Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Recent blog posts

b2ap3_thumbnail_dreamstime_xl_52319255V3.jpg

This week’s visit to Washington by Prime Minister Justin Trudeau, his family and his Canadian delegation was certainly one of the high points in U.S. – Canada relations in many years. It brought back memories of President Reagan and PM Mulroney singing “When Irish Eyes are Smiling” in Quebec City many years ago.

Watching the leaders toast each other and seeing some concrete agreements come out of the meetings was certainly a sign that Canada-US relations are back on a positive track. The fact that President Obama hosted a state dinner for Mr. Trudeau, the first state dinner for a Canadian Prime Minister in 19 years, was a very positive indicator that Canada is back in the good graces of its most important ally and trading partner.

Unfortunately for Canada, Barack Obama is in the last year of his presidency. At this point, the presidential race is pretty much down to four candidates, Bernie Sanders and Hillary Clinton for the Democrats and Donald Trump and Ted Cruz for the Republicans. As you listen to and study the rhetoric from these candidates, and sense the mood of the American electorate, there is much to worry about.

The Democrats

...
Hits: 2597
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_xl_58379129.jpg

The essence of successful freight rate negotiations is an honest exchange of information. Carriers count on shippers to supply them with complete and accurate information on shipment weights, dimensions, volumes by lane, seasonal spikes and any special service (i.e. job site deliveries, weekend pickups etc.) requirements. Shippers expect carriers to be able to supply them with the correct types of equipment to pick up their freight at the designated time, to provide adequate amounts of equipment at the right time to move their loads, to meet their designated transit times over 95% of the time and to provide good customer service and quality information as they outlined in their submission and interview.

While this all seems so straight-forward and reasonable, there are a host of challenges that get in the way of committed shipper-carrier relationships. Here are a few to consider.

Changes in Shipment Volumes

Business conditions are constantly changing. There are ebbs and flows in the general economy that can impact on many industries, including both shippers and carriers. There is ongoing competition in the market where shippers win or lose customers every day. Then there are mergers and acquisitions and new product launches (or old product cancellations) that can lead to rationalization of locations for factories or distribution facilities. The net impact of these changes is that the shipment volumes discussed in an RFP may not come to pass or the actual volumes by lane may vary over time.

...
Hits: 2591
0
Continue reading 0 Comments

Passion

Posted by on in Career Advice

b2ap3_thumbnail_dreamstime_xl_59460025.jpg

Last week, I was watching the U.S. Democratic Party Town Hall on television that took place in South Carolina. A member of the audience stood up and asked Senator Bernie Sanders of Vermont to talk about what he considers one of the most important traits of a leader. He replied that having a passion for what you do is a driving force for him. He then went on to amplify his response. That question and answer was quite revealing and has stayed with me ever since.

Two days later I received an e mail from Scott Monty who publishes a blog entitled The Full Monty (http://www.scottmonty.com/ ). Scott is an expert in Social Media. The title of his weekly blog was Passion. The fact that these two seemingly random events happened in the same week inspired me to write this blog.

As I reflect back on my over 45 years in the working world, the issue of passion has been a driving force for me. There have been times when I worked for some fine companies and great leaders. I got up in the morning and couldn’t wait to get to work. I was proud to represent my company and I was very driven to see the company succeed.

I am very happy to be running my own company at this stage of my career. I am very motivated to help our shipper clients save money on freight, to help our carrier clients improve their profitability and to help organize and host one of the best freight transportation conferences in Canada. I have a deep passion for all of these segments of the business.

...
Hits: 14171
0
Continue reading 0 Comments

 

b2ap3_thumbnail_dreamstime_l_57437139.jpg

Social Media have become huge in the last few years. There are new Social Media that pop up every day. I have been personally involved with social media for about ten years and have found them to be helpful to our freight consulting business. Here are few thoughts on how to make effective us of them in your company.

Social Media are an integral part of a company’s Sales and Marketing Strategy

The first point to consider is that Social Media should not be looked at independently from a company’s Sales and Marketing Strategy. They should be an integral component and should be used to accomplish a company’s key marketing objectives. The selection, of which media to use, how and when they should be used, should be developed as part of a company’s Business Plan. The Social Media strategy should correlate directly with the company’s marketing goals, target markets and revenue targets.

...
Hits: 2596
0
Continue reading 0 Comments

 

 

b2ap3_thumbnail_dreamstime_l_46467035.jpg

The first part of this blog focused on the operational, service and equipment issues that constitute a strong shipper-carrier freight agreement. This blog will address the financial and business issues that need to carefully captured in detail.

