Logistics Viewpoints: A Blog for Logistics, Supply Chain, and 3PL Executives

Last year, I wrote about how Walmart improved the efficiency of its private fleet by almost 69 percent in 2011 compared to its 2005 baseline. How did Walmart do it? By increasing its pallets per trailer and better managing its routes (among other things). Obviously, companies can achieve great benefits via better route planning and load building. However, from my perspective, many companies treat route planning and load building as two distinct, separate steps in the transportation management process. Could companies achieve even greater value if they were to take a more holistic and integrated approach? In this Viewpoints on the Air podcast, I discuss that question and others related to integrated route planning and load building with Bobby Miller, Global Chief Strategist, Consumer Goods at ORTEC. Bobby brings a unique perspective to this topic. He not only works on the technology side of things, he was also a shipper himself, having worked at Georgia-Pacific, Kraft, and other companies, so he understands from first-hand experience the challenges shippers face every day on the frontlines. Last week, ORTEC issued a press release highlighting one of its customers, Molson Coors Canada, and how the company is taking an integrated approach to routing, pallet building, and truck loading. I asked Bobby about this case study, and here’s an excerpt of what he said: [Molson Coors Canada’s] business challenges were focused on the fact that they had all of these legacy systems that had been built over the years for delivery planning...so what they wanted to do was to build an integrated solution that could provide for all the capabilities necessary to deliver to over 17,000 customers in Quebec alone. So, [they wanted] to improve routing and dispatching, and they wanted routing and dispatching to be part of their SAP framework, as well as load building and territory planning. For more insights on this topic and the case study, listen to my conversation with Bobby below. Then post a comment and share your viewpoint on this topic.

A lot has happened in the LTL industry the past few years, with some carriers exiting the market and others struggling. But a lot has stayed the same too, such as the pricing model for LTL shipments, which is still predominantly based on the National Motor Freight Classification (NMFC) schema established in 1936. And this pricing model, which is somewhat complex, tends to confuse a lot of shippers, as I discussed in "Time to Rethink Less-than-Truckload (LTL) Pricing" back in December 2010. In this Viewpoints on the Air podcast, I explore the complexities of LTL shipping and pricing with Steve Pandolfo, Director of Pricing at Sunset Transportation, who shares his perspective on this topic based on his experience handling pricing negotiations with LTL carriers, as well as his role managing Sunset’s technology platform. Also participating in the conversation is Geoff Comrie, CEO at Transite, who provides his perspective on this topic as a TMS provider. What are some of the key challenges shippers face today when it comes to LTL pricing and shipping? Here is an excerpt of what Steve had to say: LTL is pretty confusing to break down and try to rate because of all the different [factors] that go into getting that final [rate]. Every carrier has what is called a rules tariff and those are how they break down the fees that [they] charge to shippers for things like notifying the consignee before [the shipment] delivers, if you have a lift gate, if the driver has to go inside somewhere and break the freight down...[and] it's important for shippers to know that all these charges are different for every carrier, it's not a [common] charge across the board, and those charges are increased, generally, on a year-by-year basis, so the [fee] you were charged in December could be completely different in January. And what challenges does LTL pricing create for 3PLs? What a shipper wants from me as a service provider is to give them an accurate rate upfront. You have to be as accurate as you can because one of the most frustrating things for a shipper is when he gets a rate from me for $100 and then my invoice comes in and it's $200 and he wants to know why....From my perspective, it's important to have a [technology] platform that allows [shippers] to put as much information as possible [about the shipment] to get an accurate rate upfront. For more insights on this topic, listen to my conversation with Steve and Geoff below. Then post a comment and share your viewpoint on this topic.

A few weeks ago, I wrote about the build vs. buy decision that many third party logistics providers (3PLs) face when it comes to IT solutions, particularly when off-the-shelf applications don’t meet all of their functional requirements (see “The IT Dilemma for 3PLs”). That posting generated a lot of comments, not only on Logistics Viewpoints but also on LinkedIn. In this Viewpoints on the Air podcast, I explore this topic a bit further with Kyle Krug, Director of Client Solutions at TMSi Logistics. Kyle led the TMS selection process at Griffin Global Logistics (which TMSi acquired earlier this year) and he discusses why “flexibility and customization” were important capabilities the company looked for in a TMS. Also participating in the conversation is Geoff Comrie, CEO at Transite, who provides his perspective on this topic as a TMS provider. One of my key takeaways came at the end of our conversation, when I asked Kyle and Geoff to provide our listeners with words of advice or recommendations. Here is part of what Kyle had to say: The first thing we learned from experience is that TMS from a shipper’s standpoint and TMS from a 3PL’s standpoint are very different, so if you are a 3PL looking for a TMS you really need to make sure the [solution] is able to service the extra layers of needs [you have as a 3PL]...That seems kind of a simple thing, but it’s really not, there’s a lot to it, so I would really make sure you take that angle. Geoff added: If you’re about to make an investment in a TMS, you’re probably looking to make a long-term investment. I would look several years down the road and try to understand what [your] strategic needs are versus tactical needs...If you are a 3PL and you’re not looking at how a TMS is going to impact sales or how you will use it to drive sales, then you missed a big step [in the evaluation process] and need to go back and examine that. For more details on these recommendations and other insights, listen to my conversation with Kyle and Geoff below. Then post a comment and share your viewpoint on this topic.

