Opinion: We’re All in It Together

By Joel Anderson

President

International Warehouse Logistics Association

This Opinion piece appears in the March 26 print edition of Transport Topics. Click here to subscribe today.

It has become something of a cliché that what followed the economic deregulation of trucking in the early 1980s was even more regulation, albeit in different forms.

The readers of this newspaper are well aware of the many burdens that have been placed on trucking and other parts of the supply chain in the form of new hours-of-service rules, antiterrorism security measures and “green” fuel laws and restrictions. But readers primarily involved in hauling may not be aware of the full extent to which the mushrooming growth of regulation in other parts of the supply chain has affected all of us.

Here is what happens: Congress reacts to the latest news stories by passing more laws, and the bureaucracy reacts to that by writing new regulations to implement those new laws — and by finding ways to shift resources to enforcement in the new target areas. So even though neither the trucker nor the warehouseman had anything to do with impurities in the supply chain that originated elsewhere — think E. coli in lettuce or foreign substances in over-the-counter drugs — the resulting laws affect every part of the supply chain, trucking and warehousing included.

Complicating things even more, it is common these days for trucking companies to perform warehousing services, while many warehouses operate truck fleets — with both offering many of the same services. Sometimes, the only way you can tell the difference between a trucking concern and a warehouse operation is by looking at the company histories on their websites. In reality, both are asset-based third-party logistics providers.

Unfortunately, in their haste to target issues of public concern, lawmakers and bureaucrats forget the years of written law and legal precedent that have built up around the practice of logistics, and all too few of them even know how the supply chain functions in sourcing and delivering products to the customer.

These officials react to situations by developing solutions with minimal input from the industries whose work is being regulated. And they also fail to take into account that truckers and other supply-chain partners are offering solutions to time and distance problems for many different businesses, both foreign and domestic.

Contrary to fact, some of these lawmakers and regulators view the supply chain as a linear, one-dimensional set of transactions between a buyer and a seller. But we know the modern supply chain is a complex, collaborative, value-creating network with many intersecting patterns of movement between the points where it begins and ends.

We have seen how failure to make this distinction results in faulty legislative and regulatory actions. Recently, for example, the facilities of a member of the International Warehouse Logistics Association were visited by a Food and Drug Administration inspector who, seeing boxes of vitamin supplements neatly stacked in storage, demanded that the warehouse owner produce sales receipts for all of the supplements he had sold. No matter how many times the warehouse owner pointed out to the FDA official that his company merely stored the product for another company that was responsible for selling it, the inspector kept demanding to see his vitamin sales receipts, demonstrating a total unfamiliarity with how a third-party warehouse works.

That situation and others like it reinforce the mission-critical need to educate congressional staff and agency officials about how our members’ facilities actually function in the supply chain. To that end, we regularly conduct tours through member facilities to show government officials how our warehouses track and trace every shipment down to a single package, and, in the case of medical supplies, down to each and every prescription bottle.

These visits are vitally necessary to help legislators and regulators understand exactly how our portion of the supply chain works to ensure product integrity. We must make sure they see the actual security practices of the warehouse logistics industry because, if they operate blindfolded, it can cost everyone in the supply chain, not just warehouse operators.

It’s also important to realize that the educational process is a never-ending task — you can’t just do it once or twice and think you’ve made your point. Members of Congress, their staff and agency personnel change, and each change re-creates the need for the educational process to continue. And in our case, state chapters and members also must work to make sure their state officials are similarly well-informed.

Last year, we inaugurated a program called the Sustainability Logistics Initiative, which created reliable metrics our members’ customers — and government policymakers — can trust.

This year, we will roll out the Responsible Chemical Warehousing program, which has been designed specifically for asset-based 3PLs and developed in conjunction with the chemical industry.

Another innovation will be IWLA’s new Public Affairs Center, which will sponsor, assemble and disseminate independent research about the industry to policymakers and the public. We also are continuing an education and outreach program to our members that provides them with practical advice on how to deal with changing labor relations and legal and regulatory challenges.

However, the point I would like to make is that no industry association representing a link in the supply chain can have a real effect on the policymaking process without your presence — whether you are operating a warehouse, a 3PL or a trucking company — and the presence of everyone else in the supply chain. It may be controversial for me to say this, but as much as we value our members’ dues, we also need their active participation.

Whether it is choosing to serve on an association committee; working with local, state and national groups that advance your industry’s interests; or hosting a physical site visit by your member of Congress, you can accomplish good things for the advancement of your company and the supply chain by doing your part.

The International Warehouse Logistics Association, Des Plaines, Ill., represents U.S. and Canadian warehouse-based third-party logistics providers, many of whom operate truck fleets.