Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

Welcome to Freight Dawg!

The Logistics Blawg!

My name is Eric J. Joiner, Jr.  I've been fortunate to work in the logistics and supply chain field for a quarter of a century. I work with a large 3PL and logistics integrator in a global sales role. I am blessed to work in an industry that I love!

Freight Dawg topics range from leadership, careers, green supply chains, supply chain technology, most transportation modes, passenger airlines, as well as logistics and supply chain strategy.  I'm not above the occasional tantrum on the trials and tribulations of my weekly air travel either!  This is a truly multi-modal blog.  Shippers, consignees and carriers are all covered here. 

The goal for Freightdawg.com is to provide industry level depth of content and perspective to logistics and supply chain professionals and interested parties. 

Your feedback and participation are welcomed.

Please comment on what you read here!

Eric

Driver Leasing Supplements Logistics Demand

My good friend and fellow freightdawg, Scott Sigman, works for Vanguard Services in Indianapolis. Vanguard is in the business of driver leasing to logistics companies who need to flex their workforce to meet demand.

The article below appeared in the Indianapolis Star today and highlights Vanguards business model. Scott wrote an excellent piece on this subject for Freightdawg.com some time ago.

I've been fortunate lately to see several current and former colleagues with their name in lights lately. Vanguard operates one of the larger driver leasing programs in the country.  For private fleet operators who need to flex for seasonal peaks, Vanguards services are potentially very valuable.

(And ...Yes, I changed the highlights to red.  I didn't like the goth look of all that black!)

clipped from www.indystar.com Vanguard Services in the driver's seat Company leases workers to meet rising demand in logistics industry By James Harper / Star correspondent Posted: May 9, 2008 More than 724 million tons of freight pass through Indiana -- the fifth-busiest state for commercial freight traffic every year Somebody has to deliver the goods. As the nation's third-largest driver-leasing company, Vanguard Services has added customers, opened an office in Nashville, Tenn., and launched a driver-on-demand service to meet that need, said Scott Sigman, the Indianapolis-based company's director of business development. Vanguard's driver work force now totals more than 1,100 men and women at its Far-Northside headquarters and four regional locations that also include Dallas; Allentown, Pa.; and Greenville, S.C. "We provide the detailed work of recruiting and certifying professional drivers," enabling customers to focus on their core revenue- generating business areas, said Jim Malarney, Vanguard's president. "From the beginning, we have tried to instill two basic core values in our work force -- safety and customer satisfaction -- and these values have served us well in building a long-tenured, successful business ," he said. Among Vanguard's secrets of success in filling this niche, Malarney said, are its stringent employment standards -- only one of eight drivers interviewed is hired -- and its low turnover, which has allowed it to nurture decades-long relationships with customers such as Bridgestone-Firestone, Pepperidge Farms and General Electric. John Rigel, 44, who has been driving for 18 years including the past two for Vanguard, appreciates the shorter trips to neighboring states like Ohio and Illinois, which allow him to spend more time at home with his wife and seven children. "It's stable. They've been fair with me," said Rigel, an Acton resident. "I don't have to drive constantly . . . so I get to watch my kids grow up." Bulk-distribution warehousing centers in Indianapolis, Plainfield, Whitestown, Mount Comfort and elsewhere have helped with driver-recruitment efforts, Vanguard's Sigman said, because it allows for those shorter regional trips, rather than long cross-country routes. Experienced drivers for Vanguard can earn annual incomes of $30,000 to $80,000, Sigman said. However, the TDL industry still faces a driver shortage, he added. "There is a shortage of drivers," agreed Clayton Boyce, spokesman for the American Trucking Associations, though he couldn't give a specific number. He said that shortage has eased, however, because of to a steady decline in freight since January 2007. One solution to the driver shortage has been an effort by companies such as Vanguard to work with local educators to get the word out to 18- to 21-year-olds about employment opportunities. The Supply Chain Orientation and Research Education pilot program encourages interest in TDL and manufacturing. "The ultimate goal is to prepare them for college-level courses that will lead to future careers," University of Indianapolis professor Leslie Gardner said of students in the SCORE program. That includes on-campus classes for high school seniors to help them earn college-level credit toward a TDL-related degree, she said. Jim Hopkins, president and chief executive of Laibe Corp., an Indianapolis well-drilling company, has worked with Vanguard since 2005. "Originally our manufacturing personnel were handling customer deliveries, and that consumed too much production time while they were on the road," Hopkins said. "Vanguard is now handling all of our deliveries. They are extremely reliable and very responsive." Greenwood resident Mel Lawson, 74, is semi-retired now, but said he has driven for 49 years -- 34 of them for Vanguard. Vanguard is "the best company I've worked with," he said Wednesday, as he prepared to team up with Rigel to drive two well-drilling trucks from the parking lot at Laibe to Baltimore for shipment overseas. "(They) are just good people. It's an overall good working relationship between the drivers and the company."

