Copyright 2005 by Innovative Computing Corporation 750 Old Hickory Blvd. Suite 290 Brentwood, TN 37027 615-986-1900 5924 NW 2nd Street Suite 100 Oklahoma City, OK 73127 405-495-8788 www.innovativecomputingcorp.com 1999-2005 Innovative Computing Corporation This document contains proprietary and licensed information protected by copyright. All rights are reserved. The information contained in this document is subject to change without notice.
TABLE OF CONTENTS... 3 Truckload Carrier Internal Organization... 3 Operations...3 Sales...4 Administration...4 Maintenance...5 Who Handles a Load?... 6 The Major Players...6 On the Carrier s Team...6 The Vehicle...6 Company vs. Independent Drivers and Equipment...7 The Company... 8 Independent Staff and Vehicle Sources... 8 Company vs. Intermediaries...8 2
Truckload Carrier Internal Organization Truckload carriers are typically organized into four primary divisions under the general management of the president or owner of the company. In some companies, these may be present as separate individuals or fully functioning departments, while in other organizations such as smaller fleets, any degree of overlap between the divisions may exist. For the sake of this training program, these will be treated as unique divisions. Titles will also vary between carriers. This guide will define specific duties within these summaries later. Operations While the term Logistics is used in connection with brokerage operations as well as trucking companies themselves, Logistics in the purest sense, refers to the creation of processes and systems to make shipping of goods easier and more efficient. When understanding the inner workings of a Truckload Carrier, the Operations department manages the logistics of the carrier. The operations department of a carrier is dedicated to the functional operation of the carrier. Operations are responsible for the dispatch and monitoring of each tractor-trailer and driver as well as the loads. Aspects of the transport such as pre-planning and logistics, dispatching, permitting, loading, tracking, driver management and check calls are typically covered by the operations division of a carrier. A basic layout of the operations division typically would be as follows (this may vary with each carrier): Operations Manager Customer Service Representative Planner Dispatcher Fleet / Driver Manager Customer Service Representatives deal primarily with the customer. Their duties may include inside sales and solicitation, customer notification on load status and follow through after the delivery. 3
Planners frequently work between customer service and dispatch to coordinate the information between the two roles. Through their role, they work to match trucks to loads without showing favoritism to either the shipper or the driver. Dispatchers primarily deal with the drivers and provide the where, the what and the when of a transport. By that, they coordinate with the driver - Where the load will be picked-up - What will be carried - Where it needs to go - When it will be loaded and unloaded - What tractor and what trailer will be used It is their role to monitor and coordinate anything having to do with the driver and his equipment during the transport also. Note: On occasion, duties of the customer service representative, planner and dispatcher can overlap or can be performed in total or part by the same individual. Sales Fleet and Driver Managers may be present to manage the drivers and the fleet. This will depend on the organization. The Sales department, in this case, is considered primarily outside sales. These individuals are responsible for obtaining new customers and to some degree new loads or contracts from existing shippers. During their work, Sales Representatives determine the needs of the customers and the best services to fill that need. They are responsible for setting the rates of the customer contracts, which cover the cost of a shipment, including the cost per mile, and specific drop points. Customer Service Representatives found in the Operations department compliment the Sales department through continued sales of fresh loads to existing customers. Administration Administration covers the accounting and back office tasks of the trucking organization. Included in the administration division are the collection and payment of funds, the payment of drivers, the management of fuel tax and surcharges, the coordination of fuel cards and other related office functions. Accounting includes areas such as Back Office Accounting, General Ledger, Accounts Payable, and Accounts Receivable. 4
