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Get the latest industry news from NASSTRAC Executive Director, Gail Rutkowski.

 

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Top tags: supply chain disruptions  transportation 

Something New on the Transportation Horizon

Posted By Gail Rutkowski, Friday, October 6, 2017

I have shared with you folks in the past about my geek like affection for this industry. There are times when transportation is tough to love but I always manage to muddle through the dark days and step into the light.


Recently, NASSTRAC has embarked on a new project that I’d like to share with you. It’s still in developmental stages but I haven’t been this excited about a project in a long time. It all started with a conversation at the last NASSTRAC conference between Mitch MacDonald from DC Velocity and me. Mitch and I had wanted to do something together but couldn’t get our heads around what that something should be. Then Mitch recommended that I read Thomas Friedman’s latest book “Thank You for Being Late…An Optimist’s Guide to Thriving in the Age of Accelerations”. We were discussing the book when Mitch suggested that NASSTRAC and DC Velocity launch a research project engaging NASSTRAC members, sponsors, and other logistics and supply chain groups to gather views and identify critical challenges and opportunities facing the logistics field in the next 10 years focusing primarily on freight transportation and emerging enabling (and potentially disruptive) technologies.


Our objective was to provide our members with actionable ideas they can implement to meet emerging challenges and opportunities. Also to provide valuable insight into current state and future outlook for freight transportation and enabling technologies.


As we moved down the road to putting together the outline for the project, I suggested to Mitch that we focus in on the transportation function as it exists within the shipper community today.


As I mentioned, I’ve been highly influenced by Friedman’s book as he wrote about jobs being pushed up, down and sideways and the importance of providing continual training/learning of new skill sets in order to keep employees engaged and happy. Our hope is that this project will allow us to rip apart the transportation functions currently being performed among shippers and redefine it, as well as identify the new skills needed for our members to “push up” into their new responsibilities. If NASSTRAC, in partnership with other groups and academics can provide that continual learning, it would give us the opportunity to fill a need within the transportation community. Additionally, we may be able to help ease the bunker mentality that exists among the transportation professionals within the shipper community today. I’m excited about the possibility of NASSTRAC being on the cutting edge of redesigning the transportation management function within the shipper community and I hope you will join me in making this project a reality.


I'm proud to announce that NASSTRAC has launched this project in partnership with DC Velocity, CSCMP, Supply Chain Quarterly and Auburn University. We plan on this being a multi-year project, focusing first on transportation and then on to other disciplines within the supply chain. We will be assembling focus groups to help us delve into the shipper community to discover how transportation departments are currently structured, what is lacking, what skills are no longer needed and what new skills need to be learned. Stay tuned for more information from NASSTRAC. In the meantime, if you are interested in participating in one of the focus groups, please email us at info@nasstrac.org and put Logistics 2030 in the subject line.

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Detention: A New Paradigm

Posted By Noël Perry, Chief Economist, Truckstop.com, Thursday, September 21, 2017

For most of our lives, abundant truck capacity and steadily falling costs fueled a simple, one-way relationship between supply chains and trucking. The supply determined a need for relatively high speed and responsive transportation, and truckers met that need. This relationship extended to the management of loading facilities, ports, or intermodal ramps. The shipper told the carrier what time to show up – and they did.  As an economist watching this dance, it always troubled me because the ultimate cost to the supply chain must include inefficiencies in trucking operations. Still, it was very simple from the shippers’ perspective: “Truck delays are just a cost of doing business.  They can put up with it or not get my business.”

 

One obvious inefficiency is detention. Although many carriers tack on an extra fee for delays, those charges, until recently, were seldom assessed and even less commonly paid. But a changing market is suddenly increasing the visibility of detention and shifting responsibility from carrier to shipper.

