In the Freight sales world, confidence is king. People don’t just buy whatever you’re selling because they are also buying you. So it is important to present the best version of yourself, when approaching each sale. Here are a few ways you can be a more confident salesperson:
Step 1: Knowing your product. You need to do your homework. Whatever product you are selling, you should be its expert. You should know the ins and outs of your product, and be able to answer any question about it. You should also know any negative factors that might affect your merchandise. And always have a positive solution to any of those problems. Being fluent in your product knowledge is the most important step to being a completely confident salesperson.
Step 2: Knowing your prospects. Knowing what you are selling is only half the battle! Knowing to whom you are selling is almost as important. You need to be able to judge the taste of the prospect so you can offer merchandise you know will appeal to them. This can be accomplished by simply doing a little background research on your potential customer. As for existing customers, you should be well versed in their wants and needs. Knowing your prospects and customers will definitely add to your confidence, because it is always to talk to someone familiar-who you think you know.
As a salesperson, you need to know all the answers, are an expert in every little detail can help or assist with any question or hesitance. You need to exude confidence. Besides your product, you need to sell your customers on the idea that you are the foremost authority on that particular topic. Whether you are or aren’t all about projecting a genuinely confident attitude.
Showing posts with label a1 freight training. Show all posts
Showing posts with label a1 freight training. Show all posts
Tuesday, November 8, 2011
Sunday, November 6, 2011
"Freight Broker Training" If It’s up to Be, It’s Up to me
Freight Brokers Freight agents it is vital to understand that you are the vital aspect of your business you are the one that will Take Responsibility for Choices in your business
Read this article
a Freight Broker was one day talking with a friend that also had a freight brokerage when his friend began to mourn about his business, I can’t hold onto a client, I’m in debt up to my ears and will have to declare personal bankruptcy” he whimpered. “Where did I go wrong?”
When things go wrong, it’s easy to blame others. Blaming others for our difficulties is the easy way out. That’s why it’s so popular. Turn on any daytime talk show and you’ll find endless examples of people blaming everybody and everything for the way their lives have turned out.
But the happiest and most successful people – the leaders who get things done and get on with their lives — know that life is an endless series of choices, and take responsibility for these choices as well as the consequences of their actions. Leaders choose to control their destiny so fate and others don’t. They believe that choice more than chance determines their circumstances. Even in circumstances for which they’re not responsible, they still take responsibility for their actions.
Leaders recognize that they have control and choice over a number of key factors:
Choose Not to Lose – Whether we choose to focus on our problems or our possibilities is a key leadership issue. When we are faced with obstacles and failure, those who can overcome adversity and learn from their experiences, turning them into opportunities, are the ones who will be truly successful.
Perceived Reality – Most so-called “facts” are open to interpretation and are highly dependent upon what’s being read into them. We don’t see the world as it is, we see it as we are. Too often, we let our problems trap us deep inside our own “reality rut”. As long as we’re stuck there, we can’t see out of the rut to the possibilities beyond.
Choosing Our Outlook – An optimist expects the best possible outcome and dwells on the most hopeful aspects of a situation. Pessimists stress the negative and take the gloomiest possible view. And while we may have been given a tendency toward optimism or pessimism at birth or from our upbringing, we decide what we want to be from today forward.
Choosing To Let Go of Deadly Emotions – Another milestone in our growth is when we accept responsibility for our emotions. It’s less painful to believe that anger, jealousy, or bitterness are somebody else’s fault or beyond our control. But that makes us prisoners of our emotions. We stew in our deadly emotions. For our own health and happiness, we must exercise our choice to let go. No matter how long we nurse a grudge, it won’t get better. We need to truly forgive and forget. Forgiveness is not for the other guy, it is for ourselves.
Choosing Our Thoughts – In his 19th century Journals, Ralph Waldo Emerson wrote, “Life consists of what a man is thinking of all day.” If we continue to think like we’ve always thought, we’ll continue to get what we’ve always got. Our daily thought choices translate into our daily actions. Our actions accumulate to form our habits. Our habits form our character. Our character attracts our circumstances. Our circumstances determine our future… Taking responsibility for our choices starts with choosing our thoughts.
