Now Overdue: An Attitude Adjustment
Some receivers could use a dose of reality.
DOUG CONDRA
EDITORIAL DIRECTOR/PUBLISHER
Even before our just-in-time transportation system was slowed down by the threat of terrorism, it was suffering. Delays — especially at docks where trucks often sit for hours waiting to unload—have kept the system from living up to potential.
Such delays raise costs — not only for carriers, but for shippers and receivers themselves. And the consumer pays in the end; some say over $1.5 billion a year too much, if you figure in driver turnover.
Now that we are dealing with an apparent permanent high security alert, the need for shippers, receivers and carriers to cooperate is more critical than ever. What seems like a complicated situation is really pretty simple: It's about following the money.
Some people's pursuit is just misguided.
It doesn't take a rocket scientist to see that a truck and driver waiting 8-10 hours to unload is an extra cost for all three parties. The carrier's truck could be generating revenue with another load. That increased productivity would reduce the carrier's cost, which would allow him to lower rates.
Instead, some receivers who can't get their unloading acts together just want somebody else in the supply chain to pay for the delays they cause. All that does is perpetuate the cost, when it could be eliminated altogether.
"If you want to help me get my rates as low as possible, help me free my assets. Unload me and let me go haul another load," says Arctic Express CEO Dick Durst, who chairs the Truckload Carriers Assn. Just In Time To Wait panel. The panel's mission: work with shippers and receivers to drive costs out of the supply chain.
He says there are real-time solutions that are working. For example, some shippers use financial incentives to encourage receivers to unload their freight quickly.
One program, Kraft Foods' "efficiency bracket pricing," gives its customer (the receiver) price incentives for unloading its cargo in 2-1/2 hours or less. Durst says such incentives work in some cases, but some receivers just don't seem interested.
So with all our sophisticated logistics and communications systems that get our trucks to their destinations on schedule, the whole thing bogs down because a receiver can't — or won't — unload them promptly.
The National Industrial Transportation League, which represents shippers, is considering a measure that would allow carriers to join its ranks as associate members. It would give them more say in NITL voting issues, and offer more opportunities to work with shippers. A vote of the NITL membership on the issue is planned for January.
Let's hope they go for it.
Durst says a big part of the problem is that "our industry has been giving things away....but costs are up, rates have stayed the same and our margins disappeared."
That has to change. It's wrong for a customer who holds up your rig, or sticks you with a lumper fee, to get the same rate as one who does things right.
Truck manufacturers, some of whom sacrificed profit for market share, are now all saying those days are over. Profit is what it's about, and every segment in the transportation system — carriers, shippers, receivers, manufacturers — has to make a profit or the system goes away.
It's time for customers who take your service and rates for granted to adjust their attitude. If they won't do it through the TCA panel and/or NITL efforts, you may have to adjust it for them — through their wallets.