 

This shift is based on three factors. The first is a driving fact about contemporary trucking and, for that matter, contemporary supply chains. We now have 80 years of steady refinement within truck-based supply chains. In such a ferociously open market, 80 years is enough time for competition to wring out inefficiencies. And the market has done that in its simple, two-dimensional design: truckers are close to the optimal efficiency available with current regulation and technology; and shippers have also wrung out the last savings possible on their supply costs. The remaining opportunity is to abandon this two-dimensional model – supply plus trucker – and adopt a single-platform optimization that brings carrier inefficiencies under the supply chain tent. (i.e. “I acknowledge that idle trucks cost me money. If I can change my supply design to minimize that, I save that money.”)

 

The second factor pertains to Hours of Service (HOS). Studies have shown that even the most compliant drivers frequently bend HOS laws for their convenience. Consequently, it’s estimated that, post-ELD-mandate, productivity will slip by two to four percent, causing a shortage of capacity. In fact, spot market results, as shown by Truckstop.com’s data, have already tightened. Such tightening is shifting the balance of power from shipper to trucker. Empowered truckers will favor the shippers who move equipment through their loading facilities quickly and efficiently. Suddenly, detention will become even more a shipper’s problem.

 

The third factor revolves around Electronic Logging Devices (ELDs). One of the difficulties with managing detention is verifying that a shipper caused it in the first place. But with new digital tools, like ELDs, we now have a reliable means of quantifying and locating delays. Some fleets are already using this ELD-derived information to charge for detention, or better, help their customer eliminate the delay entirely. Moreover, such measuring devices will soon be integrated into supply chain management systems, making, at long last, transport productivity a more integral part of supply chain design. Carriers still resisting the ELD mandate would be wise to consider this development. As supply chain managers realize their increased competitiveness from fostering carrier productivity, the need of real-time carrier data will become a mandatory cost of doing business for truckers.

 

The takeaway? Detention is a bone of contention between shippers and carriers only when the two players hold one another at arm’s length. As consumers, we don’t care how products get to the store – we care that it’s affordable and unbroken. If the Amazons and Walmarts of the future are to continue to dominate, they’ll need to fold transport into their supply chain design – to achieve the lowest delivered cost. The ELD mandate and the ensuing truck shortage will kick start that process, as will the proliferation of information technology. In the future, the arguments over detention will shift from carriers and shippers to more appropriate, and responsible, parties: the supply chain manager and loading dock foreman.

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Noël Perry is Truckstop.com’s Chief Economist. Perry is a specialist in analyzing risks in the transportation market and explaining the implications in the most transparent way to industry professionals. He is a managing partner in FTR Association, the premier transportation forecasting firm in North America, and has 30 years in senior research positions at Schneider National, Cummins Engine Company, and CSX.

 

Noël is the rare economistic to specialize in transportation. Starting on a loading dock in 1968, he has followed his life's interest in senior research positions at Cummins Engine, CSX and Schneider National. He has been in private practice since 2008, working with clients in four modes and the shipper community. Frequently quoted in the national logistics media and heard on the speaking circuit, he is also a partner in the industry leading transport forecasting house, FTR Associates. His monthly newsletter available from FTR reads like an economic textbook, handling one major strategic transport issue per month.

 

Noël holds degrees from the University Of Pennsylvania and the Harvard University and navigated KC-135's during the Viet Nam war. He and his wife Ginny live in the historic iron mining village of Cornwall, PA. In his spare time Noël is a gardener, singer, golfer, WWII historian and is a member of the Society for American Baseball Research.

 

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Hurricane Harvey and Irma Will Touch Everyone!

Posted By Gail Rutkowski, Wednesday, September 20, 2017

9/14/2017

Mike Regan is Chief of Relationship Development at TranzAct Technologies and NASSTRAC’s Advocacy Chairman.  Mike is the recipient of numerous industry awards including CSCMP’s Distinguished Service Award in 2014.  Mike is a frequent speaker at industry conferences and the author of numerous articles on supply chain management.

 

Make no mistake about it, Hurricanes Harvey and Irma will touch all of us. Aside from the devastation inflicted on the hundreds of thousands of individuals and families, these hurricanes will also significantly impact corporations throughout North America.