Leaders realize that life accumulates; the choices we make – good and bad – are like deposits in a bank account. Over the years we can build up a wealth of success and happiness or a deficit of despair and discouragement. It’s up to us. As with any active bank account, few of these choice accumulations are permanent. However, the longer we allow poor choices to accumulate, the more time and effort will be needed to shift that balance. Now is the time for action. There’s still time. If not now, when?
Read this article
a Freight Broker was one day talking with a friend that also had a freight brokerage when his friend began to mourn about his business, I can’t hold onto a client, I’m in debt up to my ears and will have to declare personal bankruptcy” he whimpered. “Where did I go wrong?”
When things go wrong, it’s easy to blame others. Blaming others for our difficulties is the easy way out. That’s why it’s so popular. Turn on any daytime talk show and you’ll find endless examples of people blaming everybody and everything for the way their lives have turned out.
But the happiest and most successful people – the leaders who get things done and get on with their lives — know that life is an endless series of choices, and take responsibility for these choices as well as the consequences of their actions. Leaders choose to control their destiny so fate and others don’t. They believe that choice more than chance determines their circumstances. Even in circumstances for which they’re not responsible, they still take responsibility for their actions.
Leaders recognize that they have control and choice over a number of key factors:
Choose Not to Lose – Whether we choose to focus on our problems or our possibilities is a key leadership issue. When we are faced with obstacles and failure, those who can overcome adversity and learn from their experiences, turning them into opportunities, are the ones who will be truly successful.
Perceived Reality – Most so-called “facts” are open to interpretation and are highly dependent upon what’s being read into them. We don’t see the world as it is, we see it as we are. Too often, we let our problems trap us deep inside our own “reality rut”. As long as we’re stuck there, we can’t see out of the rut to the possibilities beyond.
Choosing Our Outlook – An optimist expects the best possible outcome and dwells on the most hopeful aspects of a situation. Pessimists stress the negative and take the gloomiest possible view. And while we may have been given a tendency toward optimism or pessimism at birth or from our upbringing, we decide what we want to be from today forward.
Choosing To Let Go of Deadly Emotions – Another milestone in our growth is when we accept responsibility for our emotions. It’s less painful to believe that anger, jealousy, or bitterness are somebody else’s fault or beyond our control. But that makes us prisoners of our emotions. We stew in our deadly emotions. For our own health and happiness, we must exercise our choice to let go. No matter how long we nurse a grudge, it won’t get better. We need to truly forgive and forget. Forgiveness is not for the other guy, it is for ourselves.
Choosing Our Thoughts – In his 19th century Journals, Ralph Waldo Emerson wrote, “Life consists of what a man is thinking of all day.” If we continue to think like we’ve always thought, we’ll continue to get what we’ve always got. Our daily thought choices translate into our daily actions. Our actions accumulate to form our habits. Our habits form our character. Our character attracts our circumstances. Our circumstances determine our future… Taking responsibility for our choices starts with choosing our thoughts.
Leaders realize that life accumulates; the choices we make – good and bad – are like deposits in a bank account. Over the years we can build up a wealth of success and happiness or a deficit of despair and discouragement. It’s up to us. As with any active bank account, few of these choice accumulations are permanent. However, the longer we allow poor choices to accumulate, the more time and effort will be needed to shift that balance. Now is the time for action. There’s still time. If not now, when?
Saturday, November 5, 2011
The Keys to an Unstoppable Drive
Freight Broker/Freight Agents the following is Good stuff, a motto to be followed if you are to one day see yourself at the top you must learn to never give up as there is always room for folks with drive and ambition. It takes an inner self to push and find yourself with the extra drive to make it in this industry so here is a good s
Articles By Tim Taylor \ The Keys to an Unstoppable Drive
“Sometime back in the mid 80’s I was invited to attend a sales seminar hosted by Don Beveridgeand I was fortunatein that I got the chance to sit in on the seminar and I found it to be a memorable experience. He was motivated and his sales motivational points were strong. The ideas he shared with the audience, with a little bit of license on my part, went something like this: You wake-up at 5am, from 5-7am, you plan your day, every hour. Be in the office by 7am and by 9am get out and prospect and be in the community. At 5pm get back to the office to do your follow-up with all your prospective clients. From 7pm – 9pm you do your administrative work. After that, get into bed so you’re ready for 5am again. I heard at least two old saws proclaim, “this guy is nuts”. I thought so too but in a good way.
