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One of the biggest issues the trucking industry is facing right now is some of the problems involving maintenance. Maintenance costs are going up significantly and the time it takes to get maintenance done on your truck is increasing. This comes at a time when freight rates are at an all-time high which means owner-operators can’t afford to take time off the road to get a major problem fixed on their truck. What is causing these issues and how can you reduce the chance you have to deal with a major maintenance issue? In this article, we will be answering these questions and more. Labor Issues Many jobs and industries are dealing with labor shortages right now, and truck mechanics is no exception. Currently, qualified mechanics are just as hard to find as qualified drivers. This, combined with the truck shortage, is causing major problems. Due to the truck shortage, truckers are driving older trucks longer, which means they are wearing down and need parts and maintenance to continue to run. All of this means mechanic shops are way backed up and owner-operators are willing to pay whatever it takes to get their trucks fixed. Labor rates are rising quickly. A few years ago, maintenance on average cost $125 per hour. Now, maintenance is up to $190 per hour. This is because labor throughout the country is in short supply. Mechanics are harder than ever to find and the rates paid to these trained mechanics keep going up. Also, shop fees are being added similar to the type of fees you would see on an events ticket website. This is because shops can charge whatever they want with truck maintenance being in such high demand and maintenance options being in such a low supply. Supplier Cost Increases Every supplier of truck parts and fluids is also increasing costs as they are dealing with the same labor and supply chain issues as everybody else. Of course, as suppliers are forced to increase costs, maintenance shops are forced to as well. Fluids Fluids have increased two or three times this year already. Oil, transmission fluids, and DEF fluids have all seen significant increases. Parts The cost of metals has increased overall which is what’s causing truck parts to increase so significantly. Also, manufacturing plants for these have been closed which is creating issues all the way up the supply chain. Tires The price of tires has already gone up once and manufacturers are saying more increases are coming soon. Just like everything else, raw materials, labor, and shipping costs are all up. Labor Time With all of the issues that are going on at the same time throughout the supply chain, labor time has been extended significantly. As we’ve mentioned previously, parts shortages, lack of trained mechanics, and older trucks on the road are just a few of the factors that are not just causing the cost of maintenance to increase but also the amount of time you need to wait for maintenance to be completed. All of this is making it really easy for owner-operators to leave. They don’t have the time or the money to wait for a repair and there are other options out there. Fleets are offering a good salary with sign-on bonuses as high as $10k to drive for them as a company driver. Trucks are in such high demand that owner-operators can sell their broken truck for $10k-$20k more than they paid for it a year ago. There are also other industries that are hiring for good money which makes it easy for drivers to be home every night. Opportunity Cost The biggest takeaway is the opportunity cost of lost revenue in such a hot market from being off the road waiting for a repair. This might be the biggest issue for owner-operators that are facing maintenance issues. On top of maintenance costs being high, owner-operators are also losing out on significant revenue if they are forced to be off the road for a significant amount of time. This is because freight rates are at an all-time high so missing out on these earnings even for a short period of time is a big opportunity lost. If you’re down for a week, it means you’re losing about $2,400 in take home pay or more when considering the loss of revenue plus the fixed costs you still have to make with the maintenance as well. What Can Be Done? The most important thing you can do to keep yourself on the road is plan preventative maintenance around home time. Try to catch stuff before it becomes a serious issue so you can wait for the part you will eventually need or get it fixed quickly before it becomes a big issue. This can be done with good pre and post-trip inspections and checking for any leaks or drips. Now would also be a good time to find a preventative maintenance program. One type of preventative maintenance program is a fluid analysis. This analysis can help identify metals that are wearing down within the fluids that need to be replaced early so you can get the parts you need ordered ahead of time and get the maintenance scheduled when you know you will have downtime. Another type of preventative maintenance is after treatment ultrasonic cleanings. Doing this will clean out your DEF systems ahead of time so it stays functional for longer. Lastly, now would be the time to adjust how much money you are putting aside for future maintenance issues. We’ve updated our recommendation for how much you should be saving based on how old the truck is and how many miles it’s driven. You can see our recommendations in the chart below. This is no master savings program. Every trucking business should have their own individual maintenance savings program based on the type of freight, length of haul, and road conditions they see most. We see the cost of maintenance continuing to rise for the foreseeable future. Make sure you’re taking the appropriate steps to mitigate the problems if a maintenance issue arises. We can’t emphasize this enough, the cost of being off the road right now due to a maintenance issue is detrimental not just because of the amount of money you have to spend on the maintenance but also because of the amount of money you will be losing while taking time off during a hot freight market.