For example, last week the Wall Street Journal highlighted how Hurricane Harvey will impact Newell Rubbermaid’s profitability based on shortages and higher prices in the resin markets. And a friend of mine who is the President of a Chicago-based company sent me information about the significant disruptions in the polypropylene and polyethylene markets resulting from Hurricane Harvey.

Several senior executives have called, and the one question they all ask is: How much will my transportation budget be affected by the hurricanes? We’ve read several articles and talked to industry experts, and the consensus is thatfreight rates/costs will definitely be up in the fourth quarter of 2017 and in 2018 because of the hurricanes.  How much higher is still open for debate, because there are so many variables in play and things are subject to change, but at the recent FTR Conference shippers were warned: “We may be seeing the Perfect Storm!” That said, here are some things we do know:

Diesel fuel has gone up by almost eighteen cents ($.18) in the past two weeks. Depending on your fuel surcharge formulas, this will most likely increase your freight costs by 1.5% to 2.5% as carriers pass along the increased fuel costs. Will the price of diesel come back down? At this point, it is difficult to determine if, or when, this will happen, as the hurricanes took out approximately 16% (or 2.5 million barrels of lost production each day) of the U.S. refining capacity.

For various reasons, expect truckload capacity to be very tight in the fourth quarter of 2017 and on in to 2018. Tighter capacity means higher rates, and we are already seeing a 25% to 30% increase in spot market rates in certain parts of the country. Asset-based carriers are also taking a more aggressive approach in their rate negotiations. For those who are asking: “How this will impact my 2018 budgets?", it really depends on your Truckload Asset-Based:Non Asset-Based Ratio. (e.g. the ratio of truckload moves on your asset-based carriers versus your non asset-based, or freight broker, network). A higher percentage of moves in your non asset-based network will most likely mean higher rates and costs that need to be reflected in your budget estimates. We will pass along relevant information as it becomes available.

Don’t overlook another factor affecting truckload capacity. Hurricane Harvey damaged critically important rail lines. The Union Pacific and BNSF have alerted shippers that it could be months before they have their damaged mainlines in Texas fully operational. This will likely result in some diversion of freight from rail to truck—which will make capacity even tighter. At this juncture, no one knows how Hurricane Irma will affect the CSX or the Norfolk & Southern, but it is important to note that even before Irma, the CSX was having major service issues.  

While there will be other consequential fallout from the hurricanes, it is important to understand alternatives that can help mitigate the impact of these events.

First, accept the fact that technology is your friend. In a market where capacity is extremely tight, an effective Transportation Management System (TMS) that automates the bidding/tendering/tracking of can be an essential cost saving tool. For example, when a customer implemented our TMS this year, they were able to reduce their costs in a major traffic lane by over $400,000 by using the automated bidding process within the TMS. Again, that was just one of their many lanes! In a market where capacity is tight, you have two choices: Your people can “dial for diesel” and try to find a truck, or they can use technology to get the job done more quickly and with a better result. A great TMS saves you time and money.

Second, understand that little changes can have a big impact on your ability to get truck at a reasonable price.During the tight truck market in 2013-14, when a major food producer experienced a sudden deterioration in asset-based carriers being able to cover their loads, they were forced into the spot market for more and more of their freight. Net result? A huge increase in their freight costs! So they made some internal process changes and expanded their tendering window from two days to seven days. It wasn’t easy, but they were able to get their asset-based carriers to cover 85% (versus 60%) of their moves and drastically reduce their freight costs. For those skeptics who say “My company could never do that!” we like to (gently) challenge them: “Could never” is really a choice. What that “could never” really means is: “My company is okay with wasting money, so we won’t invest the time and resources to make the necessary changes to save money.”

