Like all carriers, ReedTMS wanted to move more loads to increase revenue and profits. At the same time, the company wanted to control expenses and cut unnecessary costs.
A fixed asset base of tractors, trailers, and infrastructure means fixed costs. If you can ship more freight with those assets, while managing costs, naturally you’ll earn more revenue-dollars per cost-dollar. And that, of course, equals higher profits.
ReedTMS decided that the smartest way to ship more loads, cut costs, and boost profits would be to increase asset utilization. Specifically, the company wanted to:
- Optimize trailer pool size
- Maximize driver efficiency
- Minimize empty trailers
With 80% of its business from dedicated or semi-private fleets, ReedTMS uses trailer pools to deliver the highest level of customer service. If it could reduce the size of those pools, without affecting service, it could reduce costs. And if ReedTMS could help its customers process trailers more quickly, it could maximize the capacity of those pools. Either way, the improved asset utilization would increase profit margins.
Trailer pools are also key to make the most efficient use of drivers’ time. ReedTMS wanted to operate its fleet 20-24 hours a day by effectively managing short hauls, with a high trailer-to-truck ratio. Short hauls could keep the assets moving, without exceeding any driver’s daily ELD limit of 14 hours. As an added bonus, this approach would make drivers happier, by letting them get home at the end of each day.
One downside of trailer pools is that empty trailers can dwell at a site for too long. This impacts both costs and revenue. For example, one ReedTMS customer received four loads in for every one load out, leaving many empty trailers to manage. As a result, drivers sometimes weren’t sure which trailers were empty, or where they were located. This could cause drivers to waste time searching for empties—and hit their 14-hour ELD limit. Without a backhaul, those drivers had to stay overnight and pay for a hotel. On top of that, the idle, empty trailers lost an opportunity to generate more revenue.