There were about 200 transportation sales people in attendance, many of which were inspired by his ideas. And my guess is that many of the salesmen (there weren’t many women selling freight in those days) took action after that day because they wanted his results. So they probably started getting up at 5am and arrived at the office at 7am and they started making the cold calls they normally weren’t making. But pretty soon, within a few days or weeks, most would probably stop and resume their old ways. Their activity levels go back to normal. Why? Because their productivity rose above their self-image and their self-image squashed their productivity down within their comfort level; a level consistent with their self-image. They took an afternoon off here and there, maybe they watched Oprah, maybe Jerry Springer; hung out in a bar commiserating with other freight solicitors, it was hard to say. It could be their actions were becoming inconsistent with their self-image.
Today many will talk about balance in life, those are thoughts best left to the idealists and those who believe the system is rigged and we ought to spread the wealth. I believe there is a place for balance all right, mine is in balancing the checkbook and my family life. Making a difference in your life and the lives of those who depend on you is, on its own, balance. The checkbook and family unit satisfaction areonly the scorecards. If your checkbook and family life is where you think it should be, you’re doing fine and don’t need to go further unless you think you can in which case you haven’t set you goals high enough.
You will always perform at a level equal to your self-image. Our self-image is the portrait we have of ourselves. It’s the picture we’ve created about our self and is commonly based on past experiences and environmental influences. So if a new desire for improvement is introduced and it conflicts with our current self-image, it is doomed to fail. I guess I was fortunate in that I had a very successful family and couldn’t envision anything other than success.
Our actions, behaviors and yes our discipline, are all heavily influenced by our self-image. Even if you force yourself via will power to do things beyond your self-image, you won’t be able to sustain it for very long. You will go back to the old behaviors consistent with your own self-belief because you believe it and you act from this belief. What caused the Ali’s, Jordan’s, and the Annika Sorenstam’s of the world to work as hard as they did? What causes the top 1% in selling to consistently sustain their mind-boggling activity levels? Answer for all: their self-image. If you watched Tiger’s meltdown in the last couple of years and its subsequent effect on his golf course performance, you can see what a blow to self-esteem can do, even if it was of his own making.
Major changes occur in income, production and satisfaction for the average salesperson (in fact all people)when they understand the importance of evaluating, changing and elevating their self-image. Agents comfortable with small and average client sizes but nervous and fearful with the high-end clients, who learn to grow their self-portrait become more confident and succeed in the large client arena..Lets not get into a discussion of which type of client you can make the most money on because you can make plenty off big clients if you set it up right and if you set it up right, it won’t be you doing the dispatching.
Speaking of dispatching; agents who are most comfortable working dispatching tasks instead of leading a group of dispatchers are destined to confine themselves to a dispatchers wage. Not that there is anything wrong with dispatching and if that is what you want to be good at, then be the best.There are many hourly pay rates in business; the highest belong to those who can lead other people in a desperate charge to the top. Job satisfaction is relevant to the position desired and the execution of satisfying your self-image. Life satisfaction is relevant to that self-image and the life that image confines us to.
As we raise our self-image we raise our expectations, behaviors and the discipline we bring to our activities. Learning to change behavior permanently is one of the most important skills a person can develop in their life. Without this skill, any self-improvement intention will result in failure and frustration. All we need to do is to change the portrait by investing time and energy with guidance through learning.
Our self-image is held in our subconscious mind. This is the inside part of our brain where all of our habits and beliefs are stored. Many estimates in the field of psychology suggest we are only utilizing a small part of our brain – generally 5% to 10%. Which means that nearly 90% is untapped and waiting to serve us. Our subconscious mind is this under-utilized resource. It’s the part of the brain that allows our body to do things naturally and consistently with such ease and proficiency that our conscious mind could never match.
Great things that seem impossible become possible when we learn to communicate to and from our subconscious mind. Here’s how: when a thought and feelings match, and are focused on over and over again, it becomes accepted by the subconscious mind. When we add pictures or visualization, which match this thought/feeling combination, we are actually changing our self-image with a new self-belief. Our self-image is only communicated to in pictures, hence the term self-image. When this ‘pictured thought with feeling’ intention is accepted by the subconscious mind it becomes a belief that executes itself automatically.