Third, dust off your Supply Chain Disaster Recovery Plans and utilize scenario planning capabilities that address this critically important question: How will our company respond when natural disasters and other catastrophes impact our ability to source materials or meet our customers’ delivery requirements? We’ve seen far too many disaster recovery plans that are focused on operational and technological considerations, but light on critically important transportation issues.

Finally, don’t be afraid to ask for help. Smart companies realize that even the Lone Ranger had Tonto, because he understood the value of a strong partner. And working with the right partner can help your company see how paying attention to little details can make a big difference and positively impact your bottom line. A partner that can help your company shine the spotlight on the supply chain and transportation areas can drastically improve your capabilities, and can help you regardless as to whether you are in disaster recovery mode or just dealing with the usual fluctuations in the marketplace.

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Do I Really Need to be a Member?

Posted By Gail Rutkowski, Monday, September 11, 2017

I’m sure we’ve all looked at our professional association renewal when we receive it and thought ‘Do I really need to be a member?’ It seems like a lot of money and some of the multi-disciplinary bodies seem to offer similar benefits of membership for the same price or less. I’ve been spending a lot of time recently reaching out and talking to our members who have allowed their membership to lapse. Fortunately, many of them just lost the renewal email in the shuffle and are getting back on board for which I am grateful. During my conversations with them I discovered that many of them want to be more involved but didn’t know how begin.  I was able to help them decide where their talents and interests can best be served within NASSTRAC. I have also made a promise to myself to reach our more frequently to our members and take a “temperature check” on how well we are doing as an association in connecting with our members.

 

I am passionate about why you should be a member of a professional association, specifically NASSTRAC. I made the decision over twenty years ago to join NASSTRAC and I made another decision three years ago to become Executive Director. Here’s why:

 

  • I believe shippers need to step up and have their voices heard. In the transportation industry, no man is an island and it is only through working together can we achieve our mutual goals of efficient supply chains and transportation networks. Through NASSTRAC’s Education and Advocacy efforts, we help shippers look beyond their offices and docks to learn about what they can do to improve their operations today.
  •  Additionally, it’s important to not be “surprised” by any regulatory or legislative changes that will impact your operations.  There any many shippers out there who are not aware of the impact HOS has on their operation or how the new ELD requirements will affect how they manage capacity needs moving forward.
  • The friends I’ve made and the network that I have developed through my NASSTRAC membership has afforded me not only with life- long friends, but access to the best and brightest in our industry. To be able to pick up the phone or email another member for help has been my best membership benefit. And now, with the NASSTRAC “View” I can join the conversation with my fellow shipper members every month.
  • Finally, NASSTRAC has been working on some significant initiatives to help drive our association forward.  Please stay tuned for further announcements as NASSTRAC, in conjunction with DC Velocity, Auburn University, CSCMP and Supply Chain Quarterly is launching the first part of an extensive research project titled:  Logistics 2030:  Navigating a Disruptive Decade.  Stay tuned too as we roll out exciting new changes in our upcoming 2018 Shippers conference and Expo.

 

Well I’ve told you why I’m passionate about why you should be a member of a professional association and hope that I expressed the importance of an association like NASSTRAC can have in developing your career and your operation. Now I want to hear from our members: Be proud to be a NASSTRAC member, shout it from the rooftops and educate others about us. What do you value about your NASSTRAC membership?  Let us hear from you today!

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Can we talk?

Posted By Gail Rutkowski, Monday, August 28, 2017

Alert to readers: This blog is more personal than most. It came about as I am struggling to deal with all of data swirling around us all the time.


I’m sure we have all seen the posts on Facebook and other places showing people sitting together around a table, not talking but looking at their phones. The message is and continues to be technology which was supposed to bring us together is actually pulling us apart. I was on cruise recently where we sat at the same table every evening for dinner. The couple next to us spent every evening staring at their phones while they were eating and never said a word to each other. It seemed so sad to me.


