Trucking Tribulations

If you ship scrap by truck, you know the pros and cons.

On the plus side, trucks are great for short- to medium-distance deliveries and pickups. In those cases, they’re faster, more practical, even less expensive than other modes of transportation. Trucks can also enable you to respond quickly—especially if you own your own fleet—and, thus, provide better customer service to your suppliers and consumers alike.

On the downside, trucks can be expensive to maintain. Qualified drivers can be difficult-to-impossible to find. There are the perennial concerns about on-the-road safety and accidents. And if you contract out for trucking services, you can’t always guarantee that your deliveries or pickups will be made in a timely fashion.

Whatever their pros and cons, though, trucks are and will remain one of the three main ways of transporting scrap, along with rail and barges or ships. Every year trucks carry an estimated 6.5 billion tons of freight—including scrap—to destinations across the United States, according to the American Trucking Associations (Alexandria, Va.), and that tonnage figure rises each year.

With all that freight being toted across the nation’s highway system, it shouldn’t come as a surprise that the trucking industry and the businesses that depend on it—including the scrap recycling industry—face a number of challenges in making sure there are minimal hassles in going from point A to point B.

Trucking’s Driving Issues

Every industry has its share of challenges, and the trucking industry is no exception. Traffic congestion, maintenance, driver quality and loyalty, and competition from other modes of transportation are just a few of its biggest concerns.

At the top of the heap, however, is safety. “No matter what you’re dealing with in trucking material, it all gets back to safety,” states one scrap traffic manager. “And that’s the way it should be. Our families are out there on the roads too.”

Maintenance Matters. You can’t talk about truck safety without talking about trucks’ road-worthiness. The trucking industry has received its share of bad press about the sorry state of some trucks on the highways. The fact is that truck safety begins with the trucks themselves and how they’re maintained. This is a critical point to understand whether you own, operate, and maintain your own fleet or contract out for trucking services, say experts.

According to Paul Gold of Transportation Consultants Inc. (Atlanta), many scrap companies tend to look at the capital investment associated with their trucks rather than the long-term costs. To reduce their capital investment, many scrap companies buy used trucks rather than new ones and sometimes fail to consider the higher costs of maintaining used vehicles. Also, since truck maintenance isn’t the focus of scrap companies, it’s not always given as high a priority as it demands, he says. It’s a dangerous approach, Gold warns, to save money by buying a used truck and then operating it without investing in proper maintenance.

A good place to start addressing the maintenance issue is to create a maintenance guide and program for your trucks similar to those for other equipment, says a scrap processor. Though you may think it’s more important to pay attention to production-related equipment such as your baler, it’s equally important to take care of your trucks, he says.

One of the challenges the scrap industry faces in the truck maintenance area is attracting and keeping good maintenance technicians and mechanics. As with most employees, maintenance specialists will generally go where the money, benefits, and opportunities are the best. Unfortunately, the scrap industry can fall short on these measures. To attract and retain qualified maintenance employees, therefore, you may have to increase wages, offer better training, and more, Gold says. Though this may cost you more, the net result will be better maintenance personnel who are more likely to stay on staff.

Scrap companies that contract out their trucking aren’t exempt from being concerned about safety. “Some smaller scrap companies tend to go with the cheapest carrier they can find, without regard to its reputation or maintenance and safety records,” says a scrap transportation manager. Though some processors may think they don’t have the right or wherewithal to evaluate trucking companies, they should definitely visit their carriers’ offices and observe their maintenance procedures and facilities, he says, noting, “You don’t have to be an expert to recognize responsible and thorough maintenance.”

Finding Drivers. Of course, well-maintained trucks are only as good as the drivers who operate them. The problem is that qualified drivers are a precious, in-demand commodity. The American Trucking Associations, in fact, ranks the driver shortage as the trucking industry’s top concern and has launched a number of programs to attract and train new drivers.

One explanation for the dearth of truck drivers is that they must, by federal law, pass what some in the industry regard as rigorous drug tests. Plus, they’re subject to random drug and alcohol tests, must be certified every two years as physically and mentally fit, and adhere to legally mandated daily work-time limitations. All of this has the effect of “culling the herd” of potential drivers, says one scrap processor. And since qualified drivers know they’re in hot demand, especially with the economy doing so well and unemployment so low, it can be challenging to retain them when offers of better pay or improved working conditions beckon. So, as with good maintenance staff, it behooves scrap processors to treat their good drivers well to keep them loyal.

The Going Rate. No discussion of transportation would be complete without talking about shipping rates with contract carriers. 

You can bet that most transportation managers who negotiate shipping for scrap companies would say that contract trucking rates are too high. However, the real issue isn’t the rate, but whether shippers are getting the most value for what they’re paying. Part of the problem, says Gold, is that scrap processors may not know how much they should be paying for particular trucking services and may not feel confident enough to negotiate better service. If you don’t feel comfortable doing this, a transportation consultant can help you negotiate rates and services with carriers, he says.

However tempting it might be to just look at cutting costs by negotiating lower rates, another scrap transportation expert recommends looking beyond the basic cost of transportation and instead viewing it from an aggregate perspective, taking safety into consideration. According to this industry veteran, the trucking industry needs to raise rates to both retain good drivers and maintain truck fleets properly. 

