Freight | Internet Truckstop News

March 25, 2013 by admin

Avoid the Ill-Planned Innovative Rollout – Plan, Communicate, Execute

It happens repeatedly. A company adopts a new technology platform that ostensibly will ease the workload, streamline operational processes and result in overall gains in efficiency and budget spending. The intention is spot-on, but the execution is decidedly less so. A post-mortem will usually reveal errors in the execution but will miss the real culprit: planning errors. While “Garbage In-Garbage Out” (GIGO) is true for any process, it is especially apparent in any change initiative. If the initiative is not planned properly, the end result will almost always reflect that lack of planning.

I frequently observe companies that attempt technology-based change initiatives with the latest and greatest new technologies (i.e. EOBM, TMS-rollouts, etc.). Many companies believe that the provider of this technology will also ensure that their technology will successfully effectuate the intended changes. They effectively defer the planning, execution and, most importantly, control to this third party. More times than not, this recipe fails and along with it goes the change initiative. The result: Blame the technology and try to find a “better technology.” In other words, they blame the equipment and not themselves.
When my clients engage my consulting services to help effectuate change, I advise them that successful change involves a three-step process: Plan, Communicate and Execute. These are not mutually exclusive as each step comprises elements of the other two steps.
Step 1 – Plan
Since planning is the most critical step, most of my attention will be here. Successful planning means an objective discovery of the real problem driving the change. Frequently the stated and/or obvious problem is not the real problem, but rather a symptom of a bigger, underlying issue. We can better discover the real issue by channeling our inner four year old and repeatedly ask why. In Total Quality Management (TQM), the 5-Why Process is a useful tool to achieving real issue discovery. For example, if we are having trouble staying compliant with the Unsafe Driving portion of CSA:
Q1: Why are we having this trouble?
A1: We’re ticketed too often for speeding, illegal lane changes, etc.
Q2: Why are we getting ticketed so often?
A2: Because our drivers are rushing to make their deliveries
Q3: Why do they need to rush to make their deliveries?
A3: Because their schedules require them to make “x” number of daily deliveries
Q4: Why do we need to schedule so many deliveries per driver?
A4: Because otherwise we can’t meet our service commitments
Q5: Why are our service commitments so tight?
A5: Because the competitive landscape requires them.

The 5-Why Process doesn’t have to repeat 5 times and it could actually be more than 5 questions. When we hit a why, that we don’t have a clear answer for, we likely are at the real issue.
Once we have discovered the real issue, we need to properly define the scope of both the problem and its intended solution. A frequent planning occurrence is when the problem is clearly defined, but the solution slowly expands to include more than just the problem. In project management terms this is called “scope creep.” While it is admirable that a solution goes well beyond its intent, if the “well-beyond” is not planned, it could compromise the entire initiative. The signs of scope creep will usually include budget and time overruns.

Once the scope has been established, proper risk management must be employed. What are the risks involved with rolling out this new technology? If it is an EBOM rollout, will our veteran drivers have trouble with it? If they do have trouble, can we provide them the proper support? With the difficulty in finding new drivers, what is the risk with rolling out this initiative and possibly losing some veteran drivers? What is the plan if we do lose these drivers? While we cannot possibly plan for every contingency, we can plan for every category of risk. This will give us a significant head-start in successfully addressing the problem and continuing unabated.

Step 2 – Communication
There is no such thing as “over-communication.” The key is to provide honest, constant and relevant communication between the change team members, upward to senior executives and outward to those that will be affected by the change. This communication must take place in every step of the change process for the initiative to be successful. Since most of us resist change primarily because of the fear of the unknown, we must make special and concerted efforts to combat this through every form of organizational communication (i.e. face-to-face, email, video conferencing, etc.). Most importantly, if we don’t have an immediate answer, we must honestly and in a timely fashion, communicate this as well.

Step 3 – Execute
Assuming that we have planned and communicated properly, we still must execute according to plan. If we have planned properly, then the likely “hiccups” inherent in any change initiative will have been planned for and can be addressed according to plan.
The end result will not be an ill-planned innovative rollout, but a rollout that encompasses the best of change management and most importantly, accomplishes its intended goal(s).

About the author

Moe Glenner is a twenty year plus veteran of the logistics and supply chain industry, a highly volatile and frequently changing industry. Throughout this time, he has served in a variety of management and senior management roles as well as an outside consultant. As a one-time entrepreneur, Mr. Glenner founded 2 separate privately-held transportation companies.

