Breakthrough Fuel Program

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Feb 26, 2008
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Does anyone out there have a customer that uses this system? For those not familiar with it, it is a program that removes the entire fuel component from the freight rate. In other words, you bill a base rate and submit an actual fuel receipt for that portion of your trip. There is no need for a fuel surcharge. I am not sure yet if you have to purchase fuel at one of their designated stations or not. We have a major client investigating adopting this program, and already, I don't like the sound of it. If anyone can provide more information about how this works, I am keen to hear. Thanks in advance.
 
Seems like the management of it would be extremely cumbersome and wouldn't save money in the end. Some accountant in a back office somewhere had a great idea 1 day and the owners think they are going to save millions.
 
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Lowmiler88, that is exactly what I thought. If you go onto their website, it really isn't very clear as to how the program functions in the real world. They also are involved in marine traffic and the control of fuel costs for that mode as well. Our client has asked for freight rates with the fuel costs out. As a broker, I can only imagine the responses I will get from our carrier partners when I ask' "what's your rate from Chicago to Toronto without any fuel?"! I applaud innovative thinking and going outside the box for new solutions.....but come on!
 
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It sounds like the first step in breaking out a carrier's costs to mitigate the carrier's profit margin. The next rounds would be "What's your driver's pay?", "What's your insurance cost?", "How much is your driver pay?", and so on, and so on. I expect it is the start of a very slippery slope.
Decisions would be made on who buys the cheapest trucks, hires the cheapest drivers, pays the least amount of insurance, etc.
The last line in the negotiation would be "Your competitor is only making 1% profit, how low can you go?".
It is however, an interesting concept.
 
This is why I'm somewhat afraid of the Elog mandate. It's not going to be used for only HOS reasons.
I can envision in the future any random broker/customer demanding "access" to the truck's elog/tracking system so they can see the "exact distance travelled" and use the truck's computer info to figure out the "exact" amount of fuel used and other ridiculous things. For example, something stupid like: "Your driver was idling for X number of minutes/hours so we're not going to pay for that."

I know certain types of customers already require access to their carrier's tracking systems, which is fine, but I can see this becoming a regular request all around for no good reason. Elogs are going to be another "tool" in the "stick it to the carrier" toolbox.

It is a very "slippery slope" indeed!
 
Paid by the mile is soon going to become a thing of the past. I can see where we're all going to be paid by the hour, or even minute, in the not-too-distant future.
 
Paid by the mile is soon going to become a thing of the past. I can see where we're all going to be paid by the hour, or even minute, in the not-too-distant future.

I'm trying to figure out how to get away from mileage and figure out hourly pay rates so every hour is covered, it's tough because you still have to make sure they make more driving than sitting. I'm close but not sure it's a good thing on the company side.
 
Drivers ??? ... well they're going to be paid salary. They get paid whether they drive or sit ... won't make one iota of difference to them.

The law says drivers can only work x number of hours per week, so we're going to pay them y for those hours. x times y = weekly salary. It's completely up to us, the carrier, whether we get value out of that or not.
The truth of the matter is that drivers should get paid like that. It's not his fault the shipper didn't have the load ready. It's not his fault the customs broker forgot to enter the paperwork. It's not his fault the receiver was not prepared to take the load. It's not his fault dispatch did not have a load home for him.
Liken that to a factory worker. If they get called in to work, they get paid whether the line runs or not. It's up to the management to see that everything is in place for the worker to work.
And Salma, you're right. The E-log is going to be used for more, a lot more, than just an electronic log book. It is irrefutable proof that your truck entered the customer's premises at 8:40 AM for his 9:00 AM appointment. It is irrefutable proof that it took the receiver 7 hours to unload that truck, and so on, and so on. It's only a tool in the "stick it to the carrier" tool box if you let someone put it there.
I said this before somewhere in these forums ... knowledge is power, and power is everything.

Anyways, we're getting off topic here. You folks should really check out this Breakthrough Fuel Program ... makes for some interesting reading.
 
