It would have been easy enough to present the 2004 McCullough Logistics Executive of the Year Award to this year's winner solely for his tireless logistics initiatives at Cincinnati-based scrap-metal brokerage David J. Joseph Co. (DJJ). But add the fact that he's engineered a turnaround at the National Industrial Transportation League (NITL) over the past year, and the decision became downright elementary.

For his vision, direction, passion, and superlative time management, NITL has chosen to present the 2004 McCullough Award to Thomas Pellington, senior director of transportation services at DJJ and chairman of NITL for the past two years. The McCullough Award, which recognizes an individual for a record of achievement and leadership in the transportation industry, is cosponsored by NITL and Logistics Management magazine. The award is named after John T. McCullough, a former chief editor of Distribution magazine, a predecessor of this publication.

To call Pellington "involved" is an understatement. When he's not riding herd on more than 300,000 shipments a year at DJJ—where he's spent the past 26 years in logistics—he's taking active roles in industry associations and committees including the Institute of Scrap Recycling Industries and the National Freight Transportation Association.

He's been engaged in leadership positions with NITL for the past 16 years and has served on the board for the past 10. Over the course of 2004, his second full year as chairman, Pellington successfully steered the development and execution of Vision 2020, the League's ambitious reorganization effort that is designed to build a more diverse community by opening membership to all parties involved in transportation.

"Tom is respected by his fellow shippers as well as carriers for being the consummate professional," says John Ficker, NITL's president and CEO. "He deserves this recognition not only for his work with the League, but also for his outstanding leadership of the transportation group at DJJ. He is always trying to find solutions to problems that provide value to all concerned."

Chief Editor Michael Levans recently met with Pellington to discuss the impact of Vision 2020 and his technology-based initiatives at DJJ as well as his advice for professionals in the rapidly evolving transportation and logistics industry.

Logistics Management: What were the biggest challenges you encountered in implementing Vision 2020?

Pellington: We really had to take Vision 2020 from 40,000 feet and bring it down to ground level, and we did that in three steps. First, we spent a lot of time developing our business plans in order to execute the change; second, we brought in John Ficker as our new president and CEO [Ficker joined NITL on September 1, 2003]; and third, we reorganized the staff in the League office, and that also had to be managed. Those three challenges were faced and met over the past year.

LM: What would you say is the overarching goal of this initiative?

Pellington: Well, it was time for the League to move out of the post-deregulatory era and move into more of a collaborative environment—one that we could foster if we opened up our traditional shipper membership to everybody involved with the supply chain. Carriers, 3PLs, ports, stevedores…these diverse groups are now full-fledged voting members of the League.

LM: You emphasize collaboration across diverse groups. How will this help NITL?

Pellington: Over the past few years, the message being put forth from inside the Beltway and up on Capitol Hill has been crystal clear: If you bring a collaborative, industry-based solution to an issue, you're not going to run into as many problems getting backing on policy initiatives. Inside the Beltway, they're looking for a turnkey solution to transportation issues, and now the League is better equipped to offer just that.

LM: Outside of critical lobbying efforts, any other direct benefits for members?

Pellington: One of the pillars that we've built Vision 2020 around is professional development. One of John Ficker's roles is to get out in the field and visit League members and their senior executives. Our grassroots strategy is to meet with existing members and promote the League's value.

I'm amazed at those visits and the feedback we receive. Since the transportation and logistics function can mean different things at each company, those meetings may be the only opportunity for some of our members to be engaged with their CEO. Transportation professionals need to seize the moment and recognize that our time in the window is now here and the sun is shining on us. With that in mind, these meetings hopefully increase our members' visibility with senior management.

LM: Let's turn the focus on your role at DJJ. What change has made the biggest impact on your logistics and transportation department?

Pellington: There's been quite an evolution in our department over my 26 years with DJJ. When I came on in '78, things were very regimented in our traffic department. We had a lot of specialized people in the group interpreting tariffs, quoting rates, and doing those tasks need in a regulated environment.

But the advent of the Staggers Act and the deregulation of the modes… saved my career. My personality is that of a trader, a "let's make a deal" guy, so that change fit me perfectly. But the skill level of the people in the traffic department also had to change, and that might be the single biggest change brought on by deregulation. We needed to inject a trader's mentality into the group.

