Hurricane Relief Pressure-Tests the ‘New Normal’ Supply Chain
Freight Waves, Corrie White
Historically, hurricane season presents abundant and often lucrative freight-hauling opportunities. For weeks or months after a storm passes, affected cities need rebuilding materials, temporary housing units, nonperishable foods, water and generators. Trucking companies and owner-operators can bid on Federal Emergency Management Agency (FEMA) contracts as early as a week or two before a hurricane makes landfall.
But COVID-19’s supply chain disruptions, like restaurant and meat plant closures, led to a reduction of the fleets, some of which couldn’t pivot quickly enough. With a reduction of capacity and general disruptions caused by COVID-19, Senior Vice President of Global Marketing at PowerFleet Craig Montgomery is concerned about the exacerbated strain on our supply chain during events like hurricane recovery. The SONAR chart below shows the climbing Outbound Tender Reject Index (OTRI), which correlates with tightening capacity in the United States.
“It’s hard enough when communications and cellular networks are knocked down, when roads are blocked and warehouses are destroyed,” Montgomery said. “And when you’re trying to bring loads into a COVID-19-affected world, it’s like a Rubik’s cube with 14 sides. It’s just that much harder on our fleets to deal with COVID issues and a natural disaster.”
Over the past six months, the industry has proved its resilience, arriving at a new normal. The beef and poultry plants have come back online. Most stores’ shelves are stocked with toilet paper. But while the industry has achieved a kind of stability, Montgomery wonders about the impact on a still fragile system in the face of hurricanes.
For instance, last week, Tropical Storm Beta delivered an onslaught of rain to the Gulf Coast, making it the 23rd named storm of 2020. While meteorologists from Colorado State University’s Tropical Meteorology Project predicted 2020 to be an active year for hurricanes, they initially predicted only 16 named storms back in April. Hurricane seasons typically run from June to the end of November, but August and September tend to see the highest concentration of storms.
“No Atlantic season on record has had this many named storms through late September, and they’ve definitely caused transportation troubles,” said Nick Austin, director of weather analytics and senior meteorologist at FreightWaves. “Hurricane Laura, a major Category 4 storm with winds of 150 mph at landfall, forced a shutdown of Interstate 10 from eastern Texas into Louisiana in late August. Hurricane Sally, just a couple of weeks later, shut down I-10 from Alabama into western Florida. The Pensacola Bay Bridge remains closed due to damage from Sally. Worse yet, the hurricane season doesn’t officially end until Nov. 30, so more storms are possible. The Gulf of Mexico and tropical Atlantic waters are still quite warm.”
When Hurricane Laura hit the Gulf Coast, the trucking market’s tight capacity coupled with this region’s lack of logistics activity meant relief efforts had to be sourced from Dallas, Shreveport, Louisiana, and other cities with established logistics networks. The tight market also means that many truckers may choose to serve their contracted or spot market loads as opposed to bidding on FEMA contracts.
“It will take a long time to clean up from this,” said Kathy Fulton, executive director of the American Logistics Aid Network (ALAN), the country’s most notable humanitarian logistics organization.
Scalable Growth Starts with the Back Office
Freight Waves, Jack Glenn
ARTICLE BROUGHT TO YOU BY HUBTRAN!!
The transportation and logistics landscape of today looks a lot different than it did just a few short years ago. An industry once overflowing with paperwork, manual data-logging and pencil-pushing has come to embrace new technologies to track and move freight as well as streamline manual processes.
A top priority for brokers, carriers and logistics providers alike has become automating back-office processes to simplify invoicing and other freight management tasks. Early adopters have gained a competitive advantage over those still clinging to the old ways of doing business.
Back-office automation is an attainable goal for companies of all sizes thanks to innovative platforms such as HubTran. Through the utilization of artificial intelligence and machine learning, the cloud-based Software-as-a-Service-based (SaaS) platform has eliminated numerous tedious manual processes for transportation companies, enabling users to instead dedicate more time and resources toward enabling users to instead dedicate more time and resources toward activities that will grow their business such as carrier onboarding.
Every transportation company will experience growing pains at some point; however, the feeling is multiplied when a company’s outdated technological infrastructure inhibits it from expanding to meet demand. This was the case for HubTran customer Integrity Express Logistics (IEL), as it realized it was growing beyond what its systems were capable of handling.
The Cincinnati-based third-party logistics (3PL) service provider contracted with around 35,000 unique carriers in 2019, handling roughly 4,000 loads per week. As it neared the 500-employee mark, IEL was unsure if its cradle-to-grave business model could keep up with the fast-growing pace of the company.
IEL Director of Operations Eric Arling detailed the specifics that led the full-truckload brokerage to consider an automation solution, “Reviewing our back office, we concluded that too many of our manual-touch processes were inefficient and holding us back from scaling effectively to reach our $1 billion annual sales goal. It came down to a business decision: Are our systems scalable for us to continue to grow?”
IEL leaders understood that greater success would be achieved if the workforce operated as service-oriented problem-solvers rather than data crunchers. Arling credited the company for immediately beginning its search for an automation solution — a search that led IEL to HubTran.
“With the current capacity crunch in addition to overall market uncertainty, we see tremendous value in HubTran for the opportunity to repurpose some of our internal roles to strengthen our carrier and customer relationships,” Arling said. “Using HubTran for every load, we knew that we’d immediately gain greater efficiency and reap the benefits regarding the elimination of human error as well as improving our ability to bill customers and carriers accurately and without payment gaps.”
HubTran’s cloud-based platform automatically processes invoices, bills customers, manages documents and factors funds. The platform gains an increased understanding of your system with each unique document it processes using optical character recognition (OCR), machine learning and artificial intelligence (AI).