But trucking companies are reticent to raise rates to “where they should be” for fear of alienating customers. “They may be afraid of losing business, but because of the low rates, the trucking industry in general is suffering from poorly maintained trucks, many of which shouldn’t be on the road,” he says. “The bigger, more important issue is whether the rates are enough to run the fleet safely and efficiently and keep good drivers behind the wheels of good trucks that we want on the road.”

Another scrap industry transportation manager concurs, adding that “squeezing rates down to the penny isn’t worth it if the trucks on the road are unsafe. All it takes is one accident, and then how would you feel about saving a few pennies on your shipping contracts?” What all too many companies don’t realize, he says, is that paying a little more for shipping material is worth it if it means the trucks are safe, maintained properly, and driven by top-notch drivers. “You absolutely must think about safety and ask what you would want to be on the highway with you and your family,” he says.

Toward that end, it’s a good idea to evaluate your carriers from time to time. Take the time to visit them, says the transportation manager—see how they operate, visit their maintenance facilities, ask about their financial situation, and look into accidents, driver turnover, and driver experience. After all, he adds, “they’re sharing the highway with us, so you want to make sure they’re qualified to do so safely.”

Rail Rivalry

Now that the railroads have gotten themselves back on track, so to speak, after several years of mergers, consolidations, divisions, and general shakeups, they’re poised to make a comeback and woo freight business away from trucks.

For years, the trucking industry has lobbied for permission to carry more weight to increase its competitiveness with the railroads. But one scrap industry executive says trucks already carry too much weight. The U.S. highway infrastructure simply wasn’t designed to bear trucks hauling excessive weight, he says, adding that even with the current weight restrictions, the highways are in shambles.

Meanwhile, truckers face ever more congested roadways and associated road rage from other drivers. The result is that many car drivers want trucks off the road, or at least restrictions on trucks in particularly snarled traffic zones, during peak driving hours, and in bad weather.

So the railroads are positioning themselves to capitalize on the general public’s discontent with the state of the nation’s roads and, ultimately, to garner business from the trucking industry. Trucking companies are responding with improved services and individualized service advantages compared with rail service. Also, truck fleets are using improved technology such as satellite tracking to ease communication and help simplify dispatching and billing.

Truck manufacturers, meanwhile, are hard at work designing a lighter-weight but heavy-duty trailer that can haul more material while still remaining within highway weight restrictions.

While it’s too early to tell how this new battle between trucks and rail will end, several scrap executives say that when the dust settles, more scrap and other materials will be shipped via rail. “I think that’s what should happen,” says one manager, adding that it’s a good idea to “let material go where it’s supposed to go and let the market forces take over and dictate the proper shipping method.”

It’s a Service Thing

Every successful scrap processor knows that customer service is a top priority in today’s business world. They also know that on-time pickup and delivery are among the most important components of customer service in the scrap industry. Processors frequently discuss the latest in time-based strategies for pleasing customers, with quick-response and just-in-time delivery becoming more than just buzz-phrases. 

With customers upping the ante on service and scrap processors having to go that extra mile to stay competitive, it’s important to consider what challenges your trucking operation poses—whether you operate your own fleet or contract with a trucking company—and come up with a set of ways to improve this aspect of your company’s customer service.

A good place to start is by evaluating your trucking operations as a separate cost center of your overall business, says a scrap processor who oversees his company’s truck fleet. Look at not only how much trucking is costing your business in dollars, but whether or not the approach you’re using—managing your own fleet or contracting out—lives up to your expectations and your customers’ expectations, he says. Is this an aspect of your business in which you rise above the competition? Or is it merely adequate at best? What can you do to improve on this aspect of customer service so that you keep your customers happy and retain their business?

Don’t expect to find glaring problems: Your business probably wouldn’t be functioning if your shipping system was a complete mess. “All in all, the system works pretty well and the changes we’ve seen over the years from the trucking companies have generally been enhancements,” says a Midwestern scrap transportation veteran. Another transportation manager agrees, noting that service, responsiveness, and communication have generally improved over the years and that “anyone who is willing to take the time to negotiate and improve their relationship with their carrier can do so and enhance their service.”

That said, the Midwestern manager adds quickly, “Nothing is perfect, and certainly anything to do with transporting goods can never be totally perfect. You just have to accept this.” Even the best systems will go “haywire” occasionally, he says, and there will be “pockets of desperation” from time to time with any company’s transportation arrangement, just as there is for any other aspect of the business.

Despite those haywire moments and regardless of what happens in the railroad-vs.-truck wars, truck rates and weights, driver availability, and so on, trucks will remain an essential transportation mode for scrap shippers, especially for short-to medium-distance deliveries.

If you manage your own fleet, the trick to trucking success lies in operating well-maintained, safe, efficient trucks, attracting and retaining qualified drivers, and meeting customer demands for on-time pickups and deliveries. If you contract out your trucking, your goal is to ensure that your carriers meet the above criteria and that you’re getting the best service at the best rates.

No one said shipping scrap by truck would be easy. But it can be successful if you follow these tips. •