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Hourly pay is very bad idea for a couple of reasons: First and foremost, hourly pay works against people who have initiative and hussle.. why go the distance when Chub Chubs.. who weighs 400 lbs and can't work half as efficiently as you do gets more because it takes him longer to complete the task. And second.. your time (assuming you're an employee ) has value TO YOU.. but none whatsoever to your employer. An employer is only interested in your productive output (not your time on the job).. and that's really what the employer should be paying for. So why should an employer pay for something that has no value to him/her?

Will customers ever pay their supplier carriers and brokers an hourly rate? No way.. not in this lifetime or the next. The name of the game is productivity.. and hourly pay works against that and disincentivizes giving one's best effort. Now, is mileage pay perfect? Of course not, and that's why we have ancillary pay for loading/unloading, stops, tarping etc. It isn't perfect.. no system is.

About five years ago the president of a large Eastern Ontario carrier proudly proclaimed that drivers would soon be paid hourly.. yup.. but he wasn't about to be the first one out the door with it. He finally understood that the pay pie doesn't get BIGGER depending on what pay system you use. You can base your pay on the transits of Jupiter's moons..or on Martian solar eclipses..or on boob size for that matter.. but at the end of the day the pay pie is still the same size, and the size of the drivers' paycheck remains the same.
 
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Interesting take, but I have to ask you, how can can driver Skin Skinny work any faster than Chub Chubs? The law says he can only drive 105 kilometres per hour. He can only work so many hours per day, and so many hours per week. Those hours are electronically monitored and correlated with GPS locations. Other than loading and unloading where it only matters in flat deck work, there is no way for Skin Skinny to get in any more miles than Chub Chubs. Given that both drivers are operating within the legal parameters, if Skin Skinny really appears to be more efficient than Chub Chubbs, then maybe the real question is "what corners is Skin Skinny cutting?". The alternative is that Skin Skinny is operating outside the law.

What needs to be understood is the days of the 100 MPH dispatch are gone. No longer can the inefficiencies of the supply chain be absorbed by the driver's log book.
You are probably correct that in the immediate future customers will not pay carriers by the hour. However, as carrier, I will have established an hourly rate for my services, and I will apply a time frame within which I can get your job done. My flat rate to you will be my estimated time to complete the task times my established hourly rate.
As an example a trip from Toronto to Vancouver takes roughly 45 driving hours. On a trip like that I shoot for $135.00 per working hour. What's the going rate for a tandem reefer trip from Toronto to Vancouver? Depending on the customer, I'm getting between $6,000.00 and $6,500.00.

For far too long shippers have been asking carriers to do them a favour by getting a load to destination no matter what. So much so that it has now become SOP. Every day, every load, the shippers now ask that of their carriers. The reality is the carrier itself can do nothing with that request unless they ask the driver. So the driver, for whatever reason or coercion, agrees that he will fulfil the request. Lots of drivers over years and years have died fulfilling that request. Now along comes a bunch of rules that detail speeds and times and processes that drivers must adhere to else they will find themselves on the wrong side of the law. To cap it all off, a government says since you people have not been able to police yourselves for the past 75 years, we're going to do it for you ... enter the e-log.

I'll assume by your moniker that you're a freight broker. Last minute trucks for last minute, hurry up and get there, loads are going to be a thing of the past. Eventually your customers will hire you not for your ability to pull a rabbit out of your ass, but for your ability to acquire and keep a steady and consistent carrier base that can flow with the ebbs and tides of their business. You're role in the supply chain, like mine, like a shipper's, like a receiver's, is changing rapidly, and this industry really doesn't care if you like it or not.

Compare the new face of road transportation to that of the airline industry. You can't call up Air Canada and say I have a passenger in Toronto that wants to leave for Vancouver right now so send over a jet. By the same token you will not be able to call up a carrier and say I have a load to go from Toronto to Vancouver that wants to leave right now, so send over a truck. You'll simply be told that the next available driver will be ready to leave in six hours.

Get out of the 20th century folks. Embrace the future because it's real, and it's here.

