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]]>If you decide to hire logistics or supply chain contract workers on your own, Logjobs is uniquely qualified to help. We are pleased to announce that Logjobs now has a dedicated section for these types of specialized needs.
Now with the overall powerful combination of our traditional job board and our new contract jobs center and professional networking site, Logjobs is poised to service all of your logistics and supply chain hiring needs on a whole new level.
Logjobs resume data base is tailored for contract workers…
Not only have we trimmed the fat by dedicating ourselves to one industry, but we also provide an extra level of filtering for those job seekers who are interested in contract work. This means that employers utilizing the Logjobs resume data base are ahead of the game when searching for contract workers. Job seekers who post their resume in our data base have the ability to easily indicate whether or not they are interested in contract work by selecting a field marked “subcontracting.” This information is enormously helpful since time is not wasted by you, the employer, approaching job seekers who may not be interested in contract work.
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Logjobs contract posting section is exclusive for the contract worker community…
Post your logistics projects with Logjobs and attract the right audience. Logjobs contract positions are competitively priced at $99. I thought about this and we’d be giving away too much here. Also why bother signing up for resume access if we’re offering this?
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Logjobs Social, our professional networking site adds another powerful dimension to locating the right contractors…
Logjobs Social is another great way to attract the right contractors. Your position will appear in the appropriate channels, and you can start a discussion about your project as well.
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Are you a logistics or supply chain job seeker?
Job Seekers, be sure to take advantage of all our services geared towards enhancing your logistics and supply chain career:
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Recently laid-off employees are now in plentiful supply and many are available to work as contractors offering a wide variety of critical logistics and supply chain skills.
Savvy employers hire contract workers directly and avoid third party agency expenses keeping contractor costs to a minimum.
Next: Tips for hiring your own contractors.
]]>Full service lease
Fleet operators choosing this popular option should be familiar with key elements of these agreements. Providers make profit margins through both fixed and variable charges with most profits made in the first and second years when maintenance costs are lowest. “Walk-away” terms that shield lessees from early termination penalties can be negotiated to be effective in as little as two years.
Safety and compliance
Safety is the highest priority at any well run company. As a practical matter, safety management is nothing more or less than cost control. It is a cost of doing business and its purpose is to avoid other, more expensive costs. The direct and indirect costs attributable to accidents and injuries, penalties for a non-compliance with regulatory requirements, insurance premiums, legal expenses lost productivity and the business impact of negative publicity are examples of exposures a safety management program seeks to minimize.
In a best practices environment, safety is an integral part of every operation and the policies, procedures and programs governing the business reflect this commitment. Safety is the responsibility of all levels of management, starting with the CEO.
Getting an accurate accounting of current state fleet expenditures and identifying and eliminating hidden costs are cornerstones of fleet cost reduction.
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Click here for part 1 of this 6 part series.
]]>Eliminate costly parts inventories
Buy parts on consignment. Carrying less inventory and paying for parts as used can reduce costs. Leading manufacturers provide parts on consignment. If the manufacturer is not receptive, pursue an independent dealer that is.
Contract maintenance.
Third party providers seek to provide their services for as many customers as possible from each facility they operate to absorb their fixed overhead and indirect costs as efficiently as possible. Purchasers of contract maintenance services can leverage this knowledge by negotiating a favorable rate structure. Purchasers should also consider the following:
· Look beyond just the first and second years - consider the total package.
· Do not pay fixed charges when equipment is not in use because of mechanical failure.
· Get replacement vehicles without paying extra.
Sales and service.
Sales and service are the “no frills” maintenance option. Here, the fleet operator is likely treated as just another customer. However, savvy buyers realize that sales and service providers have the same fixed overhead/indirect costs as contract maintenance providers. A sales and service provider may be having difficulty absorbing its overhead which your business can help solve.
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]]>Maintenance options
Maintenance expenditures are a significant portion of operating cost. To control them, it is important to use the option best suited to your fleet, and realize what leverage exists dealing with maintenance providers.
In-house
Companies considering performing their own maintenance should consider their fleet’s size. This option may not make sense for a fleet of less than 25 vehicles. Mechanics cannot be productive 100% of the time; typically, 40% of their time will be spent doing things like paperwork, sweeping shop floors, handling parts, removing snow and fueling and washing vehicles.
