis and planning process that resulted in a new company vision focused on four core strategic pillars. Being environmentally responsible with sustainable business practices and eco-friendly products emerged as one of the four pillars, which in turn elevated our fleet efficiency and emissions reduction into a strategic initiative” said Mike Jones, director of distribution and branch operations, Mutual Materials.

Since then, the company invested in fleet efficiency resulting in improved fleet-wide fuel mileage by 22%, slashing its fuel consumption by 536,000 gallons while significantly increasing its tonnage hauled. This was achieved by moving to low rolling resistance tires, spec’ing lighter-weight aluminum wheels and automatic transmissions, and downsizing and governing the engines.

But it wasn’t until May 2014, when Mutual Materials attended the ACT (Alternative Clean Transportation) Expo in Long Beach, Calif. that the company learned of the SmartWay program, from Penske Truck Leasing. SmartWay is an internationally recognized program that brings together like-minded companies who aim to improve their fleet emissions performance and fuel efficiency on an ongoing basis and contribute to a sustainable freight industry. To support members, SmartWay offers a free, standardized approach for monitoring and tracking emissions as well as reports to help benchmark company performance.

Penske leases to Mutual Materials a portion of its fleet, and suggested the company formalize its environmental initiatives through the SmartWay program, since it was already doing much of what the SmartWay program fosters. Helping smaller fleets reduce their cost of operation through improved fuel mileage is one way Penske looks to serve its customers.

“That’s really what our business model is,” said Andrew Cullen, senior vice-president of fuels and facility services with

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Mike Jones and Kendall Anderegg from Mutual Materials stepped up their fuel conservation efforts with a little help from Penske and the SmartWay program

Penske. “Helping our customers, understanding their business and helping them spec’ their vehicles to meet their needs and then trying to continually optimize the operations of the vehicles. It really just plays in with the goals of the SmartWay program.”

Penske introduced tractors with 53-ft. trailers into the Mutual Materials fleet, which had predominantly been made up of truck-trailer configurations. The trucks were spec’d to save weight and the trailers were equipped with liftable tag axles to reduce rolling resistance when empty.

Mutual Materials also introduced route optimization software that allowed it to increase the efficiency of its dispatch and move from eight dispatchers to five.

“All of this has helped drive down the company’s operating costs. We lowered our net operating cost of the fleet as a percentage of our sales by over 25.6%,” Jones said.

This accomplishment has not gone unnoticed by Mutual Materials’ customers, many of which are big box retailers such as Home Depot and Walmart, companies that are also SmartWay members. “The SmartWay partnership has been a great tool for us,” Jones said. “It fits trucknews.com

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eir

nske am

GREEN to GOLD

with who we are as a company and with our values.”

Mutual Materials’ commitment to the environment extends beyond the truck fleet, to the products it sells and how they are made. Jones said the company’s products contain recycled post-industrial product and many of its pavers are permeable, allowing rainwater to soak through to the ground rather than being diverted to sewer systems. So greening the truck fleet was a natural progression. Still, changes had to be well communicated to drivers, according to fleet manager Tim Johnson.

“At first there was some resistance from our drivers, because we basically had the same truck configuration at that time for over 14 years,” he explained. “They were used to big horsepower and being in control with making the gear selections themselves.

When we switched to less horsepower (525 hp to 455 hp) and automatic transmissions, there was a lot of resistance. But once we started charting it and showing them the savings and they saw how easy they were to drive and how less frequently they were in the shop being fixed, it really started to get buy-in.”

Drivers, who are paid by the hour, came to appreciate the more relaxed pace and safer environment that resulted from limiting top speed and automating the shifting. Semi-annual drivers’ meetings are held to emphasize fuel economy and promote fuel-efficient driving practices and drivers are kept appraised of their performance.

However, when greening the fleet, Johnson warned that individual changes to the spec’ can’t be made without considering the implications on downstream components. He recalls a time when the engine supplier reduced engine speed by 100 rpm, without considering the impact that would have on other components.

“Now we had to go back to the drawing board and factor in engine rpm all the way through to the tire to make sure we still had the right gear ratio to maintain the sweet spot where our engine runs,” Johnson said. Each year we have to visit specs because a small change in the engine or transmission can make a difference on the outcome on the other end. A spec’ is very important and each year it’s the same journey; you have to go over that same spec’ again.” When spec’ing equipment, Mutual Materials appreciates being able to tap into the knowledge and economies of scale that Penske provides.