I am lucky to have a lot of nieces and nephews (both related and not) who take some time to share their lives with me. Recently they were explaining the Tinder app to their not-so-young-anymore Aunt. They told me that dating as we old folks know it is virtually extinct. With just a swipe of your finger you can delete potential mates just by deciding they don’t look exactly right. Knowing what I looked like growing up I’m sure I’d have been swiped away…a lot.


So we have apparently become a society where people are expendable and are to be dismissed if they don’t meet our standard of physical attraction. Now I don’t mean to say that physical attractiveness is a negative thing, it just shouldn’t be the ONLY thing. In further discussion they all acknowledged that they aren’t really thrilled with this new option but don’t see any other way to meet people.


We see a similar pattern in business relationships today. Sales people communicate via LinkedIn, email, Twitter, etc. In their defense, I believe they have given up on actual phone conversations or physical sales calls because they can’t get their prospective customers to speak to them on the phone or grant an appointment.
I can see a day where all we do is stare at computer and smart phone screens and never look up long enough to see the world. That day may even be today. We don’t even need to leave our homes anymore. Thanks to ever-evolving supply chain technology, everything can be delivered to us almost as quickly as the time it took to order it on line. How in the world did the Jetsons do it?


To make matters worse, when there is an opportunity to have an actual conversation, social discourse has become so divisive, people are wary of engaging another person in case their views are not in alignment with their own.


So how do we get past this? How do we take advantage of the amazing technology that surrounds us and still retain and grow our personal relationships? Technology is supposed to make us better, right?
The one thing that I believe should never change is the human factor in relationships. Living your life, whether it’s your personal or work life, on Facebook or LinkedIn doesn’t equate to actual interaction with live human beings. It’s wonderful you have over 1,000 connections on LinkedIn but who are you going to call when you need someone? Do you think those 1,000 people, most of whom you’ve never met or spoken to, are going to be there for you?


The original purpose of LinkedIn was to allow for a place that business people could interact and exchange ideas and contacts. I don’t believe it was intended to replace actual contact. I get LinkedIn requests almost every day from people I've never heard of, working in industries that have no connection to what I do, wanting to connect. They send the generic message and never add any comments about why they are reaching out and how they hope to interact with me. I have learned that I don’t need to connect with everyone but have to confess I still feel guilty about ignoring a request.


We have so much information coming at us so fast that it’s getting more and more difficult to figure out what’s important. The voicemails/emails/texts/posts/tweets are all shouting for attention. Which one is the one we really need to know about? I have to confess I don’t have the answers…do you?


Let’s talk…

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The Key to the Right Freight Contract? Know Your Rates

Posted By Nick Wynkoop, Product Marketing Manager, Truckstop.com & Real Time Freight, Thursday, August 3, 2017

The best freight contracts not only save you money but can bring stability to your business. But the right rates aren’t always apparent. Even if you have a great system for pricing, you likely wish it was faster, more accurate, better organized, and easier to share internally. But if you’re like most companies, you don’t even have that luxury. Sometimes, you’re even guessing on what a good rate is, or on what a carrier or broker expects. Here are a few steps to creating a system to help you price your freight, grade responses to your RFP’s, and create contracts that benefit your business.

 

View Both Historical Data and Trends
The ability to get historical data and trends at the tip of your fingertips is a huge competitive advantage. Being able to go back on a particular lane and see 1) the carriers that have been used and 2) the past rates paid on the lane, gives you the ability to gain a better margin on freight. You are able to see where you have won or lost on a particular lane and work to gain better margins. Also, being able to see the rate changes on a seasonal level is a huge advantage when pricing an RFP. Many bids are applied for a 12-24 month period, and having the ability to look at historical trends and analyzing seasonality will let you price your freight needs in a more educated manner.

 

Customize for Confidence in the Market Rate
Confidence in the market rate is important to people seeking to consistently move freight. You likely use multiple rate sources (e.g. historical, market analysis, etc.) in order to come up with the "magical rate" to price your freight…but you frequently get back different information and don’t always know what to trust. By making early decisions about how you’ll process your rate data (i.e. more importance given to last year’s rates, less importance given to overall market trends, etc.), you will truly make data-driven rate decisions, instead of just using confusing and contradictory info to make an educated guess.

