FleetSmart Profiles: Highway Trucking

Mill Creek Motor Freight – Cambridge, Ontario

Achieving Cost Savings Through Leading-Edge Technology

Mill Creek Motor Freight has undergone phenomenal growth since the company began as a two-truck operation in Cambridge, Ontario, in 1980. One reason is the company's determination to keep abreast of the latest technologies for the trucking industry. Mill Creek Motor Freight has used these technologies to expand its business, reduce its fuel and maintenance costs, improve customer service and prosper in the competitive North American marketplace.

About the company

Mill Creek Motor Freight provides a freight service that moves high-value goods (e.g., computers, electronics and automotive parts) throughout Canada and the mainland U.S. and to all major points in Mexico. The fleet includes 160 air-ride tractors (50 are owner-operated) and 330 high-cube, air-ride trailers, each equipped for specialized freight movements. The company operates both 48- and 53-foot (14- and 16-metre) tandem axle units and open-top trailers.

Mill Creek Motor Freight employs 250 people (including the 50 owner-operators) at its headquarters in Cambridge, Ontario, and at a cross-dock facility in Laredo, Texas. In January 1999, Mullen Trucking Inc. of Alberta purchased a full controlling interest in Mill Creek Motor Freight. Through the Mullen network of companies, Mill Creek Motor Freight has access to 30 more terminals, as well as maintenance facilities, throughout North America.

Spec'ing lighter components

Mill Creek Motor Freight continuously monitors vehicle specifications and performance, improves safety and efficiency, and reduces emissions.

For example, since 1999, Mill Creek Motor Freight reduced the average tare weight of its trailers by 180 kilograms (400 pounds) by spec'ing lighter components such as Kemlite roof components. This improvement builds on an earlier weight reduction of 450 kilograms (1000 pounds) per trailer, which was achieved using ultra-light aluminum components for such items as cross members, frame gussets, fuel tank hangers and shock absorber brackets. The combination of lightweight but durable aluminum frame construction and low-profile tires has increased cubic capacity, allowing for trailers 110 inches (279 cm) high instead of the standard 108 inches (274 cm).

Other equipment changes over the past decade have also improved fuel efficiency. These include spec'ing third-generation Detroit Diesel engines, state-of-the-art aerodynamics and 13-speed, double-overdrive transmissions, which optimize engine speed to road speed. As well, the rear-end ratios on all tractors have been adjusted for the low-profile tires.

Most recently, Mill Creek Motor Freight has been pilot-testing automatic transmissions in high-traffic areas that have frequent stops. These transmissions are proving to be popular with drivers.

Computerizing fleet operations

Mill Creek Motor Freight was one of the first companies to automate its fleet operations using a computerized management information system that handles all operational, accounting, communication, maintenance and administrative needs of the company. This involved buying and customizing five standard software programs developed for trucking companies and giving them a satellite interface. The total system cost $150,000 in 1995.

The company estimates that this system improved productivity by 25 percent. For example, the system eliminated the need for drivers to regularly check in with dispatch, allowing them to spend more time driving. As well, equipment use has improved because loads can be dispatched more efficiently. Better customer service is another key benefit, since the exact location of a client's shipment can be determined almost instantly.

In 2000, the company upgraded the original system for $500,000. This new system should allow it to improve productivity by another five to ten percent. It has the same major components as the original system but has increased functionality and accuracy, especially for less-than-truckload, brokerage, and pickup and delivery operations.

For example, hours of service are now forecast four to five days in advance. As well, the in-cab equipment is more user-friendly (more information can be displayed on-screen, so the driver does less scrolling). Reports are run directly to meet external customers and internal analysis needs. Up-to-date reporting on general revenues, revenues by lane, trip profitability, revenue by power unit and traffic revenues by customer are examples of reports that are now produced directly. The level of monitoring and reporting can also be customized to meet each client's needs.

Operations module works in real-time mode

The operations module of the management information system works in real-time mode, so dispatchers can view up-to-the-minute lists of available loads, tractors, trailers and drivers. On receipt of a pickup order, the system displays the following information:

• which trucks are within a reasonable distance of the customer
  
  
• which drivers have the legal hours available to handle the required driving time
  
  
• which trailers can handle the load
  
  
• which trucks can ensure that delivery will be completed within a reasonable and legal time frame, based on travel times calculated by the system
  
  
• the direct cost per kilometre for each truck
  
  
• the amount of revenue that will be generated on the load
  
  

Within minutes of a customer's call, the company can determine the most cost-effective way to meet the order and calculate its profit before accepting the load.