“They continue to help us out in a lot of different areas,” Johnson said of Penske. “As a smaller company, it can be hard to get warranty repairs from manufacturers. With Penske’s greater buying power, plus a team dedicated to fighting for warranty and policy in repairs, they smoothly handle our work orders to the maximum allowed policy they can get.”

A next step for Mutual Materials environmental focus, according to Jones, is to explore how the company can convert some or all of its fleet to run off cleaner-burning natural gas.

“We have 10 manufacturing plants throughout the Pacific Northwest and in Canada and all of those plants run off natural gas,” Jones said. “One of the things we’re really looking at doing is being able to leverage that natural gas. We’d like to compress it into CNG to run our fleet between our distribution points.”

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PROFITABILITY PROFITABILITY

CONSIDERATIONS IN THE “TARGET” – PART II Don’t jump into the M&A game without a game plan. A viable structural framework for acquisitions is critical.

By Doug Nix

I

n my 20 years of Investment Banking, I have worked on a lot of M&A deals. Deals in all sorts of industries and with all sorts of characters, deals with large-cap public companies and with small-town family offices, deals with Harvard graduates and with high-school dropouts. As I reflect on two decades of experience, I have come to form definitive observations and conclusions on all things M&A. Perhaps the most surprising observation is of the thing that separates successful acquirers from unsuccessful ones. Unsuccessful acquirers jump into the M&A game and make it up as they go. Successful acquirers have a game plan, a framework. Allow me to share.

Rule #3: Acquisitions must be done within a framework.

A framework for acquisitions has three components.

One, the way you look at businesses. Two, the way you think about acquiring a business. And Three, the way you go about acquiring a business.

Businesses can be complex entities with too many moving parts to clearly understand how they fit together. Fortunately, any business can be broken down into four core components.

By looking at a business as a unique collection of these components, buyers can quickly understand any business and its value drivers. The four components are:

32 FLEET EXECUTIVE ❙ September/October 2015

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Component

Description

Customer Value Proposition

A product/service that helps customer do more effectively, conveniently & affordably a job that they’ve been trying to, or need to do.

Profit Formula

Revenue model, cost structure, margin model & velocity required to cover them.

Key Processes

Ways of working together to address current tasks in a consistent way: training, developemt, manufacturing, planning, etc.

Key Resources

People, technology, products, facilities, equipement, brands, information, channels, partnerships and cash needed to deliver alue proposition to targeted customers.

When considering acquiring a business, let these four questions guide your thinking: • What is the Purpose of the acquisition? (the “why”) • What is the Value in the acquisition?

• What is the Value of the acquisition?

• How can we successfully integrate the acquisition?

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v

RENTALS Or to put these in layman’s terms: what is your goal with this acquisition? What does the target company have that you want? How much do you pay for it? Once you’ve acquired it, what do you do with it?

Rounding out this framework is how you go about acquiring a business. The basic process is as follows, and each step corresponds with one of the previous four questions: Step one, and the most often overlooked step is to strategize. The why. The why is driven off a clear and complete understanding of your business and its needs. Do you need to improve your value proposition by adding new services, do you need more resources to meet demand, do you need to enter a new market?

Step two is to search for firms that may satisfy the needs outlined in step one. When you come across a firm, break it down into its core components; its customer value proposition, profit formula, key processes, and key resources. When you’ve done that, ask yourself if adding these components will solve your businesses needs. If no, then keep looking. If yes, then pursue it with purpose.

Next is the value of the target and structure of the deal. The value of an acquisition is not dependent on what the market says a business is worth. The value depends on what it’s worth to you. For example, a small logistics firm in Detroit may not be worth so much by market estimates, but to a Canadian logistics firm looking to enter the US market, it may be perfect and worth more to that firm. Many buyers make the mistake of valuing the target based on market multiples when they haven’t quantified the value of the acquisition to their company Finally comes integration. Prevailing practice dictates that integration is based on the size of the target: if it’s a big firm, partially integrate and if it’s a small firm, fully integrate. This is completely flawed thinking. Proper integration requires a clear understanding of what is being purchased. If you are buying its resources, then quickly and fully integrate them into your business. But if you are buying its customer value proposition, profit formula, or key processes, then keep it separate. Send in key personnel, give it your best resources and keep it well funded - but don’t integrate it, regardless of its size.

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PROFITABILITY PROFITABILITY

Closing

Determining price and structure Stategize Pricing a company for an acquisition isn’t quite as simple as just carrying out a traditional Discounted Cash Flow Stategy analysis. Let me use a sporting analogy, which may make some sense. Sometimes a team seems to pay what is far in excess of market value for a player from another team.