WOW, did I ever get off topic .... anyways that is my soapbox speech for the day :)
 
Good points Michael.. but why not implement hourly pay right now and be a pioneer.. first one out of the gate with it? Guaranteed you will have drivers lined up at your door. The drivers would like that because hourly pay effectively makes YOU pay for every delay the shipper, receiver, the DOT, bad drivers, and GOD throw your way. Truck hung up in traffic? Thanks Mike.. I'm paid hourly..Road washed out? Thanks again Mike, I'm paid hourly.. Receiver's crane down for the count? Thanks again Mike, not my problem as I'm paid hourly. Now, should drivers be paid for all of these delays? Sure, in a perfect world they should be. But you and I and them don't live in a perfect world.. so why should you or any employer take it upon yourself to make it perfect for others?

True true true.. the world is changing. And the funny thing is, I now get more service failures for delivering early than late! Shipper says load is ready today but receiver wants it next Thursday.. those type of scenarios are becoming more common as no one wants to pay for inventory anymore nor does anyone want to incur the risk of having material sit idle and poorly secured in a lot somewhere. I almost never get 100 mph dispatches anymore.. I'm forever trying to get receivers to book earlier.. it's actually become quite annoying.

Hourly pay may work fine for a shop where people are closely monitored and the work environment is under the employers' control. But as you know, our industry is an entirely different kettle of fish.. very little is under our control.

I guess its not hard to see that I prefer incentive based.. and that's in part because that's the way customers pay me. No one will pay me hourly.. and if I wanted that I'd be working on the line at GM. I do better on incentive based pay.. its a the most honest way to pay because inspite of its flaws it compensates based on the value I've generated for my customers. No value no money..
 
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I can understand your dislike to hourly based pay. As a purchaser of transportation services, one, you need to be able to deal with absolutes, and two, the first thing that comes to your mind is "how much is that S.O.B. ripping me off for?". Like all changes, that will all sort itself out soon enough.

The biggest reason for not being first is because I have to still compete with users of paper logs. Once everyone across the continent is electronic, the playing field levels, and it makes it that much easier to go hourly.
I agree that incentive based pay is a preferred method. However, with all the traditional incentive parameters redacted from the formula, i.e., the more miles you run, the better your pay, what is left to entice a driver to do better? For us, we're approaching this from two directions. First, generous flat based pay. In situations where nothing is left to chance and the only possibility of failure is a driver screw up, we offer flat based pay. The benefit is that drivers who prove themselves capable of these lanes, stay on these lanes, and garner a substantial income increase. Second is alternative incentives such as fuel consumption, completed paperwork, safety consciousness, etc. Run harder, run faster, run more, doesn't work any more.

Inevitably the hourly rate will be the same whoever you work for, the same as it is by mileage based pay today. It's all going to come down to whoever has the best incentive package is going to get the most and the best drivers.

Funny you should make the analogy to the GM line. What is really the difference between driving a truck and working the line these days? In both cases you sit in your assigned area and push buttons and turn knobs. You start when the rules tell you to. You take your breaks when the rules tell you to, and you clock off when the rules tell you to. The difference I guess is that in a truck you get an office with windows and you don't get that on a factory line.

Today, as we speak, this, the driver pay situation, the effect of e-logs, the autonomous truck, etc., etc., etc., is all uncharted territory. It could very well turn out that both of our visions for the future are way out in left (or right depending on your bend) field.

Regardless, it does make for interesting and entertaining conversation :)
 
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Good discussion although "revulsion" is a bit too strong of a word. Hourly pay is more conducive to assembly line work because GM can control every aspect of the line.. i.e. the line is less likely to be disrupted by outside influences like flooding, random government inspections and bad drivers.. the line is an enclosed and a tightly controlled environment whereas a driver's work environment is far less controlled and subject to a thousand disruptions beyond anyone's control. Apart from mileage pay there are other incentives.. look at your own situation.. I'm assuming you or someone in your family got it started as a one truck operation. You hussled and had the initiative and smarts to go to truck two three and four etc.. Drivers have those same opportunities today. If you're constrained in some way then you can break out of that and go on to the next level.. but one can't do that by remaining a driver and nothing more.. same in any other line of work including mine. Can only do so much from my baement cubbyhole.. if I want to go further I'm going to have to assume more risk by hiring more people, getting a real office in a strip mall, and perhaps buying my own trucks along with all the headaches that entails.
 
