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Monthly Archives: October 2014

RoadOne looks for right mix to keep drayage drivers

RoadOne looks for right mix to keep drayage drivers
William B. Cassidy, Senior Editor | Oct 13, 2014 JOURNAL OF COMMERCE

Like many over-the-road trucking operators, RoadOne Intermodal Logistics is looking for the right formula to attract more truck drivers and keep them. However, in the drayage business that formula quickly becomes pretty complex, said Ken Kellaway, president and CEO.

RoadOne’s drivers are owner-operators, and unlike over-the-road truckload drivers they’re not typically paid by the mile. “More often they’re paid a percentage of the revenue per load or by time-zone rates, so they’ll get a flat rate to go to a particular market,” Kellaway said.

Compensation by the hour is becoming more common to cover time lost to drivers because of port terminal delays and extended loading times, Kellaway said. “We’re doing more and more of that,” he said. “The drayage driver can’t be responsible for assuming all the risk.”

Frustrated by port congestion and chassis shortages, drayage drivers increasingly are looking for other jobs both in and out of trucking, Kellaway said. That “outward migration” of drayage drivers and trucks threatens to slow shipper supply chains to a crawl.

Incentives are becoming a more prominent part of RoadOne’s recruitment toolkit, however. “These drivers are entrepreneurs, and like any entrepreneur they’re trying to figure out how to maximize profit,” he said. “We’re trying to help them with all the line items in their business.”

For example, RoadOne guarantees tractor financing for its drivers through a third-party leasing company, ENG Financial Leasing. The owner-operators aren’t required to have credit or a down payment, according to RoadOne, to take advantage of the financing offer.

“We’re also trying to help reduce their operating costs by leveraging our buying power on items such as fuel, license plates and insurance,” Kellaway said. “If we can get those prices down for them, we can help them reduce operating costs and maximize their profits.”

During National Driver Appreciation Week Sept. 15-19, RoadOne recruited 13 owner-operators at a two-day Driver Appreciation Open House at its headquarters in Randolph, Massachusetts. As part of a company awards program, owner-operator Idilio Taveres received a $15,000 grand prize one full year of truck payments. With 40 locations and more than 1,000 drivers nationwide, RoadOne plans to hold more recruitment events.

But drayage drivers need more than perks and incentives. They also need freight that provides a profit, Kellaway said. “We’re trying to be selective about the freight, to get the best-paying freight and the freight that’s easiest to handle for them,” he said.

“The drayage business is also notorious for high empty miles, as you’re bringing empty containers back to terminals,” he said. “We’re trying to find ways to increase their loaded miles so we can pay them more.” Shippers, the party that ultimately foots the bills, need to help too. “We’ve been successful in getting our premier customers to help us with these delay time issues so we can retain drivers,” Kellaway said. That help includes better container scheduling and advance pickup notice. “It’s working, but going forward, those are the customers who will really get our capacity, the ones who help support us.”

Port delays driving dray drivers away, RoadOne says

Port delays driving dray drivers away, RoadOne says
William B. Cassidy, Senior Editor | Oct 13, 2014 JOURNAL OF COMMERCE

The shortage of truck drivers on U.S. highways is affecting drayage operations at port terminals and inland railheads, too. Frustrated by port congestion and chassis shortages, drayage drivers increasingly are looking for other jobs both in and out of trucking.

That “outward migration” of drayage drivers and trucks threatens to slow shipper supply chains to a crawl as container chassis shortages, port congestion and drayage delay times get worse, Ken Kellaway, president and CEO of RoadOne IntermodaLogistics, told JOC.com.

“So many significant changes in the intermodal supply chain have negatively impacted freight flow that the owner – operators and drivers are taking a hit,” said Kellaway, whose company is one of the largest international and domestic intermodal container haulers in the U.S.

With more than 1,000 drayage drivers operating from 40 U.S. locations, RoadOne is struggling with a rising driver turnover rate. The No. 1 reason drivers cite for leaving drayage, Kellaway said, is frustration with waiting times at rail ramps and at ports.

“It’s getting to the point where we could have a backlash,” he said. “The global supply chain is a $7 trillion sector, but it depends on the $10 billion drayage sector in the U.S. If we can’t get the freight from the ports to distribution centers, the entire model starts to collapse.”

For a glimpse of just such a catastrophe, look no further than the ports of Long Beach and Los Angeles, he said. The largest U.S. port complex is reeling from terminal congestion caused by strong cargo volumes, a severe chassis shortage and poor intermodal rail service.

The neighboring ports have struggled with chassis shortages, rail service delays and unusually long truck turn times for much of the year. In the early fourth quarter, the congestion continues to get worse, and port officials largely blame chassis “dislocations.”

“The root cause is chassis,” Jon Slangerup, executive director of the Port of Long Beach, told JOC.com last week. That complaint is echoed at ports across the U.S. Where shipping lines no longer provide chassis, locating chassis has become time-consuming and chaotic.

“The whole chassis conundrum has put extensive pressure on the drayage community,” Kellaway said. “The chassis pool has been put off-site, and that requires additional moves and waiting time. We’ve got to go get the chassis, wherever it’s located, and bring it back.”

That’s like going to a supermarket and being told you have to go to another store to get a shopping cart, Kellaway said. And offering chassis in separate, non-swappable pools is like being required to get one cart for the produce section, and another for the deli, he said.