And onlookers say something along the lines of, “he was only worth half that.” But if he’s the player that makes that team complete and the team goes on to win the championship, then clearly they didn’t overpay.

Rule #4: The value of an acquisition target is always set by the buyer It’s not entirely different when valuing an acquisition target.

For example, some of the prevailing thinking among companies right now is that “we will not pay more than the market price for that company.” It’s understandable in some ways: as soon as a CEO pays over the market price for an acquisition, someone somewhere is going to mutter “a fool and his money soon go separate ways.” But what’s important in pricing an acquisition is its value to the buyer and not the value which the market says. That is a conceptual difference where the sophisticated buyers in corporate acquisitions are making a difference.

So let’s say the market is telling a company that a firm should trade at six times its normalized EBITDA but instead, they pay seven to eight times; does it mean they’ve overpaid?

Of course, we can’t rule out the possibility that they did. But if the target company is special to them, meaning that it’s a good strategic fit (just like the seemingly overpriced player that fills the position in the sports analogy), frankly they haven’t overpaid. This is the kind of wisdom that should drive an acquiring firm’s maximum value before entering negotiations.

The market price suggested for the firm or something just below it is a good opening gambit when entering negotiations.

It establishes trust between your firm and the target, in that it’s a serious offer, while still giving you flexibility to move the price upward if negotiations lead that way. Keep in mind that the maximum price you establish before negotiations constitutes a limit and not a target. Another consideration is the bigger the difference between the market price and your maximum value, the more likely it is that you’ve found a really good target. It’s important to stress here that I would never advocate paying over the value of what a company is worth

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Search

Structure

Integrate

Assessment

Valuation

Integration

FRAMEWORK IMPACT

to you. What I am saying is that a company’s value always depends on the acquirer.

This is why the best valuations aren’t quite as simple as estimating the cash flow of the acquired firm; there are lots of specifics to each valuation: are you acquiring access to new markets which will increase the revenue for your existing products? Are there synergies present in the deal which will allow you to significantly cut back on operating costs? Does the acquisition of the firm provide you with a service offering demanded by your customers? These are just some of the potential questions that affect the pricing of the value of the target to a firm, and each firm will be asking different questions.

Valuations are always underpinned by the structure of the deal. What we’re seeing in the market at the moment is a guaranteed/contingent split of the purchase price of 70/30 to 80/20, but just as with value, this is situational. The old saying, “you name the price and I’ll name the structure,” comes into play. Therefore, in addition to entering negotiations with a negotiation opening price and a ceiling price for the target, you’ve got to keep in mind what concessions you’re willing to give up for the structure: are you happy to provide promissory notes or warrants? Will you increase the valuation through increasing Douglas Nix, the earn-out? is vice chairman What I hope I have shown here is that of Corporate reaching the best possible pricing and Finance Associates, structure of a deal is an intricate process. a top 10 ranked It’s different every time – acquiring manmid-market North American investment agers are sometimes surprised at what the target firm’s management value highly banker. Corporate and vice versa. Above all, I hope to have Finance Associates shown that by setting parameters for pricis a founding ing and structure before entering negotiamember of ICFG, tions, acquiring firms give themselves the the 14th largest best opportunity for successfully completglobal mid-market ing the deal. FE investment bank.

1. m sc m Fu co 2. ob th K ea m 3.

Sy de of

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Stakup in

inGauge® ESSENTIAL PERFORMANCE FOCUS driver to non-driver ratio

inGauge is the only dedicated online Performance Benchmarking Service for the North American Trucking Industry.

Currently tracking 45 metrics, inGauge seeks to provide timely and relevant data to: 1) Focus your efforts on underperforming areas of your business; 2) Validate your operational success and management; and 3) Provide a valuable resource for Best Practice information from some of the World’s Best Managed Trucking Companies.

This month’s Essential Performance Focus is your Driver to Non-Driver Ratio. This “Golden Ratio” of trucking is a quick measure of a company’s operating leverage. Specifically, how well a company is optimizing it’s Human Resources. This measure is a ratio of Drivers (both Company Drivers and Owner Operators) to Non-Drivers (Admin and Support, not including Shop). Based on the results from the inGauge database, this measure has a strong correlation to higher operating ratios.

The inGauge database of Trucking Companies totals 98 distinct operating profiles throughout North America (evenly dispersed geographically). Included in this total are 9 publicly traded Truckload Carriers (all U.S. domiciled). The gauge on the left represents the current range among our Population for Driver to Non-Driver Ratio. The value in the centre is the population average and the values to the left and right are the worst and top perfomers in the population respectively.

