“Upping truck weights and mandating speed limiters in the name of sustainability is irresponsible and ridiculous. Those things have nothing to do with making trucking more ‘green’ and everything to do with adding more ‘green’ to the pockets of large corporations.”
And so commented Todd Spencer, Executive Vice President, Owner-Operator Independent Driver Association (OOIDA), in a press release OOIDA issued yesterday. This was OIDA’s response to the testimony the American Trucking Association (ATA) gave to Congress yesterday where they called for (among other things) implementing speed governors and “the use of more productive truck combinations” (read the ATA’s press release for details). It appears that the trucking industry is “a house divided” when it comes to addressing its impact on the environment.
The back story, of course, is the American Recovery and Reinvestment Plan currently being considered by Congress, along with proposed regulatory changes that could affect the transportation industry (e.g., California and Clear Air Act). Lobbying efforts are in full swing, and we’ll just have to wait and see what ultimately gets passed and funded.
But back to the OOIDA press release, there was another comment in it that resonated with me. Here it is:
“[OOIDA] contends effective environmental solutions begin with addressing inefficiencies in the supply chain such as time and fuel wasted by truckers waiting to be loaded or unloaded and the amount of empty miles truckers must drive. Those two inefficiencies alone cost trucking and consumers a combined $5.7 billion dollars annually. Addressing those problems would go a long way toward reducing fuel burned as well as emissions.”
Amen, I say. Although I generally agree with many of the ATA’s proposals, I also believe that we have to address the ever-present “empty miles” problem and other supply chain process inefficiencies that continue to plague the industry. Last year, I wrote a paper arguing that the way shippers and carriers currently work together is unsustainable. Here’s an excerpt:
“Shippers and carriers operate in a business environment that has changed dramatically over the past thirty years, and it will continue to change moving forward. Yet, the way shippers and carriers work together has remained virtually the same since 1980, when the trucking industry was deregulated. The time has come for shippers and carriers, as well as Logistics Service Providers and other industry participants, to address this problem by matching the innovation that has occurred in technology over the years with innovation in business processes and services.”
Remember all that talk about “shipper collaboration” a few years ago? Well, it proved to be easier on paper than in practice. Does this mean, however, that creating continuous moves between different shippers is a quixotic goal? The answer depends on the approach. Clearly, relationships where shippers have to manage the process themselves have not been successful. This suggests that a third party needs to be involved, not only to engineer the solution, but also to manage the day-to-day operations. Another issue that has plagued past attempts is a lack of shipment density and redundancy. For example, if one leg of a continuous move is not ready for pick-up as planned, the whole route breaks down and the expected savings are nullified. This implies that a collaborative routing solution must not only include highly-reliable and repeatable freight, but also have enough redundancy to heal routes when exceptions occur. Finally, having a network is not enough; you also need technology to design, optimize, and automate the collaborative process.
Last winter, as fuel prices were on the rise, I spoke with a lot of shippers who were interested in exploring “collaboration” again. All ideas that could negate the increase in fuel surcharges were on the table. Similarly, I spoke with logistics service providers and “on demand” transportation management systems vendors, including LeanLogistics, Sterling Commerce, and Transplace, who were also revisiting “collaboration” and working on new solutions and services . Of course, some of that momentum has dissipated in recent months, as fuel prices have dropped below $50 a barrel and truck shipments have plummeted. Then again, maybe this economic slowdown gives shippers and carriers, along with their partners, the breathing room they need develop and implement innovative processes and solution.
What do you think? Has the time come for shippers and carriers to innovate the way they work together?