6. Rates and Service Charges

...
Hits: 2566
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_l_19275327.jpgFurther to the last blog, a well written motor carrier agreement can be a powerful tool in promoting partnerships between shippers and freight companies. Listed below are some of the major components of a comprehensive contract.

1. Parties to the Agreement

The document must clearly identify the parties to the agreement, including the use of any third parties or sub-contractors. This is very important since it is critical that all transport companies that perform services for the shipper have the same licenses, insurance and service levels as the primary party to the agreement. In other words, they must be a replica of the primary party or any differences must be so stated. The agreement must also make clear that the parties to the agreement are independent contractors. Neither Shipper nor Carrier shall have the right to enter into contracts or pledge the credit of or incur expenses or liabilities on behalf of the other party.

2. Services

a) Types of services

...
Hits: 3129
0
Continue reading 0 Comments

 

b2ap3_thumbnail_dreamstime_xl_64569399.jpg

Motor carrier agreements or contracts are documents signed between shippers and carriers that set out the parameters and processes under which two or more companies work together to provide freight transportation services. These documents, often prepared by lawyers (with input from freight management professionals), set out a range of service expectations and freight rates that define the relationship between the parties. While freight agreements have come into widespread use, the question is if and when these documents are necessary?

One could argue that if two or more parties are operating in good faith, do they need a legal document to circumscribe the nature of their relationship? If shippers and carriers are supposed to work together as partners in an open and trusting manner, does a formal, written agreement get in the way of a business partnership arrangement? Does it inhibit open and honest communication?

Do motor carrier agreements create a rigid framework that reduces flexibility? Are they detrimental to the sometime unpredictable and fluid nature of freight transportation? Does a formal agreement make it more difficult for a shipper to obtain additional equipment or after hour’s service? Do they place carriers with a limited set of equipment into a straight-jacket? Does the fear of punishment or service failure force a carrier to provide equipment and service to one client (that has a contract) at the expense of another client (that doesn’t have one)?

...
Hits: 6719
0
Continue reading 0 Comments

 

 

b2ap3_thumbnail_bidding-sites_20160112-151339_1.jpg

Recent stock market and currency value declines in China and Canada point to a challenging year ahead for the economies of these two countries and many others around the world. While the United States has remained fairly stable amidst current world turmoil, its high valued currency may slow exports to its key trading partners. If business levels deteriorate this year, this will place added pressure on shippers who are trying to manage their freight costs? Is this a year to conduct a freight bid?

Certainly faltering economic conditions typically encourage manufacturers and distributors to conduct RFPs to keep freight costs as low as possible. Beyond the general state of the economy, there are a usually a range of conditions that set the stage for a successful freight bid. Here a few to consider.

...
Hits: 2574
0
Continue reading 0 Comments

Some KPIs to Monitor the Transportation Industry

Posted by on in Economy

b2ap3_thumbnail_dreamstime_xl_61457032.jpg

There are a host of economic indicators that provide economists, academics and transportation professionals with insights into how the general economy is performing. Data on gross domestic product, imports, exports, housing starts, stock market trends, consumer confidence and unemployment levels are barometers of the level of economic activity in a particular country. These indicators, while somewhat indirect, highlight trends in the economy. Declines in unemployment levels indicate more people are working and as result buying more goods and services. Increases in housing starts suggest that a growing number or people are buying homes, furniture, appliances and carpets. These indices correlate somewhat with freight transportation activity levels. The same applies to other measurements of economic activity.

However, these types of general economic indicators, while helpful, don’t necessarily provide direction as to the specific segments of the economy experiencing the strongest or weakest growth. They don’t shed light on whether there are higher levels of growth in dry van, refrigerated or flat bed traffic.

As a result, transportation professionals need to turn to other indices to understand where the freight industry is going. Some of these measurements are outlined below.

1. ISM Managers’ Index (https://www.instituteforsupplymanagement.org/ )

...
Hits: 3845
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_xl_60041796.jpg

As we approach 2016, there are a number of forces that are shaping the economics of Freight Transportation. Here are a few to consider.

The US Economy and the US Dollar

The US economy is providing a number of mixed signals in December of 2015. Unemployment is at only five percent. Economic growth, while sluggish, has been able to generate a consistent 200,000 new jobs a month. But some other indices don’t look so good.

The Institute for Supply Management (ISM) PMI Index of economic activity in the manufacturing sector contracted in November for the first time in 36 months, since November 2012, while the overall economy grew for the 78th consecutive month. The November PMI® registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent and below the 50 percent mark that signals growth. The New Orders Index registered 48.9 percent, a decrease of 4 percentage points from the reading of 52.9 percent in October. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading of 52.9 percent. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.