Cold weather and lack of sun can be a dreary time for anyone, but as an owner-operator, the troubles that occur during this time of year can affect more than just your mood. Storms can feel like they come one right after the other, and they only add to the already long list of weather-related issues. Higher truck idling times and high winds can lower MPG, and poor road conditions can not only increase the risk of an accident, but also the likelihood that you won’t get enough miles each month. So what can you do to help counteract these issues? Here are our eight tips to keep you ahead of winter storms: 1. Communicate with your Driver Manager Discuss concerns with them from the start. Work as a team to create a strategy that works best for you to obtain more miles to make up for a deficit. 2. Always be prepared Plan each trip to avoid winter storms if possible by checking forecasts and potential construction areas along your route. Chart out fuel, meal stop locations, and allow extra time for traffic delays. Click here for weather mobile apps available for download. 3. Fill up on fuel Fuel can thicken or gel in extremely cold temperatures, so remember that a full tank is less likely to have problems. You can limit (and sometimes eliminate) the number of additives you have to use if you decide to purchase fuel farther North. Consult your engine manufacturer for additive guidelines. 4. Play it smart and stop If your gut is telling you to stop, pull over and stop. It’s better to play it safe than gamble with your safety. One carrier claimed that they would trade lower operations (and a little less revenue) for not having weather-related accidents anytime. 5. Reduce your idling costs Purchase an Auxiliary Power Unit (APU) to provide electricity and heat. Save your receipt to claim the APU expense on your tax return. Click here for a full list of Idle Reduction Equipment from the U.S. Department of Energy, and click here for tips on how to save fuel. 6. Check your cargo Icy roads and goods shifting in the trailer are not a good combination. If possible, monitor the shipper’s loading procedures to ensure weight has been evenly distributed within the trailer. 7. Perform a thorough pre- AND post-trip inspection Be diligent with inspecting everything visually and hands-on. Listen carefully for air leaks, because small leaks can become big leaks in extreme cold. Post-trip inspections can reveal problems that might be fixed while in the sleeper berth or off-duty. 8. Set up emergency funds Having a reserve savings account set aside just for these circumstances will take a lot of worry off your shoulders. Although bad weather can’t be controlled, you can take the right steps to prepare yourself before it hits where it hurts the most. Above all, remember that your safety and the safety of others should be of the utmost importance. Indicators are showing that we will have a fairly mild winter, but it's important to always be prepared.

Organizations that manage a fleet of vehicles can achieve significant savings by following certain fundamentals on sustainability and using new technology. In the process, they will conserve fuel and cut down on carbon emissions, as the following focuses on fuel savings. Savings Calculator The best way to save money on fleet maintenance and fuel economy is to keep each vehicle in top shape. Periodic inspections and the use of appropriate oils and other lubricants help extend the life of a vehicle. Fleet managers should use a savings calculator to get a clear view of how much they can reduce expenses by checking oil and fluid levels. The savings calculator can help fleet managers determine the number of trips or miles to accumulate in one day to achieve goals of cost-efficiency. It can also be used to decide how many drivers to schedule for a particular day, week or month. Drivers, maintenance, and fleet operators all contribute to fuel costs. How to incorporate the savings calculator into your fleet plan A big part of fleet management is monitoring gas prices and figuring out average annual miles per vehicle. By watching this data, along with average miles per gallon, a company can analyze fuel cost projections and possible alternatives or strategies on how to cut costs. There are many methods of cutting costs on fuel or getting the most productivity out of your fuel costs, including planning tighter routes. Keeping engines well lubricated helps lower overall fuel consumption. Saving by Taking Care of Your Fleet One of the best ways to optimize fuel economy in terms of miles per gallon is to use modern fuel tracking technology. By keeping careful track of your fleet with a software platform and using commercial heavy duty quality CITGO energy oils you can achieve 3 percent fuel economy savings. Software such as FUELChex monitors fuel usage of each vehicle in your fleet. A common practice for fleet management is to refuel in the morning rather than later in the day. Checking and replacing the air filter regularly will help keep the vehicle running smoothly. Another way to save money through fleet management is to use Oil Drain Interval Optimization. This strategy can triple the time between oil changes. It's part of CITGO's Guaranteed Efficiency Program. Other Ways to Increase Fuel Efficiency It's best to review the manufacturer's manual before making any type of adjustments to your vehicle. Pay attention to tire pressure and traveling with less weight. Only use an appropriate motor oil that is compatible with your engine. More fuel will be saved if you shut off the engine and restart than letting it idle for a lengthy period. Conclusion The key components to regularly inspect for keeping a vehicle in top shape are tire pressure, engine performance, oil level, and air filter quality. Using fleet management software is the key to gaining the greatest amount of fuel efficiency with your fleet. By targeting, measuring and monitoring specific metrics, you can make adjustments to your fuel cost planning.