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Airlines: 707's littlie Brother Gets Bigger

Boeing published a press release yesterday on the delivery of the first Boeing 737-900ER aircraft to GE Commercial Aircraft Services.  GECAS will lease the planes to Futura International Airways.  These two airplanes fly farther and more efficiently than all other 737 aircraft.

What is "deja vu" interesting to me is that the B737-900ER looks like and has similar lift and range capabilities to the original 707. The first B707-120 carried 179 passengers.  The 737 started as a shortened, smaller range derivative of the 707 but now carries more than 200 passengers on flights from Seattle to Miami.

When I worked for Delta in the late 70's loading airplanes, we used to call the "new" 737-200, the flying football because of its short, football like shape.  Advance the clock 25 years...and these same 737 derivatives look like 707s but with 2 engines! Thats very interesting to me because it continues to validate the beauty and engineering marvel of the original 707 shape as well as Boeing's understanding of what the potential product size should be for a given aircraft range.

An aerodynamic shape remains constant, but what happens with the engine efficiency and the avionics inside is dynamic.

clipped from www.boeing.com SEATTLE, May 06, 2008 -- The Boeing Company [NYSE: BA] last week delivered Europe's first two Next-Generation 737-900ER (Extended Range) airplanes to GE Commercial Aviation Services (GECAS) and its leasing customer, Spanish carrier Futura International Airways, based in Palma de Mallorca. "We are very satisfied to take delivery of the first Next-Generation 737-900ER for Europe through our lessor GECAS," said Román Pané, CEO of Futura. "Our experience in operating the 737 will be expanded with this new aircraft model, allowing us the longest range possible for our international fleet." Boeing launched the 737-900ER program in July 2005. The 737-900ER, the newest member of the Next-Generation 737 airplane family, increases the capability of the 737 by carrying more passengers and flying farther. The European Aviation Safety Agency (EASA) certified the 737-900ER April 22.

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NASSTRAC Recognizes Regan and Burba

It's great when two people you know personally receive well earned industry recognition for career leadership and personal commitment. Such is the case with Mike Regan, CEO of Tranzact Technologies and Al Burba, VP of Field Sales for DHL Express.

NASSTRAC recognized both at their annual Logistics Conference and Exhibition in Orlando on April 29th.  Regan was recognized as "Regular Member of the Year" while Al Burba was recognized as "Associate Member of the Year".

I serve with Mike Regan on the Board of Directors of the American Society of Transportation & Logistics and know him to be a visionary leader and substantive influence on the direction and strategic value of supply chain and logistics.

Al Burba is a great friend and colleague of mine at DHL and a superior talent for our company. Al's energy and customer care are well known. He teaches his troops by example and has built a reputation for quality in every part of the business he has touched.  Al was a major influencer on the NASSTRAC carrier advisory council for the previous two years. 

These are good guys getting well earned recognition. Congratulations Mike and Al!

clipped from www.trafficworld.com MINNEAPOLIS, MN - NASSTRAC recently announced that Mike Regan, CEO and chairman of Tranzact Technologies, has been named the 2008 "NASSTRAC Regular Member of the Year." Each year, this honor is awarded to an individual logistics executive who has demonstrated personal leadership, commitment, and dedication to the industry as well as to the association. NASSTRAC provides advocacy, education, provider relations, and networking for professionals involved in all areas of transportation, ranging from full truckload and LTL to containerization and global logistics. "As chairperson of the NASSTRAC Advocacy Committee, Mike is very well-known and has been an icon in our industry," said Gail Rutkowski, NASSTRAC's current chairperson. "However, this award is being presented for all of the things he has done behind the scenes. Two years ago, NASSTRAC made a commitment to aggressively devote significant attention to transportation advocacy issues.Mike has worked tirelessly to make sure the shippers within NASSTRAC not only know what the issues are, but also that they clearly understand them." In addition, NASSTRAC also announced that Al Burba, vice president of field sales for DHL Express, is the recipient of the 2008 "NASSTRAC Associate Member of the Year." Each year, the association presents this award to an individual from the service provider community who has shown leadership, continued commitment to the industry, and support of NASSTRAC. According to Rutkowski, Burba has been an active member of the carrier advisory council for the association for two years and has put forth significant energy in encouraging productive dialogue between shippers and service providers while assisting NASSTRAC in expanding membership into all modes and market segments of transportation.

