CSCMP 2014 Managing Cost and Service in a Dynamically Changing Carrier Market
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Transcript of CSCMP 2014 Managing Cost and Service in a Dynamically Changing Carrier Market
Managing Cost and Service in a Dynamically Changing Carrier Market
September 22, 2014
Agenda
• Meet the Panel
• Panel Discussion– A look back at the first half of 2014– Driver shortage– Government regulations– Preparing for the rest of 2014– The future of the industry
Meet the Panel
Ed Medlock• SVP Distribution, Logistics and Program Management for
Wendy’s QSCC– Responsible for distribution of food and paper for Wendy’s North
America, the planning/communication of new and limited time products and management of inbound freight for the Wendy’s system
– Previous experience as entrepreneur, an independent distribution consultant, and various supply chain positions at PepsiCo/Yum
– Graduate of Miami University (OH) and completed executive education coursework at Northwestern University
Meet the Panel
Dave Geyer • Senior Vice President and General Manager, Van Truckload
at Schneider– Responsible for leading all commercial, operational, and financial
aspects of the $1.3 billion North American Van Truckload division
– Previously served as SVP, Global Commercial Services, and in a variety of roles in Sales & Marketing and business unit leadership
– Received a Bachelor’s of Science degree in Industrial Technology from the University of Wisconsin, Stout and completed finance and revenue management work at The University of Chicago
Meet the Panel
David Marsh• Chief Supply Chain Officer at Hub Group
– Responsible for Unyson Logistics and Hub Group Highway
– Previously served as Chief Marketing Officer and Executive Vice President of Highway at Hub Group
– Received a Bachelor of Science degree in Marketing and Physical Distribution from Indiana University - Indianapolis
Q1: The “Snowpocalypse”
Sources: National Weather Service; Google Images
• 23 major storms were named from November 2013 – March 2014
• Capacity constraints
• Delayed transits
• Polar Vortex– Highway closures– Slowed Mainline &
Switching operations– Re-routed
interchange traffic
First half of 2014: High demand, tight capacity, increasing costs
Dry Van Truckload Freight Index Refrigerated Truckload Freight IndexYearly Comparison (2007-2011) Yearly Comparison (2007-2011)
Source: Morgan Stanley
First half of 2014: High demand, tight capacity, increasing costs
National Average Line Haul Rates and Fuel SurchargesAugust 2013-August 2014
Source: DAT Solutions
Question #1
How have the transportation challenges from the first half of the year affected your business?
Audience Discussion
Driver Shortage
• Shortage of 30,000 drivers, and growing annually
• Causes:– Government
regulations– Lifestyle– Leaving for other
industries with higher pay
– Retirements
Source: American Trucking Association
Question #2
What are your thoughts on the driver shortage and what needs to be done to bring more drivers into the industry to make up for the ones that are leaving?
Audience Discussion
Government Regulations
• Final rule on Hours of Service– Work week limited – 34 hour restart period– 3-5% reduction in effective capacity
• E-Logs– Transitional costs estimated at $320 million
• MAP-21 expires October 21, 2014– Impact on infrastructure– Temporary funding solution through May 2015
Sources: American Trucking Association; US Dept. of Transportation; APTA; FTR Transportation Intelligence Events; Google Images
Question #3
Are there areas the government should be addressing that would have immediate impacts on truck capacity, driver eligibility and rail capacity?
Audience Discussion
What the rest of the year looks like…
• Back to where we were:– Higher demand– Tighter capacity– Increased costs
Sources: CSCMP’s 25th State of Logistics Report; Google Images
Question #4
What actions are you taking to prepare for the balance of the year?
Audience Discussion
Question #5
Is there a new paradigm for the transportation industry, if so, how is your company handling it?
Source: Google Images
Audience Discussion
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