LM: Who makes the best type of transportation/logistics employee at DJJ?

Pellington: Since we are a trading company, we have traders with mostly "Type A" personalities—they're dealmakers with little patience. To no one's surprise, they want it now, and they want it to be accurate. So we felt we needed the same caliber of person in the traffic department. We started to take traders with anywhere from two to five years of experience and began to cycle them through the traffic department and teach them the freight side of the business.

We found out that it was much easier to teach an existing DJJ trader the freight side of the business than it was to bring in an outsider who knew transportation, hoping that they would fit into our culture. This approach has been extremely successful, and today it's the path we take when we need support in the transportation department.

LM: Sounds like an ideal training ground. What would you say are the key attributes for success in today's environment?

Pellington: Today, the ideal transportation and logistics person is clearly a multi-dimensional professional. You have to be a communication expert—and that communication is just as critical internally as it is externally. You have to have project management skills and you have to be an advocate of technology. Those are the key skills that allow us to do more with less.

LM: You've seen many revolutionary changes. Which one presented the biggest challenge for you?

Pellington: Fast, up-to-the-minute information on freight rates and routing options for all modes became the most critical information we needed to provide to our internal customers, the traders. So finding the right technology to deliver this new information became the biggest challenge.

Very early on, we had an internal freight rate and routing system, one that evolved from printed books to microfiche to a hard drive. Today we're running a fully integrated, internal transportation management system that interfaces with order processing, accounts receivable, and accounts payable.

LM: How did you get from that single hard drive to an integrated solution?

Pellington: The first thing was to do some self-analysis, so we conducted an internal survey to determine what we were doing well, what we weren't doing well, and what our internal customer wanted us to deliver. The results led us to the development of an integrated freight-rating system that ties into order processing, receipt of invoices, and automated payment.

Traders play a lot of "what if" scenarios, so we developed a system that allows them to reshuffle positions, having all the freight-rate information they need to make quick decisions in short windows of time. Transportation costs are anywhere from 15 to 20 percent of the total delivered cost of scrap materials to a mill, and now they can see these costs for every possible transaction. This direct relationship between the transportation department and the traders has helped our visibility and how senior management views the transportation function.

LM: What kind of timeframe were you working within?

Pellington: Honestly, there's never an end to it when you're in a service business. We've accepted the fact that we will be ongoing investors in technology to enhance our competitive advantage. Implementing our ERP (enterprise resource planning) system was a commitment by senior management and the whole company. It's a continual work-in-process, with most of the effort taking three to five years. Now we're starting to enjoy the fruits of everyone's hard work.

LM: You've embraced technology and are beginning to reap the rewards. Is there any way to define the importance of DJJ's integrated rate and routing system?

Pellington: It has been paramount for us. I would even say that it has totally separated us from our competitors.

We happen to be a company that is very transaction-oriented, and our ERP system allows us to grow our business without adding further administrative costs or suffering headaches from wondering, "now how do we handle it?" We're processing more than 300,000 shipments through our ERP system a year and it's holding up very well.

LM: There's a capacity crunch, rates keep going up, and participants in our recent Masters of Logistics survey told us that logistics service is down. What is NITL doing to help?

Pellington: Capacity is clearly a huge issue for everyone right now. We want to assure our members that the League will continue to work with the public sector and policymakers. We will continue to support public/private initiatives like the CREATE program that will help decongest the highways around Chicago and provide the railroads with a more efficient connection through that gateway.

But most importantly, we'll keep freight in front of the policymakers. Some of our members say, "freight doesn't vote." So it's the League's role to enhance freight mobility by educating and being in front of policymakers. It is this involvement that also served as one of the purposes behind Vision 2020. Now, all parties involved in the supply chain can come together as NITL members to discuss critical matters like capacity issues, infrastructure, capital requirements, and all the things necessary to keep our transportation system the envy of the world.

LM: Any words of advice for fellow shippers?

Pellington: Get involved, be passionate, and be visible. Communicate well, especially throughout your own organization. Logistics professionals have critical roles, and a major piece of that is getting upper management's support for investments in technology and people to execute an efficient supply chain. In simple terms, our role can be defined as turning product into cash—and that's one way I describe my job to my children.