PR LOGISTICS is pleased to be able to provide you with an accurate and timely rate for the shipping of your goods.

Use the form below to send us all information pertinent to your shipment.

To insure a prompt and accurate rate, please provide us with all the following information:

 

Skip to Content

Category Archives: Transportation

Transportation Management Systems Market 2018

A critical link in the supply chain, transportation is costly, time-consuming, and sometimes difficult to manage – and it’s going to get even more complex as capacity tightens and rates continue to rise over the course of 2018.

Approached haphazardly, transportation management can quickly eat up human resources, consume a good portion of logistics spend, and can leave customers asking questions like: “Where’s my truck/stuff?

But done right, transportation helps shippers create efficiencies, improve productivity, save money, and provide premium levels of customer service.

And while several strategies can be used to attain these benefits, transportation management systems (TMS) consistently stand out as one of the best tools for streamlining the transportation component of the supply chain.

Acting as the logistics management “hub,” TMS handles route planning and optimization; freight audit and payment; order visibility; carrier management; and other critical functionalities that help shippers digitally manage and optimize their transportation networks. Historically offered as an on-premise software application, TMS has since largely moved into the Cloud and, as such, provides real-time, always-on collaboration across shippers, carriers, trading partners and customers.

Read: Myths and Realities of Implementing a TMS

In this annual examination of the state of the TMS market, we’ll look at the current adoption trends for this software, show how vendors are innovating and coming up with new functionalities and delivery methods, and discuss what’s ahead in 2018 for what can be the most valuable tool in the logistics manager’s toolkit.

Shifting to the Cloud

Vendor innovation plus the proliferation of e-commerce and omnichannel distribution are both pushing more shippers to consider TMS as part of their overall supply chain management strategy. Bart De Muynck, Gartner’s research director, transportation technology, says adoption is particularly strong for shippers that spend more than $100 million annually on freight.

“Those companies continue to invest heavily in TMS,” says De Muynck. Much of that activity involves shippers that are “changing out” their current TMS and replacing it with modern platforms that come with more bells and whistles than their predecessors could offer.

“We’re seeing a lot of companies moving from older, on-premise platforms to either multi-tenant [when a single instance of software runs on a server and serves multiple tenants] or Cloud-based solutions,” says De Muynck, noting that some shippers are purchasing the software from vendors that they haven’t worked with before while others are sticking with their original software providers.

“At this point, a lot of the older TMS solutions are starting to be bypassed, and particularly if their vendors aren’t going to be supporting them anymore.”

Not to be outdone, small to midsized (SMB) shippers are also adopting TMS – a trend that’s being driven by a new crop of Cloud-only solutions that offer quick setup and affordable, or even free, subscription-based models.

“In 2017, we saw a huge growth in TMS usage by the SMB segment,” says De Muynck, who points to AscendTMS (developed by InMotion Global) as a lesser-known vendor that’s actually the “world’s largest” TMS vendor. “They have over 15,000 companies using their TMS, with a lot of those users being smaller shippers that are using the free version of the software.”

The World's #1 Rated TMS Software As Ranked By Crowd Reviews, Capterra, and Software Advice

Free TMS Software…

Just 10 years ago, a company that spent a few million dollars in transportation annually probably didn’t own a TMS. That’s because the software was too expensive, too much of a hassle to implement, and didn’t really drive improved productivity, says De Muynck.

The tide has turned over the last few years, De Muynck notes, and now the market is coming out with solutions that are cheaper, more relevant, and even more user-friendly. “These new solutions are so easy to implement and use that companies are very attracted to them, and particularly those shippers that are dealing with challenges around capacity and freight rates,” says De Muynck. “They see TMS as a way to get more productivity out of transportation.”

Vendors have caught onto this trend, and are coming up with solutions that fit the smaller shipper’s budget while also offering all of the bells and whistles that larger systems are offering.

Companies like Kuebix and Cloud Logistics are saying: “hey if you’re a smaller shipper, we’ll give you our solution for free or at a very low cost,” De Muynck says. “Within a week these companies are signing on thousands of new users with that strategy.” Cloud Logistics, for example, ran a $500-a-month subscription special in 2017. “We saw a very high uptake in the number of companies using the solution” he notes. Also, Kuebix ran a free TMS campaign recently that resulted in over 5000 companies signing-up for their state-of-the-art TMS solution.

Read: Kuebix Tops 5000 Companies Using Its Transportation Management System

De Muynck says that these “loss leader” strategies are creating a groundswell of SMB firms taking an interest in TMS – to the tune of tens of thousands of new users across multiple vendors. And because those shippers bring their own carriers onto those networks, they also represent new levels of transactional volume.

“This plays into the whole goal of transportation management,” says De Muynck, “which is to become more efficient and make more efficient use of available capacity.”

Strong Return on Investment

If there’s one factor driving more shippers to adopt TMS it’s the strong return on investment (ROI) that these solutions offer to companies of all sizes.

In its most recent “TMS Market Research Study,” ARC Advisory group says companies report an average savings of approximately 8% with the use of a TMS application. Of these savings, nearly 60% of users indicated that less than 10% of the net savings were absorbed by the TMS. These freight savings can be attributed to simulation and network design, load consolidation and lower cost mode selections as well as multi-stop route optimization.

View TMS Resources

“The growth of e-commerce and omni-channel fulfillment continues to help the market grow as well,” says Chris Cunnane, an ARC senior analyst, noting that in the last five years, e-commerce revenues have increased by 51% and are expected to grow by 42% in the next five years.

“This continued growth will make it more important for organizations to utilize TMS. Additionally, it’s not just retailers turning to e-commerce; more brands are selling products directly to the consumer over the web.”

Read: Why Transportation Management Technology, Why Now?

Cunnane adds that one of the key drivers of the TMS market right now are “barriers to entry that are lower than we’ve ever seen.” He credits the continued growth of Cloud-based solutions with pushing those barriers down over time. “Historically, if you didn’t have $20 million in freight spend, purchasing a TMS was out of the question,” he says. “Instead, you would look to a third-party logistics provider to handle it for you. Now, with the number of Cloud applications that are out there, suddenly it’s a lot more cost efficient to bring transportation management in-house.”

There are also more providers and solutions to choose from, with the lines between enterprise resource planning (ERP) and best-of-breed solutions beginning to blur. “Right now, when you look at the leading TMS suppliers, it’s a mix of both ERP and best-of-breed,” says Cunnane, who points to SAP, Oracle, JDA, Descartes and TMW Systems as a few of the top players right now.

“Whereas the rest of the market is focused on offering more of a ‘point’ or best-of-breed solution that fits into a different footprint.”

More TMS Speed, Please

As he looks around at the TMS marketplace, Amit Sethi, senior manager for logistics and supply chain at Capgemini, says that he’s seeing less focus on transportation optimization and more focus on execution.

“TMS and its vendors have moved toward more online planning, and to flowing orders through automated systems that vet, tender and ship without human intervention,” says Sethi. This, in turn, has pushed optimization online, with a focus on immediate execution – versus “batching” orders for execution at a later time. “This is being driven by shippers that are more interested in speed versus optimization.”

Looking ahead, De Muynck says TMS vendors will likely continue to shape their solutions’ functionalities around shipper challenges like capacity crunches and changing end-user demands. “Capacity is tight and companies are out looking for their 2018 bids and seeing that it’s not easy to secure the capacity that they need,” De Muynck points out. “Wanting to control costs, more of them are likely to turn to technology for help.”

Read: How Your TMS Can Help Manage the Amazon Effect

Acknowledging the status of TMS as one of the most mature supply chain software segments, Cunnane says there really is “only so much that vendors can do” to improve upon their platforms at this point. He sees backhaul optimization as a potential area of innovation going forward for TMS vendors that help shippers figure out how to make the most of their return freight movement.

“It’s a mature market, so innovation may slow down until we see one of the newer players enter the market with something that’s groundbreaking – something no one else thought of,” says Cunnane. “Then suddenly there’s a race to try to get to where that vendor is, but I don’t see any of those entries in the market right now.”

Related White Papers & eBooks

Download the Paper

Say Goodbye to Your Outsourced 3PL
In this eBook, we explain how companies that switch to the right TMS, experience a 10%-20% ROI on their freight spend in a matter of months, and how by taking back the management of their logistics operations in-house they make better shipping decisions every day. Download Now!


Download the Paper

The Shippers Guide to Transportation Management System ROI
Taking a deeper look at the technology needs of transportation departments, Ohio State University Logistics Professor Jim Hendrickson conducted research into the value that supply chain execution systems provide. Download Now!


Download the Paper

E-Commerce Transportation Execution
In this white paper, we’ll further explore the key challenges that shippers are facing in the e-commerce/omnichannel environment and show how transportation execution and optimization is already helping companies jump these hurdles, improve customer service levels, and cut costs.Download Now!


Download the Paper

5 Reasons to Buy a True SaaS Transportation Management System
This white paper describes how a true SaaS infrastructure can give users real-time benchmarking of transportation rates, and connect your company to a Global Trade Network.Download Now!


More White Papers on Transportation Management Systems

0 Continue Reading →

Amazon Begins Grocery Delivery from Whole Foods Market

Amazon and Whole Foods Market announced the introduction of free two-hour delivery of natural and organic products from Whole Foods Market through Prime Now, with plans to expand across the U.S. in 2018.

Starting yesterday, Prime customers in neighborhoods of Austin, Cincinnati, Dallas and Virginia Beach can shop through Prime Now for bestselling items including fresh produce, high-quality meat and seafood, everyday staples and other locally sourced items from Whole Foods Market.

