Trucking time cards are important and need to be managed properly so that you don't leak profit.

The purpose of this newsletter is to help XBE customers manage their trucking time cards so they pay truckers accurately for their services. This edition will detail the Common Fallacies in Time Card Management, the Critical Elements for Accuracy and Best Practices for Successful Time Card Operations. Let's get started!

Common Fallacies and Excuses

1. Fallacy 1: It takes too much time to manage trucking time cards. It takes more attention than time. XBE makes all aspects of the time card management process extremely efficient, and lack of time is never a good excuse.
2. Fallacy 2: There’s actually benefit in overpaying truckers. Not in the long run! If truckers should be paid more, increase their rates or change the terms. Overpayment through imprecise time card management is an uncertain benefit to the trucker, and therefore will be discounted. It’s more efficient to adjust rates if that’s needed.
3. Fallacy 3: The process can’t be managed because it requires discretion. The process must be managed since it requires discretion! If no discretion was required, then the entire process could be fully automated.
4. Fallacy 4: There’s not enough money in the balance to care. Absolutely not! We estimate that the difference between average and great time card management is at least 20 minutes per average driver day, or 5% of trucking expense. For a typical contractor, that’s 7.5% of profits.
5. Fallacy 5: Visibility alone will fix the problem. That’s true in some cultures, but not most. Anything that persists will normalize, even if it’s in plain sight.
6. Fallacy 6: Everyone already knows what to do. They might not! People are smart enough, but do they know enough? Don’t make assumptions, and pay attention to everyone. Be extremely specific regarding your expectations and the steps required.
7. Fallacy 7: None of this should be the responsibility of field operations personnel. No way! They have the most information and control. It’s critical that they play an active and primary role.
8. Fallacy 8: Patience is a virtue. In most areas, but not this one. Be impatient because delaying the fix just makes the change harder. You can go from average to great in one week.
9. Fallacy 9: It’s fine to “clean things up” later. Only in emergencies. Every rate change made after tender acceptance, or time card change made after approval erodes the trust of trucking partners.
10. Fallacy 10: XBE makes time card management complicated. No, the complexity was here all along unless the problem was oversimplified or outsourced, both of which are expensive. XBE makes the easy things easy and the hard things possible. If it’s complicated, it’s because it needs to be.

With that out of the way, let’s get into the details.

Critical Elements of Time Card Accuracy

The following types of information contribute to the overall accuracy of time cards and invoices.

• Job production plans
  • Service type unit of measures
  • Trailer classifications and equivalencies
• Tenders
  • Rates
  • Constraints (Minimums)
• Assignments
  • Driver
  • Equipment (trailer and trailer classification)
• Material transactions
  • Comprehensiveness
  • Accuracy
• Times
  • Start time
  • End time
  • Down time

Let’s walk through each element, why it matters, and what to watch out for.

Service Type Units Of Measure

Trucking can be quantified for payment by different combinations of service type units of measure depending on the job. For example, some jobs may be paid by the hour, whereas some may be paid by the ton. Some may pay for travel time, and some may not. The rates included on tenders and the line items included on time cards are based on the service type units of measure included on the job. We recommend using job production plan templates to ensure that each job is setup correctly. XBE supports a huge number of service type units of measure including many (such as tons, ton miles, ton minutes, travel before minutes, etc) that are quantified automatically on time cards. To maximize accuracy and efficiency, the most specific set of service type unit of measures should be used so that there is as little manual calculation as possible. For example, travel before minutes should be excluded from the transportation hours since they may be paid at a different rate, and the time card approver would not usually know the parking location of each truck and how long it would take to mobilize to the job site. In addition, XBE allows some service type units of measure to be rated for export (such as material per ton), but excluded from trucking time cards. If you’re not sure what combination of service type units of measure to use, please ask XBE. If you’ve set it all up right, there should be very little (if any) manual downstream data entry.

Trailer Classifications and Equivalencies

Trailer classifications are also specified at the job production plan level. For example, a job production plan may list Sweeper and Tri Axle. Each trailer classification can optionally have equivalencies. In general, these are the other trailer classifications that will operate equivalently to a primary trailer classification in the context of a job production plan. For example, in some situations, a Quint Axle may be equivalent to a Tri Axle (its physically capable of working on the job but not more valuable than a Tri Axle). If that’s the case, then it should be added as an equivalency for the job production plan (and upstream in the related template). But, keep in mind that these equivalencies can differ quite a bit from job to job and need to be thought through carefully. In addition, you need to decide if truckers will be paid according to the trailer classification that’s tendered (i.e. the Quint Axle would be paid as a Tri Axle in the above example), or as assigned (if a Quint Axle is assigned, it will be paid as a Quint Axle). It might not be obvious if mistakes are made in these settings until after the time cards are submitted, so whoever is managing time cards should scan for possible issues if equivalencies are required.

