The Hidden Costs of Managing A Fleet

Welcome everyone. Thank you for joining us for

today’s webinar. My name is Emily cash with

the freightwaves media team and I’m happy to present this webinar and

partnership with best pass.

Today we will discuss useful ways for

fleets to control this cost this year Meet the

challenges of growing business and more.

Happy to be joined by our moderator Thomas Watson Enterprise

Trucking carrier expert at freightways and

dialing in with us. Today. Is Joe clavel

VP of Business Development service providers

and Partners at best.

Thomas will also be moderating a live Q&A following

the discussion. So make sure you have your questions ready for him.

Before we get started. I’d like to cover just a couple of housekeeping items

first. If you have any issues during the webinar, please

feel free to reach out to our team view the audience chat function

in your webinar console. If you have any questions that

you would like to ask our presenters, please enter those the Q&A

box in your console and we will answer as many of those as possible

during the live audience Q&A following a

discussion.

We will also be sitting over a link to the recording of This webinar

tomorrow in case you like to view it on demand or

share your colleagues.

At this point I’ll go ahead and turn it over to Thomas to

kick off today’s discussion.

Thank you so much Emily. Welcome everybody. This is indeed a

webinar talking about the hidden costs of managing a

fleet. What is draining your profitability? We’re gonna

go as Emily said earlier myself. I am indeed Thomas

Watson Enterprise Trucking care expert here at Freight waves

joining me is gonna be Joseph clavel with best pass just

got a lot of experience over 20 years in Commercial Banking ten

years and tolling and transportation Industries gonna be

joining us by phone for this so you’re gonna see

some slides in my wonderful face, but I promise you Joel is

Joseph is here with us as well gonna

have a lot of great insights. We’re gonna go there a little

housekeeping now time to check out the agenda. We’ll push

this over. So what are we gonna be looking at today? We’re

looking at top expenses, of course.

Budgeting and forecast we have a poll coming up

as well in the next few slides and additionally

takeaways and cost how

it’s going to impact your bottom line. And then the final 15 to 20

minutes of this one hour long webinar will be devoted

towards Q&A. So if you have any

questions as well just as Emily said earlier do not hesitate

to put them in that chat box over there on the

corner. So diving right in here as well biggest

basis here is going to be a report

one of my favorite ones Atri op Fleet

expenses. And what does that mean for you? We’re

gonna go over first fuel, of course, we’ll

have lease payments. There’s going through the slides repair

and maintenance insurance premiums driver wages.

It’s like Jeopardy and the final one

The Daily Double permits and licenses. So

before I pull in Joe would like everybody to check

out this poll. Now, this is the first time I’ve done a pole

function. So we’re gonna give it about two minutes. How confident

Are you in the forecast and budget for

your Fleet this year those of you who do

have fleets take some time and it should be interactive.

So when you get about two minutes push one

of the buttons and what’s really cool is as you

are filling this out if anyone has trouble submitting it

definitely type it in the chat. It will show us the results. So

first time I’ve done this don’t be

a stranger if you’re confident in your budgeting

for your Fleet or anything Fleet related here,

you know.

We’re definitely looking at that I’m gonna pull in Joe as well while we’re

filling this out Joe. Tell us a little bit about especially

this ATR report.

Is there anything that you really enjoy when looking at this coming

from your perspective like what are some of the things that

Usually strike you in terms of General talks.

Story comes I think the last part the strike me in terms of what?

Oh, what are some of the biggest things especially that you look

at coming from the ATR report, you know fuel expenses tolling

there’s anything off the top of your head. What do

you normally hear about most folks? We’re looking

at operational costs.

Sure some so my role with that passes dealing

with I’ve kind of one foot with some fleets and

and my other foot is in with a toll agency and so

often it’s like looking in a mirror some of the human costs that

fleets have dealing with tolls and violation. The

total agencies have the same problem and

cost as well with human costs, which is not the cost

of the tool but the cost of processing violations dealing with

issues reconciliation of statements keeping things

up to date. So those are often the cost that

while toll is not as high as fuel. Let’s say

our maintenance. There’s a lot of human costs in administering operating

a fleet and toll violations that sort

of thing are aware I play and what I

what I see a lot of pain and frustration

Because a lot of police are not full experts.

Understandably, so I was not a tall expert

and I worked in trucking fleets. I was very lucky. We had other people working through

1. So I’m gonna be learning a little bit too along this webinar as well.

We’ve got about 29 submitted here.

Very good amount gonna give it about 10 more seconds.

If anybody else wants to add in some more

feel free to choose one of the bubbles and

then I’m pretty confident. I just click on this next slide here

and we’re gonna see what the response is

are. So bear with me. This is

the first time I’ve gotten to use the poll. Boom. Look

at that. How confident in your forecast and budget for

are you for your Fleet? So those of you

joining us with just audio 54.8% of

respondents. This is the top one slightly optimistic with

the budget this year coming in second. We are

very confident in forecasting budget at 22.6 third

place no forecast or budget 16.1

and finally 6.5% of

respondent says we have a budget

But are at all confident in it, so pretty slightly

optimistic seems pretty good. But that

does leave a lot of room for improvement Joe. What

do you normally hear as well when you talk to clients and

folks about how do you even manage to

try and wrap your head around this thing?

Well, I think you have to start somewhere. So my 20 years in banking

often you start in the back of a napkin and start ballparking

your costs. And then you don’t as technology comes

along you get more tools available to help you budget and

forecast and

there’s knowledge is power. And so I

think you know knowing what your costs are and where you may be able

to cut them as is a real powerful thing. So where you start

and where you finish your off in two different things, but just knowing

what’s your costs are and where you may be able to trim some some overhead

is likely a great idea.

I like the over a little over half a

respondents are slightly optimistic. I feel like half the battle

just trying to even figure out your costs in this environment. So hopefully

this webinar will provide some use we’re

going to dive into our next slide here as

well. We get this pulled up and let’s

dive in budgeting in forecasting. So,

you know, give them the respondents a lot of opportunity for

us to provide some value today with this webinar. And

the first thing is understanding fixed and variable

costs Joe you came from banking as well,

you know a little bit more than I do about this, especially if

you are a fleet or even anyone within the

supply chain, is this a big challenge trying to

figure out which one goes and which bucket or do they ever swap out

in the fixed can turn into a variable?