John Mackey, Whole Foods Market co-founder and CEO

“We are happy to bring our customers the convenience of free two-hour delivery”John Mackey, Whole Foods Market co-founder and CEO

Customers can start shopping from Whole Foods Market selection at www.primenow.com or by using the Prime Now app available on Android and iOS devices.

“We’re happy to bring our customers the convenience of free two-hour delivery through Prime Now and access to thousands of natural and organic groceries and locally sourced favorites,” said John Mackey, Whole Foods Market co-founder and CEO.

“Together, we have already lowered prices on many items, and this offering makes Prime customers’ lives even easier.”

Prime customers can shop thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral and everyday staples from Whole Foods Market available for free two-hour delivery.

Select alcohol is also available for delivery to customers. Prime members receive two-hour delivery for free and ultra-fast delivery within one hour for $7.99 on orders of $35 or more.

Delivery from Whole Foods Market through Prime Now is available daily from 8 a.m. to 10 p.m.

Customers can visit www.primenow.com or download the Prime Now app to enter their zip code to see if they are in the delivery area.

As reported by Bloomberg, about 7 percent of U.S. households bought groceries online last year, according to NPD Group.

Read: Growing Ecommerce Grocery Channel Will Accelerate Adoption of Meal Kit Delivery Services

Most of those – about three-quarters – get their orders delivered to their door; the rest pick it up at the store. NPD Group said it expects online grocery shopping to grow quickly, especially among young adults, who are more comfortable shopping online. And grocery chains don’t want to miss out when that happens.

Walmart, the country’s largest grocer, is making it easier for customers to order groceries online and pick them up at the store.

Target bought grocery-delivery company Shipt late last year. Kroger, the largest traditional supermarket chain, has been promoting store pickup for online orders and doing trials of home delivery.

Amazon isn’t saying where delivery will expand, but its Prime Now service is in more than 30 cities, including Chicago, Milwaukee, and San Diego.

The announcement gives Amazon yet another way to get groceries to customer’s doorsteps.

Related: Amazon Reportedly Focusing on Expanding its Delivery Trial Offering Threatening FedEx & UPS

0 Continue Reading →

Maersk IBM Form Joint Venture Applying Blockchain to Improve Global Trade & Digitize Supply Chain

Traditional cross-border shipping processes usually involve manually transporting and verifying paper documents for each shipment.

IBM and Maersk are forming a joint venture to use blockchain technology to make global trade more efficient, transparent and secure.

The aim of the new company will be to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem.

It will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.

The cost and size of the world’s trading ecosystems continue to grow in complexity.

More than $4 trillion in goods are shipped each year, and more than 80 percent of the goods consumers use daily are carried by the ocean shipping industry.

The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs.

According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent, boosting economies and creating jobs.

The attributes of blockchain technology are ideally suited to large networks of disparate partners. A distributed ledger technology, blockchain establishes a shared, immutable record of all the transactions that take place within a network and then enables permissioned parties access to trusted data in real time.

By applying the technology to digitize global trade processes, a new form of command and consent can be introduced into the flow of information, empowering multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality.

Maersk, a global leader in container logistics, and IBM, a leading provider of blockchain, supply chain visibility and interoperability solutions for the enterprise, will use blockchain technology to power the new platform, as well as employ other cloud-based open source technologies including artificial intelligence (AI), IoT and analytics, delivered via IBM Services, in order to help companies move and track goods digitally across international borders.

Manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities can all benefit from these new technologies -and ultimately consumers.

“This new company marks a milestone in our strategic efforts to drive the digitization of global trade. The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit,” said Vincent Clerc, chief commercial officer at Maersk and future chairman of the board of the new joint venture.

“By joining our knowledge of trade with IBM’s capabilities in blockchain and enterprise technology, we are confident this new company can make a real difference in shaping the future of global trade.”

IBM’s blockchain platform is enabling hundreds of clients and thousands of developers to build and scale active networks across complex use cases, including cross-border payments, supply chains, and digital identification.

“The major advances IBM has made in blockchain have shown that the technology can foster new business models and play an important role in how the world works by building smarter businesses,” said Bridget van Kralingen, senior vice president, IBM Global Industries, Solutions and Blockchain.

“Our joint venture with Maersk means we can now speed adoption of this exciting technology with the millions of organizations who play vital roles in one of the most complex and important networks in the world, the global supply chain. We believe blockchain will now emerge in this market as the leading way companies seize new untapped economic opportunities.”

Read: Blockchain will be the killer app for supply chain management in 2018

IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies. Since then, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, U.S. Customs and Border Protection.

The joint venture will now enable IBM and Maersk to commercialize and scale their solutions to a broader group of global corporations, many of whom have already expressed interest in the capabilities and are exploring ways to use the new platform, including General Motors and Procter and Gamble to streamline the complex supply chains they operate; and freight forwarder and logistics company, Agility Logistics, to provide improved customer services including customs clearance brokerage.

Additional customs and government authorities, including Singapore Customs and Peruvian Customs, will explore collaborating with the platform to facilitate trade flows and enhance supply chain security. The global terminal operators APM Terminals and PSA International will use the platform to enrich port collaboration and improve terminal planning.

With support from Guangdong Inspection and Quarantine Bureau by connecting to its Global Quality Traceability System for import and export goods, the platform can also link users to important trade corridors in and out of China.

To address the specific needs of the industry, Maersk and IBM are establishing an advisory board of industry experts to help further shape the platform and services, provide guidance and feedback on important industry factors, and drive open standards.

Michael J. White, former president of Maersk Line in North America, CEO of the new company

Maersk and IBM have named Michael J. White, former president of Maersk Line in North America, as CEO of the new company. He commented;

“Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes. The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardizing information flows using digital solutions. Our ambition is to apply these learnings to establish a fully open platform whereby all players in the global supply chain can participate and extract significant value. We look forward to further expanding our ecosystem of partners as we progress toward a global solution.”

The new company initially plans to commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end:

  • A shipping information pipeline will provide end-to-end supply chain visibility to enable all actors involved in managing a supply chain to securely and seamlessly exchange information about shipment events in real time.
  • Paperless Trade will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries, ultimately helping to reduce the time and cost of clearance and cargo movement. Blockchain-based smart contracts ensure all required approvals are in place, helping speed up approvals and reducing mistakes.

Upon regulatory clearance, solutions from the joint venture are expected to become available within six months.

The new company will be headquartered in the New York metropolitan area.

The platform is built on IBM Blockchain technology, which is provided through the IBM Cloud and powered by Hyperledger Fabric 1.0, a blockchain framework and one of the Hyperledger projects hosted by the Linux Foundation.

For more information about the joint venture read: Digitizing Global Trade with Maersk and IBM

Maersk and IBM Launch Digital Joint Venture

Maersk and IBM Launch Digital Joint Venture

A new joint venture company which Maersk and IBM intend to create is the first open platform of significant scale for sharing information and developing digital products related to trade. Read the Story

Related White Papers

Download the Paper

IBM Wants to Make 2017 the Year of Blockchain Enterprise Deployment
This IDC Vendor Profile discusses IBM’s blockchain strategy, existing portfolio around this technology, and specific use cases, defines blockchain and outlines its benefits and current limitations and describes IBM’s engagement with the technology since 2014 and its current offering. Download Now!


Download the Paper

Rethinking Enterprises, Ecosystems and Economies with Blockchains
This paper details how Blockchain technology – which creates a permanent and transparent record of transactions – has the potential to obviate intractable inhibitors across industries. Download Now!


Download the Paper

Can Blockchain Revolutionize the Supply Chain?
In this white paper Ranjit Notani, One Network CTO examines Blockchain’s powerful potential as well as a major problem and whether and how Blockchains can revolutionize the Supply Chain. Download Now!


More Resources on Blockchain

0 Continue Reading →

CSX Provides Surface Transportation Board with Update on Precision Scheduled Railroading Progress

Precision Scheduled Railroading (PSR) was created by the late CSX President and CEO E. Hunter Harrison, who passed away in December.

PSR requires cargo to be ready when rail cars arrive for loading or risk being left behind, a practice that served both CP (Canadian Pacific) and CN (Canadian National Railway Company) well under his leadership, with both companies seeing multiple positive results in the form of lower operating ratios, improved service, record amounts of reinvestment into networks, as well as creating significant shareholder value.

But over the course of 2017 since Harrison took the helm at CSX, things have not been quite as smooth in terms of the PSR implementation.

There were various issues stemming from CSX’s PSR implementation that were clogging the tracks, so to speak, in various ways in the form of things like informal complaints from both CSX customers and railroad industry stakeholders in regards to various service issues, including:

  • transit times increasing significantly and/or becoming unpredictable;
  • loaded and empty railcars sitting for days at yards;
  • switching operations becoming inconsistent and unreliable;
  • car routings becoming circuitous and inefficient;
  • CSX customer service being unable to provide meaningful assistance; and
  • slowing train speed and increasing dwell time along with numbers of cars online.

CSX CEO James Foote’s letter to the United States Surface Transportation Board (STB) was in response to a December 14 letter from the STB, which centered on the company’s continued progress in implementing PSR.

He explained that PSR is comprised of two phases, with the first phase at CSX focused on what he called “top-to-bottom changes” into the way in which the railroad operated.

Stifel Nicolaus analyst John Larkin

“CSX is within striking distance of the Holy Grail here, and Mr. Foote may be just the right person to carry the ball over the finish line”John Larkin, Stifel Analyst

“Mr. Harrison introduced the company to a new way of thinking about CSX’ network, which led to major operational enhancements, including the conversion of certain hump yards to flat switching and strategic adjustments to other facilities,” he wrote.

