What will truckers haul when there’s nothing left to haul?
This question popped into my head yesterday when I heard the news from Amazon that over the past month it has sold 180 Kindle books for every 100 hardcover books it has sold. Simply put, the Internet is a growing transportation mode in some industries.
Of course, not everything is going digital. There is still plenty of stuff to ship around. But although trucking remains the dominant transportation mode, many shippers are looking for ways to use less of it, due to concerns about capacity constraints, rising fuel prices, road congestion, sustainability, and other factors. The packaging initiatives Del Monte Foods has undertaken, which has lead to increased truck utilization and fewer miles driven, is a good example (see “Del Monte Foods: Packaging, Transportation, and Sustainability”).
The bottom line: As supply chain networks continue to evolve and customer needs change, trucking companies need to innovate to remain competitive and relevant to customers.
Innovation comes in many forms: business model, product, service, and so on. In the analyst world, we tend to focus a lot on technology innovations, especially software. But Con-way’s announcement last week of its DoubleStack Trailers is yet another reminder that innovation is not always about creating something new, but sometimes it’s just taking a different spin on something that already exists.
Since a picture is worth a thousand words, click below to see a video demonstration of the DoubleStack Trailer.
I spoke to Saul Gonzalez, VP of Operations at Con-way Truckload, to learn more about what prompted Con-way to develop this trailer and how it benefits customers and the company. In a nutshell, the DoubleStack Trailer allows Con-way to differentiate itself in the marketplace and it opens the door to new business opportunities, while offering customers significant cost savings. Gonzalez shared a customer example with me, an automotive supplier that runs milk routes from Canada to Mexico. This supplier picks up parts from different vendors in Canada each day, but because the products are packaged differently and pallet sizes vary, the pallets are floor loaded. But the total weight is only between 13,000 and 18,000 pounds—i.e. the trailer is significantly underutilized from a weight and cube perspective. “What if we could put a second floor on the trailer?” This was the question Con-way explored with the customer, which ultimately led to the design of the DoubleStack Trailer.
It’s important to note that double stacking is not a new idea. What’s new is how the capability is embedded within the design of the trailer. “In the old system,” Gonzalez explained, “you had to buy bars and plywood and manually install them each time.” This process was not only more labor intensive, but also created some interesting challenges with customs. “If you used the bars and plywood to ship a load to Mexico, for example, but you were coming back across the border to the US without a load, customs often viewed the plywood and bars in the trailer as items being imported into the country. We were then forced to explain to customs why these items weren’t imported goods. Since the bars and the rest of the stacking mechanism is clearly part of the DoubeStack trailer, we avoid this issue.”
The sweet spot for this trailer is clearly high-density, dedicated lanes where you want to consolidate different products from different vendors, as well as shippers with delicate products that can’t be double stacked using a traditional trailer. Also, shippers using these trailers should have good load planning capabilities to optimize their utilization. This implies that load planning solutions from vendors like JDA and Ortec need to have the ability to represent these trailers in their optimization models (see “Innovation: Addressing the White Spaces of TMS”).
So far, Con-way has converted 100 trailers to the DoubleStack system, with plans to convert more if customer demand increases. We’ll just have to wait and see what happens in the months ahead. In the meantime, I look forward to seeing what other innovations the industry develops to address the real transportation challenges shippers and carriers face today and down the road.
(Note: Con-way and JDA are ARC clients)