 

Maintain Urgency in the RFP Process
The ability to streamline the RFP process gives you a huge advantage when you head to the negotiation table. So, before you put out that RFP, keep this extra little edge in mind: maintain urgency. Are there timelines or milestones in the contract process? Does it keep both parties on track to negotiate? Is it a dedicated RFP process to keep other players from causing disruption later in the negotiation? Mutually agreed dates and timelines are vital to keeping a contract moving forward, and keeping the ball in your court.

 

Keep these tips in mind before you reach out to brokers or carriers, issue your next RFP, or sign your next contract. The results should not only save you money but build your business and strengthen your partnerships for the long term.

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And the Survey Says…

Posted By Gail Rutkowski, Tuesday, July 11, 2017
Countless Shipper surveys have indicated that improving real-time supply chain visibility is a top priority for shippers. Many shippers are demanding a more granular level of visibility to shipments while in transit. Without the ability to communicate shipment status in real time, shippers need to resort to calling carriers, waiting for answers and then hoping that information was timely and accurate. There have been scads of articles written about this topic, talking about predictive automated solutions and full data integration, but really it all comes down to this:

Shipper: Where is my truck?
Carrier: I know where you truck is.

That sounds pretty simple and on the surface, logistics is pretty simple. Pick it up, deliver it on time and don’t damage it. It’s amazing how often the simple things become not so simple. Our customers are demanding to know exactly where their shipments are at any given point in the supply chain. Amazon has led the way in providing this information and many other e-tailers are following their lead. I know as a customer, I like to click on the link and have all the details of my order, including carrier transit information pop up on my smart phone whenever I need (or want) it.

In today’s world, shippers expect carriers and 3PL’s to carry the burden (read cost) of providing the systems to give them that information in real time. And many of these companies have met the challenge and continue to drive improvement into the visibility process. But in today’s data driven, data overload era, do we need to know everything? I prefer to subscribe to the exception theory of management. Unless it’s a problem, I don’t want to know. Show me only those shipments that are in jeopardy of making their arrival dates in enough time that I can be proactive if possible, but at minimum let me be the one to notify my customer, not the other way around.

As Shippers work to develop their procedures for providing real-time visibility, there is one other overlooked area, and that is misclassification exposure. The more involved a shipper is in communication with drivers, the greater the risk of the Department of Labor or courts classifying contractor drivers as employees and plaintiffs’ attorneys holding a shipper liable for a crash. We all know that any plaintiff’s lawyer is going to go for the deepest pockets and most often, those are the shippers. And if a shipper has indirectly touched a driver, that creates a potential for liability.

I believe the key is to forge strong reliable partnerships with your transportation providers and trust them to do their jobs by providing you with timely and accurate information that you in turn can provide your customers.

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Who are your NASSTRAC “Friends”?

Posted By Gail Rutkowski, Wednesday, June 7, 2017

Having recently returned from our annual conference, I find myself sitting here at my desk with a pile of business cards and scribbled notes from folks who said they would like to get more involved in NASSTRAC, or would like to connect with one of our members for help with a problem or the opportunity to work together. I’m always excited to have members step up, so I’m taking the time to respond to these requests doing what we can to ignite the connections and help our members help one another. I’m thrilled by the willingness and commitment of our members to get on a call, offer advice and feedback, suggest solutions to a problem, or help connect with another member.


It is NASSTRAC’s responsibility to ensure our members know we are working hard for them to deliver value for their membership dollars, but consistently delivering that value is a challenge in today’s lighting fast, nanosecond world. While I appreciate the remarkable people who step up and engage (and they deserve our thanks and appreciation), I wonder about our other members and prospective members…who are your NASSTRAC Friends? Who do you reach out to when you need advice, or help in sourcing a provider, career advice, or just need to toss around some ideas and potential solutions to a problem you may be struggling to resolve?