By Juhlian Pimping from SafetyCulture Whether you run a trucking company, a taxi company, or a car rental, you should not neglect proper fleet maintenance. Fleet maintenance is the practice of keeping your service vehicles in good condition to avoid vehicular breakdowns. It is a systematic approach to preventive vehicle maintenance that involves planning, scheduling, analysis, and execution. Here are the top 3 reasons why fleet maintenance is important: Keeps your drivers safe Driver safety is an important aspect of any operation. Management must take all of the necessary steps to ensure that the risk of preventable road accidents are reduced. Some of the leading causes of crashes include worn tires and blowouts, faulty brakes, and steering/suspension issues, all of which can be remedied by proper fleet maintenance. Depending on your operational needs, preventive maintenance can be time-based (once every year), or after reaching a set mileage per vehicle. Reduces operational cost Preventive maintenance costs are significantly lower compared to reactive repairs. Paying for the repercussions of poor fleet maintenance costs even more than the two combined. According to OSHA, “motor vehicle crashes cost employers $60 billion annually in medical care, legal expenses, property damage, and lost productivity.” Perform vehicle inspections to identify maintenance and repair opportunities before they become a serious problem to avoid downtimes and improve your adherence to operational schedules. Boosts productivity and manages business downtime Business downtimes can cause a domino effect that leaves your operation reeling. Trying to make up for a missed delivery or appointment because your fleet truck broke down can delay the fulfillment of succeeding obligations down the line. When you fail to deliver a product or service to an expectant client as scheduled, your reputation and brand trust suffers. Keeping your fleet in good working condition all-year round helps you avoid operational delays and maximize your productivity. As a business owner, there are many business variables that you cannot steer in your favor. Proper fleet maintenance is not one of them. It reduces the likelihood of accidents caused by vehicular malfunction and keeps your drivers safe. It saves you money by addressing the “little problems” before they turn into big ones. Ultimately, your business becomes more efficient overall with proper fleet maintenance. A vehicle maintenance log can help you record the condition and repair work performed on an individual vehicle. This can help you manage preventive maintenance schedules, prioritize specific vehicles, and triage issues that need immediate resolution. This article was written by Juhlian Pimping of SafetyCulture, a software company that enables businesses to perform inspections using digital checklists. Infographic Link: https://safetyculture.com/wp-content/media/2019/02/Fleet-Maintenance-Infographic-Blog-Post.png

Kevin Kocmich was one of three finalists for the 2018 Owner-Operator of the Year award. This was the third time Kevin has been nominated for the award. Kevin has been an ATBS client since 2018. Recently, we reached out to ask him a few questions about the nomination and his experience working with ATBS. ATBS: What goes into the decision making for the Owner-Operator of the Year Award? Kevin: The Owner-Operator of the Year Award is the biggest award a truck driver can get. It’s not just a safety award. You are given an intense background check where you are judged on multiple factors. You have to have a minimum of a million miles without any load claims, tickets, or ever being put out of service. You also have to turn in five years of back taxes where they look at how productive you have been, what you own, how often you trade, and how often you have changed companies. They also look at miscellaneous things like where you drive, your CSA score, whether you have been in the military, or any other public service. ATBS: What have you done to be nominated for the award three times? Kevin: I have driven three and a half million miles all accident-free. I have a clean record without any tickets or ever being put out of service. I have a CSA score of zero and I have been a member of OOIDA for 28 years. ATBS: How long have you been an ATBS client? Kevin: I have been an ATBS client for one year. ATBS: What’s the most useful part of the service ATBS provides? Kevin: The most useful part is learning about deductions you can claim that you haven’t before. It was nice to be able to lower my taxable income and pay less in taxes this year. I also like having all of my records on one account. ATBS: What do you like most about working with ATBS? Kevin: The first thing, is ATBS is very trustworthy. I also like how easy it is to get you guys all of my paperwork and receipts. As I mentioned earlier, I like having everything on one account so I don’t have to ask every time I want to see my profit and loss statement. It’s also nice that every time I have any questions I get a phone call or email back with an answer very promptly. ATBS: If somebody was to ask you if they should use ATBS, what would you say to them? Kevin: I would say definitely. ATBS is very easy to use, they are trustworthy and whenever you ask a question you always get an answer. We want to thank Kevin for taking the time to answer a few of our questions. ATBS is proud to be able to work with such a successful and accomplished owner-operator. Hopefully, we can continue our partnership for many years to come.