Mr. Glenner holds a Bachelor of Arts (BA) in History from Northeastern Illinois University, a Masters of Business Administration (MBA) from Lake Forest Graduate School of Management (Lake Forest, IL), Lean Six Sigma Black Belt Certification from Villanova University (Philadelphia, PA) and is an professional general aviation pilot.

As Director – Global Logistics for Steel Warehouse Company (a $2 billion major enterprise in the steel industry), Mr. Glenner transformed both the culture and finances of the previously ailing transportation department from a cost center to a profit center, earning him the respect and accolades of colleagues and senior management.

Currently he is President of PURElogistics, LLC, a leading change management, logistics and supply chain consulting firm entirely dedicated to providing best practices in change management, logistics and supply chain strategies. He is an in-demand and frequent speaker at industry trades shows and conferences, speaking particularly on leading organizational change.

Mr. Glenner, a longtime Chicago native (and die-hard Bears/White Sox fan), currently resides in South Bend, Indiana.

***This is an article written for IT Magazine, you can view the full March/April 2013 magazine at itmagazine.truckstop.com

February 19, 2013 by admin

(Non-commercial Drivers are) On the Road Again

Cyclists often display bumper stickers or yard signs reminding motorists to “share the road.” The U.S. Department of Transportation even has a website providing information about safe road sharing.
Although these reminders are typically lighthearted, the message is serious: as road congestion increases, vehicles of all types are more likely to be involved in collisions. This unsurprising relationship between road congestion and vehicle collisions has been documented repeatedly for quite some time, and applies as aptly to large commercial trucks as to smaller vehicles.
For this reason, drivers of all vehicle classes should take note of the recent travel monitoring reports from the U.S. DOT, which show that monthly miles traveled increased year-over-year during nearly every month in 2012. During the recent recession, motorists broke a long-running trend of annual increases in vehicle miles traveled, and the trend then remained flat to decreasing for much of the past five years (Figure 1).

As the economy slowly improves – and provided gasoline prices remain fairly stable – annual vehicle miles traveled are likely to continue increasing, perhaps returning to the long-term trend. Over the next few years, the phrase “share the road” may ring truer than ever.

February 4, 2013 by admin

More on the Ebb and Flow of Truck Drivers

Last week, the U.S. Bureau of Labor Statistics reported (.pdf) that firms added 157,000 employees to their payrolls during January. As in December, the Construction and Manufacturing sectors continued to expand. But, for-hire trucking employment also grew, increasing by 5000 employees since December.

In another article, I examined transitions from and to for-hire employment in trucking. If manufacturing and construction are close substitutes for trucking, should all three of these occupations be swelling their payrolls simultaneously – especially when the overall unemployment rate remains at 7.9 percent?

Below, I update my previous analysis to incorporate time, showing the extent of employment transitions to and from trucking during each year over the last decade. Specifically, I use the previously discussed CPS-MORG employment transitions to show the ratio of new truckers to former truckers by year, rather than combined into a single measure for each sector. I present this ratio for three of trucking’s most related sectors: construction, trade (wholesale or retail), and manufacturing.

In the figure, a value of zero for a sector indicates that there is an equal flow of workers moving from that sector to employment in trucking as there is exiting for-hire trucking to that sector. A value of 0.5 indicates that there are three new truckers coming from that sector for every two former truckers departing for that sector.

Construction activity sharply declined during the recession, so it is not surprising to see an influx of construction workers into trucking towards the end of the decade. However, now that the construction sector is rapidly expanding again (.pdf), this trend could easily reverse.

The relative shift of truckers to manufacturing during recent years is also concerning, and as manufacturing activity continues to improve, this pattern is likely to continue.

Retail and wholesale trade appear to be the most balanced of the sectors, in terms of transitions to and from trucking. At this time, there is little reason to anticipate this pattern changing substantially.

About the author

Jeremy West is the Internet Truckstop research economist for the weekly Trans4Cast. Jeremy examines the broader economic picture and reports how the current economic headlines relate to the trucking industry. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. His research focuses on empirical analysis of topics in industrial organization, particularly those affecting the transportation sector. In addition to his academic training, Jeremy held several previous positions in corporate financial planning and economic forecasting. Jeremy enjoys the opportunity to offer highlights and analysis of the trucking industry.

December 19, 2012 by admin

Do I Ever Need the Christmas Spirit This Year!

***This post is originally from www.teamrunsmart.com Internet Truckstop is the official load board for Team Run Smart. Check out all their great articles on their website!

Every driver’s day has its ordinary “driving down the road” challenges and having a good attitude can you stay positive and not overreact to difficult situations. The right attitude will make a more professional, safety conscious driver. It can also help you earn more money and get more enjoyment from driving. However, the challenges the industry faces has made a positive attitude difficult to maintain.

