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DG&A's Transportation Consulting Blog

Mercifully, the U.S. election is in its final days.  As a Canadian with friends, family, colleagues and clients in the United States, it has been distressing to watch the talk shows, debates and the steady bombardment of election ads on television. 

There is no doubt that Mitt Romney and Barrack Obama are two very intelligent, gifted people.  Their respective parties each have a vague plan to restore America to its rightful place as the leader of the free world.  Regrettably, neither party has provided a detailed substantive roadmap on how they would reduce the deficit and put Americans back to work.  The reasons for this are simple.  Every policy statement offered by one party would be parsed and ripped apart by the other party.  There is safety in being vague.  Even worse, the Republican plan, if you can really call it a plan, would likely increase the size of the U.S. deficit and be of most benefit to affluent Americans, those who are least in need of more financial perks.

Also troubling is the fact that the party leaders and pundits cannot acknowledge any value in their opponent’s program.  Each party demonizes the other with misstatements, half-truths and exaggerations that make the level of political discourse very negative and unpleasant.  America is very a polarized and divided country.  Almost every poll shows the two leaders in a virtual dead heat.  Millions of dollars are being spent in a handful of “swing” states and in a select group of counties where a small number of so-called undecided voters control the fate of the election.  After four and a half hours of debates, hundreds of hours of chatter on television and radio and millions of words in the social media, is there anyone truly “undecided” at this late stage? 

The election appears to be based on two polarized versions of the past four years.  If one believes that President Obama was faced with the worst financial crisis since the Great Depression and that he did everything possible to stimulate jobs, protect U.S. autoworkers, provide universal health care and keep America safe, you will vote for the President.  If you buy into the scenario that President Obama and the Democrats could have done a better job of stewarding the economy during this period, that employment would have been higher and gas prices lower under a Republican administration, that the social policies proposed by the Democrats are too radical, that universal health care is too rich for America and that it is time for a change, you will vote Republican.  The few undecided voters ultimately have to accept one of these distorted views of reality.  Neither one of these scenarios is an accurate reflection of the current state of America. 

Fortunately or unfortunately, I live in Canada and have to deal with our own very troubled political realities.  Sadly, we lost one of our best political leaders to illness and lost one of our major political parties to a series of inept leaders and policies.  The son of former Prime Minister Pierre Trudeau, a young and inexperienced man, may end up becoming its leader and face the very difficult task of resurrecting the fortunes of the Liberal party against a very crafty Stephen Harper, Canada’s current Prime Minister - -  a very tall order.   We have our own problems in Canada.   

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Attributes of Top Trucking Company CEOs

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During my 30 years in the transportation business, I have had the privilege of leading some great organizations.  Like everyone else, I have had my share of successes and disappointments.  During this period I have also had the opportunity to work with and study a variety of CEOs.  From experience and observation, I have identified a number of characteristics for those CEOs I would deem as top performers.  Here is my list.

     1. Passion for the Business

Top CEO’s have a passion for the business.  They are fully engaged in the operation and actively seek to improve their companies on an ongoing basis.

     2. Become personally engaged with the company’s top clients

The best CEOs get out from behind their desks to meet their clients and form strong bonds with them.  They take a keen interest in their clients’ businesses.  They also seek to establish a personal rapport with their clients that extends beyond the office.  One of the best examples of staying close to a client’s business was demonstrated to me by a trucking company CEO who, several times a year, would take a tractor-trailer on the road to pick up and deliver loads for the company’s key customers so he would have an insight into the freight and its specific loading and unloading requirements. 

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The 2012 Surface Transportation Summit held in Toronto last week attracted over 200 shippers, carriers and industry vendors.  The speakers and panelists discussed a wide ranging array of topics but one of the recurring themes was the need for shipper-carrier collaboration.

The Great Recession placed tremendous downward pressure on freight costs and freight rates.  The industry is still in a recovery mode.  Carlos Gomes, the Senior Economist from Scotiabank, the leadoff speaker at the Summit, expressed the view that the economies of North America will be in a period of slow growth for some time to come.  