The trucking industry has about 80,000 fewer available drivers today compared to a year ago. Currently, the OTR truckload driver count is at its lowest point since September of 2012. Knowing this, it comes as no surprise that many fleets are having trouble finding enough drivers. We took a look at some of the biggest factors that are causing the truck driver count to decrease and have some recommendations for what fleets can do to try and combat the limited driver supply. COVID-19 & the Aging Demographics of Drivers One of the leading causes of truck drivers getting out of the industry during the pandemic was the pandemic itself. The trucking industry saw a surge in retirements among older drivers who were at-risk of facing serious complications if they happened to contract the virus. Many who were close to retirement didn’t feel as though the health risks were worth continuing to work for a few additional years. Even prior to the pandemic, trucking was already dealing with issues of drivers retiring. According to the National Transportation Institute (NTI), retirement accounts for 54% of the lack of drivers. It seems as older drivers retire, the younger pool of drivers entering the industry is not large enough to make up for the exits. The problem is only going to be fixed with creative solutions for recruiting younger people into the industry. The median age of over-the-road truck drivers is 46 while the median age of a private fleet driver is 57. Both of which are well older than the average age (42) of U.S. workers as a whole. To compound the problem, ATA also lists the average age of a new driver training to enter the trucking industry is 35. Unemployment Benefits/PPP Loans With several trucking companies going out of business during the peak of the pandemic in 2020, combined with layoffs forced by COVID-19, many truck drivers began receiving unemployment benefits. Despite a recent rebound in employment numbers in the trucking industry, nearly 1.4 million people in the trucking industry remain unemployed according to the August 2020 report by the Bureau of Labor Statistics. This is an increase of nearly 800,000 (136%) year over year when comparing the numbers from August 2019. The U.S. unemployment rate peaked in 2020 during the month of April at 14.7%. But with Coronavirus cases increasing again and lockdowns being considered in many parts of the country, it’s hard to tell whether or not the US will reach that point again. With enhanced unemployment benefits, stimulus checks, and a federal stimulus package that included PPP loans for small businesses, many made the decision to accept these benefits instead of risking their health driving during the pandemic. Many drivers even discovered that with the increase in unemployment pay during the peak of the pandemic, they were actually taking home a comparable amount of money to what they were making driving, while also minimizing their risk of contracting the virus. Additionally, it’s estimated that 105,800 trucking companies received PPP loans, which saved a reported 737,773 jobs in trucking, according to an analysis by FTR Transportation Intelligence. However, it’s unclear how many of these drivers and companies whose jobs are being supported by PPP loans are continuing to run. The Drug and Alcohol Clearinghouse The trucking industry saw thousands of drivers exit after the Drug and Alcohol Clearinghouse went live in January. The Drug and Alcohol Clearinghouse is a new database that contains information pertaining to violations of the U.S. Department of Transportation (DOT) controlled substances (drug) and alcohol testing program for holders of CDLs. The Clearinghouse provides FMCSA and employers the necessary tools to identify drivers who are prohibited from operating a CMV based on DOT drug and alcohol program violations and ensure that such drivers receive the required evaluation and treatment before operating a CMV on public roads. The CDL Drug & Alcohol Clearinghouse removed 40,000 drivers, about one percent of the driving force, from January to September due to failed drug test results, most of which were from marijuana use. Of this group, about 80% have not yet started the return-to-duty process. If the Department of Health and Human Services publishes a hair follicle testing rule, it’s estimated that five to 10 times as many drivers will become ineligible for employment. However, many large fleets have already adopted hair follicle drug testing. CDL Schools Being Closed Another contributing factor to the current lack of drivers is that fewer drivers have been going through training schools due to limited seating capacity from social distancing. Driver schools are graduating 30% to 40% fewer drivers, and it’s estimated this will result in tens of thousands of drivers not entering the labor pool this year. Furthermore, 71% of fleets halted training programs, according to an NTI survey. In 17 states, the backlog to get a commercial learner's permit is 30-90 days, with social distancing and COVID-19 prevention measures causing delays. About 20% of truck schools are still closed, and the remainder are graduating fewer students due to social distancing. It’s unclear how many of these schools are just closed temporarily and how many have been closed permanently. Rates & Pay Increasing in the Spot Market Due to the decrease in truck capacity, spot market rates have increased to near-record highs over the past several months. According to DAT Freight and Analytics, the national average for van rates set a record high, hitting $2.38 in September. This is six cents higher than the previous high mark set in June 2018. This has caused many drivers to obtain their own operating authority to try their hand in the spot market. These drivers aren’t leaving the trucking industry altogether but they are leaving the pool of drivers available to be brought on by fleets and carriers. According to FTR, the third quarter saw new motor carrier registrations increase by nearly 10,000, which is an all-time record. As mentioned earlier, with cases increasing and the threat of stricter lockdowns across the country, who knows what will happen to the spot market over the next couple of months. Drivers who recently obtained their own authority could be looking for work with a carrier sometime soon. What Can Fleets do to Bring Drivers Back? Unfortunately, a lot of the problems laid out above are out of the control of the fleet. There are going to be drivers who aren’t going to come back until they feel safe from the virus. Many fleets have already implemented increased safety protocols for their drivers in order to decrease the health risks they face when on the road. But for some drivers, this isn’t enough, and they will stay off the road until a vaccine is available and the threat of the virus has significantly decreased. Additionally, fleets have little control over drivers being lost due to the Drug and Alcohol Clearing House and drivers not being added due to CDL Schools being closed. However, there are still things fleets can do to recruit drivers. Even though capacity is low, there are still drivers out there, but the recruiting battle to land these drivers will likely be fierce heading into Q1 2021. CCJ recently released an article written by Richard Stocking, the former president and CEO of a large trucking company, and who is currently the founder and CEO of a transportation consulting firm that helps fleets with strategic operational improvements and M&A activity. In his article, Stocking lists out a few strategies fleets can consider using to improve their recruiting. Here is a summary of those points: Update your business model to embrace a younger and more diverse workforce. Predictable work. Predictable pay. More home time. It’s time for carriers to start thinking differently to improve efficiency for drivers (Richard goes in-depth on this point in the article). Shippers and receivers need to be part of the solution by keeping their commitments. Stay focused. Just because we’ve done something one way for decades doesn’t mean we should keep doing it that way. The current freight and rate environment has given us an opportunity to push for improvements on behalf of our drivers. You can read the full article by clicking here. Think about these different strategies and see how you can implement them into your own driver recruiting and retention strategy. Truck driver capacity was a problem long before the pandemic and will continue to be a problem after the pandemic as well.

