Not long after Garner Trucking began working with KSM Transport Advisors, the Ohio-based truckload carrier learned an uncomfortable truth about the biggest customer on its freight network.
“We’re losing money doing it. But it was a lot of freight,” Garner President and CEO Sherri Brumbaugh said.
Brumbaugh recalled the episode in a discussion with KSM President David Roush during the FreightWaves Carrier Summit on Wednesday. The pair talked about how truckload carriers can improve their profitability by understanding and optimizing freight networks.
Oklahoma-based KSM works with truckload carriers to boost profitability. In the case of Garner, a full-truckload carrier with about 90 power units, KSM helped identify the lanes in its freight network with low profitability yields.
“We were able to look at our network and see those outliers — what was not a good yield — and prioritize those lanes,” said Brumbaugh, also first vice chairman of American Trucking Associations (ATA).
Data key to improving profits from freight network
Key to identifying those problematic lanes: Have good data on what it costs to serve them and the rate required to make them profitable. Roush stressed that simply understanding the weak spots of a freight network is only part of the equation. The information needs to drive decisions, he said.
“We say most carriers use 20% science and 80% art,” Roush said. “We’re trying to push it to 80% science and 20% art, where you can actually spend time really thinking about what you’re doing.”
Garner Trucking has embraced the philosophy. Instead of making gut decisions, Brumbaugh is looking at the data and doing the math about whether a rate can work for a particular lane in its network.
“We want a good yield in every lane, and good math provides that for us,” said Brumbaugh, a former teacher.
That strategy has paid off for Garner. Roush noted that Garner’s performance stood out among the carriers it works with going back to 2018.
“You knocked it out of the park during that time,” Roush said.
Garner has also stayed profitable during the COVID-19 pandemic.
“We’re clawing our way back,” Brumbaugh said.
Click for more FreightWaves articles by Nate Tabak.
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