...
Hits: 3079
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_l_59142906V2.jpg

The past year started with some solid tailwinds as the economies of the United States and Canada appeared to be in a growth mode. Then a number of unexpected events took place that changed the trajectory of the year. Here is our synopsis of the major freight transportation stories of 2015.

The Collapse in Energy Prices

The rout in oil prices began in late 2014 as Saudi Arabia stood firm in its insistence not to cut production quotas. The downturn in China’s economy produced less demand as oil supply remained at pre-downturn levels, a recipe for low oil prices and other challenges throughout the year. This had a huge impact on Canada’s oil sands companies, producing significant layoffs. There were also spillover effects in other energy sectors such as coal mining. The latter experienced very large price drops and decreased shipping volumes.

The steep decline in fuel and oil prices has, in turn, been a boon to freight transportation and logistics services providers primarily in the form of lower operating costs, while at the same time tremendously aiding carriers and providers serving retail-based customers, as lower fuel prices have dramatically impacted the amount of discretionary income consumers have.

...
Hits: 3127
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_xl_38118025.jpg

 

As everyone knows, it is very difficult to time the stock market. While we are all aware of the old adage, “buy low and sell high”, in reality, this is not easy to do.

When it comes to freight rates, it is sometimes problematic to select the right time to put a company’s freight out for bid. The last few years have been particularly challenging for shippers. After the Great Recession, carriers have been adding capacity in a prudent and deliberate way. Gone are the days when carriers build transport companies and hope that shippers will come. In addition to managing their fleet capacity, carriers have also been challenged with the struggle of recruiting qualified drivers.

Consolidation in the trucking industry has been very prevalent in recent years. In Canada, companies such as TransForce have acquired large chunks of the small parcel, LTL and truckload sectors. There are simply fewer carriers for a shipper to choose from. Carriers have gained pricing leverage over the past few years.

...
Hits: 2628
0
Continue reading 0 Comments

 

 

b2ap3_thumbnail_bidding-sites.jpg

In my last blog, I outlined a set of tips to help carriers achieve greater success with Freight Bids. Here are a few more.

Put your best foot forward early in the process

...
Hits: 2871
0
Continue reading 0 Comments

 

b2ap3_thumbnail_Request-for-Proposal_20151111-142444_1.png

Freight Bids or Freight RFPs have been around for over two decades. Every year we hear comments about their imminent demise. Unfortunately for many motor carriers, this is wishful thinking. While these exercises are often detested by freight companies, they are popular with shippers across North America. Why? When well done, they provide the shipper with better service providers at a lower cost.

One of the popular themes at many freight conferences is the talk of shipper-carrier partnerships and collaboration. I have heard this theme for a decade. If only shippers would sit down with their carriers, they could pull costs out of their operations and become more efficient.

While this is possible and even probable, the problem with this scenario is that the shipper is left wondering if carrier B could pull even more costs out of the operation than carrier A. This explains why so many shippers have contracted their freight to logistics service providers. They are not convinced that if they forgo the RFP in favor of collaboration, they will derive the maximum benefit. Thus the popularity of freight bids.

...
Hits: 3198
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_l_20588089.jpgIn the last blog, I highlighted some of the opportunities that shippers miss out on to save money on freight when they don’t manage their freight spend data effectively. What steps can a shipper take to correct this situation? Here is a partial list.

• Utilize a Transportation Management (TMS) System. TMS systems have changed significantly over the past ten years. Shippers can now buy or lease a TMS system at a reasonable rate. For companies that don’t wish to make this investment, they can reap many of the benefits without making a capital investment by working with a logistics service provider that has a leading edge system.

• Make sure the company’s or LSP’s TMS system is capturing the key data elements on a daily basis that are needed to monitor freight expenditures. This includes complete and accurate commodity descriptions, actual weights and billed weights, capturing the various cost elements of their shipments individually such as the freight rate, fuel surcharge, currency exchange, accessorial charges, carrier name, origin and destination cities, state/province and postal codes/zip codes, ship date and arrival date.

• Sort the data in the following ways to help identify opportunities for improvement:

             By carrier – to reduce the company’s dependency and vulnerability in case of a strike or business failure and to leverage shipping volumes

...
Hits: 2543
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_xl_24789336.jpg

A company’s freight costs often represents between two and ten percent of total revenues. For many companies in the manufacturing, distribution and retail sectors, their freight spend has a direct impact on their bottom lines. Nine years ago I wrote a blog with the title above. In that blog, I identified one of the consistent problems we encounter in working with shippers on a day to day basis, namely a lack of complete and accurate information on their freight transportation activities.

