Howard’s End?

Imagine if the former editor and publisher of the Journal of the American Medical Association wrote an op-ed in the New York Times charging the physician community with being a threat to public safety, the AMA with blocking regulators’ efforts to make physician practices safer, and Congress with coddling doctors?

The trucking crowd was treated to this type of surreal scene nine days ago when Howard S. Abramson, who spent 16 years as editorial director of Transport Topics, which is owned by the American Trucking Associations (ATA) and considered trucking’s bible, penned a piece for the Times’ op-ed page excoriating the industry for “consistently” resisting efforts to improve road safety, and Congress for doing the “trucking industry’s bidding by frustrating” the regulators tasked with overseeing it. The column had the headline “The Trucks Are Killing Us,” and a drawing of a truck’s cab with a grill in the shape of a skeleton’s face.

If something was needed to shake off the summer slumber, this was it. Abramson, who also spent a number of years as Transport Topics’ publisher before leaving ATA in 2014, was blasted across the trucking spectrum from the executive offices of ATA to other trade journals. It became, for a couple of days at least, the talk of the somewhat clubby transportation journalism fraternity of which Abramson was a part, and who many still know well.

For full disclosure, this blogger worked for and with Abramson in the late 1980s and through the mid-1990s at two other publications. Here’s what is not in dispute: Abramson is a stellar journalist. He has deep experience covering all transport modes from every angle. He understands the business and journalistic sides of trucking. He is tough, and can be caustic, combative, and combustible. And he is nobody’s shill; he told this blogger several years ago that one of his biggest challenges was to keep Transport Topics independent from the state trucking associations that would want the magazine to serve as a mouthpiece for the industry’s line.

It is the reputation of Abramson’s fierce independence that may resonate long after the hubbub over his incendiary piece dies down. The trucking industry is locked in a fierce, emotional, and seemingly endless battle with safety advocates and the railroads over legislative and regulatory issues concerning highway safety. In fact, trucking is coming off a successful legislative period where it got a lot of what it wanted from Congress, namely a delay in the implementation of certain adverse regulations and an advancement of language allowing longer twin trailers on all of the nation’s federal-aid highways. For someone of Abramson’s prominence, and one so closely tied to trucking in so many ways, to use arguably the nation’s most powerful op-ed page to slam the industry is of no small matter to its lobbyists. Abramson was not a casual observer of the trade. Nor was his view colored by personal tragedy as so many anti-truck types who lost a loved one in a truck-related incident. He was an insider’s insider, with access few could match. That is influence the railroads and safety advocates couldn’t buy if they tried. As Congress returns from summer recess to attempt to pass a long-term transport funding bill, it will be interesting to see what impact, if any, Abramson’s column will have on lawmakers and on the status of pending truck safety legislation.

Abramson’s critics—and there a few—will say that he’s been gone from Transport Topics for 18 months, and that his power left with him. Others will call him a hypocrite, claiming he supported the industry when he needed a paycheck and turned on it only when there was nothing to lose. In e-mail exchanges, Abramson said he had felt this way for some time but couldn’t go public with his views while employed at ATA. He denied his column was an attack on the industry. “What I did was to write an opinion piece about a specific area of concern for me, and one that I believe should be a deep concern for anyone who drives on our roads,” he wrote.

Abramson stressed that he doesn’t want to put the industry out of business, that he is aware of trucking’s importance to the economy, and that he has a “deep understanding of the complexities the trucking industry faces.” But true to form, he’s not backing off. “I believe the trucking industry has done much to impede highway safety improvements … rather than supporting technologies that would lessen car-truck crashes, elements of the trucking industry have spent great energy thwarting their use,” he said. “I believe trucking has missed the opportunity to be seen as a partner with the motoring public in efforts to make our roads safer, and has made itself an adversary in this regard.”

Abramson called his op-ed a “service to the more responsible segments of the trucking industry,” saying some industry insiders and truck drivers share his view that special interests that put profits over safety are blocking efforts to employ available, proven, and affordable technology and processes that would reduce the number and severity of truck-related accidents. He also professed wonder at the backlash to his column. “In my many years of covering the trucking industry, I have often been baffled by the inability of those who run it to deal with constructive criticism,” he said.

And what about that slash-and-burn headline augmented by the skull and crossbones-like caricature? Abramson said the Times, like many publications, develops its own headlines and graphics. As one who has spent many hours working with Abramson, this blogger can attest to the truth of that statement.