With HubTran, brokers, 3PLs, forwarders, and factors, can reduce back-office work by up to 80% and process paperwork four times faster than what manual processes can achieve at an error-free rate of over 99%, according to the company.
What also makes HubTran an attractive back-office automation solution is that it’s pre-integrated with major transportation management systems (TMS) and factoring applications. Additionally, HubTran also integrates with the customer’s proprietary systems. For example, IEL integrated HubTran with its proprietary TMS in August and has already realized the benefits of faster billing, among other efficiencies. Arling said, “Anytime you integrate with a third party, there’s a lot of risks involved, but HubTran has been a wonderful partner. The integration was a collaborative effort.”
Confidence is key to attracting bigger customers. As HubTran Vice President Joshua Asbury explained, “3PLs never walk away from big deals. Large shippers will thoroughly make sure the 3PLs they work withs have the operational capabilities to handle the increase in loads. It’s crucial for 3PLs to know both the capabilities and limits of their current operations and be able to prove they have the ability to absorb the additional workload required to support them. As IEL has proven, an automated back office is a competitive advantage for 3PLs and brokers.“
In today’s fast-paced freight environment, shippers have very little patience for brokerages with back-office glitches; they expect your processes to be seamless. Arling suggested that it’s quite easy for a profitable customer to become unprofitable if you handle volumes inefficiently.
“Shippers expect more from their brokers now than they ever have. They want to see brokers articulate efficiencies that they can provide them as well,” Arling said. “With HubTran, our customers can see that we’re capable of scaling a greater amount of volume for their business without needing both parties to add headcount; that’s a value that we weren’t able to provide shippers with before.”
Asbury understands that some in the industry consider it a risk to even think about disrupting their back-office practices — especially those workforces that have achieved moderate success by operating the same way for decades. However, he encourages the entire freight and logistics sector to consider the potential for even greater success by embracing the disruption that accompanies freight-tech innovations.
“Our forward-thinking customers like IEL understand the value in automating the back office,” Asbury said. “They realize that it can add to their bottom line, strengthen customer relationships, and overall enable them to grow the business.”
Unveiling the 2020 Top 100 Private Carriers List
www.ttnews.com, Seth Clevenger
The global coronavirus pandemic has tested the mettle of the largest private carriers in North America.
This historic public health crisis has disrupted supply chains and upended freight projections, forcing fleets to adapt to rapidly changing market conditions.
But through all of these financial and logistical challenges, the companies on this year’s Transport Topics Top 100 Private Carriers list have been finding ways to navigate this turbulent time while ensuring that shipments continue to reach their destinations.
The implications of the pandemic have varied from one sector of the economy to the next.
Grocery retailers saw a surge in demand, especially during the early days of the outbreak when consumers rushed to stores to stock up on necessities.
In contrast, some food distributors saw business levels drop precipitously as restaurants closed their doors or converted to takeout service only.
The energy sector also has been hit hard, with the pandemic-induced slowdown combining with already depressed oil prices.
Meanwhile, many retailers experience a spike in e-commerce activity as consumers ordered more goods online from the safety of their homes rather than visiting brick-and-mortar locations. People who had been slow to embrace e-commerce became more willing to purchase a broader range of products online, including groceries and large and bulky items such as appliances. This expansion of e-commerce likely will remain even after the COVID-19 outbreak has subsided.
And across all industry sectors, private fleets implemented new business processes and safety protocols to reduce physical contact and help protect employees and customers from the virus.
Amid the disruption wrought by the pandemic, some private carriers expanded their fleets while others shed equipment.
The Top 100 list, which ranks private carriers on the basis of total tractors in operation, reflects several interesting changes this year.
At the top of the rankings, Walmart Inc. climbed back into the top 3, right behind No. 1 PepsiCo Inc. and No. 2 Sysco.
Checking in at No. 10 is a new name on the list, NexTier Oilfield Solutions. The Houston-based oil field services company formed in October 2019 through the merger of C&J Energy Services and Keane Group. In March, the combined company went on to sell its well services business unit to Basic Energy Services, which ranks No. 13 on the Top 100.
Several private carriers made noteworthy moves up the rankings.
Equipment rental firm Sunbelt Rentals, based in Fort Mill, S.C., rose to No. 16, from No. 24 a year ago, with its fleet of 1,589 tractors.
Univar Solutions, a chemical and ingredient distributor, also made a significant move up the list. The Downers Grove, Ill.-based company climbed to No. 21, from No. 36 last year, with a fleet of 1,372 heavy-duty trucks.
And Medline Inc., a provider of medical supplies based in Northfield, Ill., jumped to No. 49, from No. 85 a year ago, with its fleet of 791 tractors.
Newcomers to the Top 100 this year include No. 84 Stallion Oilfield Services, a Houston-based provider of auxiliary rentals and services for oil and gas operations. The company’s fleet includes 502 tractors.
Warehouse store operator Costco Wholesale Corp. enters the rankings at No. 87. The Issaquah, Wash.-based company operates 484 tractors.
Also joining the Top 100 this year are arts-and-crafts store chain Hobby Lobby Stores Inc., which ranks No. 98 with 415 tractors, and auto parts provider O’Reilly Auto Enterprises, which checks in at No. 99 with 413 heavy-duty trucks.
Another newcomer, No. 100 Dunkin’ Brands Group, rounds out the list with its fleet of 397 tractors, which help supply franchise locations serving coffee, baked goods and ice cream.