There will always be several factors you have minimal control over with your expenses, but fuel is one thing that you can control (to a certain degree). Here are some things that you can do to reduce your fuel costs right away: Check your RPMs. Many times you hear the advice to lower your speed to save fuel. However, if your truck is geared to operate at high speeds then you need to be running at those high speeds. Play around with different RPMs to determine where your sweet spot is and try to operate in that range of RPM. Make sure your tires are inflated to the proper levels. Having improperly inflated tires can increase the amount of rolling resistance that you have and reduce your fuel mileage. Use Progressive shifting. Shift at low RPMS in order to reduce the amount of fuel used between switching gears. Cut idle time. If you know it’s going to be hot over your 10-hour break, it may be cheaper for you to go park at a movie theater and see a movie for 2 to 3 hours than to idle for the same amount of time (keep in mind that this reduces wear and tear on your truck as well). Here are some additional ways you can boost fuel mileage. Some examples require an investment, but often times pay for themselves over the course of the year. Consider getting an APU. If you are leasing your truck make sure that the lease paperwork allows you to have an APU installed in your truck. This can save you a significant amount of money both in fuel and in maintenance. Consider purchasing low rolling resistance tires. The more surface area you have on the road, the more friction you have and the more fuel you burn. Purchase trailer skirts. Trailer skirts can help reduce your air resistance, but only if you own your own trailer should you consider this option. There are several types of wind resistance upgrades that you purchase for your truck or trailer. I recommend that you find the solutions that work best for you. Keep up with preventative maintenance. If your truck is not able to function properly then you will not be able to get the maximum fuel mileage. Consider a truck upgrade. There have been several improvements to fuel efficiency since 2012. You may incur more of a payment for lease, but you will want to weigh that against potentially lower maintenance and reduce fuel cost as well. Small changes can make a big difference over the course of the year. There is no simple one size fits all method for boosting your fuel mileage, but with careful testing, you can find what works best for you and your truck.

When you want to sell your service, you won’t be able to persuade anyone to work with you until you fully understand what it is that your customer wants and what your competition is providing. Once you understand this, you can then sell to them with the knowledge of what you can provide that your competition can’t. Find out what makes your business unique from the competition. The more you know what you’re able to provide that the competition can’t, the more effective your sales pitch can be. Get to know your competition and find out who they are, what they provide, and what they charge to provide it. This can help develop a stronger awareness of what you should offer and how to make your services stand out. You want to then emphasize the benefits of using your service and how you provide solutions to challenges the competition isn’t able to provide. Ask your current customers why they work with you to find out why you earned their business and if it was for the same reason you thought. Anticipating the future needs of clients and staying current with the market will make you better able to continue to assist them. Keep in mind that when making a sales call to a potential client, they are most likely using a competitor. This is why it’s important to know who they are currently using, if they are satisfied working with them, and how they can benefit from working with you instead. Here’s where you will need to make sure you have a grasp of your benefit offerings, price, and how your business can serve this client. Trucking is a business where it’s easy to replicate the services in most cases. Same truck, same trailer, same routes traveled, etc. However, there are still areas where you can separate yourself. A few examples can be: Cost - Do you charge less than your competition? Timeliness - Are you always on time and able to get the load delivered quickly? Safety - Do you have a clean safety record? Professionalism - Do you treat the client and the load in a professional manner? Location - Are you located near the customer? Part of finding an advantage in your business can be unseen by the customer. These include items such as fuel efficiency, operation costs, increased tire life, as well as decreased office and administration costs. Advantages can include better load trip planning and less deadhead. Each day we need to work to streamline our businesses to increase profits and lower costs in order to provide a service that differentiates itself from the competition. If we stay stagnant without constantly learning about new products and ways to keep ourselves ahead of the competition, we will become complacent and our competition will pass us. If you don’t keep competing or striving to do better, your business will not remain relevant in the marketplace. It would be nice if every time we figure out how to load more, how to go faster, and how to be more efficient that there would be a direct correlation to making a profit. Increased revenue is not always the outcome - sometimes it is just keeping that customer as part of your portfolio. The forces of supply and demand always keeps profitability in check. Trucking customers, the shippers, are always looking for value added services. At the same time, they are not usually looking for higher freight rates. There are, however, value-added services that can be incorporated into your business model with little or no cost. A simple example of this that was mentioned earlier is kindness and professionalism. Take the time to learn about them, their family, pets, hobbies, and background. Always follow up and stay in touch with your current or potential clients, even if they have not worked with you in a while. This will help them to not forget about you and your business. Place a phone call just to say hello or take them to lunch to catch up if you have not connected in some time. Staying in touch shows you care and can keep you current on their business needs. Not every value-added service needs to come with you cutting costs or spending additional money in other areas. It’s up to each business to be able to succeed and flourish, the key here is the competition waits for no one. If you continue to run business as usual for an extended period, your rivals will be in a position to overtake your business's competitive advantages or you will never be able to catch up to the competition. You are only as good as you were yesterday. You don’t want to be put in a position where the customer says “They were great at one time”. Resting on your laurels and becoming complacent can bring the largest or the smallest of businesses to their financial knees.