Here are a few of the challenges that have brought on some sleepless nights for many owner-operators and company drivers:

The changes in CSA regulations
Hours of service regulations
Clean air regulations
Increased cost of equipment
Increasing diesel fuel prices
Difficulties getting loans for new equipment purchases
Less parking spaces for trucks
Rates not keeping up with costs
Detention pay (the lack of and the need for)

So how do you keep up a positive attitude when you are faced with these challenges? Maybe there is a light at the end of the tunnel, knowing carriers have been successful at improving truck efficiency and reducing costs by optimizing fuel, improving truck and trailer aerodynamics, improving power train efficiency, and inventing new tools or ways to get the job done. If carriers can come out ahead, owner-operators and company drivers can too.

Here are ways to overcome some of these challenges and keep up your Christmas cheer:

Creative Brainstorm. Around the holidays, since you might have some additional downtime, start brainstorming and thinking creatively on ways to solve your business challenges. Catch up on the latest Team Run Smart articles to get industry news and business tips, or read posts in the Team Run Smart Forums to see how other drivers are solving their issues. Call some of your friends in the industry who are successful and ask them for advice. A fun idea for the holidays that keeps me in a positive attitude, is to watch my favorite Christmas shows. Seriously, it has helped me to relax and get the creative juices flowing. Start thinking outside the box and find new ways get over those bumps in the road to start fresh for the New Year.
Choose your loads wisely. If the hours of driving each day get reduced, find a way to deliver the product on time. After all, if Santa Clause can make all his delivers to every house on the globe, surely we can find a way to make one delivery on time. The change might be to quit hauling loads for folks that make us sit at a loading dock for an unreasonable amount of time without any detention pay. Of course, this time of year, we can be held up by bad weather and road closers. You may consider a computer program or GPS system that provides weather updates and road conditions. Make sure you get the phone number for road conditions of each state and call ahead to change your route if necessary prior to being detained.
Become a business minded entrepreneur. Changes in CSA will make us all better business minded entrepreneurs. CSA regulations are changing the way owners evaluate and train their drivers. Using electronic logs to ensure drivers comply with hours-of-service laws and using smart phones and iPads to take care of daily paperwork are a just a few of these recent changes.
Remember regulations may save you money in the long run. Regulations like the new CARB Greenhouse Gas Regulation will actually save you money because it forces drivers to take advantage of some of the fuel-efficient technologies available. This is better for you and the environment. (Link to CARB article.)
Consider switching to natural gas from diesel. Even though the cost of purchasing a new truck (which would most likely be necessary) is higher, the payback is fast because natural gas is less expensive than fuel. There also exists the side benefit of burning a cleaner fuel with less bad emissions, making the clean air folks happy. The engine manufactures are already developing the powerhouses for class 8 trucks. Several companies are developing a network of refueling facilities, enabling cross-country trips. (Link to natural gas article.)
Embrace technology. The new technological advances going into the cab of a truck at a record-setting pace should be looked at as assets to enable us to do a better and safer job. This integration of networked electronics with trucks means, in theory, telematics could do everything from automatically slowing a truck down when it approaches a blind curve, to diagnosing vehicle issues remotely for preventative maintenance. With telematics, your truck will have the ability to report your driving style to your boss or insurance company. It’ll keep track of any risky maneuvers you perform and tell the police if it thinks you’re to blame for an accident. If you are a safe driver, you have nothing to worry about and it should help decrease the number of truck accidents on the road, which will help boost the industry image. Telematics will also cut down on highway traffic and decrease the amount of fuel burned by idling vehicles, which will again make the clean air folks happy. Some even envision it will decrease potential litigation costs by keeping having the facts on the truck’s every move.

Plan ahead, keep positive, and make this a holiday season full of love, happiness, and optimism. Let’s put the fun back into trucking for 2013. Merry Christmas and Happy New Year.

About the Author
Patrick Dickard -With over 25 years of experience in the transportation field, Pat Dickard brings a wealth of knowledge and application to the position of Corporate Trainer for Internet Truckstop. Transportation became a way of life as General Manager for a potato and onion packing and shipping facility in Oregon. He has experience shipping from Mexico to points throughout the US. Later years found Pat in the seat of a big rig traveling the highways of the country. By joining the staff at Internet Truckstop Pat is able to bring his experience as a business manager, business owner, truck driver, broker agent, and a shipper to the forefront to assist other folks in being more successful. Host of the ITS Business Development Webinar Series – Mr. Dickard covers subjects such as How to find new shipper clients, How to sell yourself and conduct a business meeting; Identity theft, theft of loads, fraud in the industry, How to qualify carriers faster with less risk, Insurance issues, tips and tricks of using the load board for best results, and negotiating rates.