Carriers Get Extension to Rid Systems of Chinese Technologies
www.ttnews.com, Eric Miller
The Director of National Intelligence has extended the deadline to Sept. 30 for a requirement that motor carriers that do business with the federal government locate and purge telecommunications equipment manufactured by five Chinese companies that may be in use in their operations.
The waiver was granted in response to a request by Ellen Lord, the Department of Defense’s under secretary for acquisition and sustainment, who had argued that a waiver to extend the deadline is in the country’s national security interest.
The companies believed to be potential hackers into U.S. intelligence and defense agencies’ information systems are Huawei, ZTE Corp., Hytera, Hikvision and Dahua Technology. The provision also covers any subsidiary or affiliate of the entities, but experts warn that the technologies targeted could be difficult to locate in complex modern corporate systems.
The requirement, included in the 2019 Defense Authorization Act, requires federal government contractors to rid their companies of prohibited components manufactured by the five companies.
“I am granting a temporary waiver under section 889(d)(2) until 30 September 2020 to allow the Department of Defense to continue its contracting activities that would otherwise be prohibited under section 889(a)(l)(B) and to provide additional information to the Office of the Director of National Intelligence to further assess your waiver request,” John Ratcliffe, director of national intelligence, wrote in an Aug. 12 memo to Lord.
The original deadline was Aug. 13.
“Section 889 [of the law] seeks to prevent certain Chinese technology companies from accessing sensitive and classified information by tapping into devices they designed,” said Bill Wanamaker, executive director of American Trucking Associations’ Government Freight Conference. “All federal contractors, including all modes of freight carriers, have electronic systems that facilitate business processes and operate their equipment.”
Several trade organizations, including the U.S. Chamber of Commerce and ATA, have for several months been on a letter-writing campaign and engaging congressional staff to extend the compliance date by at least one year.
The law pressures federal contractors of every kind to make a determination on compliance by Sept. 30, or risk noncompliance and possible debarment as a contractor if they cannot ensure the components are not present in their systems, Wanamaker said.
Freight logistics services, including trucking, rely heavily on vast information technology systems, according to an ATA analysis.
“This corporate IT inventory is used to order freight, schedule service, provide in-transit visibility to customers, provide proof of delivery, invoice shippers, support electronic shipping documents and pay by third-party payment systems,” the analysis said. “Motor carriers also use typical office computers, networks, internet service providers, routers, portable computers and scanners, cellphones, security systems, and video monitoring of terminals and warehouses.”
ATA’s analysis also noted that cameras are used for 360-degree video recording around trucks to replace rearview mirrors and that “electronic monitoring of engines, transmissions, braking systems, tire pressure, speed, sudden braking, driver fatigue — all these things are a part of modern commercial motor vehicles.”
The newer the truck, the more IT systems are on the truck for safety, equipment management, tracking and maintenance monitoring, according to the analysis.
Tonnage Decline 8.5% Year-Over-Year in July, ATA Index Shows
www.ttnews, Dan Ronan
Truck tonnage in July declined a seasonally adjusted 8.3% when compared with year-ago levels, and on a monthly basis was down 5.1% from June, American Trucking Associations reported Aug. 18.
The 8.3% drop is the fourth consecutive year-over-year monthly decline.
In July, the ATA For-Hire Truck Tonnage Index equaled 109.6, compared with June’s 115.5. (In calculating the index, 100 equals the year 2015.)
“After a very strong June, for-hire contract freight tonnage, which dominates ATA’s index, slipped in July for a couple of reasons,” ATA Chief Economist Bob Costello said. “It is likely that tonnage was down because many fleets didn’t have the capacity to take advantage of stronger retail freight volumes. Therefore, much of that overflow freight moved to the spot market, which did increase in July.”
Costello said another factor in the decline in tonnage is that the industry is contracting slightly, and there is less available excess capacity.
“Other ATA data shows that for-hire truckload fleets are operating 3% fewer trucks this summer than a year earlier, so it can be difficult to take on a significant amount of additional freight,” he said. “Also, while retail volumes have snapped back strongly, manufacturing output and international trade freight is lagging well behind.”
Confirming Costello’s statement on spot market rates, the DAT Truckload Volume Index released Aug. 13 showed the surge continues across all equipment types. DAT Freight and Analytics operates the industry’s largest online marketplace for spot truckload freight.
Trucking serves as a barometer of the U.S. economy, representing 72.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.84 billion tons of freight in 2019. Motor carriers collected $791.7 billion, or 80.4% of the total revenue earned by all transport modes.
ATA said that despite July’s decrease, its index was 3.3% above May’s recent low. June’s index was revised slightly, up 8.9% over May from the 8.7% reported July 21.
Meanwhile, the latest Trucking Conditions Index, released July 31 from FTR Intelligence, which tracked the state of the trucking industry through June 30, reached 11.35. That figure is the highest in a decade, and it comes just two months after a record-low April reading of minus 28.66.
Avery Vise, FTR vice president for trucking, told Transport Topics he is not surprised by the volatility in the industry because of the economic damage caused by the COVID-19 pandemic.
“There have been some significant movements over the past four months or so and likely will be for several months to come,” Vise said. “However, it is unclear how long the positive factors affecting the June reading — a combination of higher utilization and strong growth in freight demand and rates — will remain in place.”
The latest FTR report and one from the Cass Freight Index Report for the same period confirmed the deep hole the U.S. economy slid into during the second quarter.
Gross domestic product shrank a record-setting 32.9% in April, May and June, tracking closely with economists’ expectations of how the COVID-19 outbreak impacted the economy during the early months of the pandemic.