Yeah, I think sometimes they can you know, you can have fixed price

contracts on a number of different things and variable are

one often people have to consider, you know,

again the human cost which will go into but and then

you know looking at is it a cost that

we should do internally or something. Should we hire an expert

and doing we’re talking about home renovations earlier, you know,

I have to do two rooms and on a couple properties. Yeah,

I could have done to myself but we’re taking me

a long time. They could have arraigned in there and cause more damage. So I had professionals. So

sometimes you have to look at your your cost

space and what your options are as well.

And looking at fuel maintenance permits and tolls those

are the biggest examples of variable costs fuel feels

like you don’t have as much you have some control

but the permits and tolling part. I know Best Buy

specializes in it for folks who don’t understand how this

thing works. Is this a situation where you know,

it’s kind of a hidden cost in terms of it’ll just catch up

on you. If you’re not paying attention. I’m assuming you use too many toll roads

in the next thing. You know, you get a Big Bill in the man.

Correct. Yeah, there’s about 65 toll agencies across North

America. And so keeping them all up to date dealing with different customer

service centers and your Fleet might run a

region or you might have vehicles that are

even local but in your company on a whole might have a national footprint

a vehicle’s running toll and so keeping statements payments,

you know vehicle updates and

reconciling all those statements passwords. If someone

leads then you’re retraining if you have a brain drain, so

that’s part of what best pass does is Outsource

and become an extension of your business as a as a

tool expert. We are moving into the permitting

with a partnership with calm data was recently announced

and and also, you know looking into other

analytics to help you do root optimization

considering the impact of

tolls versus avoiding the toll you know, what that might look like

to help you use the cost

to sign route optimization.

And we’re toss it over there next slide as well to set

your budget and I think this is

always the most interesting part as well. Especially if

you’re a motor carrier or even a shipper which is

trying to effectively calculate total cost

of ownership here this a lot with talking to people TCO, but

you know,

When you’re looking at it as let’s say you’re a CEO

or owner of a company, you know looking at total cost

of ownership. Is there a resources or something you

can get a rules of thumb when we’re looking at this or is this

something like a case-by-case where I have to literally Dig Down pull out

the napkin and figure out what my own unique costs are.

I think that you know just having come last week from the TCA the

truckload cares Association. There’s a

lot of incap devices now and sources of data and information.

It’s probably bringing together from a number of sources, but it

seems like you know, there are quite a number

of analytics tools that are available. It’s a matter

of bringing it together also one to to kind

of approximately your cough. So I think

the tools are getting better. That’s for sure and it’s it’s

always something that’s being refined all

the time.

While at TCA did you hear any carriers have when

they’re talking about the total cost are many of them trying to

adopt this technology or is the mindset still? Well,

I’ve always had a similar idea of where my costs range.

I don’t really need too much help just yet. Our carriers

starting to change their minds or make an adaptations

given the rising cost of the past two years.

Yeah, I think like everything it’s all over the

board. But I think more people are you know, once they see the it’s like

a Fitbit or having, you know a device that

it’s amazing an Apple Watch or a Fitbit can

feed you back your own activity, but it’s interesting to see you know,

what what’s in there. So once you start looking at that,

it becomes addictive where now you want to know more and dig

further into detail. So I think it is coming on and appears

to be you know, something that’s going to be sticky.

And we’re gonna go dive into as well. What

are some of the three key areas talked about it earlier in the agenda, you

know, we are talking about fix versus variable cost May

touch on that a little bit later, but we’ll get down to

the meeting potatoes of this thing which is areas where

you can save and the first one one that

holds near and dear to my heart is fuel, you know,

depending upon the carrier size. You can have a

fuel card save like five cents or if you have thousands of trucks and

you’re listening you probably have a dedicated fuel Department with a

fuel compliance program, you know, especially with

the training component. Some drivers don’t have good

feel habits. And then they go out of your area they charge

your card and then you’re paying even more for non-compliance. And

so finally on these three key points

when you get Joe’s thoughts as well shortly optimizing your

your truck routes. I’ve seen some large Enterprise cares

that yield the itself will provide the feel routing

and to have feel routing technology, but for smaller carriers

still based off a spreadsheeter very rudimentary TMS.

Can also be very difficult because you’re dealing with where the

driver wants to go versus where you want to go which

can often mean to different things Joe. What

are some of the biggest things I know from your experience is talking

with customers working through tolls in other ways this fuel

brought up. And is that something that is something that you just

have to bite the bullet or do a lot of folks actually try to eke out

those safe.

Yeah, I think people are always looking for ways to save money

and in my experience on the toll side, especially having

worked on every continent in tolling that

brand article a lot of times in South America. People are

trying to avoid the toll road, but they found out you know,

you go on a secondary Road and you break a Kingpin or something happen and

you probably would have been better off taking the toll road

because it’s it’s a you know,

more predictable travel time. The roads are generally better

condition. So all things considered I think and then

if you have to stop more often on a secondary route,

that’s not full. There’s a cost of you know

stops and starts as well. So I think you know

people have to find out in some cases for themselves what’s best

but overall we do

see people, you know trying to do rude optimization and figure out

what’s the best path to which me or may

not include toll roads in certain Regional situations.

From being a experience around the world is toll

I know in the US I’ve heard with toll roads.

It just really just depends on the location. Some states have more

toll roads than others. Is this kind of a worldwide phenomenon

or in some other countries where they’re trying to optimize

their routes. You probably would prefer the toll roads because there’s only

thing that’s maintained.

Correct. Yeah, that’s exactly right that in some jurisdictions, you

know, the the provincial state roads in some countries are horrendous where

the privately operated toll roads in some

countries are are very predictable, you know customer services

their goal. And so they often have rest areas and and

dedicated services that you know to help Logistics and

Fleet companies move Goods efficiently. So it

varies around the world, but in most cases people find

the toll roads that are are essential

but there’s there’s the cost of

the toll and then the cost of a violation as well. So it’s it’s reducing

those costs that are often very important.