New thinking on infrastructure

Congress continues to dawdle, postpone, pontificate, obfuscate and otherwise refuse to come to grips with reauthorizing highway and mass transit funding programs. Before heading off for August recess, both houses did agree on a three month extension of the current law, so at least states had funding for current projects during the peak construction season. You can see DC Velocity's latest report on the legislation's progress here.

Just as Congress went away without coming to grips with a long-term bill, along comes a timely new book on just how important fixing our infrastructure is to the health of the nation's economy. And the book, “Move: Putting America’s Infrastructure Back in the Lead,” comes from one of the nation's most respected and thoughtful business thinkers, Rosabeth Moss Kanter. A professor at Harvard Business School and former editor of Harvard Business Review, Kanter offers an analysis of what ails our transportation and other infrastructures and offers some thoughtful ideas on how to tackle them. It's book not just for transportation executives or those involved with managing transportation projects, but for anyone concerned with the long-term health of our economy.

I hope that someone of Kanter's stature addressing an issue that's usually given short shrift in the mainstream business press might help bring greater attention to the topic and help develop the sort of innovative approaches to dealing with some of the massive challenges. The book has already drawn important reviews in major publications, including the New York Times.

Now let's just hope key players in Congress take note as well, particularly of this from Kanter: “Infrastructure has no ideology. Bridges either stay up or fall down.”

TMS is driving forward

A research survey released earlier this month shows just how important transportation management has become. The survey, conducted by InMotion Global (the folks behind the AscendTMS transportation management system), reveals that the use of TMS has more than tripled in the last 10 years.

The report details that 54 percent of logistics professionals currently use transportation management software in some way. InMotion Global says that is up from only 15 percent in 2005. And to show further how TMS is growing, the research also explains that of the remaining 46 percent not currently using a TMS, more than half say that they expect to use transportation management software within the next 12 to 24 months.

 Among other findings taken from the report: 

• The two most common reasons for not using a TMS are cost (43%) and complexity (32%).
• Trucking companies were most likely to use a TMS if they had more than 20 trucks in service (89%). For those with under 10 trucks, the percent using a TMS falls to just 31%. For those with under 5 trucks in service TMS use was only 16%.
• Shippers and manufacturers used a TMS system primarily for LTL shipments (47%). However, that number rises to 73% if the shipper moved an average of 30 or more truckload shipments per week.
• Home-grown TMS systems accounted for 6% of TMS systems in use today, and 3% of survey respondents use a freight module as part of another system (such as an ERP or sales management system). 

 Clearly transportation management systems are playing a more crucial role than ever before in managing the flow of goods. Companies have learned through experience and through their competition that decisions need to be done in a smarter way using available data. A good TMS fills that role.

J.B. Hunt study shows ways to boost trucking efficiency

Logistics partners in every part of the supply chain are in a constant hunt to increase driver utilization and optimization in trucking fleets—whether their own, their partners’, or their 3PL’s.

Now a white paper from J.B. Hunt Transport, Inc. says one solution for wringing maximum efficiency out of the Hours of Service regulations covering the legal driving limits for commercial motor vehicles (CMVs) may be right under our noses—inefficiencies at the loading dock.

Breaking down the math around the DOT-regulated driver’s “on duty” day of 840 minutes (14 hours), the report shows how quickly those minutes can drain away. The rules require a 30-minute break and 150 minutes for everything else a professional driver does, including pickup, delivery, safety inspections, and shutdown.

A quick calculation shows that leaves just 660 minutes of actual driving time per day, but surveys show most drivers fall far short. The J.B. Hunt report cites figures showing that a typical driver loses valuable time on activities such as empty drive time, appointment inflexibility, and time spent at the shipper or receiver location. Multiply that over many loads, and there’s no mystery what happens to missing capacity.

The paper points out ways to avoid those wasted minutes, such as:

• shave down loading and unloading times
• utilize a drop-and-hook strategy strategy instead of live unloading
• push back against rigid pickup and delivery times
• shrink shut-down time by asking shippers to provide onsite parking and amenities
• furnish a more predictable schedule to avoid cancellations, short lead times, multi-stop loads and other headaches

To read the full whitepaper, check out http://blog.jbhunt.com/wp-content/themes/files/pdf/660_Minutes.pdf.

On track in Texas

Yesterday I was in Pharr, Texas working on a print story and a video at a company called McCoy’s Building Supply (look for this story in an upcoming issue of DC Velocity). As the name implies, McCoy’s provides lumber, hardware, shingles, blocks, and a full range of other building products to construction firms from over 80 locations throughout five southern states. I was there to look at their use of Toyota lift trucks, particularly in moving the heavy loads within their yard.