Satellite communications

Since 1998, Mill Creek Motor Freight has ordered its trucks pre-wired for satellite communications. This adds about $5,000 to the capital cost of each vehicle. Many of the original satellite communications units (bought as early as 1995) have been replaced to take advantage of the improved functions offered by newer technology (not because they were worn out).

System air time and maintenance costs amount to about $30 per unit per month. Driver training costs are minimal, consisting of a two-hour course in a company boardroom followed by a practice session in the truck.

Electronic data interchange and load tracking

Keeping pace with technology advances, Mill Creek Motor Freight now uses electronic data interchange (EDI) to communicate with some clients. The EDI system allows Mill Creek Motor Freight to electronically receive orders and identify the type of load, pickup and delivery locations and other necessary information. As well, the company has developed a Web-based load-tracking system that enables clients to monitor their loads and shipments by accessing the Mill Creek Motor Freight Web site.

The systems are part of the "just in time" world that many of Mill Creek's clients operate in. They reduce company workload and provide clients with the information they need more quickly.

Mill Creek Motor Freight also uses computer technology to track and report on its vehicle maintenance program. Among the software's capabilities are preventive maintenance scheduling, inventory management, basic warranty tracking and analysis, and fuel management. The system can automatically produce repair orders and purchase orders. Moreover, data from the maintenance program can be exported to Mill Creek Motor Freight's accounting system.

Safety lane

In 2000, Mill Creek Motor Freight opened a "safety lane" at its Cambridge depot. Here all vehicles (trucks and trailers) receive the 38-point Commercial Vehicle Safety Alliance (CVSA) inspection when they return to home base.

The safety lane itself is about 30 metres (100 feet) long, including a 24.5-metre (80-foot) pit. Each vehicle is subject to a 20-minute inspection, and any defects noted for correction are sent to the repair shop. The lane was created using an existing pit, so the initial capital cost for Mill Creek Motor Freight was limited.

Mike Palmer, Director, Maintenance, at Mill Creek Motor Freight, speaks most enthusiastically about the benefits of the safety lane. "Our out-of-service rate at roadside CVSA inspections has been reduced by 62 percent. Not only are our vehicles safer, but we save a lot of repair costs and vehicle downtime."

"Some examples of the items we have noticed before they became serious include minor cracks on the fifth wheel on bogie rail slides and the chafing of air lines under the fifth wheel. In these cases, the manufacturers were notified of the problems so they could advise other fleets and make the necessary production adjustments to correct the problem. In one case, we identified loose wheel nuts on a wheel that had been changed while the vehicle was on the road."

Overall, on-road breakdown costs have been reduced by 3.25 percent. Basically, these savings alone provide a benefit-cost ratio for the safety lane of over 2:1. Productivity savings from reduced vehicle downtime, which have not been tracked by Mill Creek Motor Freight, would only make the lane more financially attractive.

Mr. Palmer wholeheartedly endorses the use of a safety lane, noting he "Highly recommends it to any fleet."

Monitoring vehicle speed and fuel efficiency

Mill Creek Motor Freight's trucks are speed-governed at a maximum of 106 kilometres per hour to reduce speeding violations and improve fuel efficiency. This speed allows drivers to achieve enough speed to pass other vehicles on roads where the speed limit is 100 kilometres per hour. They can also keep up with the traffic flow on routes where the speed limit is 110 kilometres per hour.

Drivers are given detailed route directions, and dispatchers call both shippers and receivers to confirm loading and unloading times. Before accepting a load, dispatchers ensure that the required delivery times can be met with the drivers staying within the posted speed limits. All transit times are reviewed to ensure compliance with the speed limit, and violations are reviewed with the drivers.

The company also posts fuel prices every week for refuelling stations where Mill Creek Motor Freight has purchase agreements (fuel is purchased with limited-access refuelling cards). This allows drivers to select the stations that have the best prices, which helps minimize fuel costs.

Every month, each driver's fuel economy and idling performance are reviewed, based on data downloaded from the engine, and fuel economy results are posted quarterly. Mill Creek Motor Freight's fleet-wide fuel economy in 2002 was 36.2 litres per 100 kilometres (7.8 miles per gallon).

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