I’m going to highlight some of my experiences as well with the driver training component

with fuel making sure no aggressive

driving rapid deceleration. Those are

the fun ones. You’re usually I’ve used

a few providers as well that you will allow

you to monitor these events and it’s something that

when you’re busy almost need a dedicated compliance person. If you’re

small Fleet and it’s a handful of folks. You have to take time out of your day

to catch these hard-breaking events, but I mean

those things add up and so really interesting

is the second one excessive idling and that’s

another thing to pay close attention to because I have

managed to break a few trucks if you manage to

idle the truck too much and it doesn’t have an idle shut off which many drivers

get angry about you’re running into a situation where you’re

now clogging the deaf and the filtration and the filter

units and then you’re forced to do a manual region or at

bricks the truck and you’re having other issues. So fuel will

quickly add up now. It may not be, you know, you’re also

burning fuel through the idling process, but

Fascinating thing I’ve seen some fleets do are apus auxiliary

power units which are like a little generators. You can

attach but cost is another Factor really

good ones can run even past $10,000 or more. So

you almost have to figure out the difference between

Do my drivers want to idle am I going

to risk the excessive wear and tear on the engine to idle

or am I going to figure out the total cost of ownership invested

in an APU Joe? Have you heard any of those

from fleets? You’ve talked to Folks at TTA just clients as

well. Are there any big challenges with

trying to convince drivers to just be smart

when it comes to the fuel last?

The reason you know, my first experience goes back probably to about 2007.

I was in in Santiago Chile

and they in Spanish.

I think they call a floaters the fleet and there was

a product there where they were stack ranking the drivers a buck,

you know, and it became a pride issue of what

drivers were in the you know in the top three or top 10 and you

know, people are trying to be number one and like you say it

was based on acceleration deceleration driving habits, and

they would literally, you know, give her award for the

for the people that were exhibiting the best driver behavior and

you know, probably the top 10 drivers and and

then there’s the public shaming of those bottom but

you know the incentive to to try and

drive as best as you could and be responsible you could

so and I found it became a competition people are

naturally competitive and they want to get it close to

the top of it could so I think that was a great thing to see and and

that was rewarding good behavior.

I like that idea because I feel like it rolls into our next part which

is going to be of course vehicle maintenance to

me fuel and maintenance go hand in hand. Because if you’re burning

too much fuel, you’re running the engine the idle time you’re putting hours on

1. You’re always gonna run in these maintenance issues. So we’re

gonna go at the top three a PM schedule wet

and dry PMS Maintenance. Make sure there’s a checklist driver reporting

our dvirs driver vehicle inspection

reports being submitted. You definitely needed preferably

twice a day pre-trip and post trip and then

tire maintenance. So PMS are

another special soft spot for my experiences

because if you don’t do them, you run

into problems with your warranties as well

as getting pulled into a vice president’s office and shoot out.

So, you know Joe looking at maintenance as

well trying to get the right plan from

your experiences. Is this something that it’s

normally farmed out to different parts of the organization or have

you noticed

that fleets tackle it differently based on size or Personnel

characteristics.

Yeah, I think it depends on size and Personnel characteristics. But you

know from from the owner’s point of view or from anyone that’s

that’s bought an expensive piece of equipment. I’m a

child of the 60s born and so in the early

eighties when I was working for a very large farmer, you know,

they were paying me 10 dollars an hour. He said Joe, you know,

that’s a very expensive piece of equipment in I pay you

ten dollars an hour, but an hour you can do a lot of damage and so,

you know, that’s where the vehicle maintenance becomes.

Yes. You have equipment that

you worked hard for you want somebody to take care of it? And so

it makes good sense. Once you own something that you want to

look after when I look at the farm industry. Now, you know,

they can remotely disable. If you lease a piece of

equipment or buy it on terms and

you want to bring it back, you know, they can remotely monitor you

that if you’re not doing the right maintenance that they can shut down so

Owning that piece of equipment. I understand it operating it. You know,

I know that people there’s the whole right to repair

but certainly vehicle maintenance is the big factor

nothing’s getting cheaper and so watching it makes

good business sense.

Notice there. There’s a lot of cool stuff coming across the Horizon

with maintenance. A lot of AI driven stuff that is attempting

to kind of like diagnosing a patient.

But you’re diagnosing your vehicle. What’s the

the likelihood that these behaviors will

lead to an event and I spoke with

somebody from a startup that was doing maintenance and they said a fascinating

thing was they could predict that when one

part failed you often have a cascading chain

reaction with these class eights that you

can still statistically figure out the the likelihood of

1. So one thing I’ve I think for a lot of folks, especially

those in this webinar, if you’re not in the maintenance department, it’s

just first it depends on the size. If you come from a small carrier, you’re probably

very familiar with having to take care of the trucks because it’s

more of a one person show you’re the maintenance

person. You’re the trailer person. You’re the fleet manager, you’re

the load planner your customer service come from a large organization like

where I came from originally large asset

based carrier with thousands of trucks on the road. It’s often.

At another department. It’s another Department’s problem. They’re emailing

1. Here’s the PM reports. Here’s the the roadside

incidences and I get yelled at by extension

a few weeks later when it pops up.

So depending upon size is super important and encouraging

driver reporting. It feels like a never-ending challenge building

that culture. I liked what you talked about Joe

early in Chile where they were doing driver

rankings. I haven’t seen many fleets in the US try

that yet where both feeling and maintenance. I

feel like are great opportunities. I want to get your thoughts on this to try

and have an ability for drivers to get a little you know ownership of

it and they can also proudly show off how they’re

doing versus quite often. They only hear feedback when

something goes wrong.

Yes a great point. And again, I think it goes back to you

know, my kids. They don’t understand, you know, the value

of doing complete doing their cleaning something. I have

them, you know, when they started to wash the floors and before they didn’t

care and then we start washing the floors. It’s wait take off his shoes before

you come in the house. You know that I think once you own something you

understand that you want people to Value it, you know, hopefully as

as well or better than than you do in owning

it so it is an important aspect and and I think

highlighting it and rewarding those people and giving that

competitive analysis and benefit could be a good thing.