Rating determines the rate that a shipper should be charged for a shipment based primarily on established rates, distance, stops and taxes. After this, Billing then takes that information and invoices the shipper. These individuals in Billing may also be known as Posting Clerks. Fuel Management includes elements such as the management of fuel taxes, fuel surcharges and fuel cards. These elements will be discussed in much greater detail later in this document. Payroll covers the payment of company drivers and owner operators as well as the payment of internal office and salaried staff members. Maintenance The maintenance department covers the general maintenance of company equipment with a primary focus on the tractors and trailers owned by the carrier. A carrier s maintenance department may cover, through special arrangements, tractors owned by owner operators, as well as leased tractors and trailers. This department handles all of the service work on these vehicles including preventive maintenance, safety checks and repairs. Equipment Inventory refers to the manager and staff that monitor the equipment used for the repair of company equipment. Parts Inventory monitors the supply of replacement parts needed to repair vehicles. As part of their role, they are also responsible for ordering parts as needed and stocking onhand supplies. Consumables refer to the part of maintenance dealing with materials, which are consumed during the daily workings of the department. Included in this area are items such as shop rags, grease, rivets, oil dry and low cost nuts and bolts. Warranties deal with the warranty elements of the parts and equipment owned by the carrier. It is their task to trace current warranties on these parts and to make sure that appropriate compensation is received for parts under warranty. Service Technicians and Mechanics in trucking and warehousing firms perform preventive safety checks as well as routine service and repairs. 5
Who Handles a Load? The Major Players Shipper The shipper is the company or individual making the order for a shipment. This is the customer. Occasionally they supply the trailer or container, while at other times these are provided by the carrier. Carrier The carrier is the company doing the shipment. This covers the vehicle, the trailer (in most cases) and the staff to complete the work. On the Carrier s Team Customer Service Customer Service Representatives work with the customer to sell the shipping services, set this shipment up with the customer, follow-up during the shipment and provide delivery notification. Note: In some organizations, the terms and concepts of customer service representative and dispatcher are used interchangeably or fully replacing one another. In other organizations, they are separate departments. For this document, the terms are used as separate entities within the carrier. Planner Planners coordinate the shipment sold by customer service and the drivers coordinated by Dispatch. Depending on the size of the organization, this duty may be divided into two groups, or handled completely by the dispatcher. Dispatcher Dispatchers work with the Drivers to coordinate pickup and drop off times as well as to track the shipment during transit. Dispatchers also work to obtain follow-up trips for the driver and vehicle after the load is dropped. Driver Drivers are the actual drivers of the truck carrying the shipment. They can be Company Drivers or Owner-Operators (o/o). All truck drivers are required to hold a Commercial Drivers License (CDL). Typically, truckload carrier drivers have a Class A CDL, which licenses them to drive up to an 80,000 lb, tractor-trailer-cargo combination. Administration Administration works in the background to handle the paperwork, billing and finances behind the load. They are in action throughout the process as well as afterwards. Maintenance Maintenance works to keep the trucks and trailers on the road in a safe and efficient manner. This department works on all company equipment and may have agreements to work on leased or owner operator equipment as well. Fact: 44% of employees in a transportation company are drivers. US Bureau of Labor and Statistics, 2004 The Vehicle Tractor The tractor is also known as a Power Unit, a Unit, a Rig and a Truck. In truckload carriers, this is typically a 3-axle, 10-wheeled vehicle. This portion of the vehicle is the detachable front unit of a tractor-trailer unit. This includes the engine, driver compartment, fifth wheel, where the trailer is attached to the tractor, and typically the sleeping area for the driver known as the sleeper. Trailer The trailer is the area where the cargo is held during shipment. This can also be referred to as a semi-trailer. Variations on the trailer can include temperature controlled 6
trailers, flatbed trailers, tankers and others. Trailers are typically 48-53 feet long and attach to the back of a tractor unit through a connector known as a Fifth Wheel. The Vehicle Tractor or Unit Trailer Fact: Tractor-trailer combinations, including their loads, may legally only weigh 80,000 lb unless special permits are obtained. It is not uncommon for a company to own or lease 2-3 times as many trailers as power units. In this case, the carrier will supply the trailer to the shipper for loading, and then return later to pick up the filled trailer. This is to reduce the delay on the drivers and tractors caused by waiting on cargo to be loaded or unloaded. Shippers may also own trailers and will have them fully loaded waiting for the carrier s pickup. In these cases, carriers take advantage of the Drop-and-Hook technique in which a driver arrives with a trailer and drops their fully loaded trailer at the loading dock. The driver then picks up a new, loaded trailer and takes that to the next location. Additional Trailer Options (in addition to flat bed, dry van, reefer, tanker