The Cass Index, specifically for shipments, registered 0.971 — down 17.8% year-over-year. However, month-over-month, the index climbed 3.5% when compared with May.
“The Cass Freight Index showed sequential volume improvement again in June, although freight volumes remain well below year-ago levels and also below pre-pandemic levels. We were thinking the June rebound would have been stronger, based on what we’re hearing,” the report said. “In our view, U.S. freight volumes (the amount of ‘stuff’ moving around the country) will not return to 2019 levels until 2021 at the earliest. Given the most recent Cass readings, there is still a wide gap to bridge.”
The DAT Truckload Volume Index, a measure of dry van, refrigerated and flatbed loads moved by truckload carriers, rose 2.1% from June and was 3.7% higher than July 2019.
Van, reefer and flatbed volumes and rates ended up positive month-over-month.
In its latest report, DAT said spot rates have steadily increased since May for van, flatbed and reefer. Van rates are up from $1.60 per mile to $2.19 a mile in August. Flatbed rates increased from $1.90 to $2.27 a mile, and reefer rates climbed from $2.03 to $2.42 a mile.
DAT says capacity is loosening, but rates still were moving upward Aug. 10-16.
“Nationally, capacity loosened last week, as evidenced by the lower load-to-truck ratios on the DAT One load board network last week,” the analysis said. “Spot rates remain elevated, though, with a majority of high-traffic lanes seeing higher prices for truckload freight when compared with the previous week.”
CVSA’S International Roadcheck Rescheduled for Sept. 9-11
www.ttnews.com, Eric Miller
The postponed International Roadcheck event has been rescheduled for Sept. 9-11, the Commercial Vehicle Safety Alliance announced Aug. 10.
CVSA officials postponed the event in March due to the COVID-19 pandemic.
“Although the coronavirus pandemic understandably shifted priorities and personnel during the spring, the commercial motor vehicle law enforcement community has reasserted its focus on the roadside inspection program and enforcement duties,” CVSA President Sgt. John Samis with the Delaware State Police said in a statement. “Jurisdictions are nearly back to their pre-pandemic capacity with a strengthened concentration on identifying and removing unfit vehicles and drivers from our roadways using federal safety standards and the out-of-service criteria.”
International Roadcheck is a 72-hour stepped-up visibility inspection and enforcement initiative by CVSA-certified inspectors in Canada, Mexico and the U.S., conducting motor vehicle and driver inspections at weigh or inspection stations, designated fixed locations or as part of roving mobile patrols.
During the three-day time frame, law enforcement personnel inspect commercial motor vehicles for compliance with federal regulations and utilize the North American Standard Out-of-Service Criteria to identify critical inspection item violations.
Each year, International Roadcheck places special emphasis on a category of violations. This year’s focus is on the driver requirements component of a roadside inspection. Of the approximately 3.36 million inspections during 2019, 952,938 driver violations were discovered, of which 199,722 were out-of-service conditions.
For the driver portion of an inspection, the inspector will collect and verify the driver’s documents, identify the motor carrier, examine the driver’s license, check record of duty status and review periodic inspection reports. If applicable, the inspector will check the Medical Examiner’s Certificate, Skill Performance Evaluation Certificate and the driver’s daily vehicle inspection report. Inspectors also will check drivers for seat belt usage, illness, fatigue, and apparent alcohol or drug possession or impairment.
Drivers found to be operating without the proper driver credentials, in possession of or under the influence of drugs or alcohol, operating while ill, fatigued or showing other signs of impairment, or in violation of hours-of-service rules may be placed out of service.
The vehicle portion of an inspection includes checking critical vehicle inspection items such as brake systems, cargo securement, coupling devices, drive-line/drive-shaft components, driver’s seat (missing), exhaust systems, frames, fuel systems, lighting devices, steering mechanisms, suspensions, tires, van and open-top trailer bodies, wheels, rims and hubs, and windshield wipers.
If an inspector identifies critical inspection item violations, the inspector will place the vehicle out of service, which will require it to be restricted from traveling until the violations are corrected.
In the U.S., commercial motor vehicle inspections are conducted to check for vehicle and driver compliance with the Federal Motor Carrier Safety Regulations. In Canada, the standards are based on the National Safety Code and various provincial/territorial regulations, while in Mexico, Normas Oficiales Mexicanas are the commercial motor vehicle regulations and standards.
During International Roadcheck, inspectors primarily conduct the North American Standard Level I Inspection, a 37-step procedure that includes two main inspection categories and an examination of driver operating requirements and vehicle mechanical fitness. A third category, hazardous materials/dangerous goods, may also be part of a Level I Inspection.
International Roadcheck is a CVSA program with participation by the Federal Motor Carrier Safety Administration, the Canadian Council of Motor Transport Administrators, Transport Canada, and the Secretaríade Comunicaciones y Transportes, or Ministry of Communications and Transportation of Mexico.
DOD Re-Awards $7.2 Billion Household Goods Moving Contract
Transport Topics, Eric Miller
The Department of Defense has re-awarded a $7.2 billion household goods moving contract just two weeks after it had pledged to take corrective action on the contested award by two competitors.
In a statement, the military said the re-award for the potential $20 billion contract came after a protest had alleged that the award winner, American Roll-on Roll-off Carrier Group (ARC) of Parsippany, N.J., had failed to disclose that its parent corporation pleaded guilty to fraud and anti-trust violations, and that three of its owner’s executives were convicted of price fixing.
“The Department of Justice confirmed ARC and its parent company, Wallenius Wilhelmsen ASA, were not part of the 2016 conviction for Sherman Anti-Trust violations,” Transcom said in a statement. “A separate company with a similar name, Wallenius Wilhelmsen Logistics AS, was convicted.”