We’re going to final Point here on maintenance before we keep rolling, of course

tires. One of my other fun pet peeves is

are you buying the Right Tires? The maintenance

is 3% of an expense. But if you’re not paying attention to them

we talked about record reporting a lot

of times drivers will skip the tire part are the

Treads. Okay. Are they balding alignment? A

hurry? I don’t have time to replace this tire. Now. It’s exploded and

I have a roadside event, you know, there’s a few big issues that

these things add up if you catch

it earlier, you don’t have to pay maybe $600 for a

tow because you’ve shredded both of your, you know,

shredded to drive Tire having some issues. There’s

a lot of things that go into it making sure you’re also buying if

you’re buying retreads or if you’re buying new or tires, and if

you are buying in bulk if your Fleet sizes large enough,

are you having conversations with providers oems shops,

you know, if you’re like a good year Michelin accounts

and stuff. Are you getting that level of savings? Sometimes

truck stops can give you savings if you negoti.

It fleets often do it for fuel. But there’s a lot

of factors that need to be taken into consideration. We don’t

think about tires but they are consumable and they

will add up I’ve happened too many times whether at the

tire or my favorite is the hubs lock up because depending upon

your trailer hubs. They either have a grease

inside that are enclosed or they don’t have it in clothes.

They’ll lock up and Catch Fire had that happen a few

times the good old Hub failure. So when these happen

not only having a maintenance plan in the fuel plan by having

a plan for what happens when it goes wrong Joe do

you fleets frequently, you know, we’re putting aside money and

we talked about earlier budgeting do folks put

aside a pot of money for when things mess up or

is it more of kind of an unexpected surprise and

then a quarter to later we kick up the budget to account for

this event.

People have probably budgeting some amount. But of course with inflation

and things going up it can often exceed what you

expect and like you say one problem can uncover another problem where

you know, if an alternator is going at often can

take your starter and battery and all three at once.

So I think it’s a good idea to plan but also to you

know, expect some some slush fun over runs as

well.

And for folks who have fleets, you

know, both private and public if they use owner operators a

few good practices. I remember from my asset days were making

sure that when they do get paid you communicate and

give them the option to put money in a maintenance fund. So

let’s imagine that you know, if they’re being paid per

mile or they’re being paid a percentage having that agreement that

for some of these lease owner lease purchase owner

operators to put aside a percentage

that’s their repair fund and then when things do go wrong,

they do have the funds there. I came from a startup

and we ended up going all W-2 company drivers because

every time we brought on owner operators their

trucks kept breaking and I didn’t put aside any money

for maintenance and all their trucks were just on the side and

you couldn’t make any Revenue because you’d have a good week. Then

you’d have a bad week and you always would hear. Oh

no, it’s fine. I’m gonna fix it up. Well when it’s a 10 year old

class eight. It’s not gonna get fixed up buddy. It’s

not gonna work. So had that happen a few times right? Kick

it over.

Our next slide here license and

permitting. This is what bestpass specializes in of course the folks who

are sponsoring this webinar with Freight waves, and

this one is fascinating for me because I’m very

comfortable with the first two but I always just worried

about tolls as somebody else’s problem. Even when

I was a small carrier and we had like five and went up

to 100 trucks even as we were growing is it

didn’t really pay attention to it. So Joe talking about this,

you know, what are some of the big the

biggest things that people who don’t understand the value

of permits and licenses. What should we be paying attention

to First?

Well, I think like tools, you know, if you fail to permit properly

and Highway Patrol pulls you over that can greatly affect

your inspection, you know, your your

safety scores your inspection requirements and

and bypass the scores

when you when you go to bypass to weigh station and then

it can also, you know, cause cause you cost

you money as well. If I would Patrol does pull

you over you don’t have the proper permits. That’s not a place you want to be

so in some bridges. I know that we deal with Thousand Islands bridge

between Canada and us and some oversized load,

you know, they have to close the bridge for traffic

coming to certain way. So they like to have

that done in advance not just show up and say hey we need to get this oversized load

across the bridge because can cause major problems that

extra cost. So planning ahead is often a

good thing and our partnership with comdators allowed us to

do that. I think there were 500 permits that they issue.

And so we’re working together to help with that trip planning

the route planning and trip optimization. Make

sure that you’re reducing citations violations

that sort of thing.

And permits can be real pain in the neck. If you’re a

small carrier. Just getting started out even a large one. If you

forget to renew it. My two favorite are well my three favorite. They’re

the ones that cause me the most headache the New York Hut sticker you

need one of those. If you don’t you have to

deal with the website, you have to call somebody and you’re wasting valuable time.

You could be using for other stuff the Kyu permit

for Kentucky and the Oregon permit. If

anyone’s ever tried to get an organ permit and they’re driving

from California to Washington. You’re gonna be on hold for two hours listening to

Granny trucker give you chain advice while you’re

trying to get a hold of them. So, you know, one of

the other ones I want to get your thoughts on this Joe as well just figuring out

if I have all my permits and a new

driver seating a truck always the biggest challenge I deal

with when I dealt with small fleets even large ones you

get in the truck. They’re supposed to be a permit book. There’s not

a permit book. You have to go in you have to try to get the permit book.

You may have got half of it. Like is that something that

you deal with a lot with clients is just even knowing

the heck you need based on where you’re going to go.

And that’s not something I do but best passing in cooperation

with with comb data certainly would to try and make sure that you’ve

got all the documentation that you need and now within cab

devices, you know, some of them are able to send and receive information.

So I think with Comdata and best pass

in our customer service team would be able to make sure everybody’s equipped so that

it’s a seamless and stress free as possible.

Have you seen a fly? Let’s get I pulled over I’m getting

inspected Highway Patrol pulls me over. I’m unfortunately speeding

when I shouldn’t have because as most drivers said I was going downhill so

that has happened before for me. You know,

how big of a risk is this? You don’t have the

permits you’re you’re missing some stuff can that really impact your ability even

get loads if you start getting these citations

Yes, sir. It does. Yeah, and the other partnership that we’ve got is

with ordp the overall driver plan. And

that’s where they already can represent you

in legal courts or cases because if you have to come off

the road that’s going to cost you money and you know be in court

or fight if citation or violation that partnership with

RVP will help with that. But yes exactly, right, you know

those all ad costs and can affect you getting loads and can flag

you for other inspection levels that you don’t want to be at.