Rates

Rates are added to trucker and customer tenders based on the service type units of measure on the job and active rate agreements. For each service type unit of measure, the lowest price per unit for the highest importance group is added to the tender (with additional tie-breaking offered at the shift-level if shift-level criteria are present on the rate). XBE’s rating engine can handle almost any situation, but with that power comes complexity that can be difficult for someone to understand if they’re not very familiar with the details. For that reason, we recommend that all rate management be handled by a specialist. In addition, due to the potential long-term consequences of any rate change on the trucking market, we recommend that all rate changes be reviewed by a committee prior to implementation to ensure that long-term objectives are being adequately considered. Finally, the lineup includes a helpful “Rate Comparison” tool that makes it easy to review tender rates in one place. We recommend that this tool be used regularly to scan for anything that looks unusual. Any changes to rates after tender acceptance should be seen as a violation of trucker trust and avoided aggressively.

Constraints (Minimums)

Many organizations utilize minimums to reduce risk for truckers and ensure capacity in difficult periods or for scarce equipment. These are particularly difficult to administer manually since they require looking across all time cards on a driver day, excluding amounts from certain service type units of measure, excluding squandered amounts due to incidents, and normalizing to a common unit of measure. XBE’s driver day time card constraint feature handles all of these issues, and also integrates minimums into the tender process which is more explicit and professional. Some people are anxious about utilizing constraints because the feature can be a bit intimidating. But, the errors, inefficiency, and unprofessionalism inherent in manual minimum management is far too big of a problem not to address. We recommend that the specialist made responsible for rate management also be responsible for constraint management. We also recommend that the driver day list screen be used to scan driver days for shortfalls to sanity check the application of constraints against general expectations.

Driver Assignments

Accurate driver assignments impact time cards when driver-specific rates are implemented (which are somewhat rare, but supported and used by a handful of customers). In addition, driver assignment matters to time cards when constraints are used since driver days are built by grouping shifts during the same time period that are assigned to the same driver. In particular, be on the lookout for missing assignments, or when the same “driver” (usually the dispatcher) is being assigned to many shifts during the same day. This is an anti-pattern that should be corrected.

Equipment Assignments

Accurate equipment (trailer) assignments may impact time cards because many rates are scoped to trailer classifications. For example, the transportation per hour rate for a Tri Axle might be $100 and the transportation per hour rate for a Quint Axle might be $115. If there are multiple trailer classifications permitted on a job, then it is possible for the wrong rate to be applied if the wrong equipment is assigned. Incorrect equipment assignment would generally be caught through the material transaction matching process, but awareness of its role in time card management will help make clear why it’s important to manage the accuracy of the equipment assignment itself (not just the matching of the material transaction to the shift).

Material Transaction Comprehensiveness and Accuracy

Material transactions are obviously critical to time cards that are quantified by the ton. But, material transactions also important for time cards that are quantified by the hour because the data helps to spot incorrect times and likely incidents. We recommend that material transactions are created for all work, whether on-site or off-site, weighed or not, at an internal or external material site, and whether or not there’s an integration. With comprehensive and accurate visibility into material transactions, everything else about time card management can be done more confidently. Material transactions that are integration-sourced are generally comprehensive with accurate times and quantities, but need to be managed to ensure that they’re correctly matched to trucking shifts. XBE has robust automation to reduce the manual burden of matching, but missing or incorrect data on the ticket or plan can cause material transactions to be unmatched or incorrectly matched. XBE’s “checksum” features help sort this out, and we recommend that each organization have at least one expert that understands everything about matching integration-sourced material transactions. On the other hand, user-sourced material transactions tend to be matched correctly, but can have data quality issues (wrong time, wrong number, wrong quantity) or be missing entirely. Clear expectations to drivers and field operations staff clear up most issues so long as there is active same-day monitoring of the overall process. Finally, while material type matching is generally accurate due to the up-front setup of the job production plan material types, it is important that this accuracy is managed, especially when trucking and material rates are scoped to material types.

Trucking Start Times

The time card start time should be the time that the truck started to work at the shift’s start site. XBE provides an “implied start time” which is the earlier of the scheduled start time (if confirmed via an on-time and on-location check-in) or the first load time (which is the first material transaction time if the start site is a material site, or the first material transaction time offset by the drive and load time if the start site is the job site). In general, the implied start time should be the start time. Of course, there are exceptions. But, management should pay careful attention to any time card start times that are different from the implied start time. Sometimes the check-in time can be incorrectly selected. In other situations, the scheduled start time is selected when there is not evidence that the driver was at the start site on time. XBE’s time card management screen highlights differences between the implied start time and time card start time. Given the first material transaction time, the scheduled start time, the check-in time, and driver location data, it’s typically fairly easy to determine when the start time should be. Any strange start times that are unexplained by the data should be explained in a comment on the time card submission.

