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Overhaul Your Understanding: The American Trucking Industry in 2020

Welcome back to our expert interview series, Overhaul Your Understanding. You can listen to our interview with Andrew Boyle, Co-President of Boyle Transportation and Vice-Chair of the American Trucking Associations, or read the interview below.

Welcome back to Overhaul Your Understanding, an expert interview series. I’m Amy Shortman, Director of Product Marketing at Overhaul. And today, I’m going to be joined by Andrew Boyle, Co-President of Boyle Transportation. Andrew is also the Vice-Chairman of the American Trucking Associations and Director of the American Transportation Research Institute. Hello, Andrew, thanks so much for speaking with me today.

Well good morning, Amy, and it’s wonderful to be with you and we have great personal affection for both you and Barry, so we’re happy to participate.

I would love to start Andrew, with sharing with the audience a little bit more about who Andrew Boyle is and your background, which I have been privy in some of the HDA’s PCSC events to be exposed to. And some of the experience that you have is pretty unique. I think that it would also be great to hear a little bit about Boyle Transportation and some of the specialist areas that you work in as well.

We are a motor carrier headquartered in Massachusetts in the U.S. We operate throughout the U.S. and in and out of Canada. Our company focuses on two vertical industries that we serve, defense and government, which we’ve been in for nearly 50 years, and also life sciences, which is the majority of our business, and ranges from biotech, big pharma and healthcare distributors and device makers — which makes up a majority of our revenue. Basically, all the shipments that we transport consist of very high standards, strict requirements for quality, safety, and security.

I’m grateful to work with about 180 logistics and transportation professionals. Most of whom are blue-collar folks and their role has become so pronounced during the crisis of the last six months. Me personally, I’m probably not quite as interesting as the folks I get to work with, but I grew up in this industry.

My oldest brother, Mark, and I are second-generation owners of our company. My folks started our company and we grew up around it doing mostly manual labor throughout our teens and early twenties, and then transitioned to other types of work in management. I did spend time away in graduate school, and later as an investment banker for JPMorgan.

So it was nice to have that perspective, but I really value the type of work that we do and the opportunity that is most gratifying to me, is to provide opportunities for good work and good jobs to blue-collar folks.

Can you share with us a little bit about the trucking industry at the moment? Obviously, as you mentioned, it’s been an incredibly turbulent year for the whole world, but in particular, you highlighted the fact that our professional drivers have really been a critical part of keeping our countries, our economies moving, and people supplied with key products like healthcare and food. Can you share a little bit about your thoughts on the industry, how it’s coped with the recent events and maybe a little bit more of a deep dive into the trucking industry in general?

Certainly, it’s an honor to do so. In the US, nearly 8 million Americans work in trucking-related jobs and about three to three and a half million of those are commercial drivers. It is just a vast, massive industry.

It’s hard for me not to get emotional when you ask a question about that as to how things have gone this year, and a little silver lining during the crisis has been that the general public has been made much more aware of the critical and essential nature of professional truck drivers. So back in early March, we were named the best overall fleet to drive for in the U.S. and Canada. For six years, we were named one of the top 20 fleets to drive for, and this process is conducted by an independent third party that conducts a very rigorous analysis of workplaces. So it’s not one of these pay-to-play type of schemes, but rather an exhaustive 50 different metrics type of review.

And at that moment, when we were named the best overall fleet to drive for, it was really a combination of our efforts to invest in our people and that type of acknowledgment signified the greatest achievement or really proudest moment in our company’s history at the time. However, that was early March, and within a week or two, the COVID crisis really hit in the U.S. and I would say every day since then has been the proudest moment in our company’s history because of the way that our people have responded.

Professional truck drivers are patriots. Most of ours, coincidentally are also military veterans. However, there are certain times when we just have to get behind an effort to support and perform for our fellow person and fellow citizen. And our folks have really stepped forward to do that. It’s been very uncomfortable, it’s been very costly, but I am heartened a little bit by the fact that the general public has been made aware through the public press and mainstream media of the importance of professional truck drivers.