The impression that I get when I speak to drivers about potential automation in trucking, is one of skepticism and denial. While robots might not be able to replace humans anytime soon, I believe hybrid models may become prevalent. One such possibility may be robot team driving. What would HOS regulations look like if an owner-operator has the truck on autopilot for 10 hours? Safety and regulations may get to a point where one person could run the truck 24/7. Also, having a driver in the truck to do inspections, fuel, and back into docks is logical. The productivity potential is there. Imagine a land train with a single driver operating three, five, or even ten trucks going down the interstate. The driver could pilot the first or last truck, and be able to supervise the equipment. This concept also lends itself to aerodynamics and fuel efficiency as the trucks could be synchronized to have a closer following distance, reducing wind resistance. With increased productivity and fuel efficiency per driver, profit could be made at lower rates. This would give the owner a clear advantage over the competition without such technology. It should be noted that it's not just drivers who are at risk of losing jobs. Automation has the potential to replace many different aspects of logistics. Think brokers, dispatch, and load planners. All these, and more, are replaceable with innovations in technology. Being adaptable in a constantly changing environment is not just how we will survive, but thrive. My final thought on this topic is that this technology should be embraced with eagerness and curiosity, as the potential that it holds is enormous.

By: Todd Amen, President and CEO of ATBS As Bob Dylan sang in 1961, “ The Times, They Are a-Changin’ ”. The big thing we can take away from a 60 year old song is that the times do change. We’ve been in a robust bull market that has favored truckers for almost two years. In fact, history will show that nearly every segment of trucking has had record earnings during this time, from company drivers to Owner-Operators as well as trucking companies themselves. During times like this it’s natural for businesses, big and small, to become hyper focused on revenue. Companies get more choosy over the loads they take, the rates they accept, the lanes they run, and the customers they do business with. All of this is in an effort to maximize revenue at a time when their services are in high demand. This typically leads to companies forgetting about the expense side of their business, and they stop managing the business as a whole during boom times. By some accounts and recent media stories, the times are changing. Reductions in spot market loads and rates can be considered leading indicators that the market has moderated and things are going to slow down a little for truckers moving forward. Some of this news gets sensationalized into headlines that say there will be record bankruptcies and all the small independent businesses created during the boom will go bust. Having been in business for nearly 25 years, and having lived through multiple “changing times” with over 150,000 small business owner-operator clients, we know much of the negative news is simply headline hogwash. But that doesn’t mean we don’t need to react to changing times. Are you a self-employed truck driver that needs help with your bookkeeping, accounting, or taxes? Click here! In early March 2022, we saw one of the greatest shocks to the trucking industry that’s ever been experienced. Fuel, the number one cost for an owner-operator, spiked by $1.15/gallon in a two week period. This led to an average 20 cents per mile (approximately $400/wk) increase in operating costs. The previous largest two week spikes in fuel were a $.40/gallon increase in 2005 from Hurricane Katrina, and then again in 2008 at the beginning of the Great Recession. So our spike this March was 3X larger in magnitude than any previous experience. Understandably, this led to some small business owner-operators saying they couldn’t sustain the cost increase, and they were going to either park their trucks, give them back to the banks, move from the spot market to a stable carrier, or return back to being company drivers. Fortunately, fuel has since leveled off giving fuel surcharges and market rates a chance to catch up to the increased cost. Prior to this extraordinary fuel spike, the consensus was that 2022 would be another really good year for trucking. Most of those fundamentals are still in place, but there is a great unknown on what rising interest rates, high nationwide energy and fuel costs, and overall record inflation will do to our economy. There is little argument that over time these negative factors will decrease consumer purchasing power, thereby reducing demand for goods and services. This ultimately means less freight being shipped on trucks. The big question is when and how long until we feel the impact? Either way, the times are likely changing. So what does this mean to you, the small business owner-operator? It means you get to exercise your right as a business owner to manage your business. The good news about being a small business owner is that you can take action today that will impact your business literally overnight. If you are a large business with thousands of