Fleet Management

Preparing for Change: Ray Kuntz, Chairman/CEO, Watkins and Shepard Trucking

May 2009, TruckingInfo.com - Fleet Innovators

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'I have long advocated for the industry to better prepare itself to deal with change, and one way to do so is to better anticipate the challenges ahead."


Ray Kuntz said this in 2007 during his term as American Trucking Associations chairman, announcing the American Transportation Research Institute's annual list of the Top 10 critical issues facing the trucking industry. But it nicely sums up his approach to success as an industry leader and as chairman and CEO of Watkins and Shepard Trucking in Helena, Mont.

Whether it's issues such as addressing a chronic driver shortage, or pushing the trucking industry to take the lead on issues such as sustainability and safety, Kuntz believes in getting out ahead of potential challenges.

"I think the biggest problem our industry has always faced is training new drivers," Kuntz says. "We spend millions of dollars trying to steal each other's drivers, but few spend that kind of money on driver training."

Kuntz points to the demographics - the traditional labor pool of white males 35 to 60 years old is shrinking. "Somehow we have to put more drivers in the pool, and that means you have to train them."

Kuntz has spoken out about the need to make the industry more female-friendly, has been part of an ATA push to try to get truck driver training included in the GI Bill, and has said the federal government may need to revise its immigration policies to help deal with an aging workforce. During his term as ATA's first vice chairman, he played a lead role in developing the organization's truck driver recruitment campaign, which includes GetTrucking.com.

In 2005, while chairing an ATA/Truckload Carriers Association task force on driver recruiting, he got the idea to get banks that are involved in financing trucking equipment to also offer financing of driving school tuition. In early 2006, ATA and TCA unveiled the Company Driver Tuition Finance Program to partner motor carriers and lending institutions to provide low-interest financing for those who wanted to attend a driver training school but couldn't afford it. Under the program, a motor carrier would guarantee the student loan in exchange for the student's commitment to work for that motor carrier upon graduation.

Unfortunately, the program has run head-on into the credit crisis. "It's not worked as well as I had hoped," he says. "The typical student comes to us at 40 years old {and} has really poor credit," and banks aren't interested in lending, even with the trucking company's guarantee of the loan.

Kuntz's newest strategy is looking toward state and federal financing. "We're working with our state to get more grants for driver training. There's a lot of workforce money out there, but it hasn't been directed toward drivers. We're trying to get state Commerce and Labor Department money directed toward drivers."

For instance, in late 2007, Watkins and Shepard Trucking received a Workforce Training Grant from the Montana Department of Commerce, which paid $315,000 to help pay for the training of 63 new drivers in Montana over the period of a year. That allowed the company to cut the cost of a four-week training program at its school from $4,000 to $1,000.

With the economy on the skids, many trucking companies have cut back or dropped their training programs altogether, Kuntz says. He believes that's shortsighted.

"As the economy comes back, the driver shortage is going to come back in a lot bigger degree, because we're not training as many drivers today as we were two years ago. But tomorrow's coming, and this economy will pick up - only God knows for sure when, but it will pick up, and when it does there will be a driver shortage."

Even in this soft economy, Kuntz says, Watkins and Shepard is still training drivers, even as competitors all around have stopped. Wryly, he says, right now, "I train them, they hire them. It makes us a real popular neighbor."

One of Kuntz's first acts as ATA chairman was naming a sustainability task force. The result was the launch of a sustainability initiative last May under the banner, "Trucks Deliver a Cleaner Tomorrow."

This industry-wide environmental sustainability program identifies a series of initiatives that will reduce fuel consumption and combat the challenge of global climate change through innovative ways to reduce CO2 emissions - and save on fuel costs.

The report includes six key recommendations to reduce fuel consumption and addresses the impact of these activities on the environment:

• Set governors on new trucks to limit speeds to no more than 68 mph and reduce the national speed limit to 65 mph for all vehicles.

• Reduce engine idling.

• Increase fuel efficiency by encouraging participation in the U.S. EPA SmartWay Transport Partnership Program.

• Reduce congestion by improving highways, if necessary by raising fuel taxes.

• Use more productive truck combinations.

• Support national fuel economy standards for trucks.

"When I took over as chairman, sustainability was a fast-growing issue," Kuntz explains. "There was a lot of concern from a lot of carriers, especially larger carriers, that we had to have a really aggressive approach if we didn't want to get handed a solution that didn't work with our industry."

Working in the industry's favor, he said, are the goals of reducing our carbon footprint, being less dependent on foreign oil and saving money on fuel - all went hand-in-hand with recommendations on things like slowing down, reducing idling and increasing fuel efficiency.

"Unfortunately, the other big part of that was the national 65-mph speed limit, which makes all the sense in the world so we can slow down our cars and trucks and burn huge amounts of less fuel," Kuntz says. "Our country has not shown a lot of political guts in D.C. to make these kinds of hard decisions."

Kuntz also founded the ATA Safety Task Force during his term as chairman, which in October came out with a new agenda that will significantly expand trucking's role in the national conversation about highway safety.

Traditionally, ATA's emphasis was on its members' safety - operational and financial interests as they were affected by federal safety regulations. Now the association is trying to take the industry to a new level - proposing tough new regulations on the industry itself, and calling for major changes in the national approach to highway safety for automobiles.

Some of those 18 proposals include mandatory 65-mph speed limiters on trucks and a national 65-mph speed limit; national crashworthiness standards for large trucks as there are for passenger vehicles; and a mandatory national notification system giving carriers access to information about accidents, moving violations and convictions.

"I think our industry has to do everything we can to reduce fatalities and injuries on the highway," Kuntz says. One way to do that is through technology, such as collision and lane-departure warning systems and stability control systems.

"Anti-rollover in my mind works. It's not that expensive for the payback - and rollovers are expensive. In my mind a truck shouldn't even be manufactured without that anymore. Unfortunately, a lot of them are, because people don't understand them or think they can't afford them." But the accidents themselves, he says, cost a lot more than the technology that can prevent them.

Along the same lines, Watkins and Shepard is experimenting with electronic onboard recorders. "Our company believes we need to move down that line. I believe they're coming. I think the sentiments of the public are going to push them upon us, so we need to come up with the right kind that are easy for us to integrate into our system and make it easier for the driver to do his job."

Kuntz grew up as one of 11 children on a farm in North Dakota and studied mathematics and economics in college. His plans for graduate school got sidetr

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