Although there are a number of publicly-traded copanies in the Top Quartile of the Population, the 1st, 3rd and 4th top performing companies in the population are privately owned with 6 month averages of 11.59:1, 8.9:1 and 7.3:1 respectively.

It shouldn’t be a surprise that these three companies also have Top Quartile Operating Ratios (net of FSC) as well! In 11.59:1 1.7:1 discussions with various companies with above average Driver to Non-Driver Ratios, we were able to assemble the following tips and suggestions to achieve optimal operating leverage.

driver to non-driver ratio (no shop)

6.65:1

1. Strategic Automation is Key - very few companies are utilizing all the features of their TMS. Most systems provide modules which can not only streamline the dispatch/customer service process, but also billing, maintenance, asset scheduling, human resources and compliance. Although there is an upfront and ongoing costs associated with additional modules, it must be compared to the long term of cost of additional overhead to provide the same or similar functions.

Further, when you can leverage systems capabilities to outperform your competitors, these system capabilities become a competitive advantage.

2. Accountability - companies with above average Driver to Non-Driver ratios have set very clear operational and financial objectives for their employees. Further, the stronger the connection between these objectives and compensation, the greater the potential for optimization is. One inGauge subscriber provides real-time feedback to their Driver Managers via a set of KPI Gauges, which displays the current (daily) Billable Miles, On-Time Deliveries, Average Gross Profit and Safe Miles for each Driver Manager. Correspondingly, each Driver Manager is provided with a bonus each month based on these specific metrics versus pre-determined goals for each.

3. Use of Contractors for Non-Core Functions - the outsourcing of non-core functions (e.g. Legal and Information Systems) have two advantages: 1) Although the variable cost per hour may be more, the flexibility (matching supply to demand) helps a company stay lean for non-core, and less-routine functions; and 2) Specialized contractors must stay abreast of new trends, techniques and laws, which may in fact provide you more value for each dollar spent.

Sign up for a demo today @ tcaingauge.com

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GEARED UP

g Editor James Menzies travelled to Nevada to become certified to operate autonomous trucks in that state

“N

o one has ever passed our test.” Not the words you want to hear when you’re about to take that test. The speaker was Jim Martin, one of the few Daimler Trucks North America (DTNA) engineers certified to drive autonomous trucks in the state of Nevada and also licensed to provide certification to other CDL holders.

But while his warning may have quickened the pulse of the handful of North American trucking journalists preparing to obtain the certification, myself included, Martin quickly added, “The reason for this is, this is our first time (giving the test).”

CDL-holders require special certification to operate autonomous trucks in the state of Nevada. The criteria for this certification is developed by the truck maker and then approved by the state. It’s up to the OEM to test individuals wishing to obtain their certification and to issue the certificate allowing them to operate such vehicles.

There’s obvious irony at work here: A special certification is required to operate a truck that can effectively drive itself.

But the objective of the training and subsequent certification is to ensure the driver understands how to use the system and more importantly, that they realize they are responsible for the vehicle at all times – even when Highway Pilot is active.

Operating Highway Pilot is not at all difficult.

When Highway Pilot becomes available on the Freightliner Inspiration Truck, a ‘Highway Pilot Available’ notification appears in the driver display. The driver can then click the Set button on the steering wheel to activate the system, as long as the engine brake is turned off. The driver can then toggle through to the desired top speed. The engine brake can be activated once Highway Pilot has been enabled. To deactivate Highway Pilot, the driver simply needs to tap the service brake or press the Off button on the steering wheel.

When Highway Pilot is activated, the truck drives itself. It maintains a safe following distance from the vehicle in front of it and adjusts the steering wheel to stay centered in its lane of travel. The gas and brakes are applied as needed – all without human intervention. It’s unsettling at first – especially when traf-

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James Menzies removes his hands from the wheel while in Highway Pilot mode.

fic is approaching – but I very quickly came to trust the system.

It was a windy day in Las Vegas, with the types of gusting crosswinds that make for tiring driving. It was nice to relinquish control to Highway Pilot and relax while it took care of the frequent steering inputs needed to counteract the wind.

But you won’t be taking the opportunity to climb into the bunk for a nap or fixing yourself a sandwich. The driver is required to always be alert and ready to take over from Highway Pilot when required.

This attentiveness is one of the things Martin and other certifying engineers are looking for during their evaluations.