I know that NASSTRAC isn’t the only association confronted with lack of member engagement and I find myself wondering why. I know there are limited resources for time, attention, and discretionary dollars for associations like ours. Yet without those dollars and your support we cease to exist. I believe our goal of an engaged membership that communicates with one another is important and serves both our membership and the industry we serve.


In the past, through this blog and through our other communications, we have shared a number of stories of NASSTRAC members helping one another and depending on the relationships they have formed within NASSTRAC, that allows them to reach out in time of need and know that someone will be there to support them. This doesn’t happen via text or snapchat. It is the result of building face to face relationships over time through their involvement in an industry association. Members who view their interactions with NASSTRAC as a two-way partnership find the commitment to be professionally and personally fulfilling.


I was fortunate that I always worked for companies who supported association membership not only financially, but allowed my participation on committees, task forces, etc. Back in the day (was it really that long ago?) companies felt it a worthy cause to support professional groups. Their support helped the associations to grow and prosper and allowed them to reach out into the community to assist even more members.


As part of the supply chain, transportation has struggled to gain a seat at the table. Even as we see SCM professionals move into the board room, transportation still seems to be in the back seat, though it does tend to get a lot of notice when things go wrong (port issues, weather problems, etc.). Through NASSTRAC you can join a legion of professionals who seek to change that perception and elevate the status of transportation and the work that they do to become a fully engaged faction within the supply chain. We need your support. We need your engagement.


Our annual renewal requests will be coming out in the next week or so. Please consider renewing not only your membership, but your commitment to NASSTRAC and the transportation industry. It is our continuing goal to connect with professionals who are already in transportation as well as those who may have recently taken a position within a company that has been involved with NASSTRAC. With the never ending movement within and between companies, we have to depend on our members to make their associates aware of who we are and what we stand for in the industry. Make sure you add all of your transportation colleagues to your NASSTRAC member profile so they receive our communications and notices of upcoming events. Take the time to share with your colleagues member benefits such as the monthly View calls, the discounted Penn State Executive Supply Chain Certification program, and our Freight Resource Directory.


Won’t you join (or rejoin) today and meet some new friends?

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Why Can’t We All Just Get Along? - Insights from the Shipper/Broker Wars

Posted By Gail Rutkowski, Thursday, May 25, 2017

It seems that as long as there have been brokers and shippers there has been an adversarial approach to their relationships.  This love hate relationship can extend to their carriers that serve both of them as well.  What is it about brokers (or more politically correct, 3PL’s) that seems to engender such resentment and distrust?  And more importantly, what can brokers do to correct that perception?

 

In the interest of full disclosure, I have been both a shipper and a broker (earning my CTB a few years ago) and have been exposed to both sides of the argument.  As a shipper I recall not wanting to do business with brokers and my work colleagues calling it the dark side of transportation.  I only dealt with asset based carriers and used brokers as a last resort option.  As I broker, I recall shippers telling me (everyone has heard this one) that they don’t do business with brokers and C. H. Robinson is their biggest carrier. The apparent complaint from shippers about brokers was that when something went awry they were nowhere to be found and the shipper was left to deal with a bad situation and an unknown carrier. Or, better yet, the broker closes up shop after cashing your checks and the shipper is left being sued by the carrier for payment with courts upholding the carriers’ position to be paid.  Another major issue is that shipper’s generally don’t penalize a potential new carrier when they have a bad experience, but when a broker screws up it seems that every single broker has to pay the price for that failure.

 

Recently, I had the opportunity to moderate a panel at the TIA Annual Conference titled “Overcoming Shippers Objections” which my panel and I subsequently subtitled “10 Things I Hate About You”.  The panel consisted of two brokers and two shippers talking about the things that made them crazy about one another.  Just to make things interesting, the audience participation was very vocal and actively contributed to the discussion.

