Transportation Firms Must Improve Recruiting to Satisfy Customers’ Desires, Leaders Say

By Daniel P. Bearth, Senior Features Writer

This story appears in the Feb. 22 print edition of Transport Topics.

The transportation and logistics industries must do a better job of recruiting employees and upgrading the skills of current workers to meet the increasing needs of shippers, said several leaders in those industries.

Supply-chain efficiency is so vital to the overall performance of many companies that transportation executives must have a broad understanding of how businesses operate, those leaders said. And those new executives also must be proficient in the use of technologies for processing information on the global movement of goods, those leaders said.

In response to those market realities, some companies are beginning to push for certification of logistics workers, and many have formed close ties with schools to provide training and conduct research. Likewise, more colleges and universities are offering undergraduate and graduate-level logistics programs.

However, despite good job prospects for graduates, many business leaders said they are finding it difficult to “sell” logistics as a preferred career option.

“A university is similar to a manufacturing company,” said Joel Sutherland, managing director of the Center for Value Chain Research at Lehigh University in Bethlehem, Pa. “To survive and prosper, it must produce a product that is in demand. For universities, this means we must understand industry’s evolving supply-chain management needs and develop a curriculum that produces talent that supports those needs.”

Sutherland knows the logistics end of the trucking industry. In the late 1990s, he was hired by J.B. Hunt Transport Services to develop a non-asset-based logistics concept for Hunt and four other truckload carriers. It ultimately became third-party logistics and technology provider Transplace Inc.

At Lehigh, Sutherland said, logistics students are required to work outside the classroom “in a job that increases their understanding of supply-chain practices and enhances their value to a firm.”

“Real-world experience matters,” he added.

Logistics educators said companies are asking for help in providing training and certification to employees.

“We see schools increasing the number of programs,” said Chris Moberg, a marketing professor at Ohio University, who serves as co-chairman of the education committee for the Council of Supply Chain Management Professionals.

While more programs are being offered, Moberg said schools also are battling negative perceptions among students about careers in transportation and logistics.

Steve Sienkiewicz, a senior vice president of Agility Logistics in Baar, Switzerland, shared similar sentiments.

“It’s a challenge to bring people into this business,” he said. “It’s still considered blue collar.”

Though careers in finance or law may have greater appeal to college students, Sienkiewicz said that people who are trained in supply-chain management are landing more executive-level corporate jobs.

“It’s a pathway to top management because [the supply chain] touches so many aspects of the business,” he said.

To attract more people to logistics, business leaders are working with educators and government officials to raise the profile of transportation and logistics among school-age children and the public.

“We’ve made some gains,” said Cathy Langham of Langham Logistics, a company she started with her sister 22 years ago in Indianapolis. A graduate of Indiana University with a degree in business and marketing, Langham was working as a retail buyer when she got her first taste of transportation working in sales for P-I-E Nationwide, a prominent less-than-truckload carrier in the 1970s and 1980s.

“It gets into your blood and stays,” Langham said of her interest in transportation and logistics.

Langham applauded the efforts of Indiana Gov. Mitch Daniels (R) to develop more logistics expertise as a way to support the growth of new manufacturing jobs.

“There is a shortage of people with [logistics] skills,” Langham said. “We can train, and we can teach the business, but I don’t see a lot of people coming in the door with those qualifications.”

In a 2009 report by researchers at Ball State University in Muncie, Ind., its home state received high marks for having a highly developed manufacturing and logistics sector, good transportation infrastructure and relatively low taxes. But the state also ranked poorly in other categories, such as benefit costs, productivity and innovation. It also scored the worst — a D+ — for human capital.

“Indiana, to a higher degree than many states, has an aging manufacturing and logistics workforce,” said Steve Dwyer, president of Conexus Indiana, an initiative formed by a group of business and government leaders in central Indiana to address the state’s workforce issues.

“If the region cannot offer firms a reliable source of educated workers,” Dwyer said, “we will see a dwindling presence of manufacturing, as business seeks workers with the right set of skills and education.”

A similar partnership including business, educators and public officials in North Carolina has targeted logistics education as a way to spur economic development in a region hit hard by job losses in the textile, furniture manufacturing and tobacco industries.

“Our objective is to make this area very attractive for manufacturing and distribution for the East Coast market,” said Don Kirkman, president of the Piedmont Triad Partnership in Greensboro. “We want to make sure there is a pipeline of available workers.”