Companies performing their own maintenance should be familiar with the following:
Recent technological advances in engines and components have significantly increased life spans and lengthened maintenance service intervals as well. Yet many companies still perform various levels of preventive maintenance classified by type, i.e., “A,” “B,” and “C.” These schedules are frequently based on arbitrary and relatively short time or mileage intervals resulting in equipment being over maintained adding unnecessary costs.
Take advantage of cost tracking systems.
Proper control of maintenance expenditures requires knowing not just how much is spent in total, but where and how costs are incurred. Executives successfully managing maintenance expenses look at costs by vehicle and by total fleet. Costs in various categories are tracked by period to date, year to date and life to date. Computerized maintenance tracking provides the information to “manage by exception,” i.e., focus on defective equipment or mechanics whose performance is substandard.
Scrutinizing computerized fleet maintenance records provides ancillary data such as repetitive repairs, driver negligence and warehouse/yard damage frequency. Warranty recovery management is simplified as well.
Knowing individual tractor costs per mile gives managers the ability to assign tractors that cost the least on the longest runs, highest costing tractors on the shortest runs.
Click here for part 3 of this 6 part series.
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]]>Tires
Tires are expensed (as purchased) rather than accrued (budgeted for) on the basis of expended miles. Failure to accrue for tires can create an unexpected burden. Tires cost approximately $.03 per mile for a tandem axle tractor and trailer combination (18 wheels).
Interest expense
Some companies do not charge interest for equipment they own or paid cash for, arguing that no notes are outstanding. But opportunity costs of capital tied up in equipment are real so this position understates true operating costs.
Salaries
Sometimes transportation management salaries and benefits are not charged to the private fleet. These expenses may be omitted or charged to “manufacturing” or “warehouse” operations. They need to be included, though, for an accurate accounting.
Key hidden costs areas
Once current state fleet costs are accurately reported, executives can focus on identifying and eliminating hidden costs within their operations. Hidden costs originate in a variety of ways: fragmentary cost accounting of backhauls, poor fleet utilization, failing to use the best maintenance option and deficient management of labor costs are several.
Backhauling: does it make sense?
Logistics executives realize backhauls are frequently integrated with fleet operations. But what cost reduction benefit do they bring? Companies may account for backhaul revenue and/or vendor allowance income in total as a credit to transportation. But this approach does not identify which backhauls are profitable and which are not. Certain backhauls might be profitable to the extent their volume should be increased while others are so unprofitable, it makes better sense to deadhead. With fleets, backhaul cost is calculated from incremental miles and hours since the tractor must return to its domicile whether or not the backhaul is made. Besides incremental costs, backhauls made for third parties may require next day delivery so these costs must be accounted for, too. Lumper costs may also result and must be considered. Make sure you’ve attributed all costs before calculating profit and loss.
Click here for part 2 of this 6 part series.
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]]>Common Costing Errors
There are many resources for the fleet manager to pull together an accurate fleet costing structure. Independent consultants, guides from associations such as the National Private Truck Council and the company’s internal departments are just some places fleet managers can get more information on fleet costing. However, there are several areas where fleet managers tend to incorrectly report costs.
Workers compensation
Drivers are assigned a high workers compensation classification rate code. Drivers however, are sometimes misclassified and these costs are understated. Some companies use “blended” workers compensation rates based on all employees including low cost office workers. This broad brush method is guaranteed to understate the true cost of workers compensation for drivers. Shippers with multiple operating locations in different states may use one workers compensation rate for all locations even though rates vary considerably from one state to another. Transportation managers should audit their workforce to determine that each employee is properly classified by job description and that the correct rate is charged for that classification.
Liability insurance
Self insured companies absorb insurance liability losses directly as incurred rather than by paying a premium to an insurance company. Other private fleet operations may be tied to their parent company’s insurance and report little or no insurance expense at all. In the short run these companies may have favorable loss experience and save premium expense. But over the long term it should not be expected that favorable short term loss experience will continue. Accidents unfortunately and inevitably occur; companies that fail to accrue realistically for liability insurance will eventually face consequences. Well-managed companies have liability insurance costs in the range of 3 to 3.5 percent of expenses.
Click here for part 1 of this 6 part series.
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