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Link: Latin American Logistics dot Org.

Since my day job focuses on "The Americas", I spend a lot of time working on supply chain networks that begin or end in Latin America.   That has its challenges in terms of available carrier capacity,  north/southbound market dynamics as well as political and physical infrastructure.  I'm always looking for additional information on this market, but usually have a hard time finding in depth content, especially in English.  Having said that, I was very pleased today to get an email from Marcio Stewart of Latin American logistics.org informing me about this site.

Latinamericanlogistics.org contains numerous articles in English about logistics in Central and South America. Its very informative and one of the few sites I know of that focuses on this market.  I'm more than happy to give a little "link love" to these guys.  It's a site I will be visiting often.I'm especially interested in the NAFTA and CAFTA articles they host.

In due course, it is my plan to include some Latino expertise here at freightdawg.com.  Those regions that some companies call "emerging markets" are going to be the commerce hotbeds of the next 50 years.

Eric

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Railroads: Polticos Talk Re-regulation

You can tell when the economy is tanking by the rhetoric on Capital Hill,  particularly when deregulated industries start to become targets for re-regulation. Somebody gets to feeling abused and complains to their congressman.  If it's a lot of "somebodies", or even better, a corporation or two, then legislation gets drafted. Generally this involves politicians responding to the worries and needs of their constituents. Unfortunately, the congressional response doesn't always represent a cure to the problem.

The core of the issue noted below has to do with access to competitive rail service by shippers who may be located in remote or spur line sites. Unlike other modes of transport, the railroads own the tracks. If you happen to be off a BNSF trunk line with no other carrier with adjacent service, guess what? You get to deal with the BNSF and whatever they need to charge at market rates.  Thats as much an issue of site location as it is the railroads available.   If you build an ethanol plant and want to have access to more than one major railroad, then do the site selection survey first. 

Presently there is a lot of competition for railroad capacity. Coal, grain and ethanol in tank cars, are key commodities for railroads in the upper Midwest.  Demand drives rates. A congressional "demand" for competition may not be effective, but could absolutely screw up pricing and true market economics, especially if we wind up with some form of "blended" regulation where carriers have market limits on profitability. Canada has that now for wheat and grain. Where some extra regulation is probably warranted is even application of fuel surcharges etc.

I don't see a need for railroad re-regulation (yet). Railroads are both efficient movers of volume tonnage and have a unique investment in the tracks the tonnage moves on.

Where I could get much more interested in re-regulation would be the airline business. Service stinks, maintenance is sometimes questionable, customers are abused and rates are going up. Airlines are abandoning markets and merging as a course of survival. If ever there was a case for re-regulation, the passenger airlines in the US are a classic case. But thats another article.

Link to HR 1650 Legislation: GovTrack.US

Gary Sattler at Bloggingstocks.com also wrote an excellent article on this topic.

clipped from www.progressiverailroading.com House Judiciary Committee OKs railroad 'antitrust enforcement' bill Last week, a bill seeking to remove railroads' antitrust exemptions passed the House Judiciary Committee. On April 30, the committee approved the Railroad Antitrust Enforcement Act of 2007 (H.R. 1650), which aims to eliminate "antiquated railroad antitrust exemptions enjoyed, unfairly, by freight railroads," according to a press release issued by U.S. Rep. Tammy Baldwin (D-Wis.), the bill's author. If passed by the House, H.R. 1650 would permit the U.S. Justice Department and Federal Trade Commission to review railroad mergers under antitrust law, and eliminate antitrust exemptions for mergers, acquisitions, collective rate-making and coordination among railroads. The bill  which has "wide support from utilities, agricultural groups, chemical companies, the cement and steel industries, paper and forestry companies, and consumer groups," said Baldwin

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ILWU makes Statement on May 1.

I spent most of the week traveling for business.  During the week however the International Longshore and warehouse Union decided to make a "Statement".    That wasn't too surprising as May 1, is the international workers day. "May Day" traditionally a day when socialist countries promote labor.   In communist countries this day is often supported with military parades.

With that it is ironic that the ILWU used May day this year to host a one day work stoppage at 29 west coast ports. The union claims that the purpose of the strike was a protest of the US war in Iraq and Afghanistan. 

