Freight Execs See Many Options to Boost Industry Productivity

This story appears in the Nov. 24 print edition of Transport Topics.

FORT LAUDERDALE, Fla. — Shippers are missing collaboration opportunities to help themselves and fleets to improve productivity and more effectively tackle escalating driver and capacity challenges, industry executives said.

Paul Newbourne, senior vice president at Armada Supply Chain Solutions, which manages 400,000 annual shipments for food and other shippers, said trucking productivity has slipped up to 5% in the past year due to hours-of-service restrictions and capacity reductions.

He was joined here at the National Industrial Transportation League conference by shippers, carriers and intermediaries, all of whom offered suggestions on ways to improve the supply chain.

Newbourne said Armada tells both carriers and its own workers, “Don’t tell us you can’t do something. Come up with solutions.”

That means steps such as receiving weekly performance feedback from carriers, and specialized teams to tackle productivity problems when they are identified. Armada’s productivity also improved when 40% of freight that moved intermodal was shifted back to the highway in the face of ongoing rail delays, Newbourne said.

Mark Tinch, assistant vice president at Werner Enterprises, urged shippers to take the initiative in improving their operations and facilities. He said it is not worth losing a driver permanently over a single loading-dock incident.

“We tell customers if they need to update the facility to make that happen,” citing steps such as more driver-friendly break rooms.

Tinch offered this test: “If your cousin was a driver, would he feel comfortable with the way he was treated?”

Werner ranks No. 14 on Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada.

“It is about taking away barriers to business,” DRT Transportation President Rob Kemp said Nov. 18. One worthwhile action, he said, is reducing “live loads” that detain drivers for loading or unloading freight, which wastes valuable hours. Smaller steps, such as proper directions, help, too, Kemp added.

Jeff Silver, CEO of Coyote Logistics, said, “Detention is just one of the issues. There are plenty of other things that can be done to become a shipper of choice.”

One is to shift the hours when docks are open without necessarily extending them, something which Silver said “does not need to cost them a penny more.”

Another easy fix, he said, was smoothing out shipments so they are more consistent each day of the week, eliminating wide day-to-day variations.

“That kind of shipping pattern is brutal for the asset-based guys,” said Silver, whose company is No. 41 on Transport Topics Top 50 list of the largest logistics firms in North America.

Shippers also can change internal habits, such as a salesman who only writes up orders once a week on Tuesday for shipments to leave on Friday. Another change he urged was giving fleets and brokers more time to plan loads instead of seeking a truck a few hours, or less, before it’s needed.

Newbourne and others also stressed changing attitudes toward drivers.

He called for “a return to the fairness doctrine” so that “carriers aren’t the whipping boy for the supply chain.”

Newbourne also urged shippers to find more efficient ways to manage their own rising costs, such as having to go deeper into their routing guides to find a truck.

Another action that can be taken is increasing “safety stock” or inventory, Newbourne and others said, and repositioning inventory closer to the delivery location.

Silver said private fleets can help themselves by working with brokers to help fill unloaded trucks, though he acknowledged “that is really hard. Everything has to be perfect.”

“When two customers get involved with each other, it doesn’t seem to work very well,” Silver said, because it requires that each company’s shipping practices — such as routes, times and regulations — have to be meshed perfectly.

Gary Palmer, senior director of transportation for hardware chain True Value, praised that approach.

“The amount of empty capacity that is out there [in private fleets] could alleviate problems in the industry,” he said. “Most of those guys move empty half the time. People could get a very good rate” to use that capacity.

However, he stressed the stumbling block of “contingent liability,” in which a private carrier could face liability expense for a load it didn’t actually move.

Palmer identified another option: looking for drivers who want to return to truckload after one or two years in higher-paying, but more demanding, oil-field trucking jobs. Palmer, who said he was speaking in his role as chairman of NITL’s highway committee, identified one other consequence.

“Carriers are taking action,” he said. “If they see a shipper doing that [excessive detention time], the shipper will lose that carrier.”