LEAD 4093 Module 4 Capstone Recommendation and Implementation Plan Example

Home Most Nights by 2029: A Recommendation and Three-Year Implementation Plan for an Iowa Trucking Carrier

Student Name

American College of Education

LEAD4093: Capstone in Administration and Leadership

Module 4 Assignment

Instructor Name

April 26, 2027

Introduction

The options analysis in Module 3 compared four strategies for Cedar Valley Freight, the composite Cedar Rapids truckload carrier at the center of this capstone, and found that only one addressed both driver turnover and margins: shifting the business toward dedicated contracts and regional lanes that bring drivers home most nights. This paper turns that choice into a recommendation leadership can approve. It states the recommendation, lays out three phases through 2029, explains the new pay design, estimates costs and financial results, plans how the change will be communicated, assigns responsibility and sets measures and contingencies.

The Recommendation

Cedar Valley should, over three years, raise dedicated contract work from about 30 to about 60 percent of its fleet, rebuild its remaining regional freight into relay lanes that end each shift at the Cedar Rapids or Des Moines terminal, and pay drivers a guaranteed weekly base topped up for stops and extra miles instead of paying by the mile alone. The tractor count should drop from 210 to about 190 tractors through attrition as the lowest-margin one-way spot freight is dropped. No current driver should earn less in the first year than under the old system, and no one should be laid off. The targets are driver turnover below 45 percent and an operating ratio of 93 percent by the end of 2029.

Phase 1: May to December 2027

The first phase builds on what already works. The sales director will sign the two existing food customers' requested expansions, adding about 30 dedicated tractors by September, with three-year terms and twelve-month notice clauses. Operations will pilot two home-daily relay lanes, one between Cedar Rapids and Omaha with a swap point in Des Moines and one between Cedar Rapids and the Chicago area, using about 24 drivers. The chief financial officer will arrange equipment financing for 25 refrigerated trailers, about $1.95 million, needed for the dedicated expansions. The dispatch system will be upgraded with load planning and driver schedule tools by November, at a cost of about $180,000.

Phases 2 and 3: 2028 and 2029

In 2028, the sales director will pursue the two eastern Iowa shippers that have asked about dedicated service, aiming for two new contracts and a dedicated share of about 45 percent. Relay lanes that met their targets in the pilot will be expanded, and those that did not will be redesigned or closed. One-way spot loads will be accepted only when they reposition a truck toward home or meet a minimum rate. In 2029, the dedicated share should reach about 60 percent, with no customer above 25 percent of revenue. Throughout both phases, the fleet will shrink only as drivers leave or retire and tractors reach replacement age.

The Pay Design

Drivers on dedicated and relay routes will receive a weekly guarantee of $1,250 for a full schedule, plus activity pay for stops, miles beyond the route plan and detention time, so that a typical week pays about $1,400 to $1,550. Drivers who remain on longer regional routes will keep mileage pay with a higher minimum. Every current driver will be told, in writing, their pay under the old system for the past twelve months and guaranteed at least that amount for the first year after switching, if they choose to switch. The guarantee costs an estimated $210,000, mostly for a group of high-mileage drivers, and is the price of a change that drivers can trust. Research on drivers paid by the mile suggests that low rates push them into very long weeks to reach a livable income (Belzer & Sedo, 2018), so a guarantee also removes a quiet incentive to drive tired.

Costs and Financial Projection

One-time costs over three years total about $560,000: the software upgrade, the first-year pay guarantee, relay lane setup and recruiting for dedicated routes, and training for dispatchers. Trailer financing adds about $420,000 a year in payments. Against this, cutting turnover from 74 to 45 percent would reduce departures from about 170 to about 86 a year, saving about $760,000 annually at $9,000 per departure. Dedicated work runs at an operating ratio near 91 percent in the company's data, against about 101 percent for one-way spot freight. Applying those ratios to the planned mix, the operating ratio should fall from 98 percent to about 95 in 2028 and 93 in 2029, with revenue dipping to about $65 million before recovering to about $70 million.

Communicating the Change

Drivers have heard promises before, so how the change is explained matters. Armenakis and Harris (2009), reflecting on decades of change research, argue that people accept a change when the message convinces them of five things: the present situation has to end, the chosen fix suits the problem, the company is capable of pulling it off, the people at the top are committed and the change pays off for them personally. The plan addresses each. The president will present the turnover and route data at driver meetings at both terminals, explaining the need. Drivers from the dedicated routes, with their lower turnover, will describe the work. Oreg et al. (2011), reviewing six decades of studies, concluded that staff respond to change largely according to whether they believe their bosses and see the process as even-handed, so drivers will choose their route type and can ask questions in small group sessions.

Governance

A steering group of the president, chief financial officer, safety director, sales director and operations manager will meet monthly through 2029. The operations manager will own the relay lanes and dispatch changes, the sales director the customer targets, the safety director driver training and safety measures, and the chief financial officer the financing and financial reporting. Two drivers, one from dedicated routes and one from regional routes, chosen by their peers, will join the steering group quarterly to report what drivers are experiencing. I will coordinate the plan and report progress on the measures below. Every quarter, all employees will receive a short written update from the steering group, including measures that are off target, so drivers can see that the plan is reported honestly.

Measures

Six measures will be reported monthly: driver turnover by route type and tenure; the share of new drivers still employed at ninety days; the operating ratio by business segment; revenue share of the largest customer; the preventable accident rate per million miles; and the share of drivers home at least four nights a week. A short driver survey every six months will ask about home time, pay predictability and treatment by dispatch, the three leading reasons for leaving in the exit data. Targets for each measure are set by year, and any measure off target for two consecutive months will prompt a review by the steering group.

Contingencies

Three contingencies are planned. If a dedicated customer gives notice, trucks will move first to relay lanes and then, if needed, to other dedicated prospects, with the notice period giving time to adjust. If relay lanes fail to fill, they will be reduced and drivers offered dedicated routes. If the freight market recovers sharply, the steering group will resist expanding spot freight beyond its planned share, since a boom does not change why drivers leave. Each contingency has a trigger written in advance, such as a relay lane running below 80 percent of planned loads for two months, so decisions are made by rule rather than under pressure.

Conclusion

The recommendation is to build Cedar Valley's business around jobs that let drivers go home. Three phases, a pay design with a first-year protection, about $560,000 in one-time costs and trailer financing should cut turnover below 45 percent and bring the operating ratio to about 93 percent by 2029. Monthly figures, named owners and plain reporting to drivers will tell leadership early if the plan is slipping.

References

Armenakis, A. A., & Harris, S. G. (2009). Reflections: Our journey in organizational change research and practice. Journal of Change Management, 9(2), 127-142. https://doi.org/10.1080/14697010902879079

Belzer, M. H., & Sedo, S. A. (2018). Why do long distance truck drivers work extremely long hours? The Economic and Labour Relations Review, 29(1), 59-79. https://doi.org/10.1177/1035304617728440

Oreg, S., Vakola, M., & Armenakis, A. (2011). Change recipients' reactions to organizational change: A 60-year review of quantitative studies. The Journal of Applied Behavioral Science, 47(4), 461-524. https://doi.org/10.1177/0021886310396550