Transcom oversees moves for members of all military services and DOD civilians.
The sweeping contract is intended to address military families’ long-standing problems with delays and damaged goods during the estimated 400,000 annual moves to assignments around the globe, Transcom officials said.
ARC originally was awarded the contract April 30.
Transcom said that after extensive independent review, it determined that the corporate misconduct was not affiliated with ARC nor its parent company.
In 2016, Wallenius Wilhelmsen Logistics AS pleaded guilty to Sherman Anti-Trust violations and paid more than $98 million in fines after three company executives were indicted. Wallenius Wilhelmsen Logistics AS has no ownership or control over ARC and is a separate corporate entity, the military said.
“During its proposal submission, ARC erroneously listed WWLAS, instead of WWASA, as corporate owner in the pull-down menus of the Government’s System of Award Management,” Transcom said. “It appeared to the protester that ARC failed to meet Federal Acquisition Regulation disclosure requirements when, in actuality, the true parent company was misidentified.”
Minor errors are not grounds for disqualification, Transcom said. “Since neither ARC, nor its parent company WWASA, have a record of misconduct, Transcom substantiated its original award to ARC because its proposal provided the best service for the best value for service members, Department of Defense civilians and their families.”
“Team ARC remains committed to our proposal to provide exceptional customer service to Transcom and the service members,” Eric Ebeling, CEO of ARC, said in a statement. “We look forward to getting started on GHC.”
However, the contract will be held up for up to 100 days as the U.S. Government Accountability Office investigates protests of the re-award by HomeSafe Alliance and Connected Global Solutions.
“U.S. Transcom’s decision to re-award the Global Household Goods Contract in light of the serious issues raised is extremely disappointing,” HomeSafe Alliance CEO Al Thompson said. “We are confident GAO will agree that errors have been made on a major contract that touches every member of the armed forces and their families.”
He added, “HomeSafe Alliance filed an initial protest to the GAO following Transcom’s original decision on April 30. The protest included nine points challenging numerous issues with the winning bid, including a flawed technical evaluation process and extremely misleading contract discussions between bidders and Transcom.”
A message seeking comment from Connected Global Solutions was not returned at press time.
Transcom’s global household goods contract is a major aspect of a broader DOD reform plan to improve the relocation process for DOD families, and integrates functions currently performed by hundreds of commercial entities.
“It will improve access to, and management of, quality capacity to meet peak demand and enable the department to affix the accountability and responsibility lacking in today’s program,” DOD said.
Consumer Brands Spearheads Contactless Delivery Task Force
www.ttnews.com, Connor Wolf
A task force was launched that brings together manufacturers, supply chain partners and retailers to develop standards for reducing human contact when moving freight from Class 8 vehicles to last-mile drop-offs.
The Consumer Brands Association on June 29 launched the Contactless Delivery Task Force to create protocols to ensure delivery processes are safer and more efficient.
“Everyone is very concerned about how do we keep our employees safe, how do we keep things moving efficiently in a high demand environment,” Tom Madrecki, vice president of supply chains at the Consumer Brands Association, told Transport Topics on July 7. “But that issue of safety continues to percolate and continues to be very relevant.”
The task force will specifically study and create contactless pickup and delivery protocols with the aim of being more efficient and reducing employee risk. It has been growing since its launch and now includes 25 consumer packaged goods companies and retailers.
“We’re really looking at how do we reduce human interaction so that we can continue to facilitate the movement of goods and services,” Madrecki said. “A lot of companies raised the need for contactless deliveries mechanisms or tools.”
The task force was born from the impact and lessons of the coronavirus. The ongoing pandemic challenged consumer packaged goods companies to keep their supply chains moving efficiently while reducing contact to ensure employee safety.
Land O’Lakes is one such company and is now a partner on the task force.
“While a major disruptor, COVID-19 now gives us the opportunity to partner across our industry and develop the processes and procedures that will define the consumer packaged goods space for years to come,” Yone Dewberry, senior vice president and chief supply chain officer at Land O’Lakes, said in a statement. “Health, safety and efficiency have always been our priorities, but now we’re forced to look for new and innovative ways of incorporating technology even further.”
The coronavirus has been driving the need to limit in-person interactions beyond the task force. DHL Express, for instance, has been working to balance social distancing and meeting the needs of customers.
“Technology has played a key role in maintaining our business and implementing processes that allow for social distancing and minimize person-to-person contact,” Pamela Duque, communications manager at DHL, told TT. “We’re also holding virtual meetings and webinars with our customers and employees, and have implemented remote payment via our On Demand Delivery platform, through which customers can also choose their delivery options. Until further notice, we have waived the requirement for a recipient signature when delivering parcels.”
DHL Supply Chain ranks No. 3 on the Transport Topics Top 50 list of the largest logistics companies in North America.
The task force has looked at digitization as a path forward. Partner companies found electronic delivery verification was a natural solution to keeping their supply chains moving efficiently. The task force is first looking at electronic bills of lading (eBOL) processes but plans to branch out.
“We specifically looked at that as the first bite of the apple when it comes to contactless deliveries and how do we remove paperwork and the physical process from deliveries,” Madrecki said. “But there are clearly other applications.”
Madrecki noted the standards the task force is looking at involve the physical side of the delivery process as well as the more technical side such as information and data sharing. To that end, the task force also includes technology companies such as Accenture, Coyote Logistics and Vector.
“As shippers continue to build more efficient and resilient supply chains, the eBOL fills in a gap that many clients have been asking for,” Henry Blum, senior manager at Accenture, said in a statement. “The touchless BOL will result in entry error reduction, increased visibility to OS&Ds, drive lower transportation costs and benefit their green footprint.”