Follow these steps to a new level of discipline by changing your self-image:
Step one: Decide exactly what you want. This is critical. Is it a habit change you’re after or how about a new goal? Whatever it is, be crystal clear on the outcome you desire.
Step two: Determine the activities that would lead to this outcome. This is an easy step; just determine what you would need to be doing in order for this result to come naturally. It’s simple cause and effect. For this step, make sure you choose activities that you could see yourself doing. There are often many ways to an outcome. Avoid the activities that don’t fit your personality, but make sure the one’s you do choose will ensure your goal.
Step three: Invest 20 minutes a day in focused quiet time, Ten minutes in the a.m. and 10 minutes in the p.m. Here is the place you need to invest the time and energy. In this time, find a quiet place in which you will not be interrupted and close your eyes. With eyes closed, put your attention on the goal. With thoughts on the goal, see yourself doing these activities with ease day in and day out.
Picture yourself becoming proficient at these activities. Bring in more and more clarity to the picture every time you do this. Visualize the time of day and the reaction from those around you. The more detailed the better! And finally feel the feelings you would feel, as you would engage in these activities; also feel the feelings, with intensity, that you would feel accomplishing this goal. See yourself actually doing the deal!
Driven people produce record results because of their belief in themselves. They grew their self-image by this ‘pictured thought with feeling’ process. Many probably didn’t even realize they were doing it. Whether they intended to or not doesn’t really matter because this is how it works and it can work for anyone.
Apply this process and remember the importance of vivid pictures and concentrated feeling. Do this and you’ll never again have to be stuck in undesirable patterns from your past. With new information can come new results.
We’re only here for a visit. If you want to make a difference, you already have. There is nothing a tantalizingly close as a dream.
Articles By Tim Taylor \ The Keys to an Unstoppable Drive
“Sometime back in the mid 80’s I was invited to attend a sales seminar hosted by Don Beveridgeand I was fortunatein that I got the chance to sit in on the seminar and I found it to be a memorable experience. He was motivated and his sales motivational points were strong. The ideas he shared with the audience, with a little bit of license on my part, went something like this: You wake-up at 5am, from 5-7am, you plan your day, every hour. Be in the office by 7am and by 9am get out and prospect and be in the community. At 5pm get back to the office to do your follow-up with all your prospective clients. From 7pm – 9pm you do your administrative work. After that, get into bed so you’re ready for 5am again. I heard at least two old saws proclaim, “this guy is nuts”. I thought so too but in a good way.
There were about 200 transportation sales people in attendance, many of which were inspired by his ideas. And my guess is that many of the salesmen (there weren’t many women selling freight in those days) took action after that day because they wanted his results. So they probably started getting up at 5am and arrived at the office at 7am and they started making the cold calls they normally weren’t making. But pretty soon, within a few days or weeks, most would probably stop and resume their old ways. Their activity levels go back to normal. Why? Because their productivity rose above their self-image and their self-image squashed their productivity down within their comfort level; a level consistent with their self-image. They took an afternoon off here and there, maybe they watched Oprah, maybe Jerry Springer; hung out in a bar commiserating with other freight solicitors, it was hard to say. It could be their actions were becoming inconsistent with their self-image.
Today many will talk about balance in life, those are thoughts best left to the idealists and those who believe the system is rigged and we ought to spread the wealth. I believe there is a place for balance all right, mine is in balancing the checkbook and my family life. Making a difference in your life and the lives of those who depend on you is, on its own, balance. The checkbook and family unit satisfaction areonly the scorecards. If your checkbook and family life is where you think it should be, you’re doing fine and don’t need to go further unless you think you can in which case you haven’t set you goals high enough.
You will always perform at a level equal to your self-image. Our self-image is the portrait we have of ourselves. It’s the picture we’ve created about our self and is commonly based on past experiences and environmental influences. So if a new desire for improvement is introduced and it conflicts with our current self-image, it is doomed to fail. I guess I was fortunate in that I had a very successful family and couldn’t envision anything other than success.