“As the driver, you need to be totally aware and completely responsible for the operation of the vehicle,” Martin explained before we hit the highway. “Even if Highway Pilot is working and functioning, you still are the driver and you’re still responsible. It’s important to stay facing forward – you don’t want to turn around, don’t get out of the seat, don’t play on your phone – you still need to be aware. This is meant to be an enhancement to the driver. On a day like this, where its windy, if you’re trucknews.com

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GEARED UP

Jim Martin demonstrates how Highway Pilot works.

driving manually you are constantly fighting the wind. In Highway Pilot mode, you can let go and let the system fight the wind and that’s a huge advantage when it comes to fatique.”

Among the requirements that must be demonstrated by the trainee during the certification process are the following: • Participates in the training of the system and understands the technology; • Prior to operating the system, demonstrates knowledge of system capabilities and limitations; • Demonstrates ability to operate the vehicle in both normal driving and autonomous modes; • Driver must know when Highway Pilot is available, how to enable Highway Pilot and how to disable Highway Pilot and take back manual control; • Must demonstrate the ability to react to a system error (induced by a DTNA engineer); • Driver reaction time must be less than half a second; • A vehicle trajectory error must be corrected in no more than 2.5 seconds; • And lane deviation must be corrected to no more than 60 centimetres.

The Highway Pilot system itself is extremely intuitive. And while the concept of autonomous vehicles may initially seem futuristic or far-fetched, in reality the Highway Pilot system simply brings together many active safety systems already in use today through Detroit Assurance. There is nothing new about adaptive cruise control or lane departure warning systems.

Those are the foundations on which the Highway Pilot system is built, with the addition of automated steering. The Highway Pilot’s individual parts consist of: a stereo camera; HMI display; powertrain ECU; radar sensors; braking system; steering gear box; and mirror cameras. The front stereo camera provides a 45-degree view with a range of 328 feet. The longrange radar provides an 18-degree view 820 feet up the road while the short-range radar gives a wider 130-degree view, 230 feet out from the truck. This trio of sensors is what’s used on Daimler’s Detroit Assurance suite of safety systems today.

Daimler officials emphasized that Highway Pilot is intended trucknews.com

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not to replace drivers, but to enhance their capabilities and to improve safety. It’s a safety system, really, and any payback generated for customers if and when it goes into commercial production will have to be achieved on the merits of safety, not eliminating drivers.

The Freightliner Inspiration truck itself is not currently undergoing validation testing, according to Diane Hames, general manager, marketing and strategy with DTNA. “It was intended as a demonstration of technology,” she said. “We’re not putting it through a validation cycle. It’s not a prototype truck, it’s a demonstration concept vehicle and the intent was to show what’s possible with the combination of these technological elements.” FE

September/October 2015 ❙ FLEET EXECUTIVE 37

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INSIDE THE NUMBERS

INSIDE OUTSOURCING

Outsourcing is becoming an increasingly popular answer for shippers looking to solve their supply chain challenges, our Survey of Canadian Third Party Logistics indicates. Close to twothirds of Canadian companies responding to our national survey indicated they currently outsource some or all of their logistics functions with outbound and inbound transportation topping the list.

OUTSOURCING PHILOSOPHY

Review costs between ownership and outsourcing before decision

25 %

MAIN SERVICES CURRENTLY OUTSOURCED

Prefer to outsource non-core business activities where possible

48 % 28 %

Prefer to own/control functions in house, sometimes outsource

Outbound transportation

Inbound transportation

78%

64%

Customs brokerage

Customs clearance

54%

49%

Warehousing

Freight forwarding

42%

45%

Shipment consolidation/ distribution

Cross docking

18%

28%

Freight bill auditing

Selected manufacturing activities

10%

9%

OUTSOURCING STRATEGIES

2%

16%

Have outsourced in past but no plans to outsource in future

Have outsourced in past and considering doing so again

14%

4% Not currently outsourcing but considering doing so

64%

of respondents

Outsource some or all logistics functions and will continue to do so

38 FLEET EXECUTIVE â?™ September/October 2015

p38-40 Inside the Numbers.indd 38

Have never outsourced and no immediate plans to do so

trucknews.com

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38543_D

A Chevron company product © 2015 Chevron Canada Limited. All rights reserved. All trademarks are the property of Chevron Intellectual Property LLC or their respective owners.

DARRELL WARD HAS ICE IN HIS VEINS AND DELO IN HIS TRUCK. ®

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Delo user since 1995 Darrell Ward on History® Networks’ Ice Road Truckers™

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38543_DELO-Reality Campaign ads.indd 1 p38-40 Inside the Numbers.indd 39

15-10-05 AM 15-10-20 11:41 1:42 PM

Uptime means road time. enjoy the view.

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Volvo Trucks. Driving Progress

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