Logistics Management

In the wee hours of the morning I got to sit for a few hours at the Amtrak station in downtown Cleveland, Ohio last Thursday. It was quiet, a steady noise of the big wind turbine that is up by the Science center, punctuated by the passing of many freight trains on the Norfolk Southern main line (the old New York Central “Water Level Route”).

As the freight trains passed in both directions, I noticed three consistent characteristics of the trains. They were short. They had only one or two locomotives (3:1 one locomotive). Finally, the trains were mostly empty. 

It kind of struck me odd as I sat there and noticed these three “trends” in the 2 hours that I watched by my count almost 20 trains pass by. The NS route is not th...Read More

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Could you drive better with that phone…

I ride a motorcycle. I own several, but ride only one at a time. And I ride a lot. A “slow” year is one that I don’t ride more than 10,000 miles.

I ride both short distances and long distances. I have been riding for a long time, over 25 years. I have had a few accidents in that time. I raced for a while, and you will have more than one “close encounter with the asphalt” if you race. I have also had two on the roads accidents where I lost traction and had the rear of the bike “step out” from under me.

I have had a few close calls with other vehicles. Most of the encounters in recent years has been bec...Read More

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I stopped by the Post Office yesterday to pick up my mail. It was a busy place, not an empty parking space to be found. Most times there are only 4 or 5 cars in the lot. My first thought was that they were giving away postage. Then I remembered that today is tax deadline day and that everyone was rushing to get their taxes into the mail. The lines were long and people were grumbling, unhappy about the wait and unhappy about paying taxes.

I remember my accountant telling me as we reviewed my tax return that my “effective” tax rate was 21%. For every $100 that I earned the federal government got to take $21. But that is not the whole bite, which is only the income tax bite. There are all sorts of other taxes that we pay that are bites from our income AND additions ...Read More

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It is the afternoon of April 2. I woke up yesterday to the sound of Class 8 trucks on the turnpike. I went to bed with the sound of Class 8 trucks on the turnpike. Scale houses were just as busy this Tuesday as they were last Tuesday.

Yesterday was the big date of the “Shutdown”, by independent Owner / Operators. While there were reports of protests, like at the Port of Tampa, and the blockage on the New Jersey Turnpike around Newark, the nation’s transportation system moved like it normally does.

Not that the effort by the O/O’s was a wasted effort. They did get more press with this shutdown than they did with the ones in the past. They did get some pandering mention from a presidential hopeful in a speech to a union (but t...Read More

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The first wind of the "strike" came in a phone call to a friend in Southwest Missouri. I had heard about the flooding in along the Mississippi. My friend owns a several hundred acres in the Ozarks and heavy rain tends to make things kind of messy. My friend was not worried about flooding; he was more concerned about the truckers and the cost of getting livestock to market. The way fuel was going up the truckers were hiking up the rate to get cattle to market. My friend was just as concerned about the fuel costs, his tractors burn diesel. He mentioned that the last driver picking up stock for market talked about a shutdown on April Fools Day.

I was on vacation this week in Florida with my family. When I travel in other parts of the country away from home I look at all so...Read More

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A little more than a month ago I shared with you some feedback that I got from some truckload carriers about how they were looking at the market. The tea leaves said that they were looking to let some tractor attrition happen and tighten up on capacity. Tractor orders are down, partly due to the big buy’s that carriers did to beat a engine change, and partly due to some indecision to the future of emissions regs that happen next year.

In the supply / demand balance, the sure recipe for increased costs is for supply to shrink and demand to go up. I think that there is a slight whisper in the wind that says that while capacity is going to shrink or stagnate, that demand is going to go up.

Demand is going up? With the economy in a recession? No...Read More

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Questions keep coming about rates. What are rates going to do? There seems to be a consensus that the rates are going to continue to be soft, as we enter into the pre-election recession.

The question to ask; who has the pricing power, the shipper or the carrier?

And the second question to ask; what mode? 

I’m in a railroad frame of mind today. The railroad industry is chewing a 11% year on year revenue growth story. In the big 4 (CSX, BNSF, NS and UP) the lowest operating margin is 20%, the highest is 27%.  (Go North of the border and look at the CN with a whopping 36% operating margin). The roads are investing in capital intensive projects to increase track capacity, create more direct rout...Read More

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Sustainability.

This is a hot topic this year. There were multiple presentations at the RILA (Retail Industry Leaders Association) Logistics Conference last week on the topic. RILA has created the RILA Retail Sustainability Initiative this year using two supporting consulting groups.  In September RILA is presenting an Environmental Sustainability & Compliance Conference.

The ongoing drum beat of Global Warming, Carbon Footprints, and Conservation. The pictures of drowning polar bears, of the pollution haze and reports of bad air quality in China. More and more focus on hybrid cars, alternative energy, wind power, nuclear power.  No difference of what your political bent is, it looks like this inconvenient truth and dare. If you...Read More

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So the “big idea” that the “best in class” are doing are converting freight terms from FOB – Destination – Prepaid to FOB Origin – Collect. And the research firms like Aberdeen and AMR are predicting that there will be a growing focus to convert terms.

I agree that trend is growing. That is what trends do, they up, or they go down. As markets mature and bigger players form through consolidation of a market, the bigger players will provide growing momentum behind trends that change the behavior of a market. While I agree, I am not overly “excited” about the growing trend and how the “best in class” are driving the trend. It is nothing new, it is something to expect.

It is like this: ...Read More

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In a past life (about 13 years ago) I was toiling away as a consultant on a distribution network analysis and site selection project. In the initial project meetings with the client we identified the key parameters that would be used to determine the location. In this project, just as in almost all of the others that I have done, transportation costs were the primary driver.

Then I asked “Should we look at just outbound transportation costs for the location driver, or should inbound also be included?” I got some looks from some folks at the table that looked like they thought I was stupid. I also saw that one or two others at the table were confused about the question.

The top client manager held silent, looking around the table to see what his t...Read More

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Welcome Back!

Sorry that the blog was missing for the past few weeks. There were some big changes going on that created the need to be “absent” until things got settled. It is good to be back.

If you did not read my updated bio, let me fill you in on the changes. After 25+ years of working in corporate life I made the big step and started my own business.   I am excited about the change, which had been underway since last fall. Starting my own consulting company is a means to expand the scope of work, to work with a broader group of companies, and in some ways to have a way to make a greater contribution to the supply chain profession.

Part of what I did the past few weeks was reach out and contact m...Read More

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I remember reading a line about leadership that said “A good leader is not walking up to the tree in the forest and saying ‘wrong tree’, but is climbing the tree, looking out over the trees and saying ‘wrong forest’!” I keep that line in mind as I run into a leader that is counting heads, like the deck chairs on the Titanic. Sure, the details are important, but it is more important to keep a clear sight on the landmark that you have decided is your goal to move to.

I can hear some of you. “Dave, these have been nice stories and all, but when are you getting to the stuff about changing carriers and getting them to do what you want them to do?” If you are asking that question you are missing the point. It does not matter what you want to change...Read More

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