Our actions, behaviors and yes our discipline, are all heavily influenced by our self-image. Even if you force yourself via will power to do things beyond your self-image, you won’t be able to sustain it for very long. You will go back to the old behaviors consistent with your own self-belief because you believe it and you act from this belief. What caused the Ali’s, Jordan’s, and the Annika Sorenstam’s of the world to work as hard as they did? What causes the top 1% in selling to consistently sustain their mind-boggling activity levels? Answer for all: their self-image. If you watched Tiger’s meltdown in the last couple of years and its subsequent effect on his golf course performance, you can see what a blow to self-esteem can do, even if it was of his own making.
Major changes occur in income, production and satisfaction for the average salesperson (in fact all people)when they understand the importance of evaluating, changing and elevating their self-image. Agents comfortable with small and average client sizes but nervous and fearful with the high-end clients, who learn to grow their self-portrait become more confident and succeed in the large client arena..Lets not get into a discussion of which type of client you can make the most money on because you can make plenty off big clients if you set it up right and if you set it up right, it won’t be you doing the dispatching.
Speaking of dispatching; agents who are most comfortable working dispatching tasks instead of leading a group of dispatchers are destined to confine themselves to a dispatchers wage. Not that there is anything wrong with dispatching and if that is what you want to be good at, then be the best.There are many hourly pay rates in business; the highest belong to those who can lead other people in a desperate charge to the top. Job satisfaction is relevant to the position desired and the execution of satisfying your self-image. Life satisfaction is relevant to that self-image and the life that image confines us to.
As we raise our self-image we raise our expectations, behaviors and the discipline we bring to our activities. Learning to change behavior permanently is one of the most important skills a person can develop in their life. Without this skill, any self-improvement intention will result in failure and frustration. All we need to do is to change the portrait by investing time and energy with guidance through learning.
Our self-image is held in our subconscious mind. This is the inside part of our brain where all of our habits and beliefs are stored. Many estimates in the field of psychology suggest we are only utilizing a small part of our brain – generally 5% to 10%. Which means that nearly 90% is untapped and waiting to serve us. Our subconscious mind is this under-utilized resource. It’s the part of the brain that allows our body to do things naturally and consistently with such ease and proficiency that our conscious mind could never match.
Great things that seem impossible become possible when we learn to communicate to and from our subconscious mind. Here’s how: when a thought and feelings match, and are focused on over and over again, it becomes accepted by the subconscious mind. When we add pictures or visualization, which match this thought/feeling combination, we are actually changing our self-image with a new self-belief. Our self-image is only communicated to in pictures, hence the term self-image. When this ‘pictured thought with feeling’ intention is accepted by the subconscious mind it becomes a belief that executes itself automatically.
Follow these steps to a new level of discipline by changing your self-image:
Step one: Decide exactly what you want. This is critical. Is it a habit change you’re after or how about a new goal? Whatever it is, be crystal clear on the outcome you desire.
Step two: Determine the activities that would lead to this outcome. This is an easy step; just determine what you would need to be doing in order for this result to come naturally. It’s simple cause and effect. For this step, make sure you choose activities that you could see yourself doing. There are often many ways to an outcome. Avoid the activities that don’t fit your personality, but make sure the one’s you do choose will ensure your goal.
Step three: Invest 20 minutes a day in focused quiet time, Ten minutes in the a.m. and 10 minutes in the p.m. Here is the place you need to invest the time and energy. In this time, find a quiet place in which you will not be interrupted and close your eyes. With eyes closed, put your attention on the goal. With thoughts on the goal, see yourself doing these activities with ease day in and day out.
Picture yourself becoming proficient at these activities. Bring in more and more clarity to the picture every time you do this. Visualize the time of day and the reaction from those around you. The more detailed the better! And finally feel the feelings you would feel, as you would engage in these activities; also feel the feelings, with intensity, that you would feel accomplishing this goal. See yourself actually doing the deal!
Driven people produce record results because of their belief in themselves. They grew their self-image by this ‘pictured thought with feeling’ process. Many probably didn’t even realize they were doing it. Whether they intended to or not doesn’t really matter because this is how it works and it can work for anyone.
Apply this process and remember the importance of vivid pictures and concentrated feeling. Do this and you’ll never again have to be stuck in undesirable patterns from your past. With new information can come new results.
We’re only here for a visit. If you want to make a difference, you already have. There is nothing a tantalizingly close as a dream.