 

The Pharr facility does a little of everything. It serves as a distribution point for other McCoy stores in south Texas and there is also a retail store attached to the lumberyard that provides hardware and other home improvement products to do-it-yourselfers.

 

What struck me as uncommon about this facility was that it had a rail spur in its yard. While rail is often used to supply manufacturing facilities, few distribution operations in the U.S. have rail connections. Two flatbed rail cars had been dropped off onto the spur the night before I visited. Heavy-duty pneumatic-tire lift trucks were used to quickly unload the cars the following morning, taking advantage of their ability to access the rail cars from both sides.

 

Of course, a lot of freight moves by rail in North America. It is the most cost-effective ground transport available to shippers. Most rail loads, though, have to transfer to trucks to reach a D.C. Having a rail spur in their yard allowed McCoys to purchase full train car loads, which gave them better pricing and saved on freight. The product is then distributed to other local McCoy’s stores.

 

Possibly in the future we will see more distribution networks designed to better take advantage of direct connections to rail, gaining the efficiencies and cost savings found with being on-track.

Parcel carriers behaving badly

Duopolies should be able to make bundles of money the above-board way without resorting to tactics that could be described as underhanded or just downright dumb.

The latest incident came to light last month when the Justice Department said UPS Inc., one half of the B2B parcel duopoly in the U.S., agreed to pay $25 million to settle claims that, for 10 years, the company knowingly recorded inaccurate delivery times on packages shipped to hundreds of federal agencies to make it appear the packages were delivered on time. UPS also applied inapplicable exception codes designed to excuse late deliveries, and provided incorrect on-time performance data. UPS’ objective, according to DOJ, was to conceal its failure to meet its “Next Day Air” delivery commitments, which would have allowed the government to claim refunds through the money-back guarantees called for under contracts with the General Services Administration and the U.S. Transportation Command.

UPS did not acknowledge liability, and paid the fine to avoid the prospects for lengthy litigation. Susan L. Rosenberg, a company spokeswoman, said the company has worked to improve systems, training, and technology since it became aware of the issue.

The issue is a practice known as “stopping the clock,” where a carrier will, at times, game the system to appear a particular route has few or any service failures. The clock starts when a shipper selects a service level. The clock stops when a package is delivered and a proof of delivery is furnished, when a carrier encounters bad weather, a wrong address is entered, the recipient is not available, or if Customs holds a package. These are all legitimate causes. The problem arises when carriers, under pressure to hit tough deadlines, play fast and loose with events. There are as many as 60 codes at a carrier’s disposal that stop the clock; many can be and are used inappropriately, and the result is that the customer has no recourse to file a claim. Even if they do, most lose because the carrier’s can prove that there was a code invoked that stopped the clock.

Jerry Hempstead, who worked for decades at top positions at Airborne Express and DHL Express in the U.S., called it a widespread problem that demonstrates no respect for the shipper or the consignee. Hempstead said it’s caused by a culture of fear that flows from line supervisors to drivers to “make service no matter what it takes” in order to make their service numbers and get the bonuses and promotions that accompany good results often arise from that. “When employees are under pressure, and performance reviews, and compensation are involved, sometimes poor judgment enters the equation,” he said.

This isn’t the first time of allegedly bad behavior by either company. Nearly two years ago, FedEx Corp. reached a tentative $21.5 million settlement with thousands to shippers to resolve allegations the company overcharged commercial customers by misclassifying their shipments as residential deliveries to extract higher surcharges. Last year, DOJ accused FedEx of being part of a criminal conspiracy by knowingly transporting illegal drugs on behalf of two rogue pharmacies. The year before, UPS settled similar claims out of court; FedEx plans to fight the charges.

UPS and FedEx dominate the US B2B parcel market, and no one is in sight to challenge them. Yet they’ve been accused of acting in ways that would make them out to be scrappy newcomers willing to push the boundaries of the law just to get their names known. The two companies combined cover virtually all corners of the earth and employ hundreds of thousands of people. It’s true that there’s opportunity for sleazy stuff to go on well below the eyes of upper management. Still, the culture if formed at the top, and if messages aren’t permeating all the way down the line, then, like it or not, the buck stops in the C-suite.

Tomorrow is today!

Being just on the tail end of a long conference season, with 6 conferences and/or trade shows under belt over the past 8 weeks, it can often be tough to identify just one, two or even three high points. There were so many. 