“It also led to replacing CSX’ traditional methods with a new, balanced, scheduled train plan comprised of significantly more mixed-freight trains. Most importantly, Hunter instilled a new railroad culture that has everyone focused on the five tenets of PSR: service, asset utilization, controlling costs, safety and people.”

Addressing the second phase of PSR implementation, Foote cited “the pure, daily execution of those five PSR tenets,” which is well underway.

What’s more, he said that the results of PSR implementation are apparent, pointing to the company’s performance metrics showing a remarkable rate of positive change, with four straight months of improvement, coupled with recent trends far exceeding the prior full-year average and car handling and terminal fluidity ahead of 2016 levels. He also stated that major strides have been made in train velocity.

“Higher velocity serves as a catalyst for multi-faceted improvement,” he wrote. “As trains speed up on the network and reach their destinations sooner, there are fewer total trains running at any given time. This improved line-of-road fluidity, in concert with terminals processing cars more efficiently, leads to a higher level of on-time originations. When trains are operating in their scheduled windows and executing in timely coordination on meets and passes, movements further accelerate freight across the network. As a result, fewer locomotives and crews are needed to handle the same amount of freight, and our cars are able to cycle more quickly, such that total cars online decline. The end of this virtuous cycle is faster transit, better service, markedly improved asset utilization, and greater efficiency at lower cost.”

In concluding his letter, Foote said that he believes PSR is in place at CSX and does not foresee any significant operating changes at this time, adding that through this successful implementation, the company has seen enhanced freight flows across the CSX network and major progress toward its goal of providing a superior product for its customers.

Shortly before Harrison passed away in mid-December, CSX issued a statement noting that Harrison would be on medical leave and replaced by Foote on an interim basis.

At that time, Stifel analyst John Larkin wrote in a research note that the company’s strategy would be unchanged but the cultural conversion and rebuilding of customer confidence was required.

“After this summer’s service meltdown occurred at CSX the company moved rapidly and decisively to adopt Hunter Harrison’s precision railroading plan, service rapidly deteriorated,” Larkin wrote.

“Customers were irate and openly complained to the Surface Transportation Board. In the ensuing months, Hunter made numerous management changes as precision railroading requires complete ‘buy-in’ by everyone up and down the organization. Service improved and customer complaints subsided. But, scars from this service meltdown remain.”

“Mr. Foote may be better suited to repairing customer relationships and to further reinforce the need for everyone on the CSX team to simultaneously row in the direction of precision railroading execution. At its best, precision railroading improves service (transit times and transit time variability), lowers cost, and attracts more traffic to the adopting railroad. CSX is within striking distance of the Holy Grail here, and Mr. Foote may be just the right person to carry the ball over the finish line, given his extensive sales and marketing background, while at Canadian National.”

Related Article: CSX Corporation Announces New Chief Operating Officer & Executive Management Changes

CSX White Papers & Guides

Download the White Paper

2017 Supply Chain Trends
A pool of over 150 supply chain professionals were asked about their transportation plans, challenges and opportunities for growth, the results provide insight into a wide range of issues and shed light on what supply chain managers plan to focus on in the coming year. Download Now!


Download the Paper

Your Guide to Upcoming Trucking Regulations
As increased over-the-road regulations are set to go into effect in 2017, supply chain managers should take steps to prepare today in order to protect their organizations from negative impact. Download Now!


Download the Guide

The X’s and O’s of Intermodal Rail in Supply Chain Management
As the coach of your supply chain, you have the opportunity to turn to your playbook and choose from multiple transportation modes to maximize the efficiency of your freight network. Download Now!


Download the Guide

The Intermodal Rail Bracketology Guide
Learn how to identify sub-optimal full-truckload freight that is vulnerable to capacity constraints if and when a supply chain disruption occurs. Download Now!


Download the Paper

Practical Steps for Highway to Intermodal Rail
Learn how to increase access to capacity, reduce transportation costs and mitigate exposure to future trucking regulations. Download Now!


Download the Paper

Transportation Management Systems & Intermodal Rail
An interactive, personalized guide to learn more about the combined benefits of a TMS and intermodal rail. Download Now!


Download the Brochure

Highway to Intermodal Rail (H2R) Conversions Deliver Bottom Line Results
CSX Transportation has found that 96% of shippers have sub-optimized freight in their network. Does your organization? Find out and learn how to address sub-optimized freight in your supply chain. Download Now!


More: CSX Rail & Intermodal Resources

0 Continue Reading →

Harsh ‘Bomb-Cyclone’ Weather Adds Different Strategies to Motor Carriers’ Playbooks

While the year may be new, it stands to reason that approaches to handling freight and keeping operations on schedule and efficient is really an age-old practice in many ways.

Pittsburgh-based Pitt Ohio, a provider of less-than-truckload, truckload, supply chain, and ground services, can be viewed as an innovator of sorts, when it comes to handling heavy snowfalls and deep freezes through its more than 1,250 heated trailers spread out among its Pitt Ohio, Dohrn Transfer, and the U.S. Special Delivery groups, which it has invested in over the last three years.

Having done a fair share of business in the chemical and coating sectors, one thing that has been apparent at the company is seeing customers shift to more sustainable processes, through the replacement of things like oil-based products to water-based products, according to Pitt Ohio Chief Marketing Officer and EVP Geoffrey Muessig.

“The byproduct of that is these products are more temperature-sensitive than they used to be,” he said. “With specialty products and formulations, there is a need to keep them from freezing. In the past, we have experimented with heated pads and blankets. While they were operationally successful, the challenges were more from a distribution standpoint, as it adds a lot of extra costs and time at the warehouse. You have to back strip the pallets to take the pads down and then load the boxes on top of the pallet and then wrap the blanket around it. That’s time-consuming.”

After listening to customers, Muessig said Pitt Ohio made a significant investment in heated trailers, which he said its driving business its way. While many of its customers are embargoing shipments, he said Pitt Ohio has picked them up and is seeking to move as many as it can overnight.

“When the roads are impassable, we will keep shipments on the heated trailers or move them into warm rooms at our terminals, but we will protect the freight and move as much as we can, as per our normal service standards,” he said.

“From a customer’s perspective, they want us to minimize disruptions to their supply chain. Their customers don’t want to hear about the bad weather and not being able to get shipments this week; that does not really work. They want to do it in a cost-effective way and don’t want to be shipping four pallets on a heated trailer with a truckload provider, which is hard to justify from a cost standpoint. This is what some shippers have been forced to do in dire situations when it has been cold in the past.”

Muessig said that Pitt Ohio is particularly focused on various areas for its heated trailers in Wisconsin, Illinois, Missouri, the entire Pitt Ohio core area, and into New England and Canada through its business partners.

Visit: PITT OHIO’s Protect From Freezing Service, Heat Track

For national LTL carrier Old Dominion Freight Line (ODFL), the company’s VP of Transportation Hugh Morris called the company’s approach to winter weather complicated but simplistic in nature.

“We do use blankets to wrap around a pallet. As long as the blankets are above freezing, it will keep the temperature of the pallet at that time intact for close to 48 hours,” he said.

“We also have the standard old fashioned propane heaters that were made for trucking companies years ago that we can also utilize. The only problem we have typically is that if it gets below 18 degrees there is not much we can do to protect it.”

But he noted that ODFL has a 30-hour temperature forecasting model, which helps to determine what is the window of opportunity on freezable shipments in terms of being able to get them from point A to point B, where shipments can be protected in the event the temperature falls below 18 degrees.

Geoffrey Muessig, CMO and Executive Vice President at Pitt Ohio

“Pitt Ohio has made a significant investment in heated trailers, which is driving business its way.”Geoffrey Muessig, Chief Marketing Officer & Executive Vice President, Pitt Ohio

“If there was a shipment going from Portland, Maine to Seattle, your natural connection is going to be over Chicago, and if you look from Chicago over across to, say, Minneapolis, Fargo, Billings, Spokane, or into Seattle, the temperature is going to be below 18 degrees and for how long, and we can make the call on when a shipment moves to those connecting points and if we have to hold it in a worst case scenario if there is no window of opportunity, we will hold it in what we call a warm room, which is a refrigerated unit with a ‘warm’ option,” he explained.

“When push comes to shove, our last line of defense for, say, a shipment from Portland, Maine to Seattle, could be run down to Dallas and into southern California and then up the I-5 corridor, because there was no window of opportunity basically anywhere north of I-40 that was going to be above 18 degrees long enough to get the shipment there safely.”

While ODFL would not typically issue a full-blown embargo, Morris said it would communicate to the customer that there are options to either hold a shipment and move it in a couple of days or, alternatively, to take it and keep it moving as best as it can, with a few extra days above the normal surface transit time.

From an operational perspective in times of harsh weather, Morris said that ODFL’s service center managers at its facilities are essentially the boots on the ground.

“The technology today makes it a lot easier, as we can basically pull up any DOT (Department of Transportation) camera across the domestic U.S. and see live traffic and what is going on where our are trucks are going,” he said. “We did not have that option a few years ago, and we relied on the National Weather Service or drivers calling in and providing updates. Most of our drivers run at night between 8-9 and are usually back in the next morning between 7-9.”

As for what ODFL’s plans were for running in weather-impacted areas in storm hit parts of the U.S. today, Morris said the company would look at is forecasting model to determine which trucks are safe to leave and run and what time they would need to leave and get them back before the storm hits.

And he added that exercise is a little easier in the Northeast, because the harsh weather is more commonplace, as compared to down south, where people are not used to driving in the elements.