Friday, October 21, 2011
"Freight Broker Training" "We can't talk out of both sides of our mouth anymore"
Freight brokers & Freight Agents we must understand the time has come that the shippers must understand if they are to get quality trucks they must pay the price the following article by Mark B. Solomon lays it out it is important to read and understand
He didn't ask for the mantle, but a case can be made that Tom Carpenter, director of North American logistics for giant International Paper Co. (IP), has become the conscience of the nation's shippers.
At the Council of Supply Chain Management Professionals' 2010 Global Conference in San Diego, Carpenter was asked if shippers should be taken to task for using the economic downturn and truck overcapacity to beat up carriers on pricing. He replied that "if the marketplace is giving us [excess capacity at low rates], we have a fiduciary responsibility to bring some of it back."
At the 2011 CSCMP conference, Carpenter's comments took on a more strident tone. "The shipping community has done a good job of managing our carriers' margins," he said, the sarcasm evident in his voice.
Big shippers like IP are tough negotiators with high expectations, and are accustomed to demanding and receiving superior service at low rates, Carpenter said. But in a world of shrinking capacity, a diminishing supply of qualified truck drivers, and escalating truck life-cycle and regulatory compliance costs, the days of shippers' having it all are fast disappearing, Carpenter warned. "We can't talk out of both sides of our mouth anymore," he said.
Carpenter wasn't the only big shipper at CSCMP to sound the alarm. "We probably haven't ever been through what we will be going through in the next four years," said Mark Whittaker, vice president of PepsiCo Transportation, a unit of the beverage and snack giant that spends $3 billion a year on global transport services and boasts the largest private truck fleet in North America.
For shippers, what lies ahead could be as challenging as what Whittaker fears. From 1980, when the trucking industry was deregulated, to the year 2000, the market experienced price deflation as a plethora of new players—and capacity—entered the market, emerging technologies fostered greater efficiencies, and operating costs held relatively steady. During that period, the cost of transportation fell 65 percent in real terms, according to Noel Perry, managing director and senior consultant at Nashville, Ind.-based FTR Associates.
The last 11 years have been the inverse of the previous 20, according to Perry. Since 2000, fuel, labor, asset, and regulatory costs have climbed, barriers to entry have increased, and in the past 12 to 18 months, truckload capacity has been taken out of the market. Add to that the obsession of many shippers with maintaining lean inventories and their increasing reliance on truckers to serve as a sort of "mobile warehouse," and it's clear the issue of available capacity—and the costs of procuring it—will define the industry for the rest of the decade, Perry said.
"It is probable that capacity shortages will last for several years, not just for one," Perry told an audience at this year's CSCMP conference in Philadelphia. "We could easily see sporadic supply chain failures based on capacity shortages. That's something we are not used to."
Sticker shock
Shippers could also be in for sticker shock where freight rates are concerned. Perry said rates will need to rise 15 percent just to offset the higher costs that truckers will incur to attract and retain good drivers, whose ranks are expected to thin as a result of federal regulations like CSA 2010, an initiative designed to winnow out drivers with marginal safety records.
Making matters worse is the level of driver turnover, which is hitting uncharted territory. Thom S. Albrecht, transportation analyst for BB&T Capital Markets, said driver turnover—or "churn"—hit a stunning 90 percent in the third quarter, more than double the turnover rate for the same period in 2010. Maintaining a stable workforce will cost truckers plenty, and it will be an expense that will likely get passed on down the chain.
At the same time, trucking executives said they would not be adding new capacity for the foreseeable future. The skyrocketing cost of replacing new rigs, combined with freight rates that aren't fully compensatory for the investment, makes it economically infeasible to add to fleets, according to carrier executives. The best shippers can hope for is a straight swap of power units, a move that will put newer rigs on the road but won't have any net effect on capacity, truckers said.
"There is no credible reason to go to the board to add capacity when the return-on-asset [level] is under 5 percent," said Derek J. Leathers, president and COO of truckload carrier Werner Enterprises, at a CSCMP panel session.
Kenneth Burroughs, vice president of revenue management for UPS Freight, the less-than-truckload unit of UPS Inc., was more direct, telling the same session that "we aren't going to be adding terminal or truck capacity."