Madrecki noted the underlining mechanisms that would enable a company to have an eBOL solution are very similar to the mechanisms that would allow them to have other solutions in different types of environments. It’s all an electronic transfer of information.
“If we can work in a concerted way to provide a workable standard for that, then there are clearly other applications to other parts of the delivery ecosystem,” Madrecki said. “It can definitely open up into a lot of different directions.”
Infrastructure Stakeholders Press Senators for Testing, PPE Priority
www.ttnews.com, Eugene Mulero
A coalition that includes freight stakeholders and myriad transportation interests is calling on senators to advance legislation that would prioritize testing for critical infrastructure workers amid the COVID-19 pandemic.
American Trucking Associations is among the groups pushing for approval of the measure, which would direct federal authorities to also assist state agencies in facilitating access to personal protective equipment for certain infrastructure personnel assigned to the front lines during the health crisis.
“This type of investment in our frontline heroes is an investment in our nation’s long-term well-being because essential critical infrastructure workers are leading our nation’s response and recovery efforts on the ground,” ATA Chairman Randy Guillot said during a Senate Commerce Committee hearing June 3. Guillot is president of Louisiana-based Triple G Express Inc. and Southeastern Motor Freight.
“Keeping our frontline transportation workers healthy is how we ensure that grocery stores remain stocked, medical supplies remain available in urban and rural communities, and how we maintain critical infrastructure viability,” Guillot continued.
The freight rail industry added its voice in support for the measure.
Association of American Railroads CEO Ian Jefferies told senators at the same hearing that employees across the rail sector, as well as other essential critical infrastructure workers, “should be given elevated priority access to COVID-19 testing, personal protective equipment, sanitizers, nonmedical-grade facial coverings and other health-related or protective supplies so that essential goods can keep moving.”
Alex Oehler, interim president and CEO of the Interstate Natural Gas Association of America, added: “We are grateful for the joint efforts of federal, state and local agencies to date, and it is important that this coordination continues in the months to come as stay-at-home orders and similar restrictions are loosened, which could create a surge in demand for necessary supplies.”
Oehler continued, “Of course, patients, health care workers and first responders should always be first in line to receive this equipment.”
“Keeping our frontline transportation workers healthy is how we ensure that grocery stores remain stocked, medical supplies remain available in urban and rural communities, and how we maintain critical infrastructure viability.”
ATA Chairman Randy Guillot
The American Association of Port Authorities also expressed support for the legislation.
Commerce Committee Chairman Roger Wicker (R-Miss.) led the bill’s introduction in May. The Critical Infrastructure Employees Protection Act would specifically require the U.S. Department of Transportation to coordinate with the Centers for Disease Control and Prevention and the Federal Emergency Management Agency in supporting state agencies’ efforts of providing testing and equipment for the frontline infrastructure workforce. Besides prioritizing personal protective equipment, the workforce would have priority access to sanitizers, nonmedical-grade facial coverings and health-related or protective supplies.
“We are grateful for the many frontline workers who have shown remarkable resilience and resourcefulness to help deliver critical care, services and supplies to those in need,” Wicker told stakeholders at the June 3 hearing. The panel has jurisdiction over freight policy. “The transportation sector has countless numbers of these unsung heroes.”
Other Senate sponsors include Commerce Committee ranking member Maria Cantwell (D-Wash.), as well as Sens. Todd Young (R-Ind.), Dan Sullivan (R-Alaska), and Roy Blunt (R-Mo.). The measure has yet to be scheduled for consideration.
A recent House-passed $3 trillion pandemic relief package included $15 billion for transportation agencies.
“As this unprecedented health and economic crisis continues to wreak havoc on workers, families and communities across our country, Congress must continue to step up with big, bold measures to blunt the worst of its effects,” House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) said on May 15. “I’m especially focused on making sure the federal government helps protect frontline transportation workers and those who still must travel with clear and consistent policies on personal protective equipment that will help stop the spread of this insidious virus.”
Trucking Rises to Meet Unprecedented Challenges During COVID – 19 Pandemic
www.ttnews.com, Seth Clevenger
Businesses closed their doors and people sheltered at home this spring as the COVID-19 pandemic claimed lives and crippled the U.S. economy, but through it all, the commercial trucks that move the majority of America’s freight continued to roll down the nation’s highways.
Truck drivers have been among the front-line responders to the pandemic, delivering medical supplies and equipment to hospitals and ensuring that store shelves across the country remained stocked with essential goods for consumers.
Although this public health crisis has roiled supply chains and inflicted financial hardship on many transportation and logistics companies, it also will be remembered as a time when the trucking industry’s essential role within our society has never been clearer.
“I hope the recognition of the value of the supply chain and the importance of the American truck driver lives well beyond this pandemic,” said Derek Leathers, CEO of truckload carrier Werner Enterprises.
“I think a light has been shined on how important they are to the U.S. economy, and I hope that carries forward.”
Werner Enterprises ranks No. 16 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
At the same time, fleets have faced unprecedented challenges during this difficult time.
After an initial surge in consumer demand in the early days of the pandemic, freight volumes weakened dramatically in many sectors of the transportation industry after states issued stay-at-home orders beginning in late March, shutting down large swaths of the economy.
Many retailers, manufacturers, restaurants and other businesses temporarily closed down or slowed production while Americans adhered to social distancing guidelines to reduce the spread of the highly contagious coronavirus, which had taken the lives of more than 100,000 Americans as of late May.