Congratulations on your award there. In terms of professional drivers, do you feel that the current pandemic and the raising of awareness of what drivers have meant to people has helped promote the role? I know that a couple of years ago a common topic at events, and I know you spoke to it as well, was the driver shortage within particularly North America, but that is also a global issue. I know that over in Europe, we also have driver shortages in various countries as well. Do you think that that will help promote the role? And have you seen any impact from that already, or is it too early to tell?

Well, I would take two different paths to answering that question. Number one, look, it’s been uncomfortable for everybody, right? Operating a business, or even a household during this time has been challenging for everybody. However, there are different segments of the economy. Some people can be completely comfortable and efficient in doing their job remotely. We don’t have that choice, right? So say for example, administrative duties or advisory work, or intermediaries like in free transportation, they’re intermediaries. Well, that’s great. Many of them can, just as long as they have a phone and a computer, they’re up and running. We don’t have that luxury in asset-based transportation. The people who actually have to execute don’t have that luxury. So it’s much more complicated. We’ve got to show up to work, we’ve got to get things done, and we have risk mitigation strategies in place from PPE to distancing and engineered protocols.

However, our customers, our clients in life sciences, and ultimately the patients are really relying on us to execute. So we have had some folks, some of our coworkers fall ill during the crisis. And we have others who just made the value judgment and said, I want to go home, I don’t want to work anymore. So we’ve had to invest a lot in hiring more people to basically do the same amount of work at times, and incur massive costs. But philosophically we’re willing to, in the short run, give up profit in favor of keeping our people safe. When you are in charge of people, particularly blue-collar workers, your number one obligation at all times to them and to their families is to keep them safe. So we have spared absolutely no expense to do so, and yes, that can be financially costly in the short-term.

But on the other side of this, you’d like to look back and just say, we did the right thing. And people know, people are aware of that. So we run our business with a very simple philosophy that we invest in great people. Those people perform exceptionally well for our valued clients, and then the clients in turn want to keep doing business with us. So it’s a virtuous circle and it’s really quite simple. I think most companies would like to approach it that way, but we put our money where our mouth is.

That doesn’t surprise me that you say that because I’ve always been amazingly impressed with Boyle Transportation. I’ve had the fortunate opportunity to meet some of your drivers at events like PCSC. And it’s evident that you advocate for their position, respect within the industry, the vital and critical roles that they play as well, and that they in turn feel very looked after. So it was really the first time in the industry when I sat through one of your presentations, it was quite enlightening and it moved me because it’s often a very under-thought-about part of the supply chain, but actually, for most companies, the driver is the face. And that’s the person that has, like you said, the interactions with the life science companies when they’re going to make the collections. And them doing their job professionally correctly, adhering to compliance, is the difference between a product being delivered safely enough and the material insight being effective enough.

So I applaud your outward speech for the drivers and the professional role that they play and certainly in this crisis. Just to finish off with regards to drivers, can you just outline some of the current challenges that they are still dealing with in the industry and maybe some advice on how particularly shippers or people that come in contact with them can help mitigate those challenges?

Fundamentally in the U.S., we have a massively fragmented market. I read a piece probably six, seven years ago, about a group at MIT called the Good Jobs Project and they analyzed an industry that was rife with high turnover. They looked at say, retail workers or office cleaners in New York City and hey, we have high turnover and then as a result, you also have a dynamic where the customers often look for the lowest price. So high turnover equals a very competitive dynamic.

I saw many analogies to our industry there, not specific to my company necessarily, but to the industry at large. What they decided or showed were those companies who invested heavily in their people and try to reduce the turnover, were able to develop greater expertise in quality. As a result, the clients had a better experience. So then they were willing to retain that service provider.

So this Good Jobs theory is one I definitely buy into and if you look at the U.S. market again, it’s massively fragmented and there are different ways to approach it, but it is rife with high turnover in the truckload market for professional truck drivers or sometimes not so professional truck drivers and you get into this death spiral. Well, the way we as a company changed that dynamic is to assure people, so it’s similar to retail where when people have volatility in their earnings and they have an unpredictable schedule, well, who the hell wants to do that job? Right? So we have much of the same dynamic among trucking, in the truck drivers in the U.S., where they don’t know how long they’re going to be away from home. And then they have this rate of pay say mileage-based pay, but they have massive volatility week to week in their earnings because they can’t control the other variables.