Increased liability exposure
As truckers grapple with driver shortages and fleet reductions, shippers are being warned not to expect the service quality or reliability they have grown accustomed to. Donald A. Osterberg, senior vice president of safety and security for truckload and logistics giant Schneider National Inc., said truckers face a plethora of government mandates ranging from CSA 2010, to proposed changes in driver hours of service (HOS) regulations, to the 2010 rule that requires virtually all truckers to install electronic on-board recorders (EOBRs) to ensure their drivers are complying with HOS regulations. The EOBR rule, which would make it nearly impossible for drivers that once used paper logs to exceed their HOS limits, is in legal limbo after a federal appeals court in late August ruled that the policy doesn't do enough to ensure that truckers won't leverage the devices to force drivers to stay on the road even when they're tired. The rule, set to take effect in mid-2012, has been remanded to the Federal Motor Carrier Safety Administration for further consideration.
Osterberg said the cumulative effect of these mandates will be to force the supply chain to permanently rationalize service expectations. "I don't believe the current levels of service are sustainable going forward," Osterberg said at CSCMP.
Osterberg advised shippers to take their legal exposure under CSA 2010 very seriously, saying the plaintiffs' bar is chomping at the bit to pursue deep-pocketed shippers for monetary damages in the event of a fatal truck-related accident on grounds the shipper should have known under the CSA guidelines it was engaging a sub-standard driver and carrier. In addition, shippers that were shielded from liability through indemnification clauses written into carrier contracts will see that protection erode, Osterberg said, noting that 30 states already have non-indemnity laws on the books.
"Shipper liability is inevitable, and CSA will exacerbate its exposure," he said.
Shippers speaking at the conference say they are becoming increasingly proactive in tracking their drivers' performance. "We monitor [CSA] scores on a monthly and quarterly basis," said Michael F. Heckart, manager, North American logistics strategic sourcing for the agribusiness giant Deere & Co.
Heckart said Deere's relationships with its carriers are deeper than perhaps they've ever been. "It's not enough to just have a conversation with the carrier anymore," he said.
The difficulty in managing a customer's demanding requirements with fewer rigs and drivers at their disposal could compel some shippers to "roll the dice" and continue to use carriers that might be available but whom they know would be on the CSA bubble, according to Carpenter of IP. "Some [shippers] are probably doing it," he said. "But they are playing with fire and they're going to get burned."
He didn't ask for the mantle, but a case can be made that Tom Carpenter, director of North American logistics for giant International Paper Co. (IP), has become the conscience of the nation's shippers.
At the Council of Supply Chain Management Professionals' 2010 Global Conference in San Diego, Carpenter was asked if shippers should be taken to task for using the economic downturn and truck overcapacity to beat up carriers on pricing. He replied that "if the marketplace is giving us [excess capacity at low rates], we have a fiduciary responsibility to bring some of it back."
At the 2011 CSCMP conference, Carpenter's comments took on a more strident tone. "The shipping community has done a good job of managing our carriers' margins," he said, the sarcasm evident in his voice.
Big shippers like IP are tough negotiators with high expectations, and are accustomed to demanding and receiving superior service at low rates, Carpenter said. But in a world of shrinking capacity, a diminishing supply of qualified truck drivers, and escalating truck life-cycle and regulatory compliance costs, the days of shippers' having it all are fast disappearing, Carpenter warned. "We can't talk out of both sides of our mouth anymore," he said.
Carpenter wasn't the only big shipper at CSCMP to sound the alarm. "We probably haven't ever been through what we will be going through in the next four years," said Mark Whittaker, vice president of PepsiCo Transportation, a unit of the beverage and snack giant that spends $3 billion a year on global transport services and boasts the largest private truck fleet in North America.
For shippers, what lies ahead could be as challenging as what Whittaker fears. From 1980, when the trucking industry was deregulated, to the year 2000, the market experienced price deflation as a plethora of new players—and capacity—entered the market, emerging technologies fostered greater efficiencies, and operating costs held relatively steady. During that period, the cost of transportation fell 65 percent in real terms, according to Noel Perry, managing director and senior consultant at Nashville, Ind.-based FTR Associates.
The last 11 years have been the inverse of the previous 20, according to Perry. Since 2000, fuel, labor, asset, and regulatory costs have climbed, barriers to entry have increased, and in the past 12 to 18 months, truckload capacity has been taken out of the market. Add to that the obsession of many shippers with maintaining lean inventories and their increasing reliance on truckers to serve as a sort of "mobile warehouse," and it's clear the issue of available capacity—and the costs of procuring it—will define the industry for the rest of the decade, Perry said.