I liked at the bottom some of these other examples alcohol permits and

oversized overweight. That’s a that’s

a fascinating one because when I was a broker and a carrier and often

felt it was a little confusing, you know, as a carrier

if I’m hauling a lot of alcohol do I need to get the permit or do I

need to go through the broker? Does the broker need the permit is the customer giving me

a permit, you know, it feels like there’s a lot of confusion, especially

if you’re hauling specialized stuff on who to even asks.

Yeah, that’s again. That’s where I think we are our partnership

with come data would get you to the experts to say this is

exactly what you need based on what you’re hauling

and where

New Jersey and Kentucky band of my existence with alcohol

permits fun fun times

I’ve heard that committee. There’s a lot of Permitting in New Jersey so

forget it comes off reports and then a

lot of alcohol gets shipped in in like their specs.

There’s some carries that no, but some are like, oh no,

interesting

Yes, you’re get that shot because the final

thought I have on alcohol permits is because if you

don’t have them through those parts and if you

go through places like Kentucky, they’re Highway Patrol really

likes to randomly pull you over and make sure you have the right permits for

Kentucky. The commonwealth state makes common welds

in my experiences off of those who do not

come prepared. So very very important and

make sure you charge it back to the customer is that built

into your rate? I see a lot of times carriers will

quote something and I know it’s some folks will probably say well Thomas

the rates are going down the spot Market is hard.

Showing off to Brokers and customers that you

have a unified strategy saying look here’s where I need to be. Here’s my accessorial.

Here’s how much I need for permits. I’m gonna be very upfront about

this take it or leave it. It does show that you’re going the extra mile. I’ve

had since instances where I’ve sold the carriers as a broker

and they take it and they come back around and say an extra 300 bucks

for permits and you’re kind of you’re thinking to yourself. Why

wasn’t this communicated to me at the time? I chose you

because now I’ve lost the five other options in the soft

Market that could have ran it and had their stuff together.

interesting

I have some rants. This is therapeutic for me sometimes with

I’ve messed up a lot. So if this is from my experience,

usually it’s from I got yelled at later and so

let me pass on my hidden costs. But

okay. So looking at the hidden

costs here that could save your Fleet money.

4.2 billion in tolls annually is something that really blew

my mind, you know, people are

sleeping on this in my opinion. What are some of

the biggest reasons why we’re just kind of missing in

your opinion Joe the fact that’s a 4.2 billion dollar elephant

in the room. That’s not being addressed.

I think it’s interesting. You know, when you look at Logistics trucking

companies and and service companies. They have

a job to do they want to get the vehicle out the road and get going and you’ll

tell us something it gets incurred. What’s often

is the back office cost is what’s

what’s where the pain is, you know the cost of the tools. Hopefully if

you’re getting that information quickly, you can reveal it like you were saying

and pass on the academic information but violations or

plate reads that might come in 30 or 60 days later or

sometimes even longer than 60 days. You know, that’s missed

a billing cycle. You have to eat that and then there’s

the human cost of dealing with those violations and often.

When the total agencies are looking at a plate

charges, you know where that vehicle is registered

might be different than where that total violation

is going. You know that it should be going to

maybe one location but it’s the vehicle’s registered in

another so that causes extra Administration fees

and violation costs.

And so dealing with all these disparate toll

agencies around is a back office

human cost as a cost of the tool but there’s a cost of administering the

toll and the end of the violations.

And that’s you know, that’s part of where you can

save money by having it centralized have experts deal

with it and then try and work to reduce the

violations that’s getting placed on or the proper transponder or

working with experts in one call not in

65% calls to make sure that you’re covered as

best as you can on the tool side.

So and not every vehicle needs the same solution. So that’s

something that people have to understand is you

know, what’s what’s good for Thomas might be bad for Joe. So we

have to figure out you know, what each individual route or

vehicle where it’s going should have to

reduce the cost and the violations and get

the most efficient toll as possible and

then get that information back as quickly as possible as well some total

agencies don’t give updates, you

know, very often you have to go in

and download them which is another human cost to log in

and download it and then trying to reconcile it. So a lot of back office

human costs with with coal and citations.

You brought up a great point. I’ll talk to you earlier about the

plates. Sometimes the toll agencies

will mess it up. And if a car has the same

plate because of custom plates you can use the

same numbers. It’ll get the plates mixed up and it’ll

charge your tractor trailer when in fact, it was a minivan

that did the violation.

Exactly, right. So a portion plates are a problem where you

can have a portion plate and it’s got the same tag number as

a as a, you know, a Honda Civic

or like you say an SUV and then another

cases you can have specialized plate like I

think in Florida, there’s almost a hundred different specialty plates

you could have for different sports teams or organizations that

can have the same tag ID number. So there’s

there’s a lot of reasons like plates and then the license plate

cameras themselves. They can they might

be able to read the tag number but they can always distinguish the

state and so you can have the same tag number from

a different state and if they’ve got that played on file, it

might hit your account and that might not be your your plate. It

could be someone else’s from another state. So there’s

a lot of issues with with plates,

but that’s what you know causes some back

office headache and time and money paying

people to deal with that and that’s where we try and

specialize and deal with a number of different violations.

Efficiently rather than having someone phone in and be on hold

with a different total agency, you know 45 minutes at

a time. We’ve got direct numbers we can call in get

things resolved quickly and and save everyone time and

money because it costs the total agency money to have their customer service

rep dealing with the same issue every day over and

over.

And I’m kind of curious about transponders as well. How do

you even know I’m assuming, you know, if you’re transpondered works

or doesn’t work because weeks later you randomly

get a bunch of things in the mail saying you owe a bunch of tolls when

you’re RFID transponder. I know easy

passes one that some folks use and best past

you guys do transponders as well. There’s a few different transponder to

come of providers and such when the hardware fails. Is

that something where you’re just not gonna know until you get a bunch of tolls and

then you have to deal with it. Later.

It can yes, and so that’s why you know, we prefer transponder told

because it’s always the cheapest. It’s the lowest cost every total

agency has different back office rules some have

a 50% differential some of 100% where you know,

the the plateaus twice as much as what the transponder

total is, but we like to use transponders as

much as possible where we can and then use plates as

a catch all a backup and then for things like

rented and least equipment for trailer plates, if

you just own trailers if they’re reefers and

someone else is pulling them some agencies only have

rear view license plate cameras. So the trailer is getting the violation

and if you have the place on file, it’s a higher

toll but at least it’s better than a violation. So, you

know, that’s where we we think that playful is

at the end of the day is still better than the violation but where

we can we try and promote or capture by

by transponders. It’s the cheapest toll and you get

the data the quickest because those transponders are red

and then, you know, we can pull.