This year, though, things are different. At the invitation of good friend George Prest at MHI.org, aided by his colleague Daniel Stanton, I was honored to take the main stage at ProMat in Chicago for a "fireside chat" with none other than Apple co-founder, and builder of the first Apple personal computer, Steve Wozniak, or as he prefers to be called, simply "The Woz."

He is simply the finest kind of gentlemen. Passionate about his work. Passionate about the education of our nation's children. And, passionate about technology and its future. Yet, a model of humility. Having dinner the evening before with the man who invented THE machine that changed the daily lives of every human (and business) on the planet, was not unlike dining with a good friend of roughly the same age with interests in music, cars (he drives a Tesla), technology, and education. 

A good part of our discussion in front of the 3500-plus logistics executives who gathered for our "chat" the next day dealt with future technological advances. Among the topics was autonomous (i.e. driverless) vehicles. Certainly and important topic in the motor freight sector of logistics where a driver shortage, it seems, has been going on for over 100 years. (Seriously. Need convincing? Click here)

Everyone has heard about the Google Driverless Car, and we all seem to agree that, as far-fetched as it may seem, many of us will live to see the day when driverless cars (and trucks) will be moving down America's roads.

Well, in fact, we'll only have to what until this summer. Just days before the Woz and I took the stage, Tesla & SpaceX founder Elon Musk made a rather stunning announcement. Autonomous versions of his Tesla Model S will be available for sale, and indeed tooling down the road, as early as this summer.

Wow! Tomorrow really is today. The Tesla will not, admittedly, be fully autonomous, but will include enough driverless features that they can rightfully be called the first of its kind to be available to the motoring public. 

Now, just a month later, Musk made potentially even bigger news. Watch this YouTube clip and let me know what you think: https://youtu.be/NvCIhn7_FXI

The expanding supply chain

The recent move by FedEx to acquire Genco Supply Chain Solutions is proof of the growing trend of companies looking to stretch their traditional supply chain borders. The huge transportation company sees embarking into the contract warehouse business as an integral part of its future.

In doing so, it matches UPS, DHL, and other transportation providers who see a link between moving products and processing them in a distribution center.

Up until now, FedEx has not been a big player in this arena. With Genco under its umbrella, it has a proven commodity that has a nationwide footprint in warehousing and distribution – 35 million square feet in 130 locations.

Genco is also recognized as a leader in handling returns, which of course must be transported back to the distribution center. Once processed, FedEx can leverage its transportation network to deliver the returns to other parts of the supply chain. It should be a profitable union – one that recognizes the symbiosis within the supply chain of these important functions.

The move comes as no surprise to those of us at DC Velocity, confirming a core belief here. From its initial edition, DC Velocity has stressed the marriage of both transportation and distribution in an evolving, forward-thinking supply chain.

Now is not the time to stop fuel-saving innovations

As of today, the average gallon of gasoline in the United States is $2.06. It is even much less in some regions of the country. In New Jersey, drivers are spending only $1.69 a gallon. That is the lowest cost to fuel a car since 2009.

 

Diesel prices have also seen a drop with the average at $3.09 a gallon, down 83 cents from the same week a year ago.

 

Americans are saving millions of dollars each week on fuel costs. But if history tells us anything, we should not expect it to last. Fuel prices are highly volatile.  Companies would be wise not to make important decisions based on their current low fuel bills. That is especially true of firms that have programs designed to reduce their energy spend. Now is not the time to change course.

 

I recently visited Burris Logistics, a company that has made it a mission to reduce its fuel consumption significantly. Working with Ryder, Burris has redesigned its trucks, including modifications in engine design, gear ratios, and automatic transmissions to reduce fuel usage. They have also changed the body designs of the cabs and trailers to make them more aerodynamic and able to slice through the wind. They have added low resistance tires and mud flaps that allow air, but not road spray to pass through them. All of these innovations have increased the miles per gallon on Burris trucks by 50 percent since the campaign began.

 

My hope is that companies such as Burris do not stop innovating, even though diesel prices have dropped. The fuel nirvana we are now experiencing will not last. Innovations will still provide a reasonable return on investment, now and in the future.

Truck Driver Shortage: 100+ Years War

The driver shortage has been a topic of seemingly endless discussion and debate in the logistics industry for at least 100 years, as evidence by the citation below.

The question, then: Should we stop talking about solving it and recognize the reality of its ever-presence and instead focus on how to best cope with it?

Consider this: "Practically all truck manufacturers and nearly all employers complain of the great difficulty of securing driver who are competent and who will work handling freight."   -- Source: Traffic World, December 12, 1914