Retaining the transportation business of such refrigerated and frozen food industry leaders such as Kraft Foods, Farmland, Hormel, and Pilgrim's Pride requires a level of service that can only be achieved with a concentrated focus on the core business. “That focus has to include a determination to meet stringent delivery schedules, as well as meticulously maintaining the precise temperature the customer demands inside the trailer shipping his product,” says Murry Fitzer, chief executive officer (CEO) of Florilli Corporation, West Liberty, Iowa.
Outbound freight for the Florilli Corporation fleet comes from upper Midwestern states such as Iowa, Illinois, Minnesota, Wisconsin, and eastern Nebraska. Most of those moves are in traffic lanes to eastern Pennsylvania, Georgia, northern Texas, and California.
Return freight is solicited back to the upper Midwest to get the equipment positioned for Florilli Corporation's key customers' next outbound moves.
“Our management team was convinced we could best maintain that focus by outsourcing our maintenance efforts,” Fitzer says.
To best understand his management strategy, one needs to know a little more about the company CEO. An Iowa farmer before he became a trucker, Fitzer was first attracted to the industry because of the legendary tales associated with trucking.
“My farm was right next to Interstate 80 in eastern Iowa,” he says. “During a 1979 winter storm, I walked to the interstate and invited 30 snow-bound travelers into our house so they could stay warm. It was about three days before traffic started moving, so we had a chance to become close to some of those house guests.
“One of them was a trucker who would call or come over whenever he returned to the area. Later he introduced me to a friend who also was a trucker. That friend offered me an opportunity to purchase half of his truck, and I did.”
In 1982, with a declining farm economy, Fitzer started driving a truck. He and his business partner later took different roads, but Fitzer remained in the trucking industry.
Operating under a broker's authority, Fitzer saw an opportunity to grow his business and acquire his operating authority with the purchase of a financially troubled Florida-to-Illinois trucking company named Florilli in 1987. He moved his newly acquired trucking company to West Liberty, Iowa, and started the long, steady growth of Florilli Corporation.
A lot of the romanticism of trucking that first attracted him is gone, says Fitzer. Still proud to be a part of an industry that is so vital to the US economy, Fitzer now realizes success comes only with good business decisions.
Making the right business decisions has helped his fleet grow to 225 company-owned power units and 300 trailers.
The vast majority of the fleet's tractors are Peterbilt UniBilt sleepers. They are powered by Caterpillar C15 ACERT multi-torque 435-horsepower engines with 9-speed Eaton Fuller manual transmissions.
Florilli Corporation customers' freight is hauled in 53-ft Utility Trailers with air-ride suspensions, cooled by a mix of Carrier Transicold and Thermo King refrigeration units.
Those original equipment manufacturers (OEM) play an important role in the fleet's outsourced equipment maintenance strategy.
Aftermarket suppliers such as Bandag and Speedco — the only national network that specializes in quick lube and tire service for heavy duty trucks — also have a critical role in helping the Florilli Corporation fleet achieve the highest level of equipment uptime and customer satisfaction.
The outsourcing program Fitzer has in place today resulted from an evolution that has taken about five years.
“When we started,” Fitzer explains, “our goal was to remove the managerial burden of equipment maintenance by turning it over to an outside vendor. We were also trying to guarantee those maintenance costs by using a negotiated cost-per-mile formula.”
The first vendor supplying the outsourced maintenance services actually hired the Florilli Corporation's maintenance employees and used the company's maintenance facility to deliver those services. Later, an offsite supplier provided those services on a similar negotiated cost-per-mile contract.
“We soon learned, in our fleet, the management of the operations end of the business and equipment readiness are too closely related to the equipment maintenance discipline to take a totally hands-off approach,” Fitzer says. “That's how we evolved to the outsourcing program we have in place today.”
While actual maintenance functions are performed by outside vendors, it is no longer performed on a cost-per-mile basis. “Our management team makes the decisions about the level of preventive maintenance we need to have, and we pay for the actual work performed,” he says. “Trucks are serviced every 25,000 miles, and trailers are serviced on 90-day intervals.”
When repairs beyond routine maintenance are required, the local OEM dealer representative performs the work. With tractors on a three-year trade cycle, and trailers on a six-to-seven year-cycle, many of those repairs are covered by warranty.
“We know the program is working because we have accurate, meaningful data that helps us make the right management decisions,” says Fitzer. “When we implemented the last leg of our outsourcing evolution, we also purchased TMT Transman fleet management software.
“Utilizing the American Trucking Associations codes, every expenditure is tracked. After a truck is serviced at Speedco, the invoice is electronically sent to our system, so we know exactly what each piece of equipment costs us to operate.”
The Florilli Corporation management team recently took a close look at the fleet's three-year equipment maintenance cost history and found consistent improvement.
The data also proves valuable when new equipment purchases are made. The company has evaluated several competitive brand tractors and engines over that three-year period.
Fitzer acknowledges the data from the evaluation played a major role in the fleet's most recent equipment purchase.
Selecting the right equipment maintenance partners has even helped the fleet in its driver retention effort.
“For the benefit of both our customers who want their freight delivered in a timely manner, and our drivers who want to log miles rather than wait for equipment in a maintenance facility, our vendor selection is critical,” says Fitzer. “We must have vendors who understand the time sensitive nature of our business and provide us with the service we need in a timely manner.
“We consistently get good reports from our drivers that Speedco lubes and inspections are a positive experience. They seldom have to wait in line. And once their truck is in the lube bay, our drivers are generally back on the road in less than 45 minutes.”
Realizing that a driver shortage will continue to be a challenge for the industry for the foreseeable future, the Florilli Corporation management team has made a commitment to make every interaction with drivers as positive as possible.
With data to support their tire decisions, the management team looks at making tire purchases that deliver maximum uptime, reliability, cost-per-mile, and fuel economy. Its new tractors are spec'd with Bridgestone M720FE tires in the drive-axle position and Bridgestone M287 tires in the steer-axle position.
Fleet data shows excellent wear and fuel performance, says Fitzer. The steer-axle tires are consistently delivering more than 100,000 miles of wear.
New trailers are ordered with the Bridgestone R195 tires.
According to Fitzer, the durability of Bridgestone tires helps his fleet continue to get payback from its tire investment as the casings are retreaded twice to reduce the need for new tire purchases. The retreads deliver performance comparable to a new tire at a fraction of the cost, he says.
Eastern Iowa Tire plays a key role in providing the retreading service. The first time the casing is retreaded, the Bandag Fuel Tech tread design is used for the drive-axle position. On the second retreading, Eastern Iowa Tire fits the casing with the Bandag FCR Trailer design tread. Both designs are engineered to “deliver excellent wear mileage along with optimal fuel performance.”
Safety is a key consideration for the fleet's maintenance program and tire management efforts. In 2006, Florilli Corporation was recognized among the safest fleets logging one-to-three million miles in the state of Iowa.
The fleet actually logs more than 25 million miles annually, but most of those miles are driven throughout North America.
In addition to running a modern trucking fleet with sound maintenance and uptime, Fitzer is committed to helping the entire trucking industry improve its public image. He serves as the current chairman of the Iowa Motor Truck Association (IMTA). The organization promotes the image of trucking, supports truck safety, and works on legislative issues that could impact the industry.
For Fitzer, helping to improve the trucking industry's image is not just a community service, it's a passion.
FLORILLI CORPORATION AT A GLANCE
Location: West Liberty, Iowa
Fleet: 225 tractors, 300 refrigerated trailers
Annual miles in 2006: 25 million