Trucking End Times

The time card end time should be the time that the truck was done performing work directed by the job. XBE provides an “implied end time” which is the time of the last transaction offset by the time to the dump site of the last segment of the job production plan. This time can be used to easily spot outliers that require further investigation, but is often not accurate enough to use as a default. Reasons for a difference between the implied end time and actual end time include unplanned waiting time at the job site, longer-than-expected drive times, trucks that are sent back to the material site but not reloaded, and waste material hauled back to the material site. If truck locations are visible via GPS, it is usually easy to determine the accurate end time using the driver movement chart. When unplanned work is required that isn’t easy to explain otherwise, a crew member should utilize broadcast notifications to direct drivers to do that work. Those messages, when combined with final material transaction times and GPS data, should make every end time very clear. Finally, the end time should not be used to quantify travel times or minimums (as explained in other sections).

Trucking Down Time

Trucking down time is used to represent time between the start and end of a driver’s shift that should be excluded from the transportation hours. Trucking incidents will result in down time by default. Incident down time is the sum of the overlap between incidents and the shift start to end times. When necessary, incidents can be excluded from automated down time calculations, and down time can be set directly on a time card even if there aren’t incidents. We recommend using incidents to document all down time because it makes the source of the down time explicit and visible to all parties.

Best Practices for Successful Time Card Operations

We have reviewed the common fallacies and the critical elements to time card accuracy - now we will review the best practices to implement or refine within your organization.

Submission Management

If time cards are quantified entirely by material transactions (not by time), we recommend using “auto time cards” from the time card management screen to build and submit time cards automatically. This relies on the accuracy of material transaction acceptance and matching (covered above), but removes any additional effort and minimizes error.

If time cards are quantified by the hour, we recommend creating and submitting time cards via pre-approvals. Pre-approvals move control of the creation of time cards to the field (from the driver) which avoids time card padding and disagreement. The pre-approval will create a matching time card and schedule submission according to the submission offset setting. A pre-approved time card will be submitted and approved after the offset, and unless changed, will be approved automatically also. If the trucker disagrees with the pre-approval, they can cancel its submission, change the time card, and resubmit. Over 98% of pre-approvals are submitted automatically without disagreement.

Whether auto-approved or pre-approved, we recommend that time cards be submitted on the same day as the work to ensure that memories are reliable regarding any disagreements.

Approval Management

It is critical that time card approvers take their role seriously. XBE recommends that approvers be formally certified in the time card management process of their company (you can use XBE certifications to keep track of this too). Until you’re confident in the strength of the time card approvals, XBE recommends turning on “time card auditing”, especially for job production plans that are quantified by the hour. When enabled, this explicit post-approval step is required for an approved time card to be invoiced. If you require time card audits, it’s important to ensure that any post-approval changes are explained to the person responsible for the mistaken approval. Otherwise, the audit will weaken the upstream approval and cause truckers to lose trust in the process.

The branch-level time card management screen was designed to make auditing extremely fast and effective. XBE recommends that the people responsible for managing time cards generally become expert in this screen.

We recommend that time cards be approved (and audited if applicable) within one day of the work.

Cost Code Allocations

Time card cost is usually allocated to cost codes related to the job. By default, this will happen automatically and proportionately based on the scheduled time of related job production plan segments and their cost codes. The allocation can be adjusted for an individual time card, or a group as needed. Cost code allocation can occur after time card approval, but must be done prior to invoice batch exports in most cases.

Invoice Offsets

Invoices are generated automatically each evening from approved time cards after the offset number of days has passed. An offset of greater than zero is used to balance the desire to avoid invoice changes with the desire to post invoices to the ERP as soon as possible. We recommend as short of an offset as the maturity of your time card management process allows, but not shorter. You can have a low offset even with an immature time card approval process if you utilize the time card approval workflow. Time card changes post approval should be very rare, and are a sign of an out-of-control time card management process.

Related Topics

This newsletter covered a lot of ground, but did not cover much about service type unit of measure selection, rate setting and negotiation, or trucking surplus management. These related topics are all critical and significantly impact trucking cost as well. We recommend that at least as much focus be placed on those areas as is spent on time card management itself.

The Importance of Formal Policies

It is very important to be explicit about all trucking time card policies, both internally and externally. Maintain a single document listing specific expectations in all of the areas covered by this document. Ensure that everyone that has related responsibilities is educated in all aspects of these policies. Treat every breach of policy as a big deal that needs to be corrected immediately.

As always, XBE is here to help you with any of these topics. Please let us know if there’s anything you need.

Best Regards,

Sean Devine
Founder & CEO, XBE