By then, states had begun taking gradual steps toward reopening the economy, but uncertainty continued to surround the development of a vaccine, the timing of an economic recovery and the long-term effects of the crisis.
The business impact of COVID-19 has varied significantly from one trucking company to the next.
Fleets surveyed for Transport Topics’ annual Top 100 ranking of the largest for-hire carriers in North America described a range of experiences, with some citing steady volumes or even upticks in demand, while many more saw freight volumes drop precipitously.
One fleet cited compressed margins and sporadic volumes in what typically were consistent lanes.
Another said its revenue plummeted by 40% to 50%.
The financial strain forced some companies to temporarily furlough employees or even make significant labor reductions in line with revenue losses.
On the other hand, driver retention has improved during the pandemic, according to one company.
Fleets said shipper customers in industrial sectors such as automotive and manufacturing have cut production, thus reducing freight demand.
The energy sector also experienced a major downturn.
Transport Services of Sullivan, a bulk carrier based in Sullivan, Ill., saw business levels drop by about 50% during the pandemic.
“We’ve been very devastated,” company President Jon England said. “We were doing really well right up until the time this all happened, and then it went south fast.”
The fleet, which operates 35 power units and 48 trailers, delivers fuel to gas stations and transports ethanol.
Despite the dramatic drop in demand, England said he has been able to keep all of his workers employed. Working with its local bank, Transport Services of Sullivan was able to secure a small-business loan under the federal Coronavirus Aid, Relief, and Economic Security Act.
“I can tell you, it was a game changer for me,” England said.
The fleet also saved significant cash flow because Daimler Trucks North America was willing to furlough three months’ worth of payments on his trucks, he added.
While much of the industrial sector slowed to a crawl, business levels increased for certain consumer packaged goods and in many areas of the health care and food and beverage sectors.
The pandemic also accelerated growth in e-commerce as millions of consumers became more accustomed to shopping online for a broader range of products in lieu of visiting brick-and-mortar stores.
XPO Logistics experienced “incredible demand” in its e-commerce business while nonessential businesses were closed and people stayed at home, said Erik Caldwell, chief operations officer for the company’s Supply Chain division.
“It feels like we’re in the Thanksgiving peak for e-commerce,” Caldwell told Transport Topics in late April.
Amid all of this market volatility, trucking companies have been taking steps to protect their workers from COVID-19 as they deliver essential freight.
XPO Logistics ranks No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in North America
Across the industry, fleets have been providing drivers with hand sanitizer, masks and gloves while establishing physical distancing measures in their terminals and warehouses. At the same time, many back-office employees transitioned to working remotely from their homes during the pandemic.
Trucking’s Response to COVID-19
Across the country, trucking companies have been a core component of the nation’s response to the pandemic.
XPO Logistics, for example, has been shipping food, water and crucial medical supplies and equipment into areas with high concentrations of COVID-19 cases, such as New York and Louisiana.
That work includes expediting hundreds of shipments of N95 medical face masks, visors and other supplies to hospitals, fire departments and police stations.
XPO also has been managing medical and relief supplies in support of hard-hit New York City’s emergency management department.
The company said it was moving up to 10 times more ventilators and four times more medical beds than usual in March. It also cited increases of up to 40% in orders for food and health care supplies.
Werner Enterprises also participated in a variety of relief work as the pandemic took hold in the United States.
The carrier delivered products ranging from masks and gloves to paper products and 55-gallon barrels of hand sanitizer to locations across the country.
Professional drivers at Werner have taken pride in the importance of these relief loads and have been sharing photos of their bills of lading when hauling essential items such as medical masks or ventilators, Leathers said.
They’re just so proud of the work they’re doing and the difference they feel like they’re making, which has been really cool to see.
Werner CEO Derek Leathers
Werner also assisted its home state of Nebraska in its efforts to obtain personal protective equipment.
The company’s logistics division utilized its global network to procure more than 500,000 protective gloves, 300,000 N95 masks and 5,000 infrared thermometers for the state.
The state government initially reached out to Werner to provide over-the-road transportation of those goods, but the trucking company also offered to manage procurement, shipping and logistics for those supplies amid the global rush to secure PPE.
“It’s something we’re proud of because it’s really shown our ability to get things done when others weren’t able to,” Leathers said.
Freight Market Disruption
While panic buying and the demand for relief supplies initially caused volumes to surge in some portions of the freight market, other industry segments saw demand drop dramatically.
XPO cited a downturn in the automotive and aerospace sectors as those customers slowed production or shifted to making products to help with the pandemic.
At the same time, however, the company managed tremendous demand in the health care business. At one XPO warehouse, volumes for hospital cleaning materials were running eight times higher than normal, Caldwell said.
The food and beverage sector also saw strong demand in the early going as consumers stockpiled food, he said, citing “just an incredible spike in volume” for starches such as pasta and rice.
Meanwhile, XPO has adjusted its operations at facilities where business has been slow.
“In some places, we’ve been able to change the focus of the warehouse,” Caldwell said. “We do customized sewing for a customer, and when they shut down stores, we flipped the sewing over to making masks for all the warehouse workers and for the drivers. They’re making thousands and thousands of masks, constantly, every day, that we can send out to the field as we continue to get more.”
Leathers said Werner saw higher freight volumes when the pandemic first began to take hold due to the high demand for relief supplies, cleaning products, paper and other staple goods. But volumes started to wane in April due to lower overall consumption caused by business closures and stay-at-home orders.
The pocket surges in relief supplies combined with dramatically lower volumes in other markets have created major disruptions in logistics networks, Leathers added. This imbalance will test transportation companies’ ability to optimize in real time and adapt to rapidly changing market conditions, he said.
