Doug Martin: Finding the Right Transportation Management Organization for Your Properties

by Katie Sloan

Successful marketing strategies for any housing management organization focus on both the direct and indirect amenities offered by a specific property, especially when targeting millennials. The exceptional student experience that housing management organizations strive to achieve also creates a bridge between the facility, the campus, and the surrounding area that must be safe, reliable, and convenient. Developing and managing a structured transportation service plan that focuses on how to maximize service, minimize cost, and control external concerns like liability management can help make this value-added service much less of a burden on property managers.

When a property manager decides that they are going to offer transportation services to their residents, they incur a range of financial, legal, and operational considerations they are often not fully prepared for. First and foremost is the capital investment associated with purchasing vehicles and the operating costs associated with operating and maintaining them. A very close second is finding enough of the “right” people to drive the vehicles while ensuring students are informed of whether the bus is on schedule or not. Finally, there are the liability questions associated with moving residents to and from your facility. Each of these issues, and the myriad of other concerns, are relevant whether you have one or one hundred vehicles. And managing this “monster” is frequently the biggest thorn in the side of a property manager.

It is only when a van or shuttle isn’t running on schedule, or at all, that we realize how complex even a single shuttle system is and how valuable the service is to the residents. Figuring out how best to ensure the vehicles run on-time is an important consideration to the overall satisfaction with a property. A viable alternative to support effective management of the operation is the use of a transportation management organization (TMO). A strong TMO should be able to assist you in all aspects of the daily activities of your shuttle service. This should include:

  • Identifying alternative financing options to best manage the capital costs associated with vehicle purchases
  • Developing systems to recruit, manage, and retain enough qualified drivers to provide services
  • Supporting the development of a maintenance management program to promote maximum availability of each vehicle
  • Acquiring and implementing technology that allows residents to know whether the service is running on-time and that allows you to minimize the cost of what is typically a non-revenue generating asset
  • Creating a training program that ensures drivers operate vehicles safely and minimize the organization’s exposure to operating risk

With the right partner, your property manager can focus on managing a property, increasing occupancy, and enhancing the resident experience.

When you are looking for a TMO partner, it is important to ensure that the organization has an understanding of the demands associated with your type of transportation services. Recognizing that transporting students is not the same as transporting packages or cargo would seem self-evident, but often times organizations approach the two problems the same way. This typically results in high costs, poor service, and significant liability exposure due to a lack of attention to key safety-related fundamentals. The right TMO can ensure that you provide safe, reliable, cost-effective, and value-added services to your residents.

Engaging a TMO begins by asking yourself the critical question: “What kind of service are we looking to provide?” Like any other professional service, establishing a defined scope will ensure that both you and the TMO clearly understand what you are trying to accomplish, and by when. There is a major cost and operational difference if you want to provide 24-hour services versus something more in line with the campus class schedule of approximately 6AM to 11PM. A clear definition of those hours of service can be a major factor in your ability to control the cost of this service, and a knowledgeable TMO can help you understand the pros and cons of different options.

Additionally, there is a need to focus intently on the condition of your fleet. The vehicles your residents ride are a reflection of the quality of your core property assets. Therefore, it is important to develop a replacement and financing schedule that minimizes the total cost of ownership of the asset. Developing a sustainable replacement strategy also ensures you are managing the liability exposure associated with old assets that might frequently breakdown and create dangerous operating conditions for your residents. Finding a TMO that can help you develop and finance a sustainable replacement strategy is an important element in an effective risk management and cost containment plan, while offering the added benefit of allowing your attractive, new(er) vehicles to serve as a passive marketing tool for your property.

Two critical, though less obvious, considerations when you are engaging a TMO is their ability to bring in temporary resources and the breadth of their service offerings. The ability to call on necessary resources in times of peak demand is a strong indication as to how well they will respond when the inevitable service disruption occurs. Identifying a partner that has the resources and relationships to ensure that you can continue to provide services even if there are vehicle breakdowns, driver shortages, adverse weather, or unexpected campus events will give you the confidence that your core business (and your bottom line) won’t be negatively impacted by a service you know you need but may not want to have.

Transportation is often at or near the top of the list of things property managers love to hate. How many drivers do we need? How do we train them? What type of license and which endorsements do they need? What if we have different types of vehicles – are the drivers one-size-fits-all? Answering one of these questions incorrectly can significantly impact service delivery, create an unsafe environment for the transportation system, and expose the property and investors to an unnecessarily high level of risk. The constant demands, the significant risk exposure, and the complexities of making things run on-time often distract individual managers and their staff from their core duties for days and even weeks at a time. However, there are options that can make the misery a lot less miserable. Partnering with a professional transportation management organization can reduce the stress and financial strain of providing your residents with a service they expect and that makes your property standout.

Doug Martin is President of TransPar. He and his team manage transportation for the national leader in private student housing, The Scion Group. For more on why Scion exited the transportation business and handed their transportation operations to TransPar, click here.

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