So it’s not that hard to come to the conclusion that those factors drive a lot of people away, no pun intended. So if you change, if you basically say, okay, we’ll have a predictable schedule and then predictable earnings that are guaranteed. Well, boy, people can plan their life just like most workers want. So I think that philosophy or that approach has been adopted a little bit more by our peers, we were probably the first to do it several years ago, probably close to 10 years ago. With a weekly guaranteed pay, for 20, 30 years, we’ve had some element of guarantee. But those things really move the needle. And with respect to the industry as a whole, it is a difficult time to encourage people to come out and work, right? They don’t have the luxury to be at home working remotely and there are some elements of risk to the job right now, but we are trying to establish some sort of feeder systems.

Both through military folks transitioning to commercial driver’s license, we, through the American Trucking Association, are trying to facilitate that. And then furthermore, we have a pilot program that was just approved to have some apprentices. Currently, you can’t get in many States get a commercial driver’s license as an 18-year-old, but not drive interstate until you’re 21. So there’s this funny dynamic where some states are much larger intrastate, but then you could have a route that just goes across state lines as a short-haul, you can’t do that. So in many other trades, so say electricians, plumbers, et cetera, you have an opportunity as an 18-, 19-, 20-year old to become an apprentice. And we’re trying to establish something similar with, there are a dozen, if not, two dozen criteria that have to be met in terms of safety systems and the driver trainer on board with the apprentice and so forth, but try to stimulate interest among young people. And I think that’s a step in the right direction.

Brilliant. You mentioned the American Trucking Associations, so for anyone who’s listening who’s not familiar with that can you just give a brief description of what the American Trucking Association does and your role within it?

Our industry is one of the most heavily regulated and taxed industries that exist. And many of those are for good reasons. So I’m not an anti-regulation guy. But given that, we need to have advocacy and interface with government agencies and legislative bodies in the executive branch. So that’s first and foremost, the job of ATA is to be the voice of the industry and try to represent as much of the industry as possible when interfacing with government agencies and bodies. Furthermore, the information sharing among peers is massive. So there are forums for people to share about safety, operations, finance, et cetera. That peer to peer information sharing is key and really trying to stimulate, like we just said, other programs of stimulating interest among younger people and drawing them to the industry and establishing best practices.

So I was, for the last year, I’ve been a Vice-Chair of ATA. So it’s likely that in a couple of years, two, three years’ time I’d become Chair. It’s a tremendous honor just to serve. It’s a volunteer position. So we have a staff, a CEO, and a full staff of a couple of hundred professionals in Washington. But it is guided by the governance of members and all the big participants in the industry are members. It’s service to the industry that has provided me an opportunity to make a living.

One of the main issues in the U.S. transportation industry is the very high values for insurance premiums. In your experience what are the major factors that have contributed to this? And what solutions do you see bringing these to maybe more manageable levels?

We have a very interesting dichotomy here where on one hand, the statutory minimums, the minimum levels of insurance that a motor carrier must carry in the U.S. are ancient. A trucker can have $750,000 in total auto and general liability insurance and still operate. That was established in the early eighties by Congress. Clearly that is way too low. It should be probably multiples of that by now, because just accounting for inflation that doesn’t seem rational.

However, at the other end of the spectrum, we have these crazy nuclear verdicts where there can be in some jurisdictions, an anti-business sentiment among jurors or even jurists. There’ve been many instances where a motor carrier was not even at fault in a crash, but a jury or a judge found in favor of a plaintiff who sued because the only one with any insurance coverage of any scale was a motor carrier. That results in millions, if not tens of millions of dollars in judgments. That drives insurance rates up.

