Q&A: U.S. Xpress Enterprises John White
Logistics Management Group News Editor Jeff Berman recently spoke with John White, executive vice president, sales and marketing, for Chattanooga, Tennessee-based truckload and full-service freight transportation provider U.S. Xpress Enterprises Inc.
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Logistics Management Group News Editor Jeff Berman recently spoke with John White, executive vice president, sales and marketing, for Chattanooga, Tennessee-based truckload and full-service freight transportation provider U.S. Xpress Enterprises Inc. about various aspects of trucking, including regulations, rates, and inventory management, among others. A transcript of their conversation is below.
Logistics Management (LM): As a large truckload carrier, what are some of the things keeping you up at night?
John White: If the Hours-of-Service (HOS) changes do end up going into effect in July, that is really what is—and will be—keeping us and the rest of the industry up most. Our concerns regarding HOS essentially echo what ATRI found in its October survey [which said that trucking executives are very concerned about changes to the 34-hour restart provision, the addition of a mandatory rest break after 8 hours of driving, and threats to reduce total drive time will impact industry operations]. As for CSA, while we support the underlying tenets of the program and what it is designed to do—create a safer environment for the motoring public out there. Our challenge with it today is how it is being applied. We really do hope to have some resolution about HOS before the July deadline and implementation, as there are some significant long-term impacts for us if it goes through. What is more of a concern than the 34-hour re-start component of HOS is the 1 a.m.-5 a.m. rest requirement and how we can effectively coordinate every one of our drivers starting their restart at the appropriate time. The real challenge is the restart is 34 hours and it could be as much as 49 or 50 hours, depending on when a driver finishes his day and if freight is available. Another issue is if the driver has worked his seven days and now cannot start his 34-hour restart until 1 a.m.
LM: Who is impacted the most by these things?
White: Most private fleets are Monday-Friday jobs with drivers home on weekends that are doing their restarts from home so it does not really affect them as much. For U.S. Xpress who runs a large irregular route, over-the-road operation with solo drivers out ten-to-12 days before they are home and need to do a restart every other week on the road, there are more challenges.
LM: Let’s shift gears to the truck driver shortage. How are you approaching it?
White: We are committed to ourselves and the industry to find an avenue for people that want to get a CDL and become professional truck drivers. And we run our own large training program where we will take graduates from schools and put them into a finishing program. The biggest challenge with this issue today is not so much driver supply as it is driver retention. For those drivers now retiring, it was viewed as an honorable career path for the Baby Boomer generation, whereas now most of us that are parents are not telling our kids to be truck drivers. And the minimum age requirement is 21, an age when many young adults have already made choices about careers.
LM: With Peak Season in recent years not materializing in a true sense, how do you approach it as such a large carrier?
White: We think Peak Season in spring is really the ‘new’ fall, especially in the last few years, typically in April and May. In 2011 and 2012, we saw more of an April-May pickup than we did coming into the traditional retail peak in the second half of the year. Other than some isolated spikes in demand out of California there really has not been what I grew up knowing in this business as the traditional build for the holiday season.
LM: It seems that shippers are becoming more inventory-cautious. Is that what you are seeing?
White: We are certainly seeing much better shipper discipline when it comes to managing and controlling inventories. And when you see inventories get to such a low point, you almost assume there has to be some sort of replenishment coming. But interestingly some of the comments I get from retailers are along the lines of them thinking they can pull more inventory down and take more volume out of the system and improve the supply chain and still be in stock and satisfy customer needs.
LM: Are there any related trends along these lines?
White: Many retail shippers are talking about multi-channel approaches. They are all trying to figure out what is the new structure or infrastructure to respond to the consumer dynamic of ‘wanting an item and wanting it now.’” Many are trying to go to same-day delivery or ordering an item online and picking it up in a store.
LM: Has the emergence of e-commerce changed how you do business with shippers?
White: It is impacting the amount of business available from shippers, as they are having to change their supply chains and adapt. It is not always a full truckload into a DC or out to a store. Shippers are creating multiple distribution channels to respond and really try to compete with Amazon.
LM: What is your take on the spot market and available truckload capacity at the moment?
White: We participate in the spot market to some degree. It is not at robust as it was a year ago, because of a combination of capacity and economic-driven demand. There was a bit of a peak with Hurricane Sandy and capacity heading to the Northeast, driven by recovery efforts that boosted spot market activity. In general, capacity is largely at equilibrium and slightly in favor of the shipper right now in terms of the supply/demand dynamic?
LM: And rates?
White: We are doing well on price for the most part. We have seen rates come up although not as much as a year ago. Things are a little muted at the moment. Analysts are right in stating that the current rate outlook into early 2013 looks flat.
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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