"It is probable that capacity shortages will last for several years, not just for one," Perry told an audience at this year's CSCMP conference in Philadelphia. "We could easily see sporadic supply chain failures based on capacity shortages. That's something we are not used to."
Sticker shock
Shippers could also be in for sticker shock where freight rates are concerned. Perry said rates will need to rise 15 percent just to offset the higher costs that truckers will incur to attract and retain good drivers, whose ranks are expected to thin as a result of federal regulations like CSA 2010, an initiative designed to winnow out drivers with marginal safety records.
Making matters worse is the level of driver turnover, which is hitting uncharted territory. Thom S. Albrecht, transportation analyst for BB&T Capital Markets, said driver turnover—or "churn"—hit a stunning 90 percent in the third quarter, more than double the turnover rate for the same period in 2010. Maintaining a stable workforce will cost truckers plenty, and it will be an expense that will likely get passed on down the chain.
At the same time, trucking executives said they would not be adding new capacity for the foreseeable future. The skyrocketing cost of replacing new rigs, combined with freight rates that aren't fully compensatory for the investment, makes it economically infeasible to add to fleets, according to carrier executives. The best shippers can hope for is a straight swap of power units, a move that will put newer rigs on the road but won't have any net effect on capacity, truckers said.
"There is no credible reason to go to the board to add capacity when the return-on-asset [level] is under 5 percent," said Derek J. Leathers, president and COO of truckload carrier Werner Enterprises, at a CSCMP panel session.
Kenneth Burroughs, vice president of revenue management for UPS Freight, the less-than-truckload unit of UPS Inc., was more direct, telling the same session that "we aren't going to be adding terminal or truck capacity."
Increased liability exposure
As truckers grapple with driver shortages and fleet reductions, shippers are being warned not to expect the service quality or reliability they have grown accustomed to. Donald A. Osterberg, senior vice president of safety and security for truckload and logistics giant Schneider National Inc., said truckers face a plethora of government mandates ranging from CSA 2010, to proposed changes in driver hours of service (HOS) regulations, to the 2010 rule that requires virtually all truckers to install electronic on-board recorders (EOBRs) to ensure their drivers are complying with HOS regulations. The EOBR rule, which would make it nearly impossible for drivers that once used paper logs to exceed their HOS limits, is in legal limbo after a federal appeals court in late August ruled that the policy doesn't do enough to ensure that truckers won't leverage the devices to force drivers to stay on the road even when they're tired. The rule, set to take effect in mid-2012, has been remanded to the Federal Motor Carrier Safety Administration for further consideration.
Osterberg said the cumulative effect of these mandates will be to force the supply chain to permanently rationalize service expectations. "I don't believe the current levels of service are sustainable going forward," Osterberg said at CSCMP.
Osterberg advised shippers to take their legal exposure under CSA 2010 very seriously, saying the plaintiffs' bar is chomping at the bit to pursue deep-pocketed shippers for monetary damages in the event of a fatal truck-related accident on grounds the shipper should have known under the CSA guidelines it was engaging a sub-standard driver and carrier. In addition, shippers that were shielded from liability through indemnification clauses written into carrier contracts will see that protection erode, Osterberg said, noting that 30 states already have non-indemnity laws on the books.
"Shipper liability is inevitable, and CSA will exacerbate its exposure," he said.
Shippers speaking at the conference say they are becoming increasingly proactive in tracking their drivers' performance. "We monitor [CSA] scores on a monthly and quarterly basis," said Michael F. Heckart, manager, North American logistics strategic sourcing for the agribusiness giant Deere & Co.
Heckart said Deere's relationships with its carriers are deeper than perhaps they've ever been. "It's not enough to just have a conversation with the carrier anymore," he said.
The difficulty in managing a customer's demanding requirements with fewer rigs and drivers at their disposal could compel some shippers to "roll the dice" and continue to use carriers that might be available but whom they know would be on the CSA bubble, according to Carpenter of IP. "Some [shippers] are probably doing it," he said. "But they are playing with fire and they're going to get burned."
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