That that information very quickly on plates sometimes depending

on the agency Texas. For example, a few

years ago was backlogged like eight million plate reads.

So when you look at the license plate

cameras, they say they’re 90% effective. But

that’s if you stopped, you know in a parking garage with perfect lighting

trailer plate that you know, they’re backed into

they’ve often got swirling salt and snow and can get

dirty other things can affect the reading so those

plates that have to be sent from manual review can get

backlog, you know for a long time so

it can be months some in some cases. Hopefully not

be more I think total agencies we’re catching up through covid, but

you know in the past it’s been

quite a time delay between the plate read and I

don’t violation coming in. So transponders are

always the top way we like to go but

Again, playful is cheaper than a violation.

Well, it’s awesome to the next slide as well the costs. Let

me see if I have this up here real quick. It’s under violations. Okay.

The next one is yeah what happens with the violations? I should

have went to this one next but me and PowerPoint

are best friends, but the time processing them, you know,

some of the brought up to attention that people will steal your

plates as well. So you may be stuck at

a truck stop and someone will steal your trailer play in

the next thing, you know, you’re getting random things in the mail for a stolen plate

in the middle of a place. You’re not driving typically.

Yep, exactly, right that happens. And so there’s the you

know, there’s people do what they do and so with violations,

you know, what often happens and we were

thinking about it putting in a couple pictures of two large

customers that we have because plates sometimes in a

state are not interoperable. So we had a large customer

in Texas that had their plates on with NTTA in

Dallas, but those plates weren’t being sent through the

interoperability Hub into Houston and to Austin so they’re

getting violations. They think they’re covered but they weren’t because

those plates weren’t being exchanged we deal

with total service provider like best past. We have a comprehensive plate

Footprints or giving them to every agency

in Texas and that stops then the violations

from occurring

And then often what other what other factors

come into driving up the cost of the violation again?

Is the licensing and provisioning of that vehicle could have been

Detroit but it’s running Texas and you know,

those violations are being sent back to Detroit. So it is

a Time Factor delay that drives up those costs as well.

As well. I was thinking about the company the large asset carrier.

I came from was based in Chattanooga, but their plates

a lot of them were in Oklahoma. So imagine

getting the wrong location and you’re not having it shipped to

your correct PO box and now you’re missing out on all these

violations because you’re getting savings because of the plates, but then

you’re getting costs hidden fees associated with

the corresponding mismatches and

violations.

Yeah, and for for you know, Oklahoma if they’re getting

all these violations and they’re kept in a great big Bankers box.

Then you might phone them from Chattanooga say hey, do you guys have

any violations? They say, yeah, so then you got to send them all over and you know,

there’s a time delay in the cost of processing those paper violations

as well. So

the goal is to try and reduce those as much as possible.

Exactly. I want to bring up the slide real quick as well the cost of

1. I really liked this 800 Vehicles average of

12 that 120,000 a

month and tolls or 4,000 a month in violations. That’s

amazing. And that doesn’t

even count the fact of how much does it cost for my staff

to process these tolls. I mean that in

your opinion like it feels extremely

crazy for especially a company. That’s low. Margin. I like

Trucking.

Yes, you’re exactly right and that’s it’s a great

point. So this is you know, probably average from our our data internally and

of course it can vary by by where the

trucks are going and what state they’re operating in that

there’s a lot of tool or not a lot, but that’s on average and

it is Big cost. So if you can get that data back

quickly and rebuil it that reduces, you know, any

waste as you might have and then you can reduce your

violations again that helps your bottom line. So

It’s it’s well worth looking at it’s again not as

high as fuel might be but it certainly a big factor in

your in your company’s overall profitability.

I think it’s a cool thing to think of because Trucking thinks

of Revenue per truck per week and a lot of fleets right

now in this market may only be pulling $4,000 Revenue

per truck per week. So imagine how to 800

Vehicles one of them that will pay 4,000. So

one whole trucks weeks worth is paying on

that and then 30 of them will cover the monthly costs.

So it eats into imagine a whole

the whole productivity of some of these assets and

it’s all getting torn up and just costs

and totally

you have amazing.

Blows my mind, I’m gonna figure I’m learning as well

talk about Solutions. Then we’re coming up here going through

these slides. So looking at

Solutions. How do we calculate? The ROI is

the ROI saving and back office or is it all not dealing with

like the cartels that are all these random toll companies that also don’t

communicate with each other and don’t have a centralized database.

Yes, you’re right both. I think that it’s some

people.

because I’m thinking about you know getting the

Trying to trying to play piece my thoughts together because getting the

reductions into violations do the reductions 80% of

more come from the fact that now you’re visible to

all of these disparate companies

when beforehand you kept having to treat them as one

Ops because you didn’t have relationships.

And I think for each truck we’re looking at where does it hurt, you know or each

routes. So if and then try to get to the root cause

of the problem, so if you’re getting violations, you know, let’s get a chance

the right transponder in there or let’s get that plate on file

and reduce it going forward is good for everyone. So that’s

really what we do is is try and control the flare-ups where

there’s violations occurring and then we often work with agencies

because sometimes you know, they have issues on their side. It’s

garbage and garbage out on data. And so we

also, you know try to work with our customers and please to

say we need that information. So if you’re adding a

new vehicle or changing a plate again that garbage in

garbage out we have to get it to us as quickly as possible so we can

get it out to the tool agency to avoid any violations. And

so that’s where we often have.

You know apis or interfaces with customers to

so if it goes into the customer system, it’ll update

best paths and best passes updated. We push

it out then to the total agencies as fast as we can depending on

their system. There are some Legacy systems out there that don’t accept,

you know, updates and deletions as as quickly

as we’d like, but I think as the technology

cycle continues, they’ll move to work more

apis and real time arrangement.