Nine years later, this problem persists and it is not limited to just small companies. In fact, many companies with freight expenditures of five to fifty million dollars or more face the same problem.

The challenge now is that freight companies have figured out that if they use their scales and dimensioning devices, they can weigh and measure the freight they move more accurately. If shippers have poor practices that hinder the flow of their assets, they can calculate the cost of these deficiencies. They are now charging more aggressively for these additional costs and for the precise cubic space occupied by the freight. As a result, carriers can and are securing revenue that they may have missed in the past.

What is interesting is that some of these shippers have high quality ERP and accounting systems. However, when you try to extract a year’s worth of freight transportation data, you receive a file that is riddled with errors and omissions.

...
Hits: 2577
0
Continue reading 0 Comments

 

 

b2ap3_thumbnail_STS-logo-2015V2.jpg

 

The 2015 Surface Transportation Summit (www.surfacetransportationsummit.com) will be held at the Mississauga Convention Centre on October 14. We are delighted to report that the event has a new partner, the Freight Management Association of Canada. Here is an overview of the day.

...
Hits: 2932
0
Continue reading 0 Comments

Dan's Transportation Newspaper

Posted by on in Social Media

b2ap3_thumbnail_Dans-Transportation-Newspaper.jpg

Many of us receive information from multiple news sources on a daily basis. You may start your day with the morning newspaper in hard copy or on your iPad or Surface. If you are in the transportation industry, you are likely receiving trade magazines in hard copy and/or digital form, news feeds and white papers from various sources, updates from your LinkedIn groups, Twitter feeds, Facebook updates and of course dozens or even hundreds of e mails and text messages throughout the day.

Of course many of us have interests beyond freight transportation that may include Business, Investing, Sports, Technology and/or a range of other topics. Trying to stay abreast of the news in these areas can often result in another set of publications and news feeds. The management of information can be quite a challenge.

Using software developed by paper.li, Dan’s Transportation Newspaper tries to make life easier for transportation professionals. Published daily, 7 days a week, 52 weeks a year, the primary focus of the paper is Freight Transportation. Stories on truck, rail, air and ocean shipping are included as are stories on supply chain, trucking, warehousing, technology, data and energy management. Since many of us are keen students of Business, Economics, Social Media and Sports, the scope of the newspaper includes important stories in these areas.

The freight sections include articles from the Journal of Commerce, Transport Topics, American Shipper, Inbound Logistics, Truck News, Today’s Trucking, Logistics Management and other American and Canadian sources. The Business section contains features from the Wall Street Journal, Harvard Business Review, The Economist and other leading publications. There are 25 major news feeds that supply articles to the newspaper on a daily basis.

...
Hits: 3435
0
Continue reading 0 Comments

b2ap3_thumbnail_success-hd-for-secrets-of-in-words-beh-et-mutlu-668990.jpg

Some companies have strong leaders with good strategies and good systems. Unfortunately, they don’t put the pieces together and therefore deliver less than stellar freight management results. In other words, the execution isn’t there.  Projects are identified but they don’t produce the desired results.

Some companies seem to adopt a “flavour” or “mission” of the month approach. They hire a consultant to adopt lean manufacturing, lean logistics or balanced scorecards. The tools to make these systems work are never put into place properly and before you know it, they criticize the consultant, move on to the next consultant and don’t accomplish much of value.

While these companies may be able to generate pretty reports, the programs were ill conceived in the first place. They don’t produce results. This can lead to the “blame game.”

Achieving operational excellence is not about sexy slogans and programs. It is about teamwork, communication and commitment. There has to be an identification of the root causes of the problems. There has to be a commitment from the leadership to fix the problems. The company leaders must stay the course to fix the problems. They cannot assume that since a program has been put in place, the results will come automatically.

...
Hits: 3254
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_xl_49902079.jpg

As we all know, freight capacity throughout North America is tightening. A shortage of drivers, new government regulations and rising fleet costs are making it increasingly challenging for trucking companies to operate their fleets. As a result, carriers are being selective in terms of the shippers for whom they will offer their fleet capacity.

Smart carriers are ranking their customers on the basis of profitability and ease of serving. Shippers must now make their companies and their freight attractive to their carriers to secure the capacity they need. These are some things they can do.

Run a Clean Operation

Simply put, shippers need to be organized. As carriers enter their customers’ yards, they want to find an available dock door and they want the freight and paperwork to be ready for pick-up. They don’t want to have to wait as other carriers to block their way. They also don’t want their customers to call them back 30 minutes after they left the yard to pick up an extra skid or two. In other words, trucking companies want consistency, reliability and predictability. They want to work with shippers that are efficient and keep their costs down.