So somewhere in between should be rational. The statutory minimums probably should be higher for both motor carriers and brokers, et cetera. But on the other hand, we can’t allow plaintiff’s lawyers, and unfortunately, it’s not a cottage industry, it’s a massive industry where there’s fraud perpetrated on participants in that market between medical providers, criminals, who deliberately try to crash into trucks and then sue them. And then, of course, the plaintiff’s bars, the trial lawyers are the ones who have investors, private equity and hedge fund, and other individuals invest heavily in having plaintiff’s lawyers go out and sue motor carriers because they bet on the outcome being favorable. So “God bless America” as they say, but somewhere in between lies the truth. I think some higher statutory minimum seems appropriate, but we can’t let the plaintiff’s lawyers dictate what that number is because then they simply sue for that higher amount.

How do you ensure that your company and your drivers are protected in the event of an accident to be able to provide evidence currently? What processes do you have and what’s commonplace today?

Ooh, I love that question. So as you know, I have a shared concern for quality, safety, and security. That’s what our company sells. We sell risk management, we’re not in the transportation business, we’re in the risk management and information management business. That’s what we do for clients. They’re entrusting us with precious cargo, we’re providing them rich information in risk management. So what is required at our level, we’re not an intermediary, we actually have to take ownership of the execution of transportation in risk management. So whom do you hire? Right? And then how do you train them? And so we have exhaustive training program. All of our professional drivers must undergo defensive driving training, what’s called the Smith System, security awareness training, and then hazardous material training, et cetera. And all of our folks have to obtain a security clearance from the federal government.

In addition, what we rolled out about five years ago, was a camera-based system. We have telematics, obviously, that are telling us how fast the vehicles going, what the temperature is, and all those other factors. But video capture has been a game-changer for us, and after rolling that out at about five years ago, we have several cameras on the truck. Historically, if there was some incident with another vehicle, police would show up, we have a he-said, she-said situation. And then we could receive a claim that we’d have to litigate it, all this baloney.

The fact in the U.S. is that typically about 75% of crashes involving a truck are caused by the car driver. So now we have video capture, our safety manager simply emails it to our professional driver who all carry company-issued tablets and smartphones. They show that to law enforcement, the law enforcement officer right away says “you’re free to go.” So we avoid that whole parade of horribles as it were associated with those fraudulent claims.

That has been a game-changer for us, but yeah, painstaking level of execution and painstaking attention to detail with respect to cargo, integrity, and professional driving is all part of risk management.

Right now there are major concerns, and we’re seeing it in the press every day, about the distribution of the COVID-19 vaccines when one comes to fruition. In terms of the distribution and the way in which the industry is preparing for it, what are your thoughts, and what are your suggestions and concerns about that going forward?

Amy, I am deeply concerned about COVID vaccine distribution, currently absent vaccine distribution need. Our industry capacity is extraordinarily tight. There was a slow down a bit in the spring because manufacturing was shut down for a couple months, particularly in some sectors like auto. Currently, the demand is extraordinary. For us demand way outstrips supply, and has for several months, absent from April and May, the whole year, for several years now.

But one recent statistic that came out last week from the Census Bureau in the U.S., is that the inventory to sales ratio had dropped down to its lowest number since 2014. Meaning basically for how many widgets do you have on the shelf every one you sell and it’s down to 1.33, and that means that supplies are very lean and inventories are very lean, which means greater demand for transportation.

I’m very concerned that there’s not much capacity. Just in the last couple of months, we’ve been asked to support newly approved COVID test kits. And even that has been a real strain because we want to do our part and participate and we do it at reduced rates, quite frankly, because it’s an ethical obligation, but there’s not much capacity to do that. And the manufacturer is having a really hard time sourcing capacity for those commodities. So we do a lot of vaccine work, we have for 10 years or so already. We’d be one of the ones participating, but there’s not a lot of excess capacity right now. And we’re investing heavily, we’re buying twice as much equipment as we typically do. We’re hiring way more people than we usually do, but still I’m deeply concerned.

And clearly, if as reported some states that the products would be in would require a say -70C or -80C, it requires solutions, not just shipments, right? So to partner with the C-safes, et cetera of the world, to provide a solution both by motor and in the air because typically vaccines are going at 2C-8C and we’re well equipped to do that. No truck is going to do -70C or -80C. It’s got to be in concert with active containers. Sourcing those and transporting those, it’s going to be a massive undertaking and there’s not any slack right now. Certainly with air as you know better than I, much of the air capacity has been taken out, but maybe some of that can be brought back online or effectively commandeered, but yeah, I’m deeply concerned. And particularly, we’re engaged with government agencies and the big distributor that’s been engaged to help figure that stuff out, but everybody’s concerned because there’s not a lot of slack. But we’re going to do whatever we can.