That’s what I’m thinking about behooves them to get paid. We’re gonna go before

we hit the questions. The the three areas

of focus here kind of summarizing is

well before we start hitting these questions idling for

fuel. There’s a first one we talked about earlier make sure keep track

of your idling educate your drivers on reducing

idling and having the right behaviors towards your fuel consumptions

and preferably fueling up at the places or demanding

or nudging them that they feel up

if you have a fuel buying plant or your car don’t feel

a bit random places that don’t give you discounts and

finding ways to get them involved second one maintenance. Are

you doing your PMS do your operation staff

know because I know when I was an operations, I despise doing

preventative maintenance because the driver yelled at me for

missing a day’s worth of work having those conversations making

sure that the driver and the fleet operations

staff or if it’s just one person making sure

that they understand we gotta sometimes do it

or make them over the weekend. This was another one that I start.

It saving it to where drivers who went home every

week. You had the local shop or you have the connections drop it

off on Friday, but you have to keep tabs on

the shop because they’ll forget and they’ll try not to work over the weekend keep

an eye on that but set you up for Monday.

Finally tolls talking about the meat and potatoes here as well. How much

are you spending on violations? Can you get discounts? Do you

have the person on the inside if not, utilizing companies like best pass

to give you that Advantage because $4,000

a month on a 800 truck Fleet just alone

on the violations 120,000 racking

up drivers will drive

where they want. They don’t always go with a routing guide and they may be

racking up tolls that you don’t know about until it’s too late. So

that’s gonna go for our first portion

here, which is mostly the interview as

well as the webinar portion. We’re gonna kick it over now to the

questions and let me look real quick

here Emily. You want to start the very bottom or start at the

very top for these in terms of

I guess let’s start the bottom and just work

our way as they start coming in what I’d recommend.

Perfect. First one Joe. This

one is what are the toughest challenges facing the

trucking industry coming up in the next six months now that we’ve talked

about all the hidden costs.

Yeah, I think you know probably inflation is

is something that we’re all watching and I hope it

moderates but I’m a little nervous about fuel costs

could could rise, you know as as trying to

get back at it we could see more demand and obviously in North

America. We don’t have an expanding oral production as fast as

we could. So I’m a little nervous on the fuel cost side tools

are going up. I think Blue Water

Bridges announced today that they’re increasing tool. So,

you know inflation is going to continue to drive in inflation

in the toll rates as

well because as people ask for more money working in

the toll agency that total agents are gonna have to to continue

to raise the rate. So I think that will

probably see some inflation yet that it’s slowing down,

but I think there’ll be some more increases probably

in fuel and and then

in full rates going forward

Perfect before I get to the next question if anybody wants to

add a few more questions here. I’ve got about 13 more minutes with Joe. So

type them all in and we’re gonna get to as

many as we can of course second one’s from Ahmed Bashir. What

is and this is for Joe? What is the ideal ratio between fixed

and variable expenses?

Well, that’s a great question and it was

a banker I’d say as low as possible. But to

be honest, I think it varies probably from each Fleet and

I apologize when I was in banking. We used to have standard industry

analysis and I

don’t have access to that anymore. So I don’t know

Thomas about something you would have but I sure I’m sure

it probably very by, you know, the type of logistics company

you are whether you know, you’re running tankers or

reefers and and all that sort of thing. It might very based

on roots and and the type of logistics you’re

doing, but I don’t have that. I apologize. I don’t know Thomas

if we have any access to resources that we

could get back to give an

answer to

I think on my end it’s hard sometimes for

the ideal ratio because you want them to be as low

as possible for boats. You can maximize your margin and

profit but I think the biggest thing is

understanding what you’re looking back and until we

can get access. I’ll have to talk to some people on my end as well figuring

out historically, what are your costs and then putting them

in the ratios and figuring out are you is there

any way to notably bring them down great

question though? I don’t have access. They

don’t love me enough to give me access to this stuff either, but we will try to find out

next one question. Yeah.

I was just gonna say, you know, some of the fixed costs

like and we all know that if you’ve got the Taj Mahal as

you’re you know your office and your shop that’s gonna

be high overhead cost than someone that’s you know, got a

more reasonable modest building so but yeah, those

those ratios I’d have to do more work to find out, you know, probably what’s

ideal or or optimal.

Got the next one from Brad Thompson. This one’s

looks like a twofer we run all EP us and

drivers love to use them. We also run a miles per gallon

bonus program here with 65 trucks. All their

trucks are equipped with auto starts. So

Joe, it looks like it’s a great example of trying to implement a

culture of you know, helping the drivers have

the right habits.

I agree. I think that’s a great thing and I’m glad to see

that it’s happening here as well that I just happen to see it. You

know as I say in Santiago Chile, but it’s nice that people are

doing it here. I think it promotes a great culture of caring.

Shout out to Brad keep up the good work on that miles per

gallon the bonuses as well. I wish

when I worked at a larger Fleet, it gets really hard sometimes to

pass all that down what they figured

out though with the 5,000 trucks was they made it so

that the driver routing would only take them to

the fuel stops and they had to call a fuel Department to

authorize them out of Route stop. So large fleets

usually will solve this. I wouldn’t say it’s like hand-holding

but a lot of your trip is already planned, they’re

using software to not you know, tell the

driver exactly where the fuel exactly where preferably to

stop and go from there. It’s fascinating stuff. Next

one is from Trish Saint John one

of the most important controls you can put in place for

a large Fleet made up of rentals.

You have rentals are interesting and I think you know, it’s I was

in Florida a couple years ago and was looking at a delivery

company with the rise of Amazon. They rented every

single vehicle they could, you know

between probably October and and

say April because of the holiday season

and gift gift and and Christmas that

sort of thing and the online shopping and

so getting those license plates on as quickly

as possible is really important. And so there are

some agencies that

can help you invest fast would love to do it in some cases. What

we have to watch is if those rental

vehicles are with another provider. There’s a posting order

that every agency goes through. So we

we’ve had some issues where that vehicle is register

on the rental fleets account and

on ours when the tolling

agency reads that plate they might go through and and if

they hit best pass first, that’s great.

But if they hit the other, you know, wherever someone else is registered, they

can cost them confusing and charges but I would

say Case by case. We’d love to help with play coverage

on rented at least vehicles. And then if

it’s going to be long-term, we’re trying to get the appropriate transponder

into their as well. So it’s Case by case and then finding

a little more detail of it. Does somebody else already have

that plate listed because having the plate on

twice with two different accounts can can cause some problems but one of

our sales people would love to talk through that with you as

they deal with that every day.