“A quarter-inch of ice in Atlanta can leave 6 million people stranded,” he said. “Ultimately, it is the drivers’ call when it comes to this kind of weather. If they want to run, we will try to adjust where they can get out and when they can get back. If it does not look like they would not get back in time and they may choose not to run, then they won’t run. It is strictly their call when it comes to weather.”

Related White Papers

Download the Paper

Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and Manufacturers that insist on using inefficient and sloppy packaging methods – oversized boxes, inefficient packaging, poorly constructed palletized contents – are paying for their mistakes in sharply higher freight rates. Download Now!


Download the Paper

Compliance Safety Accountability: Why the Scores are Important
Times are changing in the motor carrier industry. Today, shippers need to pick the safest carriers and manage their own risks to drive down costs over the long term. Download Now!


Download the Paper

Superior Customer Service Through Automation
PITT OHIO depends on Kapow Katalyst™ to support its high-value customers by automating 100% of routine Customer Service activities. Download Now!


Download the Paper

How Your Carrier Can Help You Understand Your Carbon Footprint
More companies are adopting sustainability initiatives to help identify areas in their organization where they can reap savings that also help improve the environment. Download Now!


Download the Paper

Controlling Surface Transportation Costs: Six Steps Toward Improved Collaboration
The best trucking operators are the ones that can best match up their available capacity with enough freight to make their networks run in balance—or as close to 100 percent full in both the headhaul and backhaul lanes. Download Now!

0 Continue Reading →

Electronic Logging Device Mandate Adds to Truck Driver Shortage Woes

Did you know that many truck drivers have said that they would rather quit the industry than use an Electronic Logging Device (ELD) device?

In April of this year, Overdrive magazine did a survey of its readers that showed 70% of truck drivers were opposed to the ELD mandate.

The magazine goes on to speculate what the marketplace would look like without these truckers, “Assume the 71 percent of independents who say they’d quit actually do, and apply that to carriers in the for-hire population with one to five trucks.

This would equate to an overall loss of about 260,000 trucks, according to data mined by RigDig Business Intelligence, Randall-Reilly Business Media’s equipment- and business-data analysis unit.

That would remove more than 10 percent of the industry’s capacity. When the 71 percent is applied to carriers with up to 15 trucks, it leads to a capacity reduction of more than 27 percent or about 709,000 trucks.”

The American Trucking Association (ATA) expects the driver shortage to grow to 239,000 by 2022, primarily due to retirement and increased driver demand.

Combine this with the notion that many drivers will quit when the ELD mandate becomes live next month and the ATA has seen double-digit gains in the annualized turnover rate for both small and large truckload fleets, jumping 16 percentage points to 90%, the highest it has been since Q4 2015.

For smaller carriers with less than $30M annual revenues, the turnover rate grew by 19 percentage points to 85%, the highest since Q1 2016. This news cements the acceleration of the driver shortage, making it an ever-critical challenge to be solved.

At Kuebix, we believe that the best approach to solving the driver shortage is for shippers to implement a four-part plan that focuses on young age groups to ensure a steady flow of skilled and energized individuals that see the profession in a new light.

The plan to mitigate the driver shortage includes:

  • Embracing Robust Technology – As younger age groups spend lots of time online and with their smartphones, using mobile device apps to track vehicle location and to update the driving experience should be a key focus for shippers. Virtual reality is being used by many transportation companies to train drivers. This age group also seeks tech-savvy employers that continue to apply technology to address transportation management challenges in the form of social media and disruptive technology, along with pursuing startups that use advanced tech to drive their business forward.
  • Recruiting the Recruited – Tackling the driver shortage by opening the profession up to those with actual truck driving experience who find it difficult to move from a trucker in the armed forces and/or driving chops in war zones is another way to increase the number of drivers. The most attractive aspects of recruiting the recruited are the fact that drivers from the services are already experienced, which should lighten the load substantially from a training and education standpoint.
  • Tapping Into the STEM Pipeline – As the Science, Technology, Engineering, and Math (STEM) curricula gains greater adoption from grade school on up, graduates learn problem-solving skills that can be used in transportation, along with other industries. By sponsoring STEM events, corporations can open the doors to their future workforce by showing students career paths to follow in the transportation industry.
  • Recasting the Profession – Sitting back and waiting for the driver shortage to solve itself is not an aggressive enough solution that will end the issue quickly. The industry needs to get more determined, go on the offense and purse the above-mentioned opportunities. Think like the youth of today and reach them where they live, offer the tech they use, catch them at an early age and make sure they’re well aware that driving is much more than just steering a vehicle. Be at high school (and trade school) career fairs, be on campus just like college recruiters are and where members of the armed forces are concerned – be there for them when they need your support the most.

Plus, shippers need to be more creative and think of new ways to gain efficiencies and reduce costs.

Technology like the Kuebix TMS can help by giving shippers high levels of visibility across their entire transportation networks – and connectivity among all partners.

Cloud-based Transportation Management Systems (TMS) are helping companies connect in one place to less-than-truckload, truckload, and parcel carriers; receive real-time quotes using direct carrier rates; and request and receive spot quotes using a single shipment management interface.

Technology can help put a dent in the driver shortage challenge while improving transportation operations – that’s a win-win for all parties involved.

Related Article: Technology Key to Addressing Driver Shortage

Technology Key to Addressing Driver Shortage

Related Resources

Download the Paper

The Complete Buyer’s Guide to Transportation Management Systems
There is almost no limit to how a Transportation Management System can benefit your unique supply chain, but the key to success is finding the right one for your goals, so, before selecting a TMS, use the 12 questions in this buyer’s guide to find the best solution for your company. Download Now!


Download the Paper

Effectively Managing Big Data in Your Supply Chain
In this white paper, we’ll explain what the term “big data” means to the typical supply chain, introduce effective strategies for managing and leveraging that data, show how one grocer is using predictive analytics to harness its own big data, and explain the “first steps” that companies need to take down the path to effective management of their big data. Download Now!


More Resources from Kuebix

0 Continue Reading →

Elon Musk “Tesla Semi Truck Will Blow Your Mind”

Tomorrow’s semi-truck unveiling is the next logical step for Elon Musk’s Tesla company who in June 2016 revealed through the company’s second Master Planthat it was looking to enter the commercial trucking industry.

Like most of the upcoming Tesla vehicles announced in Musk’s’ ‘Master Plan Part Deux’, not much is known about the semi-truck vehicle.

Here’s the relevant part of the 2016 ‘Master Plan‘:

“In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport. Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport while increasing safety and making it really fun to operate.”

The company is set to unveil the all-electric semi truck tomorrow at a live-streamed event starting at 8 p.m. PT (11 p.m. ET).

Musk tweeted Sunday about the event.

As reported by Teslarati, an all-electric truck would be less expensive to operate than its gas and diesel counterparts on account of reduced maintenance, fuel, and reduced insurance costs once autonomous “platooning” technology is in place.

According to a previous report by Adam Jonas of Morgan Stanley, a Tesla Semi could result in operational cost reductions of 70% over existing trucks on the market.

Scott Perry, Ryder CTO

“Out of the gate, I think Tesla’s semi truck will target regional hauling”Scott Perry, Chief Operating Officer Nikola Motor Company

As mentioned before details of Tesla’s Semi has remained light, with the only hint being that the all-electric truck drives like a sports car, according to Musk, and a “seriously next level” truck that can compete in the heavy-duty, long-haul trucking sector.

Initial reports peg Tesla’s electric hauler to have a range of 200 to 300 miles, making the semi-truck better suited for short-haul operations.

According to former Ryder CTO, Scott Perry (now Chief Operating Officer at Nikola Motor Company) who reportedly met with Tesla officials and learned that the company was looking to target regional hauling with its upcoming semi-truck, Tesla could also have a strategy for tackling long distance hauling.

“I’m not going to count them out for having a strategy for longer distances or ranges, but right out of the gate I think that’s where they’ll start,” said Perry.

Tesla will likely focus on the short-haul segment first, due to the lower cost barrier to entry because of the smaller battery packs needed, but also because the market has the broadest range of applications that can benefit from an all-electric semi-truck. Teslarati previously analyzed the ROI for a Tesla Semi and found that there’s a clear business case for it in the short-haul industry.

Tesla will go up against other companies trying to develop electric semi-trucks and smaller delivery vehicles.

Other potential rivals include BoschCummins, and Daimler. A number of companies such as Siemens have pilot programs already in place to test the viability of electrifying commercial trucks. And there are a few startups also pursuing some variant of that electric trucking or delivery van goal, including ChanjeNikola, and Wrightspeed.

Supply Chain 24/7 will provide more details following tomorrow’s “mind-blowing” Tesla semi-truck unveiling.

Related: Cummins Taking on Tesla with Electric Semi Truck

Cummins Taking on Tesla with Electric Semi Truck

0 Continue Reading →

How to Build a Supply Chain Champion Following Chicago Cubs Theo Epstein’s 5R Strategy

On November 2, 2016, the Chicago Cubs did the unthinkable:

They won the World Series after coming back from a 1-3 deficit to the Cleveland Indians.

For Cubs fans, the victory marked the end of a 108-year streak of competitive futility.

Although the Cubs game seven, extra-inning victory is inspirational, you may be wondering: “As a supply chain professional, why should I care?”

Answer: Because of Theo Epstein, the Cubs President of Baseball Operations, knows how to build a championship team, a task that is likely high on your to-do list.

Vitally, Epstein’s role in the Cubs turnaround wasn’t a fluke.

In 2004, Epstein, as Red Sox General Manager, helped Boston vanquish the Curse of the Bambino and end an 86-year title drought.

Deciphering how Theo Epstein took the Cubs, a perennial loser, to a World Series championship has been a hot topic in the sports world.

