American Military University
I. Major Facts
Hardee’s Transportation Manager Jim O’Brien is concerned about a request from the company’s largest customer. Hardee’s current freight pickup and delivery operations are set to reflect for 10 hours of maximum drive time for their drivers. The dispatch centers and bobtail routes are patterned in accordance with the previous hours-of-service rules. Hardees’s customer feels a rule changes could be beneficial and suggested a new hours-service rule of 14 hour-on-duty time. Jim O’Brien has great concerns because most of his largest customers already implemented the longer PDU times. II. Major Problem
Hardee Transportation major problem is that if customers will not reduce loading and unloading times, the company has to either increase detention charges or reconsider those customers. Hardees’s sales team is against Jim’s proposal and fears the potential for significant revenue loss. III. Possible Solutions
A. One possible solution would be to consider Jim’s recommendation to require their customers to reduce loading and unloading times by reducing the time spent by a driver at a loading or unloading site, by adapting the lay-out of the site or by making use of more adequate equipment. If the customer agrees to implement those changes it will result in improved efficiency, which will also be a benefit for both the site and the company. Possible benefits include a reduction in total freight cost and the doubling of the number of shipments handled by the driver. B. The second possible option would be to increase detention charges, which are charges against the customer for the delayed return of the carrier’s equipment beyond allowable free time. If the customer declines the option of reducing loading and unloading times, Hardee Transportation has no choice but to charge increased detention charges. Hardees’s sales team is against Jim’s...