Brent Higgins Trucking, a small refrigerated carrier based in Mulberry, Ark., encountered less market volatility than many other fleets.
Company owners Brent and Connie Higgins said business has been relatively consistent, in large part because the majority of its operations are tied to food and grocery stores.
“That’s why we haven’t seen the wild swings,” Brent said.
In the early days of the pandemic, however, truck capacity was in high demand during the rush to restock shelves.
“At the beginning, there was an influx of phone calls and emails to get us to cover loads,” Connie said. “We satisfy our regular customers first, and even they were asking if we had additional capacity.”
Driver Recognition
Trucking’s crucial role in the response to the pandemic has not gone unnoticed by the public, or even the highest levels of government.
Truck drivers have received an outpouring of gratitude — everything from simple words of appreciation and “Thank you truckers” signs at customers’ locations to a formal event on the White House lawn celebrating trucking’s essential work on the front lines.
“Throughout this crisis, professional truck drivers have been there, delivering for all of us,” American Trucking Associations President Chris Spear said. “They have delivered to hospitals, markets and homes, keeping our nation moving forward. It is unfortunate that it took a global pandemic for these heroes to get the recognition they so richly deserve, but we are pleased to see them receive it now and we’re proud to have this opportunity to recognize them as the heroes they are.”
Werner’s Leathers agreed that the pandemic has highlighted the essentiality of transportation workers who are too often overlooked.
He recalled seeing two young kids waving a sign and offering free lemonade to truckers in front of a farmhouse on a country road in Nebraska.
“It’s heartwarming to see people respond to the work that the men and women of trucking are doing, and I just hope that nobody forgets when all of this passes,” Leathers said. “They’re just as important tomorrow as they are today, and the same with next year and into the future.”
Some of Brent Higgins Trucking’s shipper customers have been providing drivers with complimentary snacks and water during the pandemic.
Members of the public also have stepped up to assist drivers.
“At least one of our employees informed me that a complete stranger in another state went to a drive-thru, bought a meal and just delivered it to his truck. A lot of those acts of kindness have been going on,” Connie Higgins said.
Truck drivers and warehouse workers have always moved the world forward, but the public appreciates that work “probably more so now than ever before,” XPO’s Caldwell said.
“It’s really great to see the appreciation of the country in recognizing how much great work they do and how important that role is, and how it touches every aspect of our lives,” he said.
Worker Safety
Unlike many other professions, drivers and warehouse workers cannot work remotely from the comfort of their homes.
Carriers and logistics firms have taken steps to help protect their employees from the virus as they carry out their duties.
Companies have been providing their drivers with large amounts of masks, gloves, hand sanitizer and cleaning products, but obtaining those supplies hasn’t always been easy. Werner, for example, partnered with a couple of distilleries to produce and bottle private-label sanitizer in large volumes so the company could keep its fleet in stock, Leathers said.
Out on the road, drivers have been using cleaning products to wipe down high-contact touch points, such as the cab interior, and truck and trailer doors.
Fleets also have been taking steps to reduce driver interaction at shipper and consignee locations, in part by converting some paper bills of lading to electronic forms.
Companies have taken similar precautions in the warehouse environment.
XPO, for one, has used lines of tape to mark out work spaces on its warehouse floors to ensure that employees maintain social distancing standards. The company also has implemented thermal temperature scanning at distribution centers.
Overcoming Challenges
As much of the U.S. economy shut down to fight the spread of COVID-19, a key concern for the trucking industry was ensuring that drivers continued to have places to eat and rest.
Restaurants across the country closed their doors and shifted to takeout-only service during the pandemic. However, many made accommodations for professional drivers to park at their locations and order food on their mobile apps for delivery to their trucks.
“The biggest challenge early on was making sure our drivers had availability to food,” Leathers said. “And although those challenges have been overcome as it relates to the availability of food, the reality is they’re still living in a grab-and-go world, and that’s not sustainable long term.”
The closure of public rest areas in some locations was another key concern during the initial response to the pandemic.
The trucking industry and the Federal Motor Carrier Safety Administration have been working with state and local governments to ensure that those public rest areas reopen or remain open, Leathers said.
The major truck stop chains have kept their restrooms, showers and fuel pumps open and sanitized during the pandemic, he added.
Meanwhile, driver detention time has increased at both shippers and consignees, due in large part to the added safety protocols and precautions.
On the positive side, transit times have improved by 2% to 3% because there has been less traffic congestion, but that efficiency gain has been more than offset by the increases in dwell time, Leathers said.
Enduring Changes
Questions remain about the duration of the COVID-19 pandemic and the timing and speed of an economic rebound, but this crisis likely will leave an indelible mark on the transportation industry.
Businesses may start to think differently about inventory management, for example.
“Lean works really well most of the time, but during a large-scale supply chain disruption, you can see the challenges of being just in time,” XPO’s Caldwell said. “I think customers are probably going to segment their inventory not just on speed of turn or value, but also on the level of criticality of need, specific to getting resupply.”
The pandemic also may generate more momentum for the near-shoring of manufacturing in Mexico and South America versus Asia, he added.
Another permanent change could be the formation of deeper relationships among shippers, carriers and third-party logistics providers to enable all parties to better react to future disruptions.
“I think the level of communication and coordination between customers and carriers has increased because projections are changing daily, and we need that information to do our jobs,” Leathers said. “And I hope that we can all agree that this level of communication is where we need to be going forward.”
In time, businesses and consumers will settle into a new normal, but the trucking industry, and society in general, will feel reverberations from the pandemic for years to come.