I’ve got some experience with rental companies my startup used

exclusively Rider and Penske Vehicles Because by the

time when we started they couldn’t afford to actually get

vehicles, you know, when you’re that small so their

Fleet currently is utilizing a combination and

some of the biggest things I noticed with that from the permit side

as well. Make sure if you’re using rental, once your

drivers are actually checking the permit book don’t leave the

little facility until you actually have all of the stuff

because they will purposely forget and then depending upon the

location Penske is unique because Penske has

it set up to where if you rent it

from a specific Penske. Sometimes I don’t want to give you

the equipment you have to go through Penske roadside. So understanding the

costs associated and trying to get it repaired and

maintenance for rented Vehicles can be tough because I had

a Penske from Texas the Penske in

Dallas. I took my Penske truck over to the Penske in

Arizona the one in Arizona got mad because they said

that’s Dallas’s problem and I had to explain to them. It’s

The road truck. I’m going to escalate you to roadside unless you do

your job. And so those are some of the fun conversations dealing

with nation right wide rental companies if

the stickers of ferment books

as well making sure that you utilize their

roadside, but also keep in mind the cost. Sometimes they

will nickel and dime you and understanding in

your rental agreement what can get covered and what cannot get

covered and if you’re gonna lease with them or simply rent because

if you go with the least

Part, you know problem part you can get some

more savings but it depends on your penske’s your Riders your United

Rentals Etc shop around try to

get the best deal. But holy cow. This is definitely a hoot

to deal with because you’re dealing with a third party rental and a

third party roadside the third party maintenance and stuff.

So like you said though with the

the tolls that’s that’s something I never even considered because

when we used it, I guess they just took it out and they charge this

later and we didn’t even remember most of it.

So that’s a great Point as well. That was

my rent for rented Vehicles. By the way. Thank you all for joining that but

next one from Pete ricotic Joe

you stated there are 64 tolling agencies Nationwide.

How many is best past affiliated with

So that’s a great question. And and that’s where

I live. So we’re we’re over 40 80 season. I

probably easier to talk about who we don’t deal with. So we

do have some that are on the down low and that would

be Breeze Vine, Oregon. There’s a couple bridges in

Oregon as Breeze buys the tag we have an account

open and we can help people there if they need it, but it’s not one that we advertise

the same with Lake Pontchartrain in Louisiana

and La one and Louisiana.

Then Utah the expressions in Utah

somewhere that were not some of these.

Facilities have a legacy back office and

you know to read our transponder to work with us, they’d have

to make a change order and they’re not always prepared to do so

so we can take some of these on depending on

the circumstances and the customer they’re kind of a one-off other

ones that we covered on the download would be

Mackinaw Bridge in Michigan Blue Water Bridges both

the Canadian and US side and then

we are also doing some download work

with a full seven in Toronto. So that’s a

difficult one to deal with but it’s kind of a one-off

as well where it’s we can take an on

certain situations. So the only ones we don’t deal with

live right now, then would be in Canada

the Atlantic provinces. So the Halifax Harbor Bridge

is Comic would pass Confederation Bridge and then

the 825 and 8:30 in Montreal are ones.

We don’t deal with as well. But we are in discussions. We’re always

looking to expand and and promote our footprint.

We just recently took on a customer and open.

In Puerto Rico so we can cover Auto expresso there

as well. So overall we’re pretty

much a hundred percent of the major toll roads, but there’s

a small a couple small art lawyers that we work on

on a Case by case basis.

And looking at our final question here by Russ

Micelli thoughts on

the high cost of power and trailers our

folks keeping them longer, but then the suffering with

less efficiency.

Like I can toss this or I can toss it to you our phone. Is it bad

if there are people from your experience even being a TCA or people

holding them their equipment or we start to see folks trying upgrade to

get over, you know, get over it.

I’ll answer that one. I’ve noticed with somebody. Yeah. Yeah

for my experiences large asset

fleets are definitely doing the upgrades. You’re gonna

see very strong OEM orders. We have OEM build time still around

between sometimes six and eight months. So there’s

a lot of strength still even moving into the second half into Q3

as well for large fleets making upgrades for

smaller fleets. It really just depends on the budget. We frequently talk

about fleets that are hanging on to equipment access

Still Remains an issue. I talked to someone earlier about chassis

18 month weight time for chassis. So for

those looking at ports and Intermodal moves,

we’re still not out of the woods yet, but things are getting better trailer oems

or complaining though about a labor and parts, but

we’re still seeing some of the quite a bit of demand so when they

can is it in the budget, can you

upgrade it? And are you what’s the total cost to ownership? Is

it worth more? Because like cars, you know

Class 8 tractors run into the similar issue where you’re gonna

reach that point where everything really starts breaking.

And you know with especially a lot of these automated systems, you

know, in terms of emissions and other things there’s a

lot of computer components that are starting to give some trouble. So the question

is it just depends. It depends on the fleet. It depends

on their cash flow depends on the goals right now. We

should expect you know, we are also seeing falling used

Class 8 prices are going down. So for

some folks the big question becomes do I

buy now and have a depreciate do I wait do I

look for a bottom? So we do expect there to

be more higher demand even in spite of the fact that there will

be capacity leaving the market prices will get better. But those

who can’t afford are going to be stuck dealing with it.

If that if that answers the question as well,

but I’m going to toss it back over to

Emily Joe. Thank you so much for coming on as well joining us

via phone for this really really fun time very therapeutic for

me as well getting to complain about some of the trucking challenges.

And get Joe’s thoughts as well with his great experience

Emily Tia soft. Let’s to

wrap things up. I’m gonna toss it over to

Yep, sounds good. Thank you Thomas. All

right, everyone. Well, that is all the time that we

do have for today. Thank you to everyone again for taking

the time to listen and a big thank you to Joe and Thomas

for sharing your insides with us today. As a

reminder. The recording of This webinar will be sent

to everyone tomorrow via the email used to

register with we hope you’ll join us again next time. Thanks, everyone.

Thank you. Take care.