Based on our 20-plus years working with supply chain leaders, we argue that Theo Epstein’s job assembling a champion on the field is a model for the supply chain leader’s quest to build a winning supply chain.

Let’s take a closer look at how Epstein transformed the Cubs into champions.

His approach highlights five principles of supply chain design that we call the 5Rs (Figure 1). The 5Rs have enabled companies from Amazon to Zara to win on the world’s toughest playing field – today’s global marketplace.

Figure 1
The 5Rs of Supply Chain Excellence

Strategic Supply Chain Management: The Five Disciplines for Top Performance

Know the Rules and Break Them When Necessary

If you want to win on the baseball field – or in the marketplace – you need to know the rules of the game. The rules define not just your strategy and value-added capabilities, but also your team’s composition.

Rules, however, change and disrupt industries and dethrone champions. For proof, look no further than A&P, Compaq, and Pan Am. Thus, it’s not enough to know the rules; you also need to pay attention to how they are changing. Spotting inflection points before rivals – and responding effectively – can give you a competitive edge.

Andy Grove modeled this reality when he made the case for Intel to make the leap from RAM/DRAM to CPUs before the memory market crashed. Grove’s anticipation of a threat before it was widely discerned is a big reason you know the phrase “Intel Inside.”

Of course, sometimes the rules aren’t fair, which is a plus if they favor you and a travesty if they don’t. When you find your team disadvantaged, your job is to change the rules.

This is the scenario Billy Bean, general manager of the Oakland Athletics, faced in 2001. The A’s $40 million payroll couldn’t compete with the New York Yankees $115 million player budget. Not only did the Yankees beat the A’s in the divisional championship series but they signed the A’s Jason Giambi to a big-budget free agent contract.

To compete, Bean needed to build a different type of team. He stepped away from traditional approaches to player evaluation and embraced sabermetrics, a novel statistical approach that became known as “Moneyball.” His goal: Identify players undervalued by other teams. Bill Henry, the new owner of the Boston Red Sox, saw value in Bean’s approach and offered him the Sox’ GM job.

When Bean declined, Theo Epstein stepped in. He levered Boston’s big payroll with sabermetrics to assemble a team that won the World Series in 2004, followed by two more championships in 2007 and 2013.

Great companies do the same thing. They execute within the rules better than rivals, or they exploit opportunities to change the rules.

Search Amazon

Consider Amazon, the poster child for e-commerce. Launched in 1995 as the “Earth’s largest bookstore,” Amazon began life as a pure-play e-tailer, with no inventory or brick and mortar presence.

It acted as a broker, linking customers to publishers. Amazon went public in 1997 and immediately began to rewrite the rules of online retailing and expand its product line. At a time when other organizations were outsourcing fulfillment operations, Amazon invested in its own distribution network.

By 2016, Amazon operated 383 fulfillment centers worldwide, supporting sales of $136 billion. Amazon even began to build out an in-house network of trucks and planes to “own” the delivery experience all the way to the customer door.

Today, Amazon sports a market capitalization of $400 billion. Its allure is a willingness to push boundaries and redefines rules. Amazon made two-day “Prime” delivery an industry standard that customers were willing to subscribe to. Amazon also enabled eager consumers and intrigued investors to envision the day when drones, predictive shipping, and check-out free shopping will be common.

The result: Amazon is forecast to reach half a trillion in sales over the next decade. More amazing, Amazon achieved this unparalleled success without ever making a meaningful profit on operations. According to The Economist, 92% of Amazon’s value is due to profits that won’t be earned until after 2020. Amazon’s story stresses a point that you need to remember.

To build a winning team, you must change the competitive rules even as you execute the daylights out of existing rules. The remaining four Rs of supply chain design can help.

Assess Readiness; Your Own and That of Potential Partners

By winning the World Series, the Cubs proved their greatness. Nonetheless, you wouldn’t bet on the Cubs to win the Rugby World Cup. After all, the Cubs weren’t built to play rugby. Yet, many companies try to do the equivalent every day. They come to market with the wrong supply chain. How do smart managers get stuck in such a predicament? Two explanations persist.

Wrong focus. Great ideas spawn companies. But, source, make and deliver decisions are often an afterthought, following marketing, engineering or finance. No one asks whether, or how, SCM can confer a competitive edge. Market mediocrity is the result.

Poor scanning. Even cutting-edge supply chains can fall behind the obsolescence curve. You’ve read, for instance, about the woes of some high-profile brick-and-mortar retailers. As the Internet changed the rules of retail, they didn’t adapt. Now, they are dying. The readiness assessment is a key weapon in Theo Epstein’s arsenal. By conducting a two-step readiness assessment – the second R – you can avoid these losing outcomes.

Step 1 is an honest self-appraisal of the team’s current competencies. Simply put, ask: “Do we have the skills we need to play, and win, our industry’s competitive game?” If not, ask two questions:

1. Which skills are you missing?

2. What do the gaps look like?

By making capability gaps visible, you can prioritize your skill-acquisition efforts.

Step 2 is to assess potential partner competencies. Your job, like Epstein’s, is to close the gaps by building or buying the right capabilities.

Now, let’s take a peek into how Epstein leveraged the second R to turn the Cubs into champions.

The key to winning a baseball game is to score more runs than the other team. The emphasis on runs scored has always placed a premium on two player-evaluation metrics: Batting average and RBIs (runs batted in).

Sabermetrics argues you should set these metrics aside in favor of on-base percentage. After all, you can’t score unless you get on base, and it doesn’t matter whether you get on base via a hit or a walk. The logic of sabermetrics is simple: By using more-valid-but-less-used metrics, you can acquire the right skills at a lower price.

Of course, winning attracts benchmarking, and rivals quickly copied Epstein’s approach. Epstein’s response: Keep refining the readiness-assessment process.

Neuroscouting. Neuroscouting uses a computer simulation to make the connection between a player’s cognitive function (recognizing a pitch) and motor skills (swinging a bat). A player who picks up a pitch five feet out of the pitcher’s hand will get on base more frequently than a player who doesn’t read the pitch until 20 feet or 30 feet out. Neuroscouting helped Epstein identify Mookie Betts as a top prospect in the 2011 draft. Betts is now a rising star.

Wins above replacement (WAR). Epstein has grown fond of WAR, a metric that estimates how many wins a player contributes to above a replacement player at the same position. Going into the 2016 season, WAR indicated that the Cubs excelled in starting pitching, first base, and third base. But, right field was identified as a liability. To fill the gap, Epstein acquired Jason Heyward in free agency.

Predictive analytics. Epstein is now experimenting with simulations to predict how a given team composition will fare in each game throughout the season. Inputs can be quite detailed and include things like ballpark where the game is played, time of day and pitcher-versus-batter matchups.

Beyond closing capability gaps, readiness assessment serves another purpose. In 2011, as Epstein’s tenure with the team began, Cubs owner Tom Ricketts asked when the Cubs would be ready to compete for a championship.

Epstein’s response: The Cubs would get worse before things could get better. Building a strong farm system and young talent meant that the Cub faithful would need to be patient. Epstein’s plan, however, leveraged the “rules” of the collective bargaining agreement, one that allocated larger draft budgets to losing teams. Losing early to win later enabled the Cubs to acquire players like Kris Bryant and Kyle Schwarber, who were key contributors to the 2016 championship run.

The readiness assessment is a pivotal part of Zara’s story. Zara, like Amazon, is a rule breaker; its fast-fashion business model is truly game-changing. So too are the supply chain capabilities needed to make fast-fashion work. Compare the Zara way to Gap’s approach (see Table 1).

Table 1
Zara Has Built Unique Capabilities to Change the Rules

The backstory: Amancio Ortega, Zara’s founder, got his start in the apparel industry as a 14-year old errand boy. A decade later, Ortega began developing his own designs, reproducing popular styles, but with his own twists. He soon realized that if he could bring trendy designs to market quickly and inexpensively he could wow consumers. Ortega simply needed to convert the concept into capabilities. Readiness assessment provided Ortega the insight needed to build the capabilities that would fuel Zara’s fast-fashion strategy. Let’s highlight two points here.

Infrastructure. Capabilities derive from infrastructure. For instance, Zara brings its 30,000 distinct designs from concept to rack in only 14-24 days (a 10X advantage over rivals). To reliably hit this target, Zara sources over 50% of all items from local subcontractors in Spain (over 75% in Europe) and preps all product to be rack ready in its 400,000 square meter DC called the Cube. Zara’s infrastructure links supply to demand.

Decision processes. At Zara, decision makers evaluate every investment based on how it will enhance Zara’s capabilities. For instance, Xan Salgado Badas, Zara’s head of IT, stuck with an outdated, DOS-based point of sales system (POS) for years because newer systems didn’t offer any strategic capability upgrade. Yet, when Zara figured out how to use RFID to gain insight into fashion trends and hasten replenishment, it rolled out the technology at a scale and speed that startled rivals (in 2016, Zara bought 500 million RFID chips, 16% of that year’s total RFID sales).

Being fast and driving trends pays serious dividends. Customers visit Zara stores 17 times a year, compared to three times to five times for rivals. That’s because they know if a trendy new outfit sells out, it may not be back. In effect, Zara has turned customers into treasure hunters, transforming stockouts into a sales pitch.

Along the way, Zara became the world’s largest fashion retailer and Amancio Ortega the world’s second richest person. But, Zara’s team also knows that readiness assessment and capability development must be a lifestyle, not an event. If Zara isn’t always getting better, a rival like BooHoo or ASOS might make Zara’s version of fast-fashion obsolete. Just like the Cubs and Zara, you are only as good as you are ready.