Two major chassis-leasing companies, DLCI and TRAC Intermodal- will add 3,000 chassis over the next few weeks at the Port of Long Beach as part of a short-term relief effort. But in the long run, the ports need a “gray” pool of interchangeable chassis, Kellaway said. “It needs to become one gray pool so whatever chassis we grab, we can use it,” he said. In addition, Los Angeles and
Long Beach “have to figure out what to do with these larger vessels coming in, and they’ve got to a get a labor agreement finished” with longshore workers.

Kellaway also says port terminals need to get better at moving drivers, and containers, through their gates. “A lot of terminals, whether they’re going through a technology change, are low on staffing, or are handling larger vessels, they’ve got longer wait times,” he said.

The shift from picking up pre-mounted containers on chassis at port terminals to “live lift” operations once an unloaded chassis from a pool arrives at the terminal adds hours to the time it takes to get a container from a port to a customer and return the chassis, he said.

“The result is fewer turn times per drivers, which means a dramatic reduction in revenue for the drivers, and no one wants to step up and take responsibility for that,” Kellaway said.

“There are multiple stakeholders, and we all need to take responsibility for the parts we affect.”

Some terminals only measure drayage driver wait times from their gates, which is like “a coffee shop saying there’s no line before you arrive at the register,” he said. If a driver can’t get through the entire process in two hours, “then he should get delay time,” he said.

“Trucker dissatisfaction with marine terminals is not a local phenomenon,” Bruce of the PierPass extended-gates program at Los Angeles-Long Beach, said during a drayage panel at the JOC’s 2014 TPM Conference in March. “It’s a symptom of the real problem, which is the traditional delivery process most terminals have in place today.”

Transportation consultant Tioga Group estimates that drayage delays add $348 million a year in unnecessary costs to the supply chain including 15 million hours of lost work time and 9 million gallons of diesel fuel. Unfortunately, progress toward a better process is slow.

At the end of the day, “Somebody has to pay the drivers,” Kellaway said. “We need to get these guys justly compensated so they can make a decent living. At least we have to make it more attractive for those who are interest ed in being in the blue collar sector.”

Otherwise, those owner-operators hauling containers will take their trucks and go to the energy business, or over -the-road trucking companies that desperately need drivers.

New England Motor Freight, a regional less-than-truckload carrier with waterfront headquarters at the Port of Elizabeth, New Jersey, gets plenty of “walk-in” driver applicants from drayage operations, President Tom Connery said in an interview. “We have no problem recruiting in places like Elizabeth where there’s a lot of heavy truck traffic,” he said.

Those truck drivers can get LTL delivery or line-haul jobs where they’ll be home every day, or truckload jobs or even drayage jobs at NEMF, which has its own fleet of chassis.

In the past 10 years, port drayage has grown from a negligible business for NEMF to represent 8 to 10 percent of the company’s revenue, Connery said. “There were such delays in getting chassis that we bought our own, and that’s worked out very well,” he said.

 

RoadOne Driver Appreciation Event Fosters Driver Community Entrepreneurship and Strengthens RoadOne’s Driver Network

$15,000 Grand Prize Announced — 1 Full Year of Truck Payments

RANDOLPH, MA–(Marketwired – Oct 6, 2014) – RoadOne IntermodaLogistics, a leading single source intermodal, distribution, and logistics services company, announces today that Idilio Tavares is the winner of its $15,000 grand prize, one full year of truck payments. During National Driver Appreciation Week, September 15-19, RoadOne held a two day Driver Appreciation Open House at its headquarters in Randolph, Massachusetts. The aim of this event was to show gratitude to its drivers for their hard work and dedication, expand RoadOne’s driver team and promote owner-operator incentive programs to help drivers start their own business.

RoadOne guarantees tractor financing for its drivers with 3rd party leasing company, ENG Financial Leasing, who provides financial support. Drivers are not required to have credit or a down payment. In addition, Massport attended the Open House to help drivers apply for a $25,000 Green Truck Grant which is directly applied to their vehicle purchase.

The Open House was immensely successful for attracting drivers from the northeast. The event resulted in 13 new RoadOne owner-operator drivers signing up. Through an ongoing commitment to driver incentive programs, RoadOne will expand its driver network to meet intermodal trucking demand. Additional driver recruitment events will be held throughout the U.S. in the coming year.

“Today, it’s critically important to provide the support necessary to recruit and retain intermodal drivers. RoadOne strongly believes in assisting owner-operators in their goal of establishing sole proprietorship businesses,” said David McLaughlin, RoadOne’s COO.

RoadOne IntermodaLogistics’ 2-day Open House welcomed drivers with a BBQ lunch and an array prizes including: Gas grills, truck tires, $100 gift card, air hoses and the grand prize of 1 year of free truck payments.

Video explaining RoadOne IntermodaLogistics’ Owner-Operator Perk Program.

RoadOne IntermodaLogistics, based in Boston, was launched January 2013 by industry veterans Ken Kellaway and David McLaughlin. The Kellaway-McLaughlin leadership team was established in 1993 when they joined forces to run Kellaway Intermodal & Distribution Systems.

RoadOne IntermodaLogistics

RoadOne delivers comprehensive single source logistics solutions to customers by providing high quality, reliable port and rail container drayage, terminal operations, dedicated truckload solutions, transloading, warehousing and distribution solutions nationwide. RoadOne operates in over 40 locations with 1,000 drayage tractors throughout key intermodal locations across North America.

RoadOne is committed to serving the changing logistics and transportation service needs of customers throughout North America. This vision of consistently offering diversified service offerings means that RoadOne will grow and innovate to help customers meet not only their business requirements but also increase the satisfaction of their customers. For additional information: www.roadone.com