Hey TTR fam -
With these rates down so far compared to a year ago, I feel like I’m needing to find areas to save money but yet couple it with motivating and getting more opportunity for my drivers.
During the great times we began offering a very aggressive pay and PTO package. Now that rates are in the toilet I don’t want to have to cut back my guys programs so what can I do to keep this up?
Looking at expenses we spent over $400,000 just on fuel in 2018. Naturally, this is an easy area to focus on where increasing performance can cut costs in a big way. So, what I’m thinking is putting together a fuel mpg performance program that saves me money yet also makes it to where the drivers can make EVEN more!
We are using Omnitrac for our ELD’s which have been working great and also have decent tracking for performance metrics. The only thing I don’t like is sometimes it’ll take an entire week to update and they don’t all update at the same time. Yesterday, I came across these guys: Home – LinkeDrive I don’t know yet if it’ll work simultaneously with Omnitrac or not being I’m assuming both would need plugged into the JBUS. I have more research to do with that. Anyway, it gives performance metrics in real time in several different ways and ranks the drivers in comparison with their peers. It’ll also compensate for weight, weather, terrain, etc so it’s more fair overall. As a driver I personally would love this. I’m competitive and also want to improve so it would add a whole new aspect and enjoyment out of driving.
Now to the meat and potatoes of what I’m considering.... let’s have a baseline of 6.75 mpg average per month. If you average this or worse you get no bonus and also can see how you compare to others and how to go about improving your numbers if you want to compete and achieve bonus. Anyone that achieves over 6.75 will get a bonus of 25% of the savings.
Example: 10,000 miles 7.75 mpg average and national fuel index at $3.25
10,000 / 6.75 = 1481 gallons 1481 x 3.25 = $4813.25
10,000 / 7.75 = 1290 gallons 1290 x 3.25 = $4192.50
$4813.25 - $4192.50 = $620.75 savings per month per truck.
$620.75 x 25% = $155 bonus to the driver
620.75 - 155 = $465 savings per truck to the company.
This wouldn’t cover the cost of our aggressive pay and PTO package but it sure would go a long enough way that we could keep it up and meet the goal of not having to lower benefits. I hope to get the rest of the way there by finding better fuel discount programs which I feel could save just as much on that end.
In the long run I do believe we would make more money in many different ways. Rates come back up and we’re still seeing savings. If fuel goes up the savings and bonuses become even larger. Less idle so better on the engine. Less shop time. General overall better on the truck and the driver respecting his or her truck even more as it’s making them even more money, etc.
I see a lot of positives here. I apologize for the long post but if you have made it this far let me know what you think! As a driver what are your thoughts? As an owner what are your thoughts?
Fuel Bonus - Want Opinions
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I am not to find of fuel mpg bonus as a driver. As I've never received any.
Perhaps just lower your governed speed to 65mph Max. And pay drivers depending on how much effort they put in for you.
What are your company trucks governed at if they even are?
My thoughts if I was one of your drivers is...
Would an extra $155 a month bonus really be worth the trade off of dropping my speed from say 70 down to 62? That's well over 1 hour per day extra I have to drive for that bonus...
Just a rough estimate but that's nearly 20 extra driving hours a month for a $155 bonus??? Kind of a no brainer if I was your driver.... I'm going to keep running 70mph...
Sounds like you over extended your budget for payroll when the times we're good... Probably should have been a little more conservative with the pay raises to begin with.
As a company driver I dont really care about mpg for a measly $155 a month... If I keep my foot in it instead of worrying about mpg I can cover more country faster and therefore get enough extra miles to make at least double that $155... Just by running hard and putting in more miles.
What makes more sense to you?
Drive conservatively for XXXXX miles in YY days and make ZZZZ + $155.
Drive hard for XXXXX +1000 miles in YY days and make ZZZZ + (1000 × cpm)
Same number of days but I was able to get more miles cause I kept my foot in it and wasnt worried about mpg. Even at .30 cpm a driver would only need to get an extra 35 to 45 miles per day to double that $155.
I don’t know that speed alone would be the end all be all but maybe just one of many aspects to increasing performance.
And I’m not doing this because I’m over extended. It’s not like we aren’t profitable. I’m just trying to be proactive in hard times that will make us even better off in good times. Also, if things did continue to get much worse even then these savings would make it to where I’d less quickly have to think about clawing back some of these benefits.
My drivers are guaranteed 2400 miles per week no matter what. Some don’t get that many and some get more which they get a mileage pay last that 2400. Point is for some the extra mileage argument wouldn’t be all that relevant because they are getting paid for those miles anyway.
I do see what you are saying though. It seems like already people are feeling that $150/mo is not very much. I’d like to think that guys would want to be one of the best in the fleet with no monetary incentive and the money would be a true bonus for essentially doing your job.
Some drivers are as good or better at math than you. In the 80's I worked with a company that did that. Some figured out how to run as hard as they could and keep up with their mileage. The trucks were fueled at the company. They would buy fuel at the truck stop and buy fuel, like $17 worth cash. Just enough to still get the fuel bonus which was more than the fuel. They also figured out how to override the after market electronic gizmo.
Good idea but I feel like you are better to have the trucks set at an acceptable level and just let them go.
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