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United Materials Trucks
United Materials Trucks
PACCAR Financial Helps Bulk Transporter End High Driver Turnover with Fuel-Saving Peterbilts

Fuel Savings Allow Blue Flash Express to Increase Driver Pay

For Blue Flash Express, the driver revolving door was more than just a drain on morale. The bulk contract carrier’s high annual driver turnover rate also caused a seemingly unending stream of profits to go out the door, too.

“Every year we were replacing a majority of our drivers,” said Jason Aguillard, vice president of operations for Blue Flash Express, which operates a fleet of 60 trucks driven by 50 company drivers and about 10 owner-operators. Baton Rouge, La.-based Blue Flash Express hauls dry and liquid products in bulk and dry van trailers – everything from bulk resin pellets to make plastic 2-liter bottles and powders, to non-hazardous liquid oils and polymers.

Blue Flash operates its fleet primarily from two company-owned locations: a 19-acre full-service bulk export container loading facility on the south side of Houston in LaPorte, Texas; and its main terminal in Baton Rouge. There are also owner-operators who operate from various locations throughout the Carolinas, Georgia and Tennessee.

While recruiting and training costs are not inconsequential, Aguillard said the loss of anticipated revenue that could have been generated by the idled trucks represented the biggest drain on the bottom line.

Taking delivery of 26 Peterbilt Model 579s equipped with PACCAR MX-13 engines and 72-inch sleepers with premium interiors helped stem that loss, he added. And because Blue Flash Express financed the trucks through fair-market value (FMV) leases from PACCAR Financial (PFC), Aguillard said he got premium trucks with monthly payments that fit the company’s needs.

“We looked at buying used trucks, but couldn’t find any with the specifications we needed for greater driver comfort and productivity,” he added. “And our experience in leasing with a competitor and its partner OEM was just unsatisfactory.”

“In many cases, they provided financing packages with cookie-cutter trucks equipped with pre-selected specifications for bulk transporters,” he said, “The trucks didn’t offer us the off-loading capacity we needed or the driver amenities we wanted. And we couldn’t choose alternative specifications that would have worked better in our operation. We had to take whatever they had available.”

Aguillard is convinced that being limited to trucks that didn’t quite fit its operation contributed to the high driver turnover at Blue Flash Express.

“Buddy Valentine, our sales representative at Peterbilt of Louisiana and PACCAR Financial district sales manager, Chris Kittrell, made the process of ordering our replacement trucks and financing them very easy,” Aguillard said. “The fair market value lease from PFC allows us to choose trucks with the specifications we need. At the end of the lease we have the option to buy the truck, re-finance it or simply walk away. We don’t have to worry about residual values or what’s happening in the used truck market since PFC takes over all of that risk. And because we can get premium Peterbilt trucks, PFC can use the trucks’ high residual values to provide us competitive monthly payments that fit our operation’s budget.”

Besides the financial benefits that have come from FMV leasing with PACCAR Financial, Aguillard said Blue Flash Express has seen its driver turnover rate plummet. Since the new Peterbilt 579s went into service starting in July of 2014, Aguillard said Blue Flash Express hasn’t had to replace a single one of the 26 drivers assigned to those trucks. With the company’s previous high turnover rate, Aguillard said he would have expected to replace at least a dozen or more of those drivers within a year’s time.

“We feel that having a better truck, both in terms of how they look and how they run, has been a key to helping with driver turnover as well as recruiting better drivers,” Aguillard said. “The Peterbilt 579 with the 455-hp multi-torque PACCAR MX-13 engine, 10-speed manual transmission and air-assisted hydraulic clutch offers our drivers a truck with plenty of power and makes it very comfortable to drive and easy to shift. The 72-inch high-roof sleeper provides lots of storage space and plenty of room to walk around the seats and into the sleeper.”

Then there’s the money that the company saves with the improved fuel economy the aerodynamic 579s and fuel-efficient PACCAR MX-13 engines offer. With the Peterbilt 579, Blue Flash Express has seen a .5 mpg improvement in fuel economy compared to the older aerodynamic trucks they replaced. With that ½ mpg improvement in fuel economy, and mileage for each truck averaging between 125,000 to 150,000 miles annually, Aguillard figures his company saves about $5,500 per truck in annual fuel costs or about $143,000 for all 26 trucks. While the fuel savings is substantial, Aguillard said the reduction in downtime due to unexpected repairs, though difficult to quantify, has been substantial as well.

While the decision to replace trucks coming off leases with new Peterbilt 579s has had a huge impact on driver retention and fuel economy, the decision to go with the Peterbilt 579s resulted from another more immediate problem the company has had with the trucks they’re replacing, according to Aguillard. Blue Flash was experiencing serious warranty issues with the engines on the trucks it was currently operating.

“In 2012, we acquired a Peterbilt equipped with a PACCAR MX-13 engine to test out the engine,” Aguillard said. “After two years of operations, we were pleased with its performance. We had none of the issues we had with the truck it replaced. It got great fuel economy. And the driver liked how quiet the truck and engine ran.

“Based on that performance, we decided two years later that the time had come to start replacing the trucks coming off leases with the 579s equipped with the PACCAR MX engines,” he said.

The combined reduction in maintenance costs, fuel expenses and recruitment costs means Blue Flash has more money to increase pay for drivers, which even further enhances the company’s reputation as a place drivers want to get hired and stay, he added.

The impact of a lower driver turnover has been transformative for Blue Flash Express.

“Before we leased the Peterbilts from PFC, our customers wondered what was wrong at our company when they saw a new driver with each new delivery,” Aguillard said. “Then there was the drain on our employee morale because of the potential for them to be confronted with unhappy customers due to shipping delays or more work that had to be done to get caught up. Plus, it took a lot of effort to hire and retrain replacements.”

It can take upwards of three weeks or more to hire and train a new driver. Because of that lead time, Aguillard estimates that up until the time the company started replacing its older trucks with new Peterbilts, the company had eight or nine units sitting idled at any given time.

“Meanwhile, we were still paying the paper on those units that were just sitting there,” he added. “That’s a lot of money going out the door. And with no revenues coming in to offset that cost, it makes it a lot harder for our company to make a profit.”

So far, the company has replaced 26 of its 50 company trucks with Peterbilt Model 579s and Aguillard said Blue Flash plans to continue replacing trucks coming off of leases with the 579s until the company is operating an all-Peterbilt fleet.

“I couldn’t be more pleased with our new Peterbilts and the service support we get from our local Peterbilt dealers, especially Peterbilt of Louisiana in Baton Rouge,” Aguillard said. “From the standpoint of driver recruitment and retention, which is huge for our company, getting the 579s through a FMV lease from PACCAR Financial was one of the best things we’ve ever done.”.

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