December 17, 2012 by admin

Some (Cautiously) Optimistic News for the Economy

Last week, two key economic reports showed an improving environment for trucking. In one, the U.S. Census Bureau reported that total monthly retail sales increased by a seasonally-adjusted 0.3% during November, or 3.7% year over year. In the other, the Federal Reserve documented a full percentile increase in the monthly industrial production index for November, including a 1.1 percentile improvement in the manufacturing component.

Contrasted with the weakness seen in these measures during recent months, the November reports are especially promising for trucking. The improvement in industrial production, for instance, was the largest monthly increase in this index since December 2010. Retail sales, meanwhile, are now up nearly 25% from their recessionary bottom.

The scene is not all rosy, however. As the Fed’s report noted, “The gain in November is estimated to have largely resulted from a recovery in production for industries that had been negatively affected by Hurricane Sandy, which hit the Northeast region in late October.”

Moreover, inventories continue to grow throughout the supply chain. As shown in the figure, the growth rate of inventory accumulation has outpaced that for retail sales and production since late 2010, and the volume of business inventories steadily increases. So long as the supply chain struggles to move existing stock, we will continue to see a disconnect between new production and demand for more trucking.

Whether the November improvements in manufacturing and sales will continue is an open question. Some early answers to this question will be provided this week in the December regional production reports from the Fed Banks in New York, Philadelphia, and Kansas City.

Jeremy West
ITS Economist

December 10, 2012 by admin

NEW EOBR from uDrove!

The U.S. Congress has passed the MAP 21 Transportation bill that requires drivers to track their hours of service using electronic logging devices. All truck drivers in the U.S. and Canada who drive more than 100 air miles from their home base must maintain driver logs. These logs are monitored by federal authorities to ensure that drivers are not exceeding their time on duty or driving hours. An Electronic On Board Recorder (EOBR) fleet solution automates Hours of Service reporting. If you are required to file a record of duty status (RODS), this mandate affects you.

When the FMCSA first made its cost assumptions for requiring the use of EOBR, it used a popular device in the marketplace that a number of large fleets had adopted as a fleet management and electronic logging solution. The price for the hardware of this device was estimated at $1,675, according to the Preliminary Regulatory Impact Analysis. Smaller companies and owner operators that wanted a Fleet Management System to help reduce operating expenses, simplify business management, and improve driver habits could never justify the expense of purchasing the equipment, or committing to a long term contract. uDrove has built a solution for companies that is affordable and easy to use, minus the contracts.

While implementing an EOBR system in your fleet does require an initial investment, the long term benefits outweigh the costs incurred up front. Hours Of Service violations are virtually eliminated and Fuel/Mileage tracking is done electronically, simplifying IFTA reporting and reducing driver error. Not only does uDrove eliminate driver error but we have integrated with PC Miler to give our customers access to real-time date for a single truck, a group of trucks, or an entire fleet’s in-state and interstate mileage, with automated reports for fast and efficient compliance with state and federal tax regulations.

Using smart phone technology, drivers can also maintain their fuel and business expenses electronically. By taking a picture of fuel and expense receipts, anything a driver spends money on can be captured and kept on their web account at uDrove.com.

uDrove provides companies a simple, cost-effective solution that truckers can purchase pre-mandate, and still have it make sense financially. They came into the market well before the MAP 21 Transportation bill was proposed and passed. With the data received from the EOBR and the capabilities of the smart phone, companies realize their R.O.I. (return on investment) almost instantly.

For more information on uDrove’s EOBR please contact 888-983-7683 or visit eobr.udrove.com

December 3, 2012 by admin

Upward 2012 Q3 GDP Revision Reflects Mainly Growth in Inventories

Last Thursday, the U.S. Bureau of Economic Analysis reported that gross domestic product (GDP) grew at a 2.7% annual rate during the third quarter of 2012, which was an upward revision from the preliminarily reported annual growth rate of 2.0%. At a first glance, this appears to be good news, but as economist James Hamilton points out, a more thorough reading of the report shows that the U.S. economy is “growing a slower rate than any of us would like.”

In particular, 0.8 percentage points of the growth in GDP translated into increased inventory accumulation, and 0.7 came from higher levels of defense spending. Excluding these factors, Q3 GDP grew at a measly 1.2% annual rate. Hamilton reasonably anticipates that GDP will continue to grow at below-average rates during 2012Q4 and in the near future.