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I see where you are coming from !!!
First the outside factors that you are referring to are all really minor in their influence as they are generally the exception, and not the rule of the day. Today we manage the exception, and not the everything.
The incentive part of your statement ... a driver is limited by regulation as to the amount of earning potential he has available to him. No different than an airline pilot. To the driver's mind, he needs to make every second of that earning potential profitable. On the other hand the GM line worker can work all the OT he wants to because there is no law that limits his earning potential. He could even take on a second shift at the Ford plant !!!

If the driver wants to take that next evolution to chance bettering his lot, then a company driver becomes an owner-operator, and an owner-operator becomes his own transportation company, and a transportation company buys another transportation company, and so on, and so on. We foster that spirit by offering good, safety checked, e-tested, end-of-cycle power units to company drivers that want to be owner-operators with a 0% interest loan, on a repayment schedule that is structured to see them successful. It's a good program and it works very well. I get to keep a good driver, and the driver gets to take the next step in his career with a solid footing under him.
 
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It's a very interesting discussion, folks !
Never liked to be a peace disturber, or opening can of worms , BUT..
Hear me out..
Many of you noticed slow moving trucks on a highways, going 10-20 km/h slower than a posted 100 km/h speed limit..
My guess is that about 75 to 90% of them getting paid by the hour and about half of them in a lower pay bracket..
So, here is a question :
-Would you be able to have sufficient incentive in your pay system to make driver work more efficient ( mileage wise)..?
My only reasons to drive below a posted speed limit on a 100 km/h highways are fuel and safety.
And I'm planning my trips that way.
 
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Open and honest discussion is always welcome :)
Transportation is all about safety first these days. Not that it wasn't important before, but it was never the prime objective like it is now.
The majority of slow trucks you see these days are completing two very important tasks. 1) staying as safe as they can be, and 2) conserving as much fuel as they possibly can. The two biggest reasons 1) accidents hurt, and 2) fuel consumption reduction bonuses pay well.
In our system we have sufficient incentives to entice drivers to work smarter. Our fuel bonus systems is based on mileage, so the more efficient miles you do, the more money you make. I have one driver that is on track to put an extra $12,000.00 in his pocket in fuel bonus alone for the year. I have several others that are close behind him.
We also plan trips with our main focus on safety and fuel efficiency, and so far it's working out just fine.

Fun factoid ... did you know that at 80 miles per hour a Michelin radial truck tire starts to go out of round?
 
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If there are any carriers or brokers on this site, currently doing cross border traffic for Nestle's Canada, I would be very interested in hearing your thoughts or concerns about this Breakthrough Fuel program. I have no interest obviously, in discussing your lanes or your rates, only how you think this program will affect your operations and/or service. In order to keep these discussions as confidential as possible, please PM me and we can decide on which platform our discussions could continue. Thank you in advance.
 
Old thread ... but here is my 2 cents on Breakthrough.

A LOT of major shippers who are based in Wisconsin and increasingly Chicagoland are using this system. Breakthrough was created through a group that were transportation managers/directors at Fortune 500s. It's sold as a win-win for carriers and customers but really I agree, just a nightmare to administrate. But if you want to do business with customers such as Nestle, SCJ, ConAgra, SCA, and a lot of the big guys based in that area, you have to comply. It is not an option.
 
It's a very interesting discussion, folks !
Never liked to be a peace disturber, or opening can of worms , BUT..
Hear me out..
Many of you noticed slow moving trucks on a highways, going 10-20 km/h slower than a posted 100 km/h speed limit..
My guess is that about 75 to 90% of them getting paid by the hour and about half of them in a lower pay bracket..
So, here is a question :
-Would you be able to have sufficient incentive in your pay system to make driver work more efficient ( mileage wise)..?
My only reasons to drive below a posted speed limit on a 100 km/h highways are fuel and safety.
And I'm planning my trips that way.
In Quebec we are obliged to limit our truck speed to 95 km/h so part of your theory is wrong right there.
Once the ELDs are up and running that is the next project for the US. Speed limiters will, apparently, save thousands of lives