So do you think that the focus is very much on finding the vaccine as opposed to really the nuances of how that distribution is going to happen? And how do you think that the industry is that through associations like the HDA or the American Trucking Association can put pressure higher up the chain to say, we need this area of the distribution to really be thought out and to be collaborating with key stakeholders now, as opposed to once the vaccine has been found and is starting to be manufactured, and then just expecting that there is a set up ready to distribute this on an unprecedented scale globally?

Yes, I think that’s just begun recently. In the last couple of months, as you know, the big integrators, the big global integrators have begun setting up more storage capacity for the extremely low temperatures. And I think they are looking at it with their air partners either organically or through third-parties, but ultimately let’s face it, no matter what, whether it’s between the manufacturing site or packaging site in an airport or from the airport to the ultimate destination, no matter what it’s going to ride on a truck. And the trucking capacity that’s validated for this type of application is very limited. So, yeah, I think the effort by those parties in the last couple of months, the massive 3PLS and integrators has been more towards storage and assessing air capacity. And I think in the coming weeks and months, it will be flowing into motor as well.

I would like to ask you a few questions to finish off — words of wisdom, shall we say. In terms of anybody who’s listening to this podcast, that’s either new to the transportation trucking industry, what advice would you give them?

Well, the first one I would say run while you can. [Laughs] No, look, it’s a great industry. You have to have a strong stomach. There are many sleepless nights. It’s not the typical nine to five, right? Our operation is 24/7, 365, always has been. That’s a lot different than if you’re intermediary or other participant in the transportation markets. Maybe those are just a nine to five or you have somebody on call, but no, we’re non-stop. So it’s quite challenging, however, if you like to have meaning in what you do, if you like to take pride in what you do, do you like to have a tangible result to what you do…

Well, boy, as we speak with the folks who are interested in working with us, we want to find out other than financial objectives, which we all have, do you like to have purpose to your everyday work? And in our case, all the cargo that we transport is either supplying military service members doing very difficult work or we’re transporting in many cases, life-saving medicine. Well, gosh, that’s something to really take a lot of pride in, and particularly for blue-collar folks, to be able to puff out their chest a bit and be uniformed and be compensated accordingly and have meaningful work. That certainly motivates many of them. So yeah, in that respect, it’s very meaningful and it’s even something that you can explain to your grandmother if you’re a millennial. It’s tangible.

What’s the best piece of advice you’ve ever been given?

It’s very simple. The golden rule. So when Mark, my brother and business partner, and I communicate with our coworkers, we say, please and thank you. And we ask them to do the same with their coworkers and customers. So going back to the golden rule, how do you invest in people, if you were in that role, particularly in a blue-collar safety-sensitive role, how would you want to be treated? Would you want to have the anxiety of not knowing what you’re going to earn or what your schedule’s going to be? Well, then if that’s the case, you’re probably not going to act in the best interest of the company at all times, or of the customer. Because if you’re motivated to drive a lot of miles that means you have to drive faster, go over in your hours. We’re in the quality, safety, and security business, so we’re trying to incent people accordingly.

And so you have to be a little bit empathetic when you’re employing folks and a lot empathetic and try to get them to execute on what’s important to the client and to them as well.

And have a good sense of humor — if I didn’t laugh a lot, I’d have to cry a lot.

I’m a big believer in that, that behavior breeds behavior. And I do think like you, that those small things —  “please” and “thank you,” are very important. And that leads me to…thank you very much for being part of our Overhaul Your Understanding podcast. I appreciate all of the contributions and the insight that you’ve given us today!

Missed the last episode of our podcast where Chuck Forsaith discussed the security risks for COVID-19 vaccine distribution? Listen here and gain more insight into how to protect the COVID-19 vaccine supply chain from risk by downloading the guide.

 

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