Here is a common question I bet you have heard before. “Tell me again why our driver is driving 1,150 miles and only getting paid for 1,000?” asked Rick, the new “rating” manager. Rick and his team are responsible for comparing and rectifying the contracted rates and mileage to the actual miles operated, the amount invoiced, and what the customer paid. Unfortunately, he discovered that while the operation considered itself a lean machine, the reality was that they were experiencing losses at every level. The contract mileage was well short of the practical miles, the actual miles driven were well over the paid miles, and the customers regularly paid short on invoiced miles.
This is not an uncommon situation. What is unique is that Rick discovered the discrepancy and dug deeper to rectify the issue. How? GPS data from his vehicle tracking solution. That data and its analysis are essential to fully understanding business realities compared to the business plan. Vehicle trackers are one of the best, low-cost methods for collecting and pulling apart data to make it meaningful. They provide precise time, date, speed, and engine status using GPS and engine data. In addition, the best vehicle tracking systems offer insightful reporting to assist you in improving operations and, oddly enough, complying with the FMCSA’s Safety Management Controls.
Back to Rick’s investigation. During his deep-dive analysis of the situation, three culprits were discovered: determining mileage, driver non-compliance with planned routes, and speeding. When determining mileage, charging mileage from Point A to Point B is more complex than one might think. Several calculators are used to determine the distance, with each providing a different result. In fact, from one version to the next, the same calculator can return different results. Variance is often due to “switches” in the calculator. The switches may consider things like shortest, practical, interstates, tolls, and even ferry routes. If the carrier isn’t using the same calculator and version with the same switch options, the route mileage will not match.
For route planning, Rick’s drivers weren’t adhering to established routes as directed. He also found many drivers were making unplanned and unapproved stops. Not only did this take them out of route, but it also exposed their loads to unnecessary theft, risk, and fines. Some drivers said they knew a faster route, but further investigation determined these unsanctioned routes were actually more miles. A route that may have saved 30 minutes literally took a driver 100 miles out of the company-calculated route! A 100-vehicle fleet could save $325,000 per year by using GPS data to reduce their out-of-route miles from 10% to 5% (based on 2,000 miles per week average per vehicle, at eight mpg fuel efficiency, and fuel at $5.00 per gallon).
Regarding speed, based on numbers provided by the United States Department of Energy, not only can reducing speeds by just five to ten miles per hour improve your fuel economy by seven to 14 percent, but it can also help to prevent both violations and accidents. Rick’s drivers were sometimes conflicted, asking, “Do you want me not to speed (be safe) or make my deliveries on time?” His answer was a resounding, “Yes!” Rick used vehicle tracking data to educate drivers on where and when they were speeding and help them understand that speed is just one part of the equation, along with sticking to the planned route. The reality is that on a 100-mile trip, the difference between a 50-mph average and a 60-mph average is just 20 minutes.
There is really no need to guess. Using data from their vehicle tracking system, Rick’s team was able to meet the customer demand with rates that corresponded to business needs. In addition, their vehicle tracking system helped them adhere to and monitor established and quantifiable standards. Consider investigating vehicle tracking solutions, including the J.J. Keller Encompass Vehicle Tracking System, as a powerful way to monitor operations, costs, and rule compliance. I know a “tracker” seems ominous, but it really can be helpful to your operation. The North American Transportation Association (NTA) is an official distributor of J.J. Keller training, forms, and supplies through our NTA Super Store, and is available in our Members Only program. Check out www.ntassoc.com for more details.
On a different note, 3G-powered ELDs are now non-compliant as of the end of last year (2022). All of the mobile carriers have shut down their 3G networks, which will impact motor carriers if their electronic logging devices relied on a 3G system. The final 3G sunset date was December 31, 2022, when Verizon completed their shutdown of its 3G network. AT&T, Sprint, and T-Mobile all shut down their 3G networks earlier that year. Any ELD that requires 3G cellular connectivity to perform its functionality will no longer be in compliance with the technical specifications in the ELD rule after the 3G network it relies on is sunset.
When in an area that does not support 3G, a 3G device will register a malfunction. The carrier has eight days to get the malfunction resolved, in this case by replacement, unless an extension is granted, according to the Federal Motor Carrier Safety Administration. To avoid compliance issues, carriers should contact their ELD provider and ensure their ELD does not rely on a 3G network, and that it meets all of the minimum requirements. If an ELD does rely on 3G, ask the provider about their plan for upgrading or replacing the device. The ELD recently introduced by NTA is 5G, and it also just happens to be the lowest priced system on the market today! Check it out at www.ntassoc.com today. Why pay more for this service if you don’t have to?!