It is hard to believe that a year has gone by since I sat in on a presentation on Social Media in Transportation at the 2011 SMC3 Winter Conference.  This past week David Tuttle, VP, Digital Strategy at TMP Worldwide (who spoke last year) was back again and joined by Bobby Harris, President and CEO of BlueGrace Logistics.  In the short space of 12 months it is clear that social media have exploded in popularity. 

Here are a few statistics to reinforce this message.  There are 800 million global profiles on Facebook, Twitter has 175 million users and LinkedIn has 150 million profiles.  Facebook reaches 85% of logistics professionals on the internet – over 2.8 million people; Twitter reaches over 22% of logistics professionals on the internet; LinkedIn Reaches 19% of logistics professionals on the Internet.

Beyond the impressive user numbers, there appear to be two breakthroughs this year.  The first is in functionality.  Companies and individuals are now starting to figure out how to embed the capabilities of social media in their businesses. 

David highlighted the “follow me” feature on LinkedIn.  It allows people to stay up-to-date on employment opportunities and organizational changes at companies of interest.  Your “career page” beside your “company page” is a powerful tool to “inform active and passive candidates” of opportunities.  It can be used to “see who is following your company and send automatic updates.”   Twitter can be custom branded and used both as a tool to communicate with your followers and to follow them as well.   

David also noted that a Facebook page for your business, with photos that tie in to the website or other business activities, can play a key role.  Targeted ads can be placed on the right side of the Facebook page and can be tailored to the specific demographics and interests of your customers. Each company pays for these ads on a CPC basis.  He also spoke about the importance of scheduling your communication over a period of time to maintain the attention of your fans and followers.  Take advantage of opportunities to connect directly with your fans.

As I reach my 30^th anniversary in the freight transportation industry, I continue to be struck by the lack of innovation in this business.  While we have had some changes over the past three decades (e.g. transition from 48 to 53 foot trailers and containers, scheduled train service, the rise of international freight transportation, speed limiters, GPS tracking devices, more energy efficient engines and transportation management software systems, the industry has not changed much when compared to others.  If one looks at the retail industry and the advent of shopping over the internet, or the music industry and the advent if iTunes and iPods or the book and magazine publication industries and the advent of tablet computers, the transportation industry lags behind in innovation.

One can argue that changes in the transportation industry are constrained by existing road and rail infrastructure, government regulations and by the huge cost of changing transportation equipment standards.  The fact is that with hybrid and battery powered engines in their infancy, we still have diesel powered tractors and locomotives pulling trailers and rail cars as we have had for decades.  As a result, when a shipper or carrier tries to “break out of the box” and come up with something significantly different, we all should take a close look to see if this could be an opportunity to improve the competitiveness of North American supply chains. 

Four five decades, wood pallets have been the industry standard for moving packaged freight. Swedish retailer Ikea is replacing its wooden plates, not with plastic but with paper pallets.  Ikea uses 10 million pallets a year to ship its goods to its 287 stores in 26 countries. In January, Ikea will make the switch to paper with an expected savings of ten percent in transportation costs. 

The new corrugated cardboard design can support shipment weights of 1,650 pounds or 750 kilograms.  At two inches high, the paper pallets are one-third the height of wooden ones and at 5.5 pounds each, ninety percent lighter. The pallets will be recycled after each use.

The company will have to spend $124 million U.S. on paper and new forklifts.  Ikea expects to cut its transportation costs by $193 million U.S. a year.  This initiative is already being met with skepticism by those who believe that paper pallets may not meet the requirements for durability and may be adversely affected by weather. 

For the past decade, the Canada-U.S. model of economic integration has been deteriorating - - a victim of a border chocked with traffic, an overreaction to the 9/11 attacks, steep fees and erratic regulation.  FAST trade has become thick trade.  Canada – U.S. trade peaked in 2000 and has stagnated since.  Between 2001 and 2010, Canada’s dominant share of U.S. imports has fallen precipitously across a range of products - - from furniture and electrical equipment to printing, paper and plastics.

Market share worth billions of dollars now belongs to China.  This reduction in efficiency came during a period of expanding global trade as China in 2009 eclipsed Canada as the leading exporter to the United States. 

The new deal that was announced in December 2011 by President Obama and Prime Minister Harper addresses America’s concern with security and Canada’s need to facilitate trade.  Rather than publish a comprehensive document as was done with the North American Free Trade Agreement, this new deal basically consists of a press release and a set of good intentions.  It has been called the North American Border Security and Trade “Trust Us” Deal.  Since the United States is in the midst of an election year and since some of these initiatives will require congressional approval and funding, time will tell as to how many of these good intentions become reality.

The good news is that there seems to be a consensus that a number of these action plans will take effect over the next few years.  These are some of the specific programs that will have a direct and positive effect on trade and transportation.

Harmonize and Improve “Trusted Trader” Programs

We enter 2012 with a lot of unknowns.  Will the European debt crisis be resolved effectively and expeditiously or will it lead to another recession?  Will the American economy that is showing some signs of improvement, be able to strengthen during a U.S. election year that will likely produce more political gridlock?  Will the expected surge of foreclosed homes further depress the U.S. housing market and the economy or will the buyers of these homes create a resurgence in home renovation?  Will North American consumers drive a solid increase in the purchase of goods and services at the expense of higher debt per capita or will this be a year to pay down debt and hunker down for what is expected to be a long and slow economic recovery?  Will business leaders feel confident enough to take some of the trillions of dollars that have been parked and invest in plant, equipment and new hires or will they keep their hands in their pockets and drive the unemployment rate higher?  I wish I knew the answers to these questions since they will have a material effect on freight transportation. 

With these issues as a backdrop, here are some suggested strategies to lead your freight transportation organization in 2012.

1. Expect the Unexpected and take an “Emergent” Strategy Approach

In such a volatile climate, a “proceed with caution” approach would make good sense in 2012.  This would include everything from fleet purchases to new hires. 

Unless a clearer picture begins to appear from the shadows of 2011, it would be wise to take an “Emergent” strategy approach first suggested by Professor of Business Strategy Henry Mintzberg at McGill University in Montreal. Instead of the more commonly used deliberate approach, the emergent approach is the view that strategy emerges over time as intentions collide with, and accommodate, a changing reality. It is a more grass roots, front-line oriented approach where solving real business problems lead to new strategies.  Executives should look for new business opportunities among their front-line troops and middle managers.  They should test a number of these opportunities using an approach known as Jugaad.

As we enter the New Year, it is time to reflect on the events of the past year and try to anticipate some of the drivers of the economy in the months ahead.  In this blog, I will take a look at some of the key economic trends in 2012.  In the following blog, I will share some thoughts on the major drivers of freight transportation in the coming 12 months. 

Here are some of the economic forces shaping the economies of North America in 2012.

1. North America will avoid Recession

The United States and Canada will probably avoid a recession. The good news is that domestic risks have diminished somewhat, and growth momentum has picked up modestly. Consumers seem willing to spend and businesses are more disposed to hire—albeit cautiously. The consensus among economists is that over the next year growth in the United States and Canada will average between 1.5% and 2.0%.

2. Fundamental Changes are taking place in the Housing Market