Assemble the Right Players; Build or Buy Needed Competencies

Redefining rules and assessing readiness are tough tasks. But, the outputs – a capability-development matrix and a talent-acquisition map – are critical to devising a winning game plan.

Bringing all of the right pieces together and molding them into a champion is equally daunting. Emotional fortitude is needed. Executives like Theo Epstein, however, embrace the team-building challenge. Team ego results when you holistically progress through the remaining 3Rs – right players, right roles and right relationships. Let’s explore how Epstein brings these Rs together.

Through experience or intuition, Epstein knows the best players aren’t always the right players. Many so-called super teams never hoist the Commissioner’s Trophy at season’s end. So, what type of player does Epstein look for?

Talent is critical, but even more so, Epstein seeks a mix of athleticism and positional skill backed up by EQ and a team-first mindset. After all, when a crisis arises – and it will during the course of a 162-game regular season – team ego decides whether the team steps up or collapses.

The better question is, perhaps, how does Epstein put the right mix of skills on the field? Like you, Epstein has two options. He can build competencies or he can buy them. To field a consistent contender, he must do both exceptionally well. Figure 2 depicts Epstein’s method.

Figure 2
Assembling the Right Players

Phase 1: Long game. The core of an Epstein team emerges from the draft. Young talent like Javier Baez (2011) and Kris Bryant (2013) is identified and developed. The process takes time, but it provides a big bang for the buck. Baez and Bryant both made pivotal contributions to the Cubs’ World Series run. Of note, when Epstein arrived in 2011, he began to trade valuable players that didn’t fit his vision and culture, giving the Cubs more draft picks.

Phase 2: Close key gaps. Epstein opportunistically closes key skill gaps by acquiring proven talent via free agency or a well-timed trade. Consider Jake Arrieta, a starting pitcher acquired from the Baltimore Orioles just before the 2013 trading deadline. Arrieta won the 2015 NL Cy Young Award and was the ace of the Cubs’ 2016 pitching staff.

Phase 3: Win now. By July 25, 2016, the Cubs had the best record in MLB. But, by Epstein’s estimation, the Cubs still lacked a critical piece: a hard-throwing lefty closer. To bring Aroldis Chapman, the hardest thrower in baseball (105-MPH fastball), to Chicago, Epstein traded four up-and-coming prospects – a steep price Epstein was willing to pay to win it all in 2016.

One more point: Epstein knows that the concept of right “players” extends beyond the playing field. To help make things click, Epstein brought on Joe Maddon, former manager of the Tampa Bay Rays. Maddon’s keen sense of strategy and a sabermetrics-driven willingness to tweak the batting order and defensive alignment helped position the Cubs to win a league-leading 103 games.

Simply summarized, getting ready to compete means bringing the right players on board, whether drafting undervalued prospects, signing free agents, making pivotal trades or signing a manager whose true talents are being underutilized.

Apple has shown an uncanny ability to bring the right players together to develop and deliver hit products and services. Figure 3 shows how Apple uses Epstein’s playbook.

Figure3
Apple’s Path to Developing the HomePod

Phase 1 – Long Game: At the turn of the millennium, Apple began to invest in what has become the source of its success – software. The iTunes Music Store, paired with iOS, set in place the foundation for Apple’s ecosystem, which consists of over one billion active devices worldwide and includes services such as App Store, Apple Pay, Apple Music and iCloud. Apple touches its owners’ lives every day – and in an increasing variety of ways.

Phase 2 – Close key gaps: By buying Siri in 2010, Apple forged into both the search and mobile “assistant” markets. More recently, in 2014, Apple acquired Beats Electronics, quickly integrating Beats Music into its own streaming service, Apple Music. Pundits, nevertheless, questioned Beat’s $3 billion price tag. But, Apple appeared to have a compelling goal: To close gaps that powered Google Android’s foray into Apple’s turf.

Phase 3 – Win now: In August 2016, Apple quietly acquired Turi, an artificial intelligence startup, for $200 million. Less than a year later, on June 5, 2017, Apple introduced HomePod, a device designed to “reinvent music in our homes.” The Beats acquisition now made sense. But, that’s not all. HomePod is a home assistant – Apple’s answer to Amazon’s Echo and Google Home. Turi’s machine learning makes Siri smarter, giving Apple the win-now capability needed for HomePod to become the central nervous system for the IoT-enabled home, a nascent market with fantastic growth potential.

Apple is seldom first to market, but the design, user-friendly interface and massive ecosystem that support Apple products and services make it a game changer. The result: Apple’s market capitalization hit $800 billion in 2017 – 2X Amazon’s. Consider two facts: Despite owning only 30% of the mobile operating system market, Apple earned 90% of the industry’s 2015 profits. And Apple earns developer loyalty by delivering 75% more revenue vis-à-vis Google Play, making App Store the go-to place for the latest and greatest apps. Bringing the right players to the game has made Apple a perennial industry champion.

Put Players in the Right Roles; Shift As Needed

Getting the right players is just one step in the team-building process. Jim Collins described what comes next: “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Matching players to roles is critical. Yet, the way most companies do this won’t deliver a true – i.e., inimitable – competitive edge.

To be a supply chain champion, you have to think differently about how to mix and match key capabilities. With Epstein at the helm, the Cubs tinker incessantly with player roles. That’s one reason Epstein hired Maddon: His teams led the league in distinct batting lineups and in-game positional shifts every year from 2006 to 2014.

The goal: Tweak the lineup to improve the Cubs’ chance to win any given game. Imagine sending your catcher out to pitch. Maddon did just that, inserting David Ross to pitch against the Milwaukee Brewers. Ross had never pitched in the MLB, but he recorded a perfect inning. Maddon’s penchant for moving players around led the Cubs to acquire Ben Zobrist. Maddon called Zobrist a “super-U,” someone who can play multiple positions.

In fact, during his career, Zobrist has played every position except pitcher and catcher. Proactive role shifting made the Cubs improbable season possible.

Best Buy

In 2015, many pundits had already written Best Buy’s obituary, claiming the electronics retailer couldn’t survive Amazon’s assault and consumers’ affinity for “showrooming.”

Yet, Best Buy did survive, showing how role shifting can create a competitive edge even against Amazon.

How did Best Buy do it? Consider three pivot points that enabled Best Buy to become an experienced retailer.

Reduced costs. To contest showrooming, Best Buy began matching prices. To reduce costs and make price matching economically viable, Best Buy deepened collaborative relationships with suppliers, especially in the areas of merchandising, forecasting and replenishment.

Repurposed bricks. For brick-and-mortar retailers, Amazon’s onslaught turned what once was an asset into a liability. Yet by shipping online orders direct from local stores and encouraging in-store pickup of online orders, Best Buy can deliver with Amazon-like speed, turning its 1,600 physical stores back into an asset.

Reimagined roles. Clicks and mortar wasn’t Best Buy’s only proactive role shift. Best Buy invited top suppliers like Samsung, Apple, LG, Microsoft, Sony and Google to set up shops within its cavernous stores. Best Buy charges rent and benefits from high-margin sales of high-end appliances and electronics.

What’s in it for suppliers? The opportunity to create immersive customer experiences without the cost of owning stores. Google Guides, full-time Google staff, offer tutorials and tech classes, helping customers discover, play and have fun. Samsung Experience shops are located in every Best Buy store.

The result of role shifting: In 2017, Best Buy shares surged to an all-time high. However, as the Cubs know from first-hand experience, some role shifts backfire. Boeing discovered this the hard way with the launch of its vaunted 787 Dreamliner. Poorly conceived and managed shifts cost Boeing five years in first-mover advantage and, by some estimates, $20 billion in design, production and launch costs.

To avoid such misfires, you really do need to do the work entailed by all five Rs. Despite the risks, as Table 2 highlights, game changers from rivals’ strategic moves to disruptive technologies dictate that you begin to experiment with proactive role shifting.

Table 2
Forces Driving Role Shifting

The Future of the Supply Chain Workforce Will Be Determined By Technology Talent

Cultivate the Right Relationships; Build Identity and Trust

Having the right players in the right roles does guarantee that your team looks good on paper. Sadly, looking good on paper is no guarantee your team will win once the game begins. What separates paper tigers from competitive champions, both on the sporting field and in the boardroom? Champions possess chemistry; that is, a common vision backed by a willingness to work together to achieve strategic goals – even if someone has to play a less visible role.

Critically, chemistry derives from trust. To fully sense the value of trust, consider this key fact from the auto industry: The most trusted automakers are also the most profitable. Your takeaway: Ultimate success requires that you invest in a culture of trust.

Theo Epstein is a culture guy. Organizational culture, after all, endures beyond the departure of talent. So, what are the core tenets of an Epstein-inspired culture? For starters, Epstein believes people perform best, especially under pressure, when they are part of something bigger than themselves. He also believes that environment matters. That’s why the Cubs’ new $300 million stadium renovation included a round clubhouse – 60 feet, 6 inches in diameter (the exact distance from the pitcher’s mound to home plate). Epstein wanted to promote collaboration by putting everyone within eyesight of each other and encouraging serendipitous conversations. The space eliminated hierarchy, engendering camaraderie and team identity. David Ross, the Cubs catcher, described the design as, “a subliminal message they’re sending.”

Beyond facilities, Epstein cultivates “lever points”other people who help drive the culture. Epstein then steps back and lets them do some heavy lifting. Joe Maddon, the Cubs manager, is an ideal lever for an Epstein-built team. “Try not to suck,” a key Maddonism, communicates big-time expectations without big-time pressure. Madden helped nurture the Cubs culture: Trust each other; do the right things consistently, including stretching for better results; have fun, but hold each other accountable; expect greatness. Epstein and Maddon know that if you build the right culture, that comes crunch time, someone will step up.

