With capacity constraints, material shortages, driver shortages and numerous other disruptions impacting supply chains, the 2021 Holiday season is preparing for impact. Supply chain leaders are struggling to provide great customer service while containing costs and mitigating risks. Is it time to throw out your old playbook? Are there new benchmarks for success? Listen in as Ben Cubitt and TEKTOK host, Karin Bursa discuss how leaders are diving into functional areas like transportation, warehousing and network wide performance gaps that can be holding you back today. Find out how shippers across industries are building 2022 supply chain roadmaps with a new focus on cohesion and flow.

Intro/Outro (00:01):

Welcome to TEKTOK Digital Supply Chain podcast, where we will help you eliminate the noise and focus on the information and inspiration that you need to transform your business, impact, supply chain success, and enable you to replace risky inventory with valuable insights. Join your TEKTOK host, Karin Bursa, the 2020 Supply Chain Pro To Know Of The Year. With more than 25 years of supply chain and technology expertise and the scars to prove it, Karin has the heart of a teacher and has helped nearly 1,000 customers transform their businesses and tell their success stories. Join the conversation, share your insights, and learn how to harness technology innovations to drive tangible business results. Buckle up, it’s time for TEKTOK, powered by Supply Chain Now.

Karin Bursa (01:13):

Welcome back supply chain movers and shakers. Karin bursa here, and I am glad that you are with us today on TEKTOK, the digital supply chain podcast. Well, guess what? The 2021 holiday season is right around the corner, and you’re probably wondering where all those gifts are today. Well, the bad news is, they’re off the shore. And we’ve got significant disruptions that are continuing, not just on land, but on sea as well. And we’re going to talk through some of those issues today.

Karin Bursa 01:46):

But before we do, think about this, we’ve got material constraints, we’ve got shipping constraints, we’ve got labor constraints. And all of those are working together to really create an environment like we’ve never seen before. So, with the holidays looming, I checked yesterday and there are about 90 ships carrying about a-half-a-million shipping containers off the coast of Southern California, and another 30 ships that are backlog off the Port of Savannah. So, imagine just the effort it’s going to take to move those goods for the shippers and to get the goods and services in position to help you celebrate your holidays the way you’d like to.

Karin Bursa (02:30):

So, what do you do? What do you do with a shortage of workers? The shortage of equipment containers, shortage of truck drivers, and a general lack of global coordination across the transportation industry. Nobody is immune, no industry, no geography. Everybody is struggling to figure out how to provide great service while helping to contain cost in their business. And good news for you today, is that, we’ve got a guest with us with some pretty good opinions that are well-informed from a career in the logistics and supply chain industry. Back with us today is Ben Cubitt, and Ben is the Senior Vice-President of Consulting and Network Services with Transplace. Ben, it’s great to have you with us today.

Ben Cubitt (03:22):

Good morning. It’s great to be here, Karin.

Karin Bursa (03:24):

All right. So, my first question for you, Ben, is with all of this going on, are you sleeping at night? Are you carving out time? Is it possible? Because every day you’re waking up to new challenges as you help your customers mitigate some of these risks.

Ben Cubitt (03:40):

Yeah. That’s a great question. And one of my peers at Transplace said, “Yeah. I woke up at 3:00 the other morning with all these things on my mind.” And I think we all are doing that this last 24 months, you know, we wake up sometimes and it’s just right there. Then, take a second and you’re thinking about, you know, this challenge or that challenge. It could be trying to find people to fill all the seats. It could be, you know, disruptions of California. It could be this customer that you’re really working hard to help.

Ben Cubitt (04:10):

You know, we, did surveys and we’ve got that feedback from our employees, and it’s stressful. Our employees are really committed. They feel part of the shippers teams as their own. So, if somebