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Published December 2015 Truck-Right Data Management Inc. www.truckright.com

Why TruckRight?Growth & Profitability Through Technology

pg. 1

Cost of training

Risks of non-compliance

Labor costs associated with paper processes

Turnover–cost of replacing drivers

Communication

Online training

Automated compliance

Electronic documents workflow

Paperless recruiting & onboarding

Employee engagement

Challenges Solutions

Increasingly, companies are looking for ways to focus

on retention through engagement. However, they are

finding it difficult to do so in a traditional environment.

If you always do what you’ve always done, you’ll always get what you’ve always got.

~Henry Ford

pg. 2

Executive Summary

Some of the challenges that plagued the transportation industry decades ago are still prevalent today. A costly paper based workflow makes it problematic to track compliance, recruit and onboard employees. Until now, communicating, training and engaging with employees who are primarily a mobile workforce has been difficult.

This whitepaper examines how TruckRight and D.A.D services can address these challenges, offering a complete web-based recruiting, background screening and management solution. Together, these two systems can contribute to fleet profitability through the use of a paperless workflow, compliance and recruitment processes, employee training and tools to improve retention through better engagement.

pg. 3

Cost of Turnover/DriverIn a recent study, the average

cost of turnover per driver was

$8,234; with a range from $2,243

to $20,729.*

*The Costs of Truckload Driver Turnover www.ugpti.org

There is a financial impact, regardless of your

company’s turnover percentage. With an average

recruiting cost of $8,200 per driver1, the cost

to recruit new drivers skyrockets to millions of

dollars annually for the transportation industry.

Multiple factors contribute to high turnover and knowing the make-up of these factors allows the adoption of specific methods geared toward lowering costs. The major turnover costs include: advertising, staff labor, official documentation, recruitment, orientation, training, and idle equipment, amongst others.

Retirement will be one of the biggest factors of turnover in the upcoming years. The average truck driver is 49 years old, compared to 42 for all other industries. In the next 10 years the industry will need to hire 89,000 new drivers a year to replace retirements and to meet the expected demand.2

1 Julie Rodriguez, Michael Kosir, Brenda Lantz, Gene Griffin, and Janice Glatt, “The Costs of Truckload Driver Turnover”, Upper Great Plains Transportation Institute, http://www.ugpti.org/pubs/pdf/SP146.pdf

2 Ryan Randazzo, “Truck shortage means thousands of available jobs”, The Arizona Republic, http://www.usatoday.com/story/money/nation-now/2015/11/29/trucker-shortage-means-thousands-available-jobs/76513996/

The Challenge

Turn

over

Cos

t Per

Dri

ver

Turn

over

Cos

t Per

Dri

ver

CompanyCompany

5000

0

10000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

15000

20000

25000

$8,234 average

pg. 4

The Cost of Paper

The average North American company spends $20 in labor to file a single document and $120 in labor to find a misfiled document, with 15% of all documents misfiled or misplaced at any given time. In total, 70% of “white collar” worker time is spent processing paper documents and 50% of an employee’s work time is spent searching for information.3 For companies with no or limited computerization of the recruitment process, this fact makes the handling of paper a major inefficiency and a contributor to high recruitment costs. Changing jobs can be costly for a potential candidate and speeding up the hiring process can help lessen the financial impact on the driver.

Considering the amount of manpower it takes to file documents and search for information, paper files are not only costly in terms of worker time, but also in terms of creating an environment of non-compliant files. As

transportation is a very busy industry, it can be easy to forget about certain documentation or to remember the expiration date for each document and its associated employee, exposing the company to risk of non-compliance.

There are a growing number of third-party paperless compliance service providers and as companies migrate to them, the transportation industry is seeing a shift in document compliance. Application non-compliance decreased drastically to 12.92% in 2013, down from 43.14% in 2012. This shift can be directly attributed to the industry’s adoption of

electronic application tracking systems.4

3 Coopers & Lybrand, http://bielsdm.blogspot.ca/2011_07_01_archive.html4 “Commercial Driver Safety Report”, First Advantage, http://www.fadv.com/Portals/0/Downloads/reports/FADV-commercial-driver-report-032014.pdf

The Challenge

Due to electronic application programs,application non-compliance dropped to

12.92% in 2013 from 43.14% in 2012.

43.14% 12.92%

Non-compliance

2013Non-compliance

2012

$120 in labor to find a misfiled document, with 15% of all documents misfiled or misplaced at any given time.

pg. 5

Safety and Compliance

In order to be compliant with the Federal Motor Carrier Safety Regulations (FMCSR), fleets must maintain files on each individual driver, including an annual driver abstract, written authorization for retrieval of drug and alcohol testing history and confirmation that a driver can safely operate the vehicle assigned, amongst others. Understandably, this is a lot of information that fleets must gather and maintain for each driver and as such, it is not easily accomplished. For many years, trucking fleets gathered and maintained compliant driver files the old fashioned way: paper.

The true cost of an accident can be staggering with not just direct costs such as vehicle damage, but indirect costs, like poor publicity, lost clients and lost productivity. The average cost for a truck accident is $148,279, not including litigation. It would take an additional revenue of $7,413,950 to pay the accident costs, assuming an average profit margin of 2%.5

The possibility of litigation is an uncertain factor as companies may not be fully aware of a driver’s past history, including safety violations. A study of over one million lines of data on truck violations discovered that over 28,000 trucking companies, representing over 200,000 trucks, operated with safety violations.6 The Federal Motor Carrier Safety Association’s (FMSCA) settlement for non-compliance was $36,262,097 in 2014 with an average fine of over $7,000 per case.7

Ensuring that there is proper training on a mobile workforce such as truck drivers is a difficult task. It is not always a guarantee that a driver has the proper training or has received corrective action training and it can be difficult to track in a paper based environment, causing a company to take on unnecessary risk.

The Challenge

5 Jeff Ross, CPA, CRP, “How Much Does a Truck Accident Cost a Company?”, C.A. Short, http://www.cashort.com/blog/transportation-how-much-does-a-truck-accident-cost

6 “Warning! Safety Violations Ahead: Motor Carrier Companies Keep Unsafe Trucks on U.S. Roads”, American Association for Justice, August 2009, http://www.justice.org/cps/rde/xbcr/justice/ Truck_Report_Final_082109.pdf

7 “Closed Enforcement Cases”, Federal Motor Carrier Safety Administration, https://www.fmcsa.dot.gov/regulations/enforcement/civil-penalties

2014 2013 2012 2011 2010

2008 2014

Total Cases (Settled)

$36,262,097 5085

$27,881,994 6069

$31,814,508 6451

$28,275,406 6454

$28,090,842 5889

The Cost of Non-Compliance (Totals), 2010–2014

The Cost of Non-Compliance (Average), 2008–2014

$7,169

$5,050

Average Non-Compliance Fines

FMSCA Settled Fines For Non-Compliance

pg. 6

Trends and Solutions

Mobile technology is transforming recruiting and people management in the industry. The response rate to traditional (and costly) print media continues to decline and have challenges to their measurability, while word-of-mouth cannot keep up with the burgeoning need for drivers. The use of online, mobile-enabled technology reduces the costs associated with searching for drivers, helps with the recruiting of the younger generation and bridges the gap between home office and drivers, making them feel like part of a collective team, regardless of driver location.

Over 95% of drivers had smartphones in 2015, which allowed them to succeed professionally while staying in touch with their families. Smartphones are also a way to help recruit drivers as 67% of drivers surveyed said they use their smartphones when looking for a new job opportunity.8

Given these recruitment trends, a solution is required to connect with drivers where they

can be found, while reducing the high costs of recruitment, training and people management.

Industry trends indicate an ever increasing need for drivers, raising recruitment costs. Coupled with trends indicating a need to engage drivers online rather than through traditional methods, companies need solutions that can help them reduce the cost of recruiting and tap into the supply of drivers where they can best be found.

Trends and Solutions

Recruiting Trends

INCREASING ONLINE JOB POSTINGS IN TRANSPORTATION INDUSTRY: Internet recruiting is becoming more and more targeted and effective as response from traditional print media declines.

Job Trends (Indeed.ca)

Source: http://www.indeed.com/jobanalytics/jobtrends?q=transportation&l=

13 14 15

8

6

4

206 1207 08 09 10 11

Per

cen

tage

of M

atch

ing

Job

Po

stin

gs

JANUARY 2015

0

500,000

Job Posting

Jan Apr Jul Oct

474,047Transportation IndustryTransportation job postings have increased 57% since October 2014.

Clicks on Transportation Jobs have increased 16% since October 2014.

