Presentation on theme: "Swift Transportation The Value of Research Barbara Kennedy May 11, 2007."— Presentation transcript:
Swift Transportation The Value of Research Barbara Kennedy May 11, 2007
Company History Founded in 1966 with 1 truck in Phoenix, AZ Largest publicly traded truckload transportation company –Approximately 17,477 tractors, 51,000 trailers and 20,000 drivers History of strong growth –22% CAGR in revenue since 1990 IPO –20% CAGR in net earnings since IPO Comprehensive North American service network –Organized regionally utilizing decentralized management structure –33 major terminals in the US and Mexico Recently announced expansion of Intermodal business with acquisition of 5,000 containers
North American Regional Network Extensive network of service, fuel and repair centers enables the Company to develop personal relationships with customers and drivers Major Swift Facility Dry Van Refrigerated Flat Bed Heavy Haul Dedicated Intermodal Container Nationwide Services
Source: American Transportation Research Institute (ATRI) Predicting Truck Crash Involvement report –Identified behavior that increase likelihood of drivers being involved in accidents –Made the connection between: –driver behavior, traffic violations and roadside inspections –Increase in the likelihood of these drivers being involved in an accident
Inspections & Citations Data was critical in expansion of our policy –Example: A driver who receives an improper turn violation is 105% more likely to be involved in an accident in the future
Research Outcome Confirmed that past and present behavior is indicative of future behavior Validated our beliefs and provided opportunities to prevent accidents Information is shared company-wide We now provide additional training to prevent the driver from becoming part of this statistic Enhanced our Drivers’ Citations and Inspections policy and procedures Implemented an enhanced software solution Instituted remedial training A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.
Safety Research 2 All Accidents by Driver Tenure
Research Outcome Swift re-evaluated our training classes We now use L3 truck simulators to change the trend Today we have placed additional focused on lowering our accident frequency spike in our 1-2 year drivers through training
Safety Research 3 Backing Accidents by Driver Tenure
Research Outcome Created a specialized Close Quarters training program –Focused on backing and working in confined spaces Tested this new program in one terminal for over 6 months –Backing accidents decreased by 20% compared with the remaining fleet Training is now conducted nationwide at all facilities
Source: Internal Two other carriers saw a minimum of a 50% reduction with the anti-rollover system Projected reduction with anti-rollover system –50% estimated reduction in overturn accidents would result in $3.9 million in savings –50% estimated reduction in jackknife accidents would result in $1.2 million in savings –50% projected reduction in towing costs would result in $723 thousand in savings Outcome –Purchased the Anti-Rollover Device for all new trucks being delivered to Swift – June 2006 & forward –Currently have 2,800 units equipped with roll stability –Year end 2007 – 4,500 units will be equipped with roll stability
Success Story We noticed 3 hard braking events within minutes of each other. Data revealed driver was out on a rural highway and would get up to highway speed and decelerate rapidly. He would then sit for a few minutes and accelerate away. Then the cycle would repeat. We found out the driver was having personal issues at home and was getting messages over the Qualcomm. When he would get the message he would slow down rapidly and read the messages. We were able to step in and get things clamed down so he could get the information he needed without having to drive like this.
Success Story We had a team that kept getting dynamic control events on the CER system seconds apart. We found that they were on a rural highway in Wyoming and the roads were covered with ice. They we struggling at 5mph for traction to get to a safe place to get off of the freeway and park. With this information we were able to warn other vehicles and keep them out of the area.
2.6 % of drivers responsible for 10% of the idle. $2,900,000 Fix a Few…Save a lot of Fuel Dollars
Current use of Selected Idle Reduction Systems Helped us understand & validate what we “knew” about our peers All of the respondents using direct-fired heaters were either satisfied or very satisfied 67% of respondents using auxiliary power units/generator sets or battery-powered air conditioners were either satisfied or very satisfied –Cast doubt on APU’s Percent of Sleeper Cab Respondents # of TrucksPercentage of Total Sleeper Cabs Automatic Engine Shutdown55%40,70174% Direct-fired Heaters32%8,11019% APU/Generator Sets12%1550.4% Battery-powered A/C24%920.2% Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.
Average Capital & Maintenance Costs of On-Board Idle Reduction Technologies Validated our studies Fuel savings was mentioned most often followed by less engine wear and less pollution as a benefit of idle reduction technologies –We agree plus Driver satisfaction is key Capital CostsAnnual Maintenance Costs Direct-fired Heaters$888$110 Battery-powered A/C$4,300$200 APU/Generator Sets$7,750NA Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.
Likelihood of Purchasing Idle Reduction Technologies 26% of respondents indicated being likely or very likely to purchase idle reduction technologies if the payback period was two years 48% of respondents indicated being likely or very likely to purchase idle reduction technologies when incentives to offset half the purchase price were added to a two-year payback period Confirmed our analysis so we went with direct-fired heaters combined with Automatic Engine Shutdown Unit Specs in March 2006 with direct-fired heaters Not Very Likely Not Likely UncertainLikelyVery Likely No Response A 2-year payback period23%10%29%16%10%13% A 2-year payback period & incentives to offset half the purchase price 16%0%23%16%32%13% Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.
Likely Use of Selected Idle Reduction Technologies 40% of respondents with sleeper cabs indicated they are likely to use battery-powered air conditioners over the next 2 – 5 years 28% of respondents with sleeper cabs are expected to use direct-fired heaters over the next 1 – 5 years 28% of respondents with sleeper cabs are expected to be used over the next 1 – 4 years –Cast doubt on APUs Percent of Sleeper Cab Respondents # of TrucksTimeframe (years) Battery-powered A/C40%10,6062 – 5 Direct-fired Heaters28%10,5551 – 5 APU/Generator Sets28%991 - 4 Information retrieved from ATRI. A copy of the study may be obtained from ATRI at www.atri-online.org or by phone at (703) 838-1966.
Well over 10,000 individual measurements were taken to prepare this data. Acceptable Swift Transportation Air Pressure is 110psi. Ideal average is 110psi. Trendline indicates we are right on track! Fleet Air Pressure – 2006
Research Outcome Source: Michelin performed a monthly check on 25 trailers & 10 tractors for two years Study revealed a low pressure problem –We implemented a process that requires us to do an air check on the equipment every time we touch it for repair –This is significant improvement, we have 600,000 tires in our fleet –We saw significant improvement in the following areas: Reduced on-road failures Enhanced fuel economy
The best way to ensure your business decisions are effective are to base them on fact / research.