For the trucking industry, I find the increased accumulation of inventories to be the most concerning aspect of this report. As shown in the below figure, U.S. total trade inventories increased by $135b, or 9.1%, from March 2011 through September 2012 (the most recent month currently reported by the Census Bureau). Over the same time period, total retail sales actually declined by $17b, or 1.4%. Basically, retail sales have been largely flat for nearly two years, while inventories have steadily accumulated.

I have discussed the problems of increased inventory accumulation previously on this blog, and it remains troubling for trucking to have increasing production volumes be simply stashed in warehouses.

New orders for durable goods (products with a useable life of at least three years) remained flat during October (.pdf), as did new home sales (.pdf). Moreover, consumer confidence improved by only 0.6% during November.

Recently, the American Trucking Association reported that truck tonnage declined by 3.8% in October, the first year-over-year drop since November 2009. Clearly, the trucking sector is in need of a positive shock to demand. A possible source for such a shock is much less clear.

Jeremy West
Internet Truckstop Economist

November 14, 2012 by admin

Are Hurricanes Good for Trucking?

In the wake of Hurricane Sandy—as is often the case following a major natural disaster—economic pundits perform an intellectual dance, arguing whether or not a hurricane is ultimately good for the economy, especially during a recession. I want to take a narrower perspective, asking whether trucking volumes improve following a major hurricane.

The theory goes as follows. A hurricane such as Sandy destroys a large amount of physical property (e.g. houses, office buildings, shops, and infrastructure). Following the storm, the area slowly rebuilds, often renovating older and deteriorated construction along the way. This (re)construction activity requires a large volume of building materials, which—you guessed it—need to be trucked.

Although the story seems plausible, it’s ultimately an empirical question whether a hurricane leads to a significant uptick in trucking activity. To investigate this, I’ve plotted the timing of several major U.S. hurricanes along with the Transportation Services Index for Freight,reported monthly by the Bureau of Transportation Statistics since 1990. This index measures national freight activity and is seasonally-adjusted, which is key in this case because the “hurricane season” largely overlaps the annual peak trucking season. Thus, the test is to see whether hurricanes generate spikes in transportation volumes.

Eleven of the thirty most costly U.S. mainland tropical cyclones from 1900-2010 have occurred since 1990, per the National Oceanic and Atmospheric Administration (NOAA, .pdf report, Table 3a. on p. 9). To these, I’ve added Hurricane Irene (August 2011)for the figure below.

You can of course pass your own judgment on the results, but I think the data speak for themselves. To the extent that hurricanes boost trucking activity, the increase looks pretty small.

This is not to say that trucking is unaffected. In particular, some types of trailers (especially flatbeds) should realize bigger gains in volumes than others. But, I wouldn’t count on Sandy to revitalize the trucking industry.

Jeremy West
Internet Truckstop Economist

October 9, 2012 by admin

Surprise, Surprise… the Manufacturing Sector Remains Choppy

By Jeremy West, Internet Truckstop Economist

Over the past few months, it has seemed like U.S. manufacturers are treading water. Factory output isn’t dramatically sinking, as occurs whenever the economy is entering a recession. But, on the other hand, we’re not seeing any production gains worth cheering about either.

Two basic metrics are tracked for manufacturing output: the quantity of current production and the volume of orders for future production. Last Thursday, the Census Bureau reported that new orders in August for factory production fell 5.2% month-over-month and 2.5% year-over-year. This was the first year-over-year decline in new orders since November 2009.

Much of this decline resulted from a 101.8% drop in orders for commercial aircraft. As shown in the figure, orders excluding transportation equipment increased by 0.28% YOY. Regardless, the message is clear: manufacturing production is stalling.

Separately, the Institute for Supply Management reported that the Purchasing Managers’ Index (PMI) increased to 51.5 during September. This was positive news: any value above 50 indicates manufacturing growth, and the index has been below 50 since May. The next few months will show whether this represents a temporary spike in manufacturing activity or a reversal of the contraction seen in the manufacturing sector during 2012Q2.

So, the production picture isn’t entirely gloomy, and some regions of the country are performing better than others. During September, manufacturing output improved in Texas and in the Central Atlantic regions, worsened in New York and in much of the Midwest, and remained largely flat in the Philadelphia region.

Taken together, these reports offer a mixed outlook for total manufacturing—and, subsequently, trucking—with aggregate production activity trending to the downside. The next Federal Reserve Industrial Production and Manufacturing report is scheduled for October 16^th. Don’t be surprised to find that factories continued to slowly churn.