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Posted April 8, 2019

Successful Fleet Solutions Include Company Culture

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How Fleet Solutions Aim to Highlight a Positive Culture 

The trucking industry first became concerned about the driver shortage in 2015. Since then, fleet managers and owners have been looking to develop strategies and fleet solutions that address the situation in a way that promises long-term results. Strong corporate earnings this quarter continue to push the economy higher, which means the pressure for results is only mounting.

With a robust economy, consumer spending is up along with infrastructure spending and the cost of housing and development. What it all means is that there is a strong demand for trucking – and clearly that translates to drivers. “It’s a real bear,” said Tyson Foods CEO Tom Hayes of the inflationary pressures of the shortage in an interview with TheStreet

Approximately 60,000 drivers are needed to meet robust demand for trucking services, and that may be a conservative estimate. The shortage could be upwards of 100,000 or more.

Kevin Sterling, Seaport Global Securities LLC

To develop an effective fleet solution, fleet managers are looking at the big picture in an attempt to address the underlying reasons for the shortage. They are hopeful that by looking at what drivers want as well as what competitive industries are doing to keep employees, they can make meaningful changes that will attract and retain drivers.

retain drivers

Top 6 Factors Contributing to the Shortage

1. High driver turnover rates (above 90% at present)
2. Reduced capacity as a result of regulatory changes
3. Aging workforce 
4. Increasing freight demand
5. Inflationary pressures
6. Lifestyle priorities (more home time)

With turnover rates the leading issue, fleet solutions need to focus on understanding why. Kara Deniz, senior communications coordinator for the Brotherhood of Teamsters, the labor union of drivers and warehouse workers, suggests that the turnover is reflective of low wages and poor working conditions, which include too much time away from home. Companies such as UPS and Walmart have addressed the issue successfully and find that they are no longer pressured to find drivers. Walmart recently increased wages for drivers to $80K+, which led to an increase in transportation expenses, but that increase has been dwarfed by the larger benefit of driver retention.

UPS Makes Company Culture a Priority

While some companies are increasing pay to attract drivers, shipping giant United Parcel Service Inc. is setting an example by addressing culture as one of the best fleet solutions there is. UPS is considered an industry bellwether that may find it easier to navigate the dwindling driver base. An example of their successful navigation is their ability to staff up during the holidays.

UPS does have issues finding drivers during the peak holiday season, but tries to make the job more attractive based on the fact that most, if not nearly all, tractor-trailer drivers are out and back in the same day; they don’t sleep on the road somewhere, in a truck or a motel. 

UPS spokesman Dan McMackin

UPS, started in 1919, took in $58 billion in revenue last year, ranking them #168 on Fortune’s list of the world’s largest companies. Approximately 2% of the world’s GDP and 6% of the U.S. GDP flow through the UPS network. They employ a workforce of more than 435,000 people. Clearly they are doing something right, and many believe that what they are doing right is based on a strong sense of culture meant to inform every decision the company makes.

It’s a distinctive culture and one that undoubtedly helped make us successful.

— Myron Gray, president of U.S. operations, UPS

UPS Makes Company Culture a Priority

UPS considers culture just as important for their own employees as they do for their external partners. What the company believes in as shown by their culture is building strong relationships in every aspect of business. While some fleet solutions are addressing more efficient payment systems, UPS looking not only to strengthen their financial supply chain through more efficient fleet payment systems, but also to build lasting relationship by doing business with people and companies whose cultures they admire. They seem to be blazing a trail with this thinking and other companies are on board. In fact, Fortune magazine released a study suggesting that today’s business leaders place more importance on a business partner’s culture than ever before.

“We have partnerships all over the world. What holds them together is one purpose, one set of values, one set of principles.” 

— Former P&G CEO James Lafferty

“Management is temporary; returns are cyclical. But if we use our values as connective tissue, that has longevity.”

— Former IBM CEO Sam Palmisano

A positive culture can differentiate a business from its competition and serve to attract employees and business partners alike. Today business is not about being everything to everyone. It is about building a tribe based on shared values. Just as UPS has proven, a strong, authentic, and positive culture can be the most valuable fleet solution a company has to offer.

 

 

 

RESOURCES:

https://www.truckdriverssalary.com/us-truck-driver-shortage-stats/

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=Speeches&id=1441222269987-510


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