The 12-county Triad area in North Carolina has lost 50,000 jobs in the past four years, said David Hauser, director of logistics and distribution for PTP.

“Objective No. 1 is to stop the bleeding,” Hauser said. “Furniture manufacturing is not coming back, but design work can, and distribution. Components can be made in China and assembled and shipped from here.”

PTP garnered support for the establishment of a Center for Global Logistics near the airport in Greensboro.

The center, which is slated to open in 2011, will feature a working warehouse, exposing local students to inventory management systems, material handling equipment and the radio-frequency identification technologies used in modern distribution centers.

In Dallas, warehouse operator John Ward said he is working with state and local officials to develop curricula for high school, community college and university students to spur interest in logistics careers.

“I need skilled people,” said Ward, who leads Dallas Transfer and Terminal Warehouse Co. “Right now, we pick up whoever we can and we train them.”

Ward said he supports the idea of offering a certification test for logistics workers using a process similar to the one used to test and certify automotive mechanics.

For example, Ward said, federal regulations now require forklift training, but the license is not transferable and is equipment specific.

With a logistics certification, employers would have a way to easily judge the skill level of prospective employees, while workers could use the credentials to advance their careers.

“Warehouses are thought of as a dark, dirty place where you pick up boxes,” Ward said. “Most of my people work with computers. Brawn only gets you so far.”

The need for more highly qualified personnel reflects the pressure on transportation service providers to do more for shippers.

“Rather than simply calling to pick up a load, they are looking for the motor carrier to be more involved in scheduling, working the dock — more logistics-type work,” said Tom Bray, a training consultant with J.J. Keller & Associates Inc.

“Firms have created new positions to deal with what used to be the traffic department of the shipper.”

With supply-chain issues be-coming more important to the overall performance of many companies, schools and businesses are finding new ways to extend learning from the classroom to the board room.

Samuel Campagna said when he was global transportation and logistics manager for United Technologies Corp., Farmington, Conn., he was asked to develop a logistics curriculum for the company after officials identified a “real skills gap in logistics.”

Using a video instruction program from the Georgia Institute of Technology’s Supply Chain & Logistics Institute, more than 200 people received instruction.

“It made a difference,” Campagna said. “Awareness of logistics has increased. We identified $100 million in savings last year through process improvements and waste reduction.”

Campagna left his job with UTC on Feb. 5 to join Albany International Corp. in Albany, N.Y., as vice president of supply chain.

At Fox Valley Technical College in Oshkosh, Wis., Anne Haberkorn directs five instructors who work full time providing training in “lean logistics” concepts and sustainability to employees on the job.

“It has always been tough trying to interest high school graduates in this field,” Haberkorn said. “Many people that find themselves in these positions are promoted from other jobs.”

One of Haberkorn’s recent training assignments was at School Specialty Inc., a company that sells educational materials and supplies based in Greenville, Wis. The company had just completed implementation of an enterprise resource management program and needed to bring its 2,700 employees up to date.

“We needed to help our associates understand the basic processes and principles of what we are trying to do, and to create a general level of lean literacy throughout the organization,” said Michael Killoren, vice president of School Specialty Inc.

Fox Valley also has more than 1,000 students enrolled in online courses, and it provides certification courses for the Chicago-based Association for Operations Management.

Jeffrey Arnold, executive director of the North American Transportation Management Institute, which provides certification courses for safety and maintenance managers, said interest remains strong in such programs despite the downturn in the economy.

“We have seen a fair amount of folks in management lose their jobs. A number of those folks are looking to professional development to keep themselves marketable.”

At the Intermodal Transportation Institute at the University of Denver, the focus is on helping transportation executives learn from each other.

Each five-week course has about 25 people and features a mix of classroom instruction and trips to ports and other important transportation facilities.

“There is a need for the next generation of leaders to acquire the skills to take their organization to the next level,” said Ted Prince, a prominent rail industry consultant and instructor at the ITI.

Prince said that most transportation executives develop expertise in just one mode — truck, trains, air or ocean — and have little opportunity to con-sider the economics of intermodal transportation.

“There’s no textbook for this,” Prince said.

Tom Finkbiner, another ITI instructor — and a former truck and rail executive — said the need for executive education is all the more pressing because the pace of change is accelerating.

“In transportation, a right decision yesterday could be a wrong decision now,” he said. “Most successful shippers don’t view their business in terms of mode. They’ve got a commodity going from point A to point B, and what’s the best way to get it there? It’s an open-ended question.”