8 Kelly Maddock, “Over 95% of Truck Drivers Have Smart Phones”, KJ Media, http://kjtransmedia.com/95-truck-drivers-smart-phones/

pg. 7

Businesses are increasingly leveraging SaaS (Software-as-a-Service) solutions to service their computing needs, an upward trend that is expected to continue into 2016. The increased adoption is due to the many benefits derived from the SaaS model, wherein software is owned and maintained by a third party and provided to customers on a subscription basis. The SaaS model reduces total cost of ownership, allows reductions in design/development, infrastructure and operating costs, and enables simplification of the budgeting process.

SaaS solutions can bring many efficiencies to the recruitment process, greatly lowering a major cost for companies in the transportation industry and thus contributing positively to ROI (Return on Investment). They provide cost-effective and flexible means of computing to businesses, allowing for rapid deployment and growth with reduced capital expenditure. Human resource requirements are much lower under SaaS offerings as the need to develop, maintain and upgrade software installations is eliminated.

Trends and Solutions

pg. 8

About TruckRight

TruckRight is a driver-centric platform, designed to accelerate the recruitment and onboarding process. The simple paperless workflow allows driver access from any device, from filling out an online application, uploading documents, pre-hire orientation and orientation. The application tracking system flows seamlessly into a paperless Driver Qualification (DQ) file.

The “One Stop Shop” in TruckRight, ensures compliance through automated communication with D.A.D services. With D.A.D (Drivers Authenticated Data) services background screening and annual reviews become automated. With all required compliance documents available.

Online training from pre-hire, orientation to continuing education is made easy with our mobile friendly Learning Management System (LMS). Easily upload any and all repetitive documents, power points and videos to ensure your drivers are continually updated.

The Solution

Why TruckRight? Engagement with a candidate,

from the initial contact, through

their life cycle with a company

is paramount to the success and

profitability of any fleet. Retention

is maximized through good

communication, mutual respect

and continued education. Not only

will employees feel empowered,

their work habits will improve –

meaning a safer, more professional

and profitable fleet.

pg. 9

TruckRight has four distinct modules on a SaaS platform, providing workflow for: recruiting, training, safety and compliance, and payroll solutions for the transportation industry.

About TruckRight

1. Recruiting – Application Tracking System

a. Automated compliance*

b. Mobile-friendly online application

c. Career page linked from company’s website

d. Paperless workflow

2. Human Resources Information System (HRIS)

a. Recruiting module

b. Risk management

c. Online training

d. Employee engagement

3. Payroll

a. HRIS module

b. Transportation specific

c. Employee view pay settlements

d. Reporting

4. À La Carte

a. No contract

b. Pay per use

c. Online application linked from company’s website

d. D.A.D services

Rec

ruiting Training

Compliance

Safety

Life Cycle

* Requires D.A.D services

pg. 10

TruckRight

In addition to the common benefits of SaaS that contribute to a positive ROI, TruckRight also provides tools for engaging with drivers and streamlining the driver management life cycle:

ĵ Online Driver Portal

ą Connects companies with drivers, wherever they are

ą Allows drivers to help maintain compliance and keep their DQ files up to date

ĵ Career page with online job application

ą A built-in online presence that connects companies with the multitude of potential drivers online

ĵ Learning Management System

ą Enables drivers to train wherever they can access the internet – no need to schedule classes or book training venues

ą No need for separate expensive LMS solutions

ą Fleets can develop their own training modules or use training from third party providers

ą Corrective action training

ĵ Employment Verification

ą Stand-alone or integrated use of D.A.D services – a secure employment verification service for the transportation industry

Drivers Authenticated Data (D.A.D)

D.A.D provides the North American trucking industry a secure and multilingual employment verification service.

FAST, ECONOMICAL Background Screening Services:

ĵ Employment verification (Safety Performance History Records Search)

ĵ Driving records

ĵ PSP reports, credit/criminal checks and other driver documentation

ĵ Automated features help keep driver files in compliance

ĵ Driver data exchange

ĵ Unbiased opinions on background checks

ĵ Secure document handling

ĵ Authentication of documents

About TruckRight and D.A.D

pg. 11

Conclusion

Ultimately, the North American transportation industry spends millions of dollars on inefficient paper-based workflow, recruitment and driver training processes each year. “If you always do what you’ve always done, you’ll always get what you’ve always got.” Now you have a choice.

Truck-Right Data Management Inc. believes that its proprietary systems — TruckRight and D.A.D — will improve your profitability by streamlining workflow, improving retention, facilitating training and engaging employees, while helping maintain compliance.

1.855.932.9323

(855) IFAXDAD (432.9323)

todd@truckright.com

www.truckright.com

Growth & Profitability Through Technology

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Todd CornettTerritory Sales Manager