trucks, taking these same actions is like turning the Titanic, it literally takes months or years to make big business shifts. So let’s consider some actions you can take today to positively impact your business: 1) Change your mindset from focusing only on revenue (high paying loads in very specific lanes) to a more all-encompassing business owner mindset. This involves a more comprehensive look at the revenue generated as well as managing the cost side of the business to maximize your bottom line. 2) A more comprehensive revenue mindset Consider running lanes and routes you haven’t previously Don’t just focus on the highest rate per mile; focus on generating the most revenue per day over a sustained number of days. This may include accepting some substandard rates that get you into a market where rates are higher. Don’t sit and wait (layover) hoping for a better rate the next day. The average O/O has business and personal fixed costs of $240/day. If you sit 2 days waiting for a load that pays more per mile, you’ve dug yourself a hole of $480 that is harder to get out of. Manage deadhead and out of route miles. When loads were paying over $3/mile and fuel cost $2.75/gallon, it might have made sense to deadhead further for a higher paying load. Today it’s reversed, loads are under $3/mile and fuel is over $5/gallon so your cost to deadhead is much greater for lower pay. Run an extra load every week or every other week. In 2021 the average ATBS owner-operator ran 8% less miles because they were making more money with high paying loads. When things start to slow down, we all have to work a little harder to make the money we desire. 3) Manage your costs Understand your fixed and variable costs and how they play into your breakeven point. These are complicated calculations that your ATBS Business Consultant can help you attain from your ATBS Profit Plan and monthly Profit and Loss statements. You can reach our ATBS business consultants at 888-640-4829. Fuel has quickly become a cost you need to manage every single day Take advantage of fuel discount programs! Programs offered through your fleet if you are leased on to a carrier Programs through independent networks Get better Miles Per Gallon There are tons of strategies to maximize fuel economy The two highest bang for your buck strategies are to slow down and to idle less. With fuel over $5/gallon, managing these 2 areas can easily result in saving over $10,000/year. Maintenance costs have spiked up to $.12 - $.18 per mile. If you are leased to a fleet, take advantage of their buying discounts for parts and labor. If you are independent, shop and negotiate with a specific maintenance facility that will provide you discounted quality service. Look at all other costs and consider which ones are necessities and which ones can be trimmed or cut. A motto passed down from our grandpa who was a farmer is “tough times never last, but tough people do!” We are currently far away from tough times, but it does feel like “ the times are a-changin’ ” a little. It is always best to think ahead and be prepared. Don’t hesitate to reach out to ATBS if we can help with your business in any way.

Fuel: What does it mean to you? For many owner-operators, fuel is simply their largest annual business expense - a necessary evil on the path toward earning a living in trucking. However, when you dig deeper, fuel can mean different things to different drivers: Beyond being a large, unavoidable business expense, fuel is an owner-operator’s biggest controllable expense. This gives you the opportunity to manage it in different ways depending on the economic dynamics you are in, as well as what is most important to you in your business and personal life. Some see fuel as an expense that can essentially be ignored during times of high freight demand - potentially leading to higher revenue and profit. For others who understand and manage their business costs well, fuel can be an expense that can be used to justify spending more time at home instead of on the road. While still others work hard every day to minimize their fuel cost and save the most money possible on their biggest expense. At ATBS, we see fuel as the single most dynamic expense that owner-operators manage while running their businesses. We’re introducing a new 12-part series - this being part one - discussing fuel and understanding what it means to you and your business. We hope you’ll follow along in our series to gain a better understanding of fuel and how it affects the businesses - and lives - of owner-operators. Here are a few subjects we’ll be covering in the 12-part series: Why are fuel prices increasing, and what to expect in the near future regarding prices How to understand and analyze your biggest expense (fuel) as a business owner Comparing your fuel spend vs. other owner-operators and industry trends Learning great habits to help you reduce fuel costs How trip planning affects fuel, and how to maximize daily revenue for your business Resources for fuel cost reduction Understanding fuel surcharge and how it affects your business’ cash flow Our goal is to help you understand what fuel means to you and help provide you with the tools and knowledge you need to maximize its value for your business. To read the next article in the series, click here!