etc. mentioned above): Chassis are frame trailers used to carry intermodal containers during the trucking portion of intermodal transport. Step Vans are typically 48-53 trailers used for moving used furniture (i.e. moving vans). Pup Trailers are short trailers, usually between 26 and 32 long. Pups are connected together for use as tandem trailers. Tandem Trailers are two pup trailers, connected to one tractor. These are also known as Doubles, Twins and Twin Trailers. Throughout most of the country, tandems are limited to two trailers, though in some western states, Triple Trailers are also used. NOTE: Drop Yards are locations where a carrier has authority of the property s owner to leave their equipment, such as unused trailers or those waiting for loading, on another company s lots. Company vs. Independent Drivers and Equipment The company itself, by independent contractors or by external vendors, provides many of the individuals who do the work for a carrier as well as the vehicles and equipment used by these people. 7
The Company The company can provide, among other things, company tractors, trailers and drivers. The carrier owns, manages and maintains each of these pieces for their contracted shipments. This is the more common option and what will be explained most heavily in this document. Independent Staff and Vehicle Sources Independent Sources offer a viable option to company owned vehicles and drivers. These include Owner Operators, and Trailer Pulls as well as third party sources and agreements for staff and equipment such as Trip Leasing, Leaseback Truck Agreements and Driver Leasing Companies. This guide will outline business dealings with independents such as Owner Operators, as warranted. Owner Operators (often abbreviated o/o) are drivers who own their own trucks. These people contract their services and their tractor to a carrier for a set fee. Agreements may also include fuel cards or fuel discounts, advances, permitting and various other elements. These individuals may also be referred to as Independent Contractors. Trailer Leasing and Trailer Pools involve groups of trailers owned by a third party. Carriers lease these trailers as their demand increases. When the demand decreases, the carrier stops leasing the trailer and is not liable or responsible for the trailers upkeep or storage. Leaseback Truck Agreements involve a third party buying all or part of a carrier s fleet. These vehicles then are leased back to the carrier when needed. Using vehicles through this process allows carriers to avoid maintaining a full fleet, but still to have access to those vehicles when needed. Driver Leasing is a temporary personnel option for carriers. Typical driver leasing organizations provide the drivers as well as all Human Resource (HR) management of them. The carrier and agency agree upon a contract fee, which the carrier pays the leasing agency for the drivers work. The leasing company then pays the drivers. Trip Leasing involves the lease of a full trip between carriers. Specifically, one carrier would sell their shipping services to a shipper, but then be unable to perform the work due to a possible staff or equipment shortage. When unable to fulfill the order, they would lease the trip to a second carrier for completion. Note: When equipment is used by a carrier, but not owned by that carrier, this is called Foreign Equipment, as it is foreign to the carrier. Company vs. Intermediaries In addition to drivers and equipment, dispatch services can also be maintained by the company as well as by Intermediaries. Intermediaries are third party organizations, which coordinate loads between shippers and carriers for a commission on the transport. Company Dispatchers are individuals working for the carrier to dispatch loads, vehicles and drivers as needed to complete the work of the carrier. Carrier employed dispatchers are the most common source of this service and will be the focus of this guide unless otherwise noted. Freight Brokers are intermediaries who work to match loads and carriers for shippers. These brokers will offer their services to carriers and shippers to find the nearest available load and driver. Often these individuals are utilized when a carrier is seeking to avoid a drive segment with an empty trailer. In this case, a company dispatcher might contact a freight broker to find a load that needs moved from a driver s drop-off point to his next pickup point. Frequently, when a shipper has a hard time finding a carrier for a particular load or type of load, they may turn to a broker to find the widest audience for their load. Freight 8
Brokers may also work when a carrier has too many loads for their capacity and will outsource the work. These are also known as Brokers and Logistics Management Companies and may even operate as a division of a carrier organization. Commissioned Sales Agents or Agents are freelance sales representatives who work outside of the carrier to sell loads for the carrier. These people work on a commission typically in the range of 10% of the shipment s value. Third Party Total Logistics Providers are third party companies, which provide the full spectrum of managing incoming and outgoing shipments for a warehouse. 9