 

While both sides made a number of valid points about what bothered them about one another, during the course of the discussion certain similarities became apparent.  I’d like to share them with you:

  1. No matter how good you are, bad things will happen.  It’s how you handle the bad things that establish the basis of your relationship.
  2. Honest and open communication on both sides is the only way a healthy relationship can be sustained.
  3. Brokers need to do what they do best…accessing the capacity that shippers don’t have the time or resources to procure.  And, making sure those resources are safe, legal, and reliable.
  4. Neither party wants to waste time getting the run around.  If shippers aren’t interested, quit dodging phone calls and emails and just tell them.  And, brokers need to respect their position, though it is appropriate to see when a follow up would be entertained.
  5. No shipper wants to get caught in the middle of warring brokerage offices.  If you have multiple locations that will be contacting the same shipper base, figure it out before you move forward.  There are some larger brokers out there that are well known offenders and shippers just don’t want to deal with them.
  6.  If you are unable to sustain a long term pricing arrangement, do NOT participate in an RFP where rates are required to be sustained for a year or longer.  Nothing annoys a shipper more than a broker being awarded freight in a RFP and then backing off when the market moves up.  And, on the flip side, shippers pulling back a load already tendered because they found a cheaper option.

We can (and did) go on and on about the issues that arise between shippers and brokers but the bottom line is we do need one another.  Brokers have proven to be a valuable addition to a shipper’s transportation network. At NASSTRAC we encourage all of our members to vet brokers as conscientiously as they do their carriers. We also tell them to make sure the broker they are doing business with is a TIA member. TIA members adhere to a code of ethics and business practices that ensure you are doing business with a responsible business partner. TIA members that are members of NASSTRAC can also designate that they are TIA members on-line at the NASSTRAC Freight Resource Directory…a resource used by NASSTRAC members to source transportation providers. 

 

I’d like to believe that shippers and brokers can get along…given the current transportation landscape, it’s important that we do.

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“It’s Time to Build” Infrastructure Week Kicks off Monday, May 15, 2016

Posted By Gail Rutkowski, Friday, May 12, 2017

Infrastructure Week May 15-19 will bring together businesses, elected officials and members of the public at the local, state and federal level to participate in a series of media events, projects, talks, initiatives and activities to shine the light on the nation’s need for an across-the-board infrastructure fix. Infrastructure Week is actually an organization led by a bipartisan team comprising business groups, chambers of commerce, labor unions and think tanks working to improve America’s sagging infrastructure.


The events are hoped to get the attention of government policy-makers at all levels to convince them of the broad-based support for fixing the nation’s roads, bridges, rail infrastructure, airports, ports, and water and sewer systems. The week formally kicks off on Monday, May 15 with key leaders from American business, labor and government. Addressing the Week’s theme, “Time to Build,” panels, presentation and keynotes will speak to the critical role infrastructure plays in America’s economy, will highlight new technologies, projects, and priorities for infrastructure in the21st century, and will debate how policymakers at all levels of government can work together to pass a transformative infrastructure package. Speakers include:


• The Honorable Elain Chao, US Secretary of Transportation
• Thomas J Donohue, President & CEO, US Chamber of Commerce
• Mayor Eric Garcetti, City of Los Angeles, CA
• Mayor Michael Hancock, City of Denver, CO
• Judith Marks, President & CEO, Siemens USA

This event is by invitation only, but will be webcast live and portions will be broadcast on Facebook live. If you are in the DC area and would like to request an invitation, please contact partnerships@infrastructureweek.org. You can also find a full listing of events at infrastructureweek.org.


We would like to ask all NASSTRAC members to get involved in helping to spread the word that “It’s Time to Start Building.” Now is a great time to start planning how you’re going to PARTICIPATE during this year’s Infrastructure Week. Become an Affiliate, Plan an Event, or Tell Your Story, your organization is encouraged to take part — in whatever way makes sense for you.


Follow the events at #TimeToBuild.

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