Why is the Price of Fuel Going Up? In recent weeks, U.S. fuel prices have skyrocketed to record highs and are expected to continue rising. What are the factors contributing to this? There isn’t a single answer, but like the price of any commodity, it’s based on supply and demand. Below are a few factors impacting rising fuel prices. Production: At the beginning of the pandemic, petroleum refineries reduced output as the economy slowed. Output has not yet ramped back up to pre-pandemic levels. Inflation: Overall U.S. inflation rose at a 7.9% annual rate in February, and consumer prices are the highest in 40 years. The cost of all commodities is rising. Fuel oil increased 43.6% on an annual basis, the highest inflation rate of any expenditure category listed in the U.S. Bureau of Labor Statistics table for consumer prices. The post-pandemic economic recovery has left many households with extra cash. The tight labor market also allows workers to earn more money by working more hours, running additional miles, and earning higher wages or per mileage/shipment pay. Continually Loosening COVID Restrictions: Commuters are returning to the office, air travel has picked up, and people are vacationing again. While we all want things to go back to normal, this sudden surge of fuel usage is not being met with enough supply. This directly causes prices to go up. The Crisis in Ukraine: Russia is one of the biggest oil producers in the world. After its recent attacks in Ukraine, many traders, shippers, and financiers shunned Russian oil. Furthermore, the U.S. has now imposed sanctions on Russian oil. Last year, around 8% of imported U.S. oil came from Russia. There are several other factors that are pushing the price of fuel up and up. But the simple economic reality is that demand is outpacing supply. We should expect prices at the pump to continue to rise for a while into the future, and with that, owner-operators should be prepared to adapt and pivot in their businesses to compensate for the higher expense. What is a Fuel Surcharge? A fuel surcharge is a mechanism in the trucking industry that helps balance the fluctuations in the cost of fuel. Incorporating a fuel surcharge into transportation pricing became a widely accepted practice years ago. For those who have been in the transportation industry for a while, you may remember that fuel spiked above $4.00/gallon for the first time in U.S. history after Hurricane Katrina. This spike in fuel prices may have put the trucking industry out of business if fuel surcharges hadn’t offset the additional cost of fuel. In today’s world, there are a variety of sources for fuel information, and the fuel surcharge is calculated in many different ways. For simplicity, we will look at one of the most common methods to calculate fuel surcharge based on today’s numbers. An example of a common formula is listed below: Fuel Surcharge = [the current price of a gallon of fuel - the base price of a gallon of fuel in a shipping contract] / the average miles per gallon of a truck National Average on 3/11/22 = $4.85 Base Price = $1.25 $4.85 - $1.25 = $3.60 $3.60 / 6.5 mpg = $0.55 CPM fuel surcharge This surcharge helps owner-operators offset the costs of high fuel prices, especially in times like these. Read more about how Fuel Surcharge works here. How Can You Make More Money with the Fuel Surcharge? You often hear Independent Contractors who say they “make money” off of fuel surcharge. The higher the price of fuel, the more they make! How can that be? To win this “game” you have to get better fuel economy than the miles per gallon (“mpg”) the fuel surcharge is based upon. Let’s look at these examples of a 1000-mile load: As you can see from the chart above, the better your miles per gallon, the more you save on fuel, and in most cases, you actually make a profit from the fuel surcharge. Please keep in mind that the calculations above depict just one example of how fuel surcharge could be calculated - actual calculations may vary significantly. How Can You Modify Driving Habits to Save on Fuel? As a truck driver, you actually have a lot of control over how much money you spend on fuel. There are several ways you can modify your driving habits right now that can put extra money in your pocket. Slow down - generally, 10 mph equals 1 mpg Find the “sweet spot” - lower RPMs burn less fuel Be smart with braking Stay in higher gears when possible Think about and use your tractor’s momentum when possible Utilize cruise control when it is safe to do so Cut out of route miles Minimize idling To learn more about each of these topics and put these practices into action, read our article here. How Can You Manage Cash Flow with Rising Fuel Costs? As an owner-operator, one of the most important pieces of your business that you need to manage is your cash flow. How much money (cash) you have coming in, versus how much money you have going out for your business and home expenses. When fuel prices are high, this becomes even more important. Read more about when you should fill up your tank, the dangers of cash advances, and how to plan your fuel-ups accordingly, by reading our article here. How Can You Optimize Fuel Using Discount Networks and Fuel Cards? If you’re hauling freight for a carrier, stay within their fuel network to take advantage of their negotiated discounts. If they offer a fuel optimizer program, take advantage of that too. Thanks to the ever-growing list of fuel cards and smartphone apps, owner-operators have the tools needed to ensure they are paying the lowest price possible for fuel during their next fill-up. Fuel cards are designed to offer carriers and drivers per-gallon discounts on fuel and other services specific to trucking. There are many different types of fuel cards offered by a variety of companies. Some fuel cards are offered by truck stops, some are offered by fuel providers/oil & gas companies, some by trucking and driver associations, and others by companies whose only service is their fuel card. Based on conversations our team has had with our owner-operator clients, ATBS is able to list a few fuel cards that we often hear about: NASTC Quality Plus Network P Fleet CFN Fuel Card OOIDA’s Truckers Advantage Fuel Card EFS Fleet Card RTS Fuel Card Program Axle Fuel Card For more information about fuel card discounts, check out our article here. The Bottom Line There is no denying that fuel is going up and you will need to adjust how you do business. Rates are still at an all-time high, and you can still make great money as long as you manage your biggest cost. As fuel rises, you might need to take an extra load to compensate for the lag in fuel surcharge, but the best operators will do just as well, if not better, with the high price of fuel!