On the other hand, Maximizing Profitability and Reducing Freight Costs remain the two top priorities for shippers in the 2012 Transportation Buying Trends Survey, as presented at the Summit by Lou Smyrlis, Editorial Director of the Business Information Group. The carrier executives who spoke talked about the need for freight rates to increase to maintain the viability of their businesses.  How do you reconcile these two disparate positions?

A number of shippers and carriers talked about the importance of communication and collaboration.  This collaboration is taking several forms.

Brian Springer, the VP of Transportation of Loblaw Companies discussed the value of providing a company’s core carriers with freight forecasts.  His company provides 6 month, 6 week and 24 hour forecasts of load expectations, thereby allowing his core carriers to better meet the Loblaw capacity requirements.  This approach is particularly important since a number of carriers talked about the requirement to control investments in capital, specifically tractors and trailers, until there is a quicker pace of economic improvement.

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For over two decades the University of Tennessee has been conducting its Masters in Logistics research study.  This year the study was undertaken in partnership with Con-way Inc., Ernst & Young, and Logistics Management.  The U.S. based participants accounted for an estimated $30.1 billion in domestic transportation expenditures and over $20.5 billion in international transportation.  Some 1,370 domestic and global logistics, transportation, and supply chain management professionals participated in the study.  A summary of the report appears in the current issue of Logistics Management and is the basis of this blog.

The Masters of Logistics, those companies with annual freight spend in excess of $3 billion, represented 27.8 percent of the study participants. Medium-sized firms, with between $500 million and $3 billion in annual revenue, were 20.6 percent of respondents. The majority of respondents (51.6 percent) were smaller firms with reported annual revenue less than $500 million.  The study participants came from a broad array of industries.

 The results identify the emergence of an idea advocated for over a decade, and one which is being put into place by the Masters of Logistics: Use logistics and transportation services to differentiate yourself in the marketplace. As the study suggests, being able to deliver differentiated service is not possible without a value-creating partnership between the shipper and its strategic carriers; in turn, this has created a unique balance of power between the two parties.

Overall transportation spending as a percent of sales increased from 2011 to 2012. The data showed that companies that spent more than 5 percent of sales on domestic transportation increased year-over-year, rising from 21.2 percent to 26.7 percent in 2012.  The key reason is the change in strategic direction for many companies. Following several years of intense cost cutting, particularly in transportation spending, the 2012 study results point towards companies shifting some of their focus to maximizing profitability and asset utilization. In the meantime, the percentage of respondents who reported that their primary objective is reducing costs has shrunk each of the past three years—findings that reveal that shippers again believe that you have to “spend money to make money”.

Being able to rapidly respond to changing customer requirements is becoming increasingly critical for both shippers and carriers. Today, more than ever, transportation plays a key role in helping companies attain that necessary level of responsiveness. The study indicates that some 71.6 percent of respondents are either capable or highly capable of adjusting transportation operations in response to changing conditions—and this ability to alter and adapt is greater for transportation than for logistics operations.  ‘Total Delivered Cost” is becoming the value creation metric and competitive differentiator among carriers.

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Dan’s Transportation Newspaper

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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, Kindle or Kobo.  If you are in the transportation industry, throughout the day 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.    Of course many of us have interests beyond freight transportation that may include Business, Investing, Sports, Technology, the Arts 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, I have tried to make life easier for transportation professionals.  Dan’s Transportation Newspaper is 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.  Since many of us are keen students of Business and Sports fans, the scope of the newspaper includes important stories in these areas.

The freight sections include stories from the Journal of Commerce, Transport Topics, American Shipper, Logistics Management and from other American and Canadian sources.  The Business section contains features from the Wall Street Journal, Harvard Business Review, ISM, The Economist, Report on Business and other leading publications.  The Sports segment provides articles on the NFL, NHL, MLB, NBA and the CFL.  There are 25 major news feeds that supply articles to the newspaper on a daily basis.

Busy transportation professionals can now obtain the latest news in all of these areas in one daily newspaper.  The good news is that there is no charge. 

Here is a link to the paper.

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