The driver decrease is pushing industry leaders to think outside the box. The big question: How do we increase driver retention and bring on board new drivers? Last month, we discussed Blue Bloodhound and its efforts to connect drivers with carriers quickly and easily to give drivers more control and act as 1099 independent contractors.
Now, we’re going to look at Overhaul, a company that shines a light on driver professionalism and accomplishments.
IN THE BEGINNING…
For 16 years, Barry Conlon ran a company called Freight Watch. His network and connections were geared toward providing a logistic security solution for high-value shippers. “I knew a lot of the P&L holders, large transportation budgets, and the Fortune 100-200 companies out there. I also dealt directly with their chief security officers, because the primary victim of the loss of freight while in transit was the transportation department,” says Conlon. “The driving force behind Overhaul came from back in my Freight Watch days.”
Armed with both connections and sufficient industry insight, Conlon founded Overhaul with a specific goal in mind. “I always knew getting inside the driver’s head was something that I wanted to do, because a good day or a bad day was always driven by what that individual would do with the freight. Having a truck and making sure to have the right vendor supply the transportation services are important and will never go away; the most important person in the whole ecosystem of distribution is the driver.”
For a company to have enough confidence in a driver to know that driver is whom it wants to be pulling its high-value freight is an important part of the industry and always will be. So, getting to the bottom of driver needs was an important step in the Overhaul foundation. Regarding getting into the heads of drivers, Conlon asked basic questions: “How do I look at the driver population and give them enough incentive that it will meaningfully change their life and how does that reflect directly?” The answers? By providing drivers with performance incentives while in transit, removing cost from the system for shippers of high-value freight when they decide to look for something disruptive and new to drop costs, while providing reassurance and trust that they are not going to end up paying true extra savings on the backend for performance. “So, that was the challenge. Providing the technology that could actually provide that ability to both sides of the equation, the buyer and the seller, in one online marketplace as a solution.”
KNOW THE INDUSTRY
The best way to succeed in any business is to know the industry. “Transportation is vertical,” says Conlon. “It requires specialization; it requires a deep understanding. The nuances of transportation are profound. Typically, large, high-value manufacturers are almost exclusively dedicated and held in the grip of large, 1,000-plus-unit transportation companies—the dedicated fleets that are out there.” Overhaul stands apart by providing buyers with an opportunity to break the grip they’re currently experiencing wherein they have to pay a premium. “Now they can start trading with trusted resources who are already out there and, in some cases, already applying the services through a 1099 relationship with a large carrier.”
The benefit of Overhaul’s service is a two-way street, wherein both ends benefit. “Just as shippers know that and pay a premium for getting that professional, we’re putting that professional directly in line with that buyer and eliminating the hold of the large carriers,” says Conlon. “We’re offering drivers a world where we keep them moving and flowing. We provide them with the tools to be more efficient and productive in their engagement, which we all know transfers to a stronger bottom line for the driver.”
When looking at new or potential job opportunities, one question comes to mind: What’s the pay like? Well, with Overhaul, not only is the pay good, so are the incentives. “There is about a 30 percent net increase in take-home pay for a driver who operates on Overhaul,” says Conlon. This is one of the steps in Overhaul’s mission to dramatically changing a driver’s world. “We want to be in a world where the driver never has to factor another invoice. $19 billion a year is factored to drivers in the US today. We all know, as business owners, that factoring is a sign of stress; it’s a last resort, not something you want to do.”
“It’s hard to get out of that debt trench once you start factoring,” continues Conlon. “You need advances and everything that goes along with it. That’s the kind of debt trench grip that most of the owner/operators are in. All the profit margin is taken by the large carrier, owners, or brokers. So, providing drivers with their fair share of that is one of the key differences of the Overhaul platform. We provide the drivers with the means to never have to factor again. We predict in the region of the 25-30 percent net increase in take-home pay if the driver is operating in the program.”
FROM VETTING TO INCENTIVES
Overhaul uses a traditional vetting process for drivers. “It’s the background check, a DOT check, drug screening, what they’re used to dealing with when working for third parties,” says Conlon. Once the initial vetting process has concluded, Overhaul becomes less interested in background checking and focuses more on foreground checking.
“We’re shining a light on the driver’s professionalism by showing the customer four key milestones in transit,” says Conlon. “Part of my experience with Freight Watch was defining what constitutes a secure, trusted transit or transport. We understood what it took to deliver something intact and on time. There are certain milestones that must be passed in order to achieve that and secure that. We’re shining a visibility light from the buyer’s side of things to actually see this occurring.”
Which leads us to the incentives program. “Every time drivers hit these milestones, they get a bonus, which they receive at the end of the day. It’s immediate, but more importantly that secure transit is then logged into the driver’s profile,” explains Conlon. “If a driver completes 15 of what we call ‘trusted hauls’ and gets the Eagle Award—an actual award from each transit that’s delivered successfully and on time—that driver gets to climb a meritocracy ladder.”
From bronze, the driver can then move up to silver level. Once the driver reaches 25 completed deliveries, s/he gets to gold level, which will allow the driver to be put in touch with the most high-value loads that pay—in some cases—as much as 25-30 cents per mile extra. And, these incentives are not modeled into the 25 percent net/net. “It really is a smarter and harder play for the driver. Really giving the driver a chance to shine is what this is about. It’s not about the driver’s background, because we all know criminal history checks don’t tell you if a person is a criminal,” says Conlon. “It’s about professional checking on what the driver does day to day around performance incentive programs.”
“We’re bringing that to the transportation world by allowing the driver to actually show just how good s/he is and be rewarded for that. These drivers are professionals; they’re doing it day in and day out—their skin is in the game. They’re out to make sure that they maintain the trust of the customer,” continues Conlon. “We want the best of the best coming into our system and they get rewarded for doing it. It’s a simple system. It’s really, genuinely a simple system of providing the right incentives and the reward the driver deserves.”
This screen shot provides an example of the Overhaul app in use.
THE DRIVER POOL
Now, we get to the meat of the problem—and the potential solution: the driver shortage. “We know that there is this pending wave of retirements coming soon based on the profile. Overhaul shining that kind of professional light on this industry will attract a younger class of driver. It will secure what is a rapidly growing industry that needs more drivers—not less—and has a shortage right now,” says Conlon. “This kind of looming shortage that is only getting worse is going to have an impact on rate, which is going to affect the buyer.”
“In a situation where you can make a living in this industry and attract some new talent is a real win for everybody, quite frankly. One of the things that we hope to do is show the most important person in the system a little bit of trust on a two-way street—give him a greater earning potential and then see what happens.”
The Overhaul platform was designed with the knowledge of what it takes to make the industry work. “We’re not developers coming in with an app that’s going to change the transport industry. We are supply chain professionals who understand what goes on in this industry and we’re trying to make drivers’ lives a little bit easier—to allow them to enjoy the job again, because you can make a decent living,” says Conlon.
“Drivers are getting a chance to show, in a social media kind of way, just how good they are. We want the best and the brightest out there to come in and trade in our marketplace. That’s going to work for the driver, as well as a new buyer who currently doesn’t shop here. We’re bringing that level of individual, strong, dependable customer base and providing a portal for drivers to actually get these customers, where they never previously could dream of that,” continues Conlon. “Both sides win in that environment. That’s truly disruptive to the industry.”
As for the future? Plans are being made. “At a point in time, we will probably expand into LTL next and then we’ll look at the last mile. Right now, we’ve got a clear plan around developing and expanding that network in the Overhaul system and then we’ll see what happens next.”
FOR MORE INFORMATION:
Find out more about Overhaul and its services, visit www.over-haul.com.