What will happen to transportation rates in the weeks ahead? Will they go up, stay the same, or go down? That is one of the most frequent questions I get as an analyst, especially towards the end of the year. And it’s one of the questions I discuss with Carl Fowler, Sr. Director of Business Development and Solutions Design at Menlo Worldwide Logistics, in this latest episode of Viewpoints on the Air. Both Carl and I believe that the pendulum is swinging in the carriers’ favor, and while we’re not quite in a “carrier’s market” today, carriers are certainly in a more favorable position than they were a year or two ago. What actions should shippers take? Carl highlights five things: Question why you are shipping (i.e., eliminate unnecessary shipments) Make sure you are leveraging your spend effectively Optimize your network Make sure your network is operating effectively Have the right metrics in place For more details on these recommendations and other insights, listen to my conversation with Carl below. Then post a comment and share your viewpoint on this topic.

In this latest episode of Viewpoints on the Air, I talk to Jordan Kass, Executive Director for TMC at CH Robinson Worldwide, about the factors that are driving companies to expand their global presence and operations, as well as the implications of going global from a transportation and logistics perspective and the key capabilities companies need to succeed. Jordan raised several interesting points during our conversation. For example, he discussed how population growth and urbanization (the rise of “megacities”) are playing a key role in the global strategies of many companies. Simply put, tomorrow’s consumers won’t be living where they are today. He also talked about the importance of having the right “people processes” in place. In other words, going global goes beyond having a physical presence in multiple geographies and having a technology platform capable of supporting a global operation; it’s also about creating an organizational structure that is truly aligned with the right metrics in place. Of course, having a TMS capable of supporting multiple transportation modes and services, with global visibility and business intelligence capabilities, is also important. For more details and other insights, listen to my conversation with Jordan below. Then post a comment and share your viewpoint on this topic. For past episodes of Viewpoints on the Air, check out our new podcast player on the right sidebar of our homepage or click on "Podcasts" on the top navigation menu. You can also click here to subscribe to our podcasts via iTunes.

Last month, I gave you a sneak preview of a “mega session” I will be moderating at this year’s CSCMP Annual Global Conference in Philadelphia titled “At the Social Media Inflection Point: Texting, Tweeting, and Friending the Next Wave of Supply Chain Innovation.” In today’s Viewpoints on the Air podcast, I interview two of the great panelists we have assembled for the session: Terri Griffith, Professor of Management at Santa Clara University and author of the forthcoming book “The Plugged-In Manager,” and Tom Nightingale, VP Communications and Chief Marketing Officer at Con-way (a Logistics Viewpoints sponsor). Terri wrote a very informative article published in the Wall Street Journal in April titled “Tapping Into Social Media Smarts” that focused on how companies can use social media to improve workplace collaboration. She addressed this topic in our conversation, along with some recommendations for how supply chain managers can overcome the “change management” issues associated with social media. She mentioned how supply chain managers need to “stop, look, and listen” for opportunities where social media can help them identify and respond to trends or problems faster by gaining access to tacit knowledge that historically has been difficult or impossible to get. In other words, think of social media as another type of business intelligence and supply chain visibility tool. But as Terri also stressed, you can’t “go off half-cocked” and implement social media in the workplace without taking into consideration your current organizational practices and potential risks. My conversation with Tom focused on the challenges and benefits, both expected and unexpected, that Con-way has experienced in the year since it introduced TweetLoad, which provides carriers with visibility to available loads via Twitter (@ConwayTweetLoad). If a driver sees a load he wants to bid on, he simply clicks on the link to access the portal and complete the transaction. Or if he has an iPhone, he can click on the phone number, which automatically initiates a call to an agent (for related commentary, see “Mobile + Social Media = Supply Chain Innovation”). According to Tom, one of the challenges Con-way faced was determining the right time to enter each tool (not too early, not too late), while dealing with limited resources, vocal skeptics, and other business requirements. A pleasant surprise, however, was the willingness of the organization to work through all of the necessary evils that come with social media, such as setting up policies, processes, and protocols, and getting everyone aligned and protected from a legal standpoint. For more great insights, listen to my conversation with Tom and Terri below. And of course, plan to attend the mega session at the CSCMP Annual Global Conference, where you can participate in the conversation too with Terri, Tom, and the other great panelists we’ve assembled from Home Depot, Volkswagen, and Trendset Information Systems. So, mark your calendars: The mega session on social media and supply chain innovation will be on Wednesday, October 5th from 8:00 to 9:30 AM, so make your travel arrangements accordingly. I look forward to seeing you in Philly in October. In the meantime, post a comment and share your viewpoint on this topic!

Last week, Transplace announced that it was acquiring SCO Logistics, a Philadelphia-based 3PL serving the chemical industry. I shared my initial reaction to this deal in last Friday’s “This Week in Logistics News” posting. Yesterday, I had the opportunity to speak with Tom Sanderson, President and CEO of Transplace, and Frank McGuigan, President and CEO of SCO Logistics, to gain additional insights and perspectives on this deal. Here are some of the questions and topics that we discussed: Based on the press release, it seems that SCO's experience in the chemical industry was a key factor in Transplace’s decision to acquire them. Why is the chemical industry--and SCO's experience serving this industry--attractive to Transplace? Transplace's tagline is "The 3PL and Technology Company" and SCO had "Powerful Logistics and Technology Solutions" prominently displayed on its website. Technology, therefore, is core to the business models of both companies. What role did this alignment play in the acquisition? What role will technology continue to play moving forward? What does this acquisition mean for existing clients? How will it benefit them? M&A activity is starting to heat up in the 3PL industry, and this probably won't be the last acquisition for Transplace. Why is M&A activity on the rise again? What is Transplace's M&A philosophy--i.e., what do you look for in a candidate, what are you trying to achieve in making an acquisition, what are the potential risks involved and how do you mitigate them? Our recorded conversation is the inaugural edition of Viewpoints On the Air, our new podcast series where we discuss emerging trends and breaking news in the supply chain and logistics industry. You can listen to my conversation with Tom and Frank below. Viewpoints On the Air will soon be available on iTunes too (we’ll let you know how to subscribe when it becomes available).