Pacific Maritime Association officials however, doubt that is the true purpose of the work stoppage. The PMA represents west coast shipowners and the work stoppage is a violation of the current PMA/ILWU labor contract.That contract expires this summer.

Given that the US economy is headed toward recession, if its not already in one,  the work stoppage also could send a clear signal that the ILWU isn't going to just give up on negotiations because times are tough. There is probably some truth to that.  Hard tactics by a negotiating union are no surprise.

All 29 ports on the west coast were back at work by the evening shift, but this strike action by the union seems to be a shot across the bow of the PMA. For shippers this is a space well worth watching.   I've  thought for some time that the union and the shipowners would find a way to work the new contract out.

With the US economy in some trouble, and jobs hard to find, now is not the time to cause a work stoppage.  A long term strike could cripple the country and cause major diversions of freight to non-US port alternatives in Mexico and Canada.   it would also put pressure on available container ship space to the US East Coast.   

The ILWU  used declared peaceful intention to make a militant political move.  Smart tactics in a negotiation, but with the economy being fragile, it is a highly questionable time for shenanigans.

Eric

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Airlines: Continental Stays the Course.

Continental Airlines has a long history of financial drama. I clearly remember the mess that Frank Lorenzo left the airline in back in the late 1980's. That guys' main claim to fame was building discount airlines and union busting. Along the way, he broke both Eastern Airlines and Continental.

Gordon Bethune and Greg Brenneman helped turn Continental into a reliable, good airline that made money. Brenneman was a former Bain consultant and Bethune was an former Boeing executive.  Both took a fresh approach to the airline business and made a significant difference in changing how Continental approached a market in which they were basically hated.

They used basic tenants such as "give the customer a meal if its mealtime." and a other logical methods to make flying Continental less painful than it had been previously. They also worked hard on employee pride. Continental employee morale improved considerably and we pax recognized it.

I remember in the late 90's when I got seriously mad at Delta. I mean really mad. My hometown airline had gone to hell in a hand basket regarding service, baggage handling, in flight service, pricing, reservations...just about everything. So I fired them. For two straight years I never flew Delta.  They fly 600 flights a day out of ATL and but I wasn't on any of em.

Looking back, I find irony in  "why I fired Delta" now.  The straw that broke the camels back is sort of silly in retrospect. It had to do with a completely offensive meal idea that Delta had called "Sky Deli".  Essentially you got an inferior sack lunch of tasteless, sub par foodstuffs. I thought I'd do better on a bus line than an airline with this kind of crap. That little marketing strategy sent me to the competition with GUSTO. I was offended. Garbage food, bad service and a passenger seat that gave you a wedgy wasn't for me.

For two years all I flew out of ATL was Continental.  I was working for the COO of P&O Containers at the time and flew with great regularity to Newark from Atlanta. I made platinum with Continental in a year. Consider at the time that was 90 round trips on an airline that only flew direct from ATL to Houston, Cleveland and Newark. I was willing to change planes to make my point. That was a very positive experience. So positive I took my 16 year old son to Japan on Continental frequent flyer points.

Theres a valuable lesson above.  With Delta and Northwest planning a major airline consolidation (it is a DAL acquisition if you haven't guessed this yet). I am delighted that Continental has decided to stay the course and remain independent. We need options as passengers.

I'm a platinum flyer nowadays on Delta.  Delta got my business back after my travel patterns changed and I HAD to use them. Delta's service, to their credit, also improved. However, now that we live in a land of airline consolidation and general unhappiness amongst the flying public, I am reminded to have a two airline strategy. I'm willing to give Delta some slack because I'm pretty invested in them with a BUNCH of frequent flyer miles that get me frequent flyer status. However, they've had to earn that investment.  I still don't trust any of the airlines.

Dear Continental: I may look like a stranger, but you may be getting some of my business back. Delta has 70,000 platinum flyers in ATL and I'm amongst them.   I am loyal to my hometown airline, but with the market as unstable as it is, I'm going to spread my business around as a defensive strategy.  Now don't blow this up by deciding later to get consumed in some mindless, serviceless, merger.

Eric

PS: Southwest, JetBlue and Airtran: Thank you for keeping prices reasonable in the markets in which you fly.  I've had it with "the major airlines" for charging 1300 bucks for tickets into markets that lack discount competition.  (helloooo... Louisville KY, Jackson MS, Charleston SC, Columbus Oh, Cincinnati Oh., etc.) 

Abusing the passenger is never the answer. I'm ready to teach another lesson. 

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