And that’s exactly what happened in game seven of the World Series. After digging out of a 1-3 deficit and building a commanding three-run lead going into the bottom of the 8th inning, the Cubs did the unimaginable – they gave up the lead and gave away the momentum. The 103 wins didn’t matter anymore; the dream was slipping away. Then, it began to rain – and culture took over. As the grounds crew came on the field, the Cubs exited toward the locker room.

Jason Heyward impulsively called his teammates into a weight room for a player’s only meeting. Never the outspoken leader, and struggling at the plate throughout the playoffs, Heyward reminded his teammates just who the Cubs were. David Ross recounted Heyward’s message: “He just said: ‘We’re the best team in baseball for a reason. Continue to play our game, support one another. These are your brothers here, fight for your brothers, lift them up, continue to stay positive. We’ve been doing this all year so continue to be us.’”

What would’ve happened if Heyward hadn’t spoken up? The Cubs may still have won. But, Epstein knows that you leave less to chance when you invest in the right culture.

Honda

Honda is a Cubs type of culture warrior.

More reliant on suppliers than rival carmakers, Honda’s buyer-supplier culture is truly unique, even a little quirky. Honda treats strategic suppliers as an extension of Honda itself.

Simply put, Honda invests in supply partners as if it is buying their capacity and capabilities, not just their parts. By the way, 90% of Honda’s spend is with strategic partners.

To help these partners succeed, Honda sends engineering teams to work on-site at suppliers for three months – and as long as 24 months – at no cost to the supplier.

The goal: Help suppliers optimize manufacturing and business processes. A typical best practices (BP) improvement initiative improves quality by 30% and labor productivity by 50%. More importantly, under Honda’s coaching, suppliers develop critical skills. Honda, in turn, gains stronger supply partners. Cost savings are shared 50/50 with the supplier.

Honda’s investments aren’t limited to BP projects. Honda expects supply partners to participate in corporate training, senior-leader business reviews and new product and target costing programs.

You may be wondering why Honda invests so much in its suppliers instead of switching to more capable suppliers. Honda’s response: Other suppliers would have similar problems. The nuanced answer, however, runs deeper.

Like Epstein, Honda is playing the long game, building a trusted team that can compete the “Honda Way.” Identity is critical.

One result: Honda is the most trusted carmaker among suppliers. Almost 40 years after launching U.S. operations, nearly all of Honda’s original supply team remains intact. The trust also shows up in Honda’s profitability.

Despite Toyota’s superior scale – producing twice as many cars per year – Honda has consistently delivered higher profit margins.

General Motors

Now, let’s go back to the early 1990s. J. Ignacio Lopez, General Motor’s purchasing czar, tore up supplier contracts, putting everything out to bid.

By saving $4 billion dollars, Lopez saved GM from bankruptcy. But, Lopez alienated suppliers, solidifying a culture of mistrust.

Over a decade later, supplier resentment still ran hot. Suppliers scored GM a 114 on the 2005 Supplier Working Relations Index(the lowest score ever – 300 points behind Toyota’s 415).

The real cost: Suppliers were holding back on GM, dedicating their best engineers and sharing their latest technology with more trusted partners like Honda and Toyota.

The rise of autonomous vehicles, however, forced GM in 2015 to acknowledge an existential threat, that its future depended on supplier innovation.

Compelled to change, GM began offering longer-term contracts to urge suppliers to more openly share their best ideas. Two years later, GM’s 2017 WRI score reached its all-time high of 290, lagging behind only Toyota and Honda.

The Journey Continues

The Cubs faithful view Epstein as a miracle worker. In truth, Epstein simply embraced core tenets supply chain champions put to work every day as they design and manage world-class value-creation teams. What then is your key takeaway?

Epstein succeeded by executing each R as part of an integrated 5Rs strategy.

In Epstein’s words:

“Acquiring the talent is only half the battle. The other half of the Cubs’ rebuilding required the organization to establish a winning culture. This meant devising a ‘Cubs Way.’”

In our experience, putting all five pieces of a 5Rs strategy together is quite a feat. Even supply chain champions struggle to implement all five Rs.

But, Maddon offers a word of advice: “The process is fearless.”

If you continue to work the process, the 5Rs will help you break whatever supply chain curse you’re facing.

About the Authors
Stanley E. Fawcett, Ph.D., is the Goddard Professor of global supply chain management at the Goddard School of Business at Weber State University. He can be reached at stan.e.fawcett@gmail.com.

A. Michael Knemeyer, Ph.D., is a professor of logistics at Fisher College of Business at The Ohio State University. He can be reached at knemeyer.4@osu.edu.

Amydee M. Fawcett, Ph.D., is an assistant professor of supply chain management at the Goddard School of Business and Weber State University. She can be reached at amydeefawcett@weber.edu.

Sebastian Brockhaus, Ph.D., is an assistant professor of supply chain management at the Boler School of Business at John Carroll University. He can be reached at sbrockhaus@jcu.edu.

Image Credit: Dan Vasconcellos

Related: How The Chicago Cubs Baseball Team Brought Data-Driven Decision Making to Wrigley Field

Related Leadership Resources

Download the Paper

Managing Operational Performance in Volatile Times
As part of our continued efforts to help clients adapt and improve operations and achieve a competitive advantage, this paper examines trends in supply chain operational performance over the past 15 years. Download Now!


Download the Paper

Strategic Supply Chain Management: 5 Disciplines for Top Performance
In this book, we set out to offer readers our understanding of the current state of supply chain management theory and practice based on our experience and observations from engagements on supply chain projects at over 600 organizations. Download Now!


Related Video: 5 Core Supply Chain Management Attributes of Successful Companies

0 Continue Reading →

Today’s Millennial Supply Chain Professionals

APICS, the professional association for supply chain management, has published the results of its Millennials in Supply Chain research report, conducted by Peerless Research Group in conjunction with Supply Chain Management Review(SCMR) and the American Productivity & Quality Center (APQC).

A survey carried out in April 2017 was designed to gain insight into millennials as a critical segment of the supply chain workforce.

The report finds that millennials are focused, engaged, enthused and committed to working in supply chain management, and reveals that supply chain represents a sought-after, dynamic and rewarding long-term career choice for professionals in their 20s and 30s.

“The results of the report are eye-opening, especially when compared to the more senior supply chain professionals in leadership positions, who were part of a previous study from APICS and SCMR in 2016,” said APICS CEO, Abe Eshkenazi, CSCP, CAE, CPA.

“We see that more millennials started their career in supply chain, are moving around less, are highly satisfied with their jobs and see more opportunities for advancement in the field.”

APICS CEO Abe Eshkenazi

“Despite some noted frustrations, millennials are continuous learners and fast movers who are eager to advance”APICS CEO Abe Eshkenazi

The report shows millennials have a diverse interest in activities that span the end-to-end supply chain. Notably, the area that holds most appeal, supply chain design, and planning, is a role that touches all areas of supply chain.

The millennials surveyed also said they find their careers personally rewarding. Eighty-one percent feel they can make a difference in the supply chain field, 87 percent believe working in the field will help with their personal growth and development, and 88 percent agree that there are opportunities for advancement within the field.

Diversity topped the list of what millennials consider most important about the field and the companies for which they work. Eighty-five percent noted that supply chain involves a diverse workforce and encompasses people of all types, which additional findings that more women are now entering the field also reflect.

Respondents were roughly two-thirds male (61 percent) and one-third female (39 percent), compared to the 2016 survey of senior supply chain leaders, in which 76 percent of respondents were men while only 24 percent were women.

However, just as earlier research of senior managers in 2016 showed a pay gap between males and females, there is a gender wage gap among millennials. Men and women start at roughly the same salary, but the disparity grows larger as they move up the career ladder.

This disparity is chief among complaints from millennials surveyed, along with frustration around the attitude towards millennials by older generations in their organizations and a disconnected feeling from the big picture or a lack of purpose in the workplace.

“Despite some noted frustrations, millennials are continuous learners and fast movers who are eager to advance,” Eshkenazi concluded.

“To address the ongoing skills gap, industry expectations, priorities and communication styles must adapt to and embrace the different needs of this younger generation. Millennials are growing and learning on the job in an era of lean, optimized, end-to-end supply chains and are critical to the ongoing transformation of the industry.”

SC24/7 Search Term: Millennials

Millennials Don’t Just “Fall Into” Supply Chain

This generation comes to the field with early and prolonged commitment

A generation ago – or even a decade or two ago – if you asked a group of students about their career goals, the field of supply chain management probably wouldn’t rank highly, if at all, among their responses. Most Gen X and baby boomer supply chain professionals didn’t plan for, prepare for, and intend to work in supply chain. It was a field they found themselves in, having landed there as they evolved from previous roles in engineering, finance, planning or management.

Millennials in Supply Chain research report

Download the Research Report: Millennials in Supply Chain

0 Continue Reading →

L’Oreal S.A. Creates Award Winning Transportation Solution with LTL Partners

October 10, 2017

As any fashion model will tell you, it isn’t easy to look perfect. It takes plenty of planning, preparation, and assistance.

It’s the same with freight transportation.

If you want “white glove service” you have to devise a great strategy and then team up with best-in-class carriers to execute that plan on a daily basis.

SalonCentric recently did just that through a unique partnership with two of its key less-than-truckload (LTL) partners, Pitt Ohio Express and Averitt Express.

A unit of Clichy, France-based L’Oreal S.A., SalonCentric is a leading distributor of professional salon products in the U.S.

It operates in 48 states, serving more than 565 stores, and distributes many brands including L’Oreal Professional, Redken and Matrix.

