Tucker recently hosted its first Strategic Council in our Cherry Hill, NJ, headquarters. We assembled various leading shipper organizations and experts, representing some of the world’s most influential firms. Clients included leaders in the pharmaceutical and medical diagnostics, consumer products, industrial materials industries as well as US Government representation from the General Service Administration (GSA). The goal of the Strategic Council is to discuss critical transportation economic issues and their impact now and into the future, and to discuss effectively and successfully communicating these issues, changes and concerns to each of our organizations, vendors and customers. Guest presenters included: Jon Langenfeld, R.W. Baird’s Director, Senior Research Analyst, recognized by Forbes Magazine as among transportation’s “Top Analysts;” John Gentle, DLP, former Logistics Management’s Logistics Person of the Year and a DC Velocity Magazine “Rainmaker;” Annette Sandberg, past Administrator for the Federal Motor Carrier Safety Administration. Capacity and fuel dominated the day, followed by new legislation and elevated liability and risk selecting safe carriers.
Langenfeld’s economic transportation forecasts a significant shift from the abundant capacity that began in 2006, to a more severe and prolonged capacity starved environment, possibly as early as 2009, calling that period a “pricing renaissance” for carriers. Langenfeld provided an analyst’s perspective of fuel, illustrating how difficult it is for carriers to survive this fuel crisis, and how it has contributed to the loss of capacity.
Tucker’s CEO Jeff Tucker and General Counsel and Director of Risk Management Darin Day provided an overview of the new, expensive legal liabilities applied against shippers and brokers by plaintiff attorneys. Landmark cases like Schramm v. Foster and Puckrein v. ATI, and copycat suits have re-written safe carrier selection requirements that shippers and brokers should follow when hiring a motor carrier. These new procedures remove available capacity from the equation.
John Gentle presented the results of his recent survey of leading national and regional motor carriers entitled, “Looking in the Mirror and How Carriers Perceive Shippers.” The study provided rare, invaluable insight into how carriers decide which shippers will receive their service and available trucks. The carriers ranked the most important shipper characteristics in this order: operations, compensation, relationships, receivables, legal, claims, other. Summary discussion focused on how a shipper’s internal self-evaluation can yield positive results affecting service, cost and capacity from transport providers. As we begin our journey into a capacity-starved environment, the resulting discussions involved what each of us can do to handle the challenge.
Annette Sandberg provided insight into what is happening on the regulatory front, from both DHS and DOT agency perspectives. She covered expected DOT announcments this year on final rules for hours of service, electronic on board recorders (EOBRs), New Entrant Motor Carrier Safety Audits, and Intermodal Container Chassis. In addition, Ms. Sandberg discussed the DOT’s plan for merging the medical license and commercial driver’s license programs for drivers. She also provided commentary on the newly introduced TRUCC Act (See Owner Operators), and the unified opposition against it in Washington and the Clean Air Action Plan LA/Long Beach, where authorities there would drive owner operators out of business, in a “green” push. Finally, Ms. Sandberg outlined the debate in Washington on infrastructure investment, which will dominate the upcoming Highway Reauthorization Bill. Every presentation illustrated in different and clear ways, how and why capacity is leaving the marketplace. Capacity is leaving due to fuel costs, bankruptcies, highway congestion, new regulations, safety and risk reasons, broader economic conditions and because physical assets are being sold overseas due to the weak U.S. demand and weaker U.S. dollar. The singular challenge ahead for all shippers: survive the upcoming crisis, in tact. The smartest shippers will not only survive, but they will prosper.
To be involved in future Strategic Councils, please contact
Hugh McLaughlin at (800) 229-7780, ext. 128,
For more information on successful strategies, contact Hugh or your Tucker sales representative. We will continue providing feedback and insight in our newsletters, too. Tucker Company can help you plan for the crisis ahead, and successfully navigate through it, so that your company is positioned to win.