...
Hits: 3022
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

Infrastructure Accessorial Charges Railway Association of Canada employee termination Transplace US Auto Sales autonomous vehicles Sales Management Freight transportation news carrier conference automation e-commerce Masters in Logistics cheap oil transportation newspaper Uber Freight rail safety consumer centric financial management Habs freight forwarders Politics freight agreements home delibery Doug Nix Transportation Buying Trends Survey Software Advice FCPC Training New Hires Transportation service broker security small parcel Tracy Matura computer Freight Shuttle System ShipMax Canadian Transportation & Logistics Grocery solutions provider trade technology US Housing Market freight transportation in 2011 truck driver peak season the future of transportation Comey Horizontal Supply Chain Collaboration Loblaw Schneider Logistics Climate Change $75000 bond Broker Spanx Social Media Freight Recession Swift Geopolitics Yield Improvement freight transportation NCC small business Derek Singleton Map-21 Montreal Canadiens Success LTL capacity shortage CRM BlueGrace Logistics freight RFP Covid-19 2014 freight volumes last mile delivery FCA Inbound Transportation Entrepreneur capacity shortages Keystone Pipeline CN Rail Rotman School of Business transportation audit intermodal freight costs buying trucking companies Leadership New York Times 2015 Economic Forecast Life Lessons Crisis management Transloading Finance and Transportation CP Rail freight marketplace home delivery USA Truck Business Strategy Twitter Coronavirus tanker cars LinkedIn IANA BNSF US Economy broker bonds routing guide Freight Management network optimization Canadian Protests NAFTA Search engine optimization economic outlook professional drivers Surety bond Muhammad Ali 360ideaspace Transportation Toronto President Obama Trump NMFC Hudsons Bay Company asset management Management future of freight industry driverless FMS dark stores Online grocery shopping Crude Oil by Rail Amazon Dedicated Trucking robotics Hockey energy efficiency Canadian freight market Value Proposition 2014 economic forecast laptop Retail Fire Phone Load Boards Freight Rates Microsoft CN David Tuttle Werner FMCSA Tariffs economy Sales Strategy Deferred Packaging TMP Worldwide CSA scores Freight contracts driver shortages Blockchain US Election Freight Carriers Association of Canada US Manufacturing Whole Foods Training Rail Conway Anti-Vax cyber security derailments Distribution freight rate increases Canada Canadian economy Emergent Strategy coaching business security Consulting Harper Davos speech Global experience Carriers University of Tennessee 3PLTL Packaging Business Development Retail transportation Canada-U.S. trade agreement YRC driver pay Success failure entrepreneur CSX Dan Goodwill FuelQuest USMCA freight audit shipping wine Transcom Fleet Leasing Education fuel surcharge 2014 freight forecast marketing MBA natural disasters freight cost savings JB Hunt UP Government online shopping freight payment computer protection Load broker truck capacity Freight Capacity ELD Right Shoring freight broker freight transportation conference bulk shipping Trucker Protest Digitization Canada U.S. trade Career Advice China Bobby Harris customer engagement freight bid Stephen Harper Trade Vision Otto selling trucking companies Donald Trump Warehousing autos Associates Doug Davis Electric Vehicles Business Transformation Strategy cars Regina Facebook Digital Freight Networks CITA Shipper Pulse Survey 2013 Economic Forecast dynamic pricing economic forecasts for 2012 General Motors Sales Cleveland Cavaliers Transport Capital Partners (TCP) freight payment freight audit supply chain management driver TransForce LCV's NS business start-up APL Adrian Gonzalez Driving for Profit truck drivers shipper-carrier collaboration Outsourcing Sales MPG Sales Training Colilers International Global Transportation Hub Omni Channel CSA Wal-Mart dimensional pricing YRCW shipper-carrier contracts shipping Justice shipper-carrier roundtable trucking company acquisitions Toronto Maple Leafs Failure Celadon Blogging hiring process ProMiles Social Media in Transportation digital freight matching computer security recession EBOR Scott Monty Driver Shortage Canadian truckers Impeachment 2012 Transportation Business Strategies. Jugaad Canada's global strategy drones Shipper Ferromex Freight Matching pipelines 3PL TMS KCS Job satisfaction Leafs RFP mentoring Dedicated Contract Carriage risk management Reshoring Business skills Rate per Mile Trucking Truckload

Blog Archives

March
February
December
October
September
August
June
May
April
March
January