l lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a m

The trucking industry is no longer as simple as it once was. Because of deregulation and changes in the marketplace, companies now experience tremendous operating pressure. Revenue may be growing rapidly without a corresponding increase in profitability. Senior management wonders, “What is wrong and what can I do about it?”

All companies reach a point where they can either move forward to profitability or wallow in stagnation. If a company’s performance is stagnant, it’s because problems have become too complex for senior management to see and understand—what I call the Barrier of Complexity. As a result, symptoms are treated and the real problems go unresolved.

In the trucking industry, you know all too well what those problems are:

--Increased operating costs due to competitive pressures and customer demands.
--Rising capital investment and reinvestment costs.
--An acute driver shortage.
--Rising insurance costs.
--Rising wages and benefits for your employees.
--Rising fuel costs (enough said).

LTL companies often react to these problems instead of managing them because they’re measuring productivity in outmoded ways.

For example, most companies still use Operating Ratio to measure shipment profitability and make pricing decisions. But is a 105 operating ratio on a shipment a “true” 105? That shipment could generate $5 or $75 of profit. You know which one I’d pick. But do you always know how much the contribution each shipment will generate?

If you don’t, you’re operating blind. And operating blind in today’s environment will lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a ma

tability or wallow in stagnation. If a company’s performance is stagnant, it’s because problems have become too complex for senior management to see and understand—what I call the Barrier of Complexity. As a result, symptoms are treated and the real problems go unresolved.

In the trucking industry, you know all too well what those problems are:

--Increased operating costs due to competitive pressures and customer demands.
--Rising capital investment and reinvestment costs.
--An acute driver shortage.
--Rising insurance costs.
--Rising wages and benefits for your employees.
--Rising fuel costs (enough said).

LTL companies often react to these problems instead of managing them because they’re measuring productivity in outmoded ways.

For example, most companies still use Operating Ratio to measure shipment profitability and make pricing decisions. But is a 105 operating ratio on a shipment a “true” 105? That shipment could generate $5 or $75 of profit. You know which one I’d pick. But do you always know how much the contribution each shipment will generate?

If you don’t, you’re operating blind. And operating blind in today’s environment will lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a m

e pressures and customer demands.
--Rising capital investment and reinvestment costs.
--An acute driver shortage.
--Rising insurance costs.
--Rising wages and benefits for your employees.
--Rising fuel costs (enough said).

LTL companies often react to these problems instead of managing them because they’re measuring productivity in outmoded ways.

For example, most companies still use Operating Ratio to measure shipment profitability and make pricing decisions. But is a 105 operating ratio on a shipment a “true” 105? That shipment could generate $5 or $75 of profit. You know which one I’d pick. But do you always know how much the contribution each shipment will generate?

If you don’t, you’re operating blind. And operating blind in today’s environment will lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a m

ompanies still use Operating Ratio to measure shipment profitability and make pricing decisions. But is a 105 operating ratio on a shipment a “true” 105? That shipment could generate $5 or $75 of profit. You know which one I’d pick. But do you always know how much the contribution each shipment will generate?

If you don’t, you’re operating blind. And operating blind in today’s environment will lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a m

l lose you money. A trucking company is only as strong as its terminals. Effective Management Systems helps you see and understand what’s happening at the terminal level—we have the software and technology to diagnose problems based on accurate information and to help you develop strategies to maximize profit.

Here’s how.

--Accurately measuring and understanding productive output. As a manager, you don’t just want to pay by the hour—you want to pay for the productive output during that hour.

Many companies base their accounting systems on actual cost. But almost every company EMS has worked with has been at least 30% inefficient (or carrying 30% excess capacity). When you use actual costs, you’re passing your inefficiencies on to the customer with price increases, and in a free market environment that becomes harder and harder to do.

--Using capacity efficiently. With inefficiencies built in to your accounting system, your company doesn’t know the true quality of the revenue because the inefficiencies are masking that. As a result, many trucking companies don’t know their true capacity, turn away business, and as a result growth is stunted. Much more market share is available to most companies than they realize.

--Utilizing a productivity/capacity management system with engineered standards. Such a system allows you to manage capacity and productivity at the terminal level on a daily basis.

All companies have three containers—fixed cost, variable cost, and revenue. The key to running a profitable company is managing the relationship of variable cost to revenue. But if variable cost is not separated out from fixed cost—if you cannot see it—then you have no way of managing productivity and capacity in an effective, profitable way. And most traditional, full-costing accounting methods keep variable costs hidden.

Fixed cost remains relatively the same whether any business is handled or not. Take depreciation as an example—the bank doesn’t care if