Global Logistics and Supply Chain Strategies - August 2008 - (Page 57) INDUSTRY VOICES mental change in the way supply chains are going to be managed in the future. Many people seem to think that when this economic downturn is over, it will be back to business as usual. But there are some fundamental changes going on. Coming out of this downturn, energy prices are going to be different than when we went in. I don’t think anyone would suggest that we’re ever going to see the day when fuel is anywhere close to what it used to cost, even two years ago. The continual modal adjustment by customers, who are trying to keep their costs in line as best they can, suggests they will look for any chance to move from LTL to truckload, and from truckload to intermodal. You’re going to see the length of haul shorten. To the extent you can shorten the distance, you shorten the expense. People are looking at the whole manufacturing and warehousing cycle, trying to get more product in a load. You mentioned LTL to truckload, but it doesn’t stop there. It continues to go on down the modes. continued to shrink. Drivers are making the same or less than they were two or three years ago, even though in many cases we’ve raised the mileage pay, because the miles have gone down. So wrap it up with all the other issues that you just mentioned and yes, it’s still a difficult job, one that’s not attractive. And even though it’s a little better today, the fundamentals are still pointing in the wrong direction. than the highway system will. We’re concerned that congestion continues to plague us. Even with this big run-up in energy costs, I still believe there are going to be motor vehicles on the road that far exceed our ability to handle them over time. Q: How are we going to pay for improvements? Bergant:That’s a great question. I don’t know. Does it matter? There’s never going to be enough money. I hate to say it, but we seem to be living in a society where something has to break before it can come up to the top of the list to be fixed. Maybe the bridge has to fall, the traffic has to come to a dead stop, before we will actually turn our attention to it. It’s a piecemeal approach, and I don’t think we have put enough thought into a policy to try and understand it better. Q: How are you coping with the security issue today? Bergant: One thing that Hunt has done is adopt trailer tracking in our overthe-road fleet. From a security standpoint, we know where our trailers are. We can “geofence” that trailer, put a perimeter Q: What new services are you putting into place at J.B. Hunt? Bergant: In our dedicated contract services group, the final-mile delivery is a real opportunity. They have provided home deliveries for some time, and are trying to step up that piece of their business. Intermodal obviously has the opportunity to grow, with the length of haul continuing to come down to where it’s effective, both in terms of service and cost. Our integrated carrier service, which includes our brokerage arm, continues to find ways to provide trailers for customers. We can also utilize other people’s tractors and become the marketing arm for them. There are things out there that are going to help us continue to grow. Q: How has the driver shortage affected J.B. Hunt? Bergant:The truckload industry in general would pretty much speak with one voice. And that voice suggests that driver turnover is probably at the best levels that we’ve seen for many years, because many fleets including Hunt have reduced their tractor count. So drivers aren’t necessarily jumping around as they typically would in the past. Today, turnover is controllable. And we’re able to find drivers when we do have turnover. But there’s one fundamental that has not changed, and that is the quality of drivers we’re finding. It is not a job that most people strive to do. I don’t want to paint all drivers with the same brush, but if the supplydemand situation came back into proper alignment because the economy turned around, the quality of drivers would still be something less than we would like, generally speaking. And you would probably start to see turnover jump up again. Right now we’ve got a temporary lull in that situation. When we see an uptick in the marketplace, we’ll be back in the same old boat. around it so that if it ever moves, we know that. If someone dismantles the onboard computer in the tractor, many times they forget that the trailer might have a tracking device on it as well. That has also helped us immensely in terms of service, giving customers good information on the whereabouts of their loads. Q: What new developments are taking place on the technology side? Q: There’s also the challenge of having to pay drivers more to offset some of the disadvantages of the job, such as lengthy hauls and time away from home. Bergant: As I mentioned earlier, the length of haul for most if not all carriers has Q: What is the biggest challenge out there right now, with regard to the need for infrastructure improvements? Bergant: It all boils down to money and prioritization. Quite frankly, we are not real confident that the money spent to protect and build on that infrastructure is going to keep pace with the need for highway and infrastructure improvements. Railroads, on the other hand, even though they’re looking for public/private partnerships to help pump capital into their infrastructure, are spending a substantial amount in their capital budgets. I think they’re going to be able to keep up with the infrastructure requirements a little better Bergant: We continue to enhance the basic technology that we have spent millions of dollars on through the ‘90s and into this century as well. We’re fine-tuning the technology that we have to make our operation run more smoothly, and we’re continuing to take cost out of the system by reducing empty miles. While nothing revolutionary is coming up, we’re making further enhancements to some pretty good systems. That’s what the goal is going to be. To access this article online, visit The Digital Edition at www.SupplyChainBrain.com. Resource Link J.B. Hunt, www.jbhunt.com www.supplychainbrain.com GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 57 http://www.SupplyChainBrain.com http://www.jbhunt.com http://www.supplychainbrain.com
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