But delivering to all those stores was challenging due to its wide geographic area and the fact that none of their store locations have loading docks or delivery areas.

SalonCentric also knew that it needed to increase their customer order windows, decrease its carbon footprint and develop a return solution that was both economically and ecologically sound.

Let’s take a deeper look into how this beauty salon supplier worked to develop this award-winning transportation solution through improved collaboration with two of its most important logistics partners.

SalonCentric’s Three distinct challenges

About four years ago, SalonCentric realized that is had two distinct distribution challenges. First, its McCalla, Ala., distribution center that services 110 wholesale stores in the Southeastern U.S. needed better service to its network of stores. These stores receive weekly shipments averaging two pallets with 79 pieces weighing about 375 lbs.—and half of those shipments were made in reusable plastic totes.

Editor’s Note: The successful partnership forged by SalonCentric, Pitt Ohio Express and Averitt Express was awarded a 2017 Alliance Award. The Alliance Awards, sponsored by Logistics Management and SMC³, recognize how shippers and their service providers work together to overcome challenges to critical components of their
unique supply chains. Winners are singled out for their ability to effectively solve challenges through innovative, measurable means. Entries for the 2018 alliance Awards will soon be accepted here.

Because SalonCentric stores don’t have receiving docks, these deliveries required breakdown and inside delivery into a back room or classroom area. Empty totes from the previous week’s delivery had to be removed at time of delivery as well.

The final challenge was to speed up delivery times. Because its stores comprise a large geographic footprint, orders had to be placed well in advance. The challenge was to be able to extend those order times to get more timely shipments of exactly the products each store needed.

Time for collaboration

To address these challenges, Eric Reddish, SalonCentric’s director of operations, says that he knew he needed his carriers to step up and become an integral part of his logistics operation. What resulted was a solution that delivered cost and time savings and lessened the impact on the environment through the implantation of an innovative tote consolidation program—goals that would have never been meet without the collaboration of trusted partners.

Eric Reddish:

“A lot of times transportation is viewed as a commodity—you need a shipment, call a carrier, they pick it up and hopefully deliver it. That is especially true in the LTL world.”

But because SalonCentric delivers to its own stores, it needed a distinctly different, non-commodity-type service. “We want our carriers to be an arm of our greater logistics network,” says Reddish. “We need carriers delivering to our stores and to be partners in the process.”

The plan, conceived four years ago, involved about 200 of SalonCentric’s stores.It came after thorough examination of its shipping patterns, distribution center schedules and capacity along with analysis by Averitt and Pitt Ohio transportation experts on what the most efficient system would look like.

In Alabama, Averitt began to pull multiple trailer loads of freight nightly from the McCalla location in accordance with the store shipping schedules to address the first challenge. Furthest locations were dispatched first with those closest picked up later. This partnership with the Averitt team allowed the maximum processing time in the DC while still meeting sort times at the local hub.

Eric Reddish, Director of Operations, SalonCentric

“We need carriers delivering to our stores and to be partners in the process.”Eric Reddish, Director of Operations, SalonCentric

Automated PRO numbers further allowed the DC to manifest shipments accurately and with confidence that they will flow smoothly through the Averitt system. Once en route, the store shipments were now managed through the network via tracking until final delivery. After successful removal of empty totes, Averitt sends an EDI 214 notifying SalonCentric that the delivery is complete.

Regarding the second challenge, typically its UPS line hauls only utilize 50% to 65% of the truck. In the McCalla example, Averitt was line hauling to Jacksonville, Fla. In cooperation with Averitt to better utilize the line haul, the decision was made to round out the truck with SalonCentric stores going into south Florida.

Averitt then makes two stops with the line at both UPS and its hub in Jacksonville. After making the final store deliveries in south Florida, Averitt then consolidates the empty totes from those stores back in Jacksonville, returning them to McCalla, twice a week.

From its East Manchester, Pa., DC, deliveries are made to both a UPS hub and Averitt service center in Richmond, Va. Averitt then does final delivery to SalonCentric stores in Va., N.C. and W. Va. A tote consolidation program was again established by Averitt to consolidate and return to East Manchester. In those instances when there’s insufficient room on the line haul trailer, store deliveries into Va., N.C. and W. Va. are given to Pitt Ohio at origin. Pitt Ohio then hands off to Averitt for final delivery.

By zone skipping via line haul more than 5,000 small parcels a week to four or five stores a day, SalonCentric reduced by an average of one to two zones, thus lowering overall fees. Reddish and his team were also able to extend the daily order cut-off and reduced damages.

However, the appearance and professionalism of both the Averitt and Pitt Ohio drivers was “probably the single most important factor” in making the partnership work, says Reddish. “We look at these guys as part of our team. We ask carriers if they can provide the same driver so that relationships build between store manager and driver—and often our customers.”

Because SalonCentric stores are open when deliveries are made, Averitt and Pitt Ohio drivers must occasionally mingle with clients receiving $200 perms and color tints. Those drivers are in uniforms with shirts that read “SalonCentric Logistics,” adding to the professionalism of the driver.

The third solution addressed the environmental need. After Loreal created SalonCentric following a series of small beauty supply company purchases in 2013, an emphasis on growing “green” began. As a result, the shipper converted from cardboard boxes to use of reusable plastic totes, a move that saves money and reduces its carbon footprint.

The $10 totes can be reused for up to 20 to 30 deliveries over several years for annual savings of around $40,000

“Our waste is tracked to the minute detail, and we’re measured by it. Using plastic keeps up from using corrugate cardboard, and it has also saved on damages, which is a big win for us.”

How the carriers did it

Collaboration in logistics is often easier said than done, but Pitt Ohio and Averitt executives say that their partnership with SalonCentric is an alliance that will do nothing but grow into the future as all sides are realizing benefits every day.

“True collaboration was the key, and this is the wave of the future,” says Tim Duven, enterprise solutions executive for Pitt Ohio Express.

“It used to be taboo to interline because you would lose visibility and the ability to track and trace freight. But now we can track and trace on each other’s Websites and create a true partnership—and it saves the carrier from using brick and mortar to build new terminals. Now you just find a partner who goes into that territory.”

As usual, truck drivers were on the front line of making this work. Because they were operating during business hours, Duven says that his drivers had to act like they “were not even there” and just do their jobs quietly and efficiently.

Tim Duven:

“Drivers have to be an extension of the people managing that store. The stores buy for what they need, so we need to be on time, get in the store and be almost invisible. That’s hard to do when you’re carrying bins and boxes, and we have to do it in a very professional manner.”

Brandon Mazur, director of corporate business development for Averitt Express, agreed that partnership collaboration among all the players was simply the key to the success of this endeavor. “But in the end, appearances really do matter at this level of partnership,” he adds.

Results and the future

SalonCentric’s unique partnership with Averitt and Pitt Ohio has resulted in tangible transportation savings, pickup and delivery efficiencies, as well as supplemental environmental benefits.

Some of the highlights include:

  • lessened impact on the environment via the plastic tote return solution;
  • cost savings in not using corrugated materials;
  • elimination of line haul charges;
  • and increase in SalonCentric customers order times.

On the environmental front, Averitt and Pitt Ohio say that utilizing the plastic hinged totes instead of corrugated boxes saves SalonCentric money and reduces its carbon footprint. The $10 totes can be reused for up to 20 to 30 deliveries over several years.

Averitt picks up the totes while making deliveries and returns them to consolidation points in Jacksonville and Richmond. Average savings with this program net any transportation fees is $40,000 annually.

Proving pool distribution points and zone skip services gave SalonCentric’s customers additional order time each day. The parties developed several pool points for SalonCentric and provided zone skip services in many areas, including Birmingham, Ala., to Jacksonville and Richmond and East Manchester.

This resulted in an additional 4 hours to 5 hours per day for SalonCentric’s customers to place orders and still receive the same delivery service. These tweaks, net of line-haul charges, has saved SalonCentric in excess of $50,000 annually.

Averitt and Pitt Ohio have pledged to continue to develop ways to save SalonCentric money and improve service to customers. In fact, Averitt and the shipper are currently developing a pool distribution solution from Omaha to Oklahoma to service stores in Oklahoma and Texas.

According to Pitt Ohio’s Duven, this type of business model continues to grow. “SalonCentric recognizes the value, and if you perform, you will be rewarded with other markets like Michigan and Nebraska,” he says. “But you have to perform, because at the end of day, we’ve earned that business together.”

Averitt’s Mazur adds that the relationship is in “a constant state of flux” because Averitt uses a blended mode approach—LTL, TL and logistics. “We can go outside our verticals and craft a solution for Eric and SalonCentric at any time,” he says.

“We can offer many options for him to choose. But at the end of the day, it’s amazingly gratifying to work with this partner. It’s one of the highlights of my career.”

And most importantly for the two carrier partners, the shipper feels the same way. “We’re just extremely pleased,” adds Reddish.

“Our barometer is the feedback we get from the stores. We very rarely hear any issues; and if we do the response time is phenomenal. It’s really been just quiet—which in my world is a good thing.”

Related White Papers

Download the Paper

How Your Carrier Can Help You Understand Your Carbon Footprint
More companies are adopting sustainability initiatives to help identify areas in their organization where they can reap savings that also help improve the environment. Download Now!


Download the Paper

Controlling Surface Transportation Costs: Six Steps Toward Improved Collaboration
The best trucking operators are the ones that can best match up their available capacity with enough freight to make their networks run in balance—or as close to 100 percent full in both the headhaul and backhaul lanes. Download Now!

Comments
Be the first to post a comment.
You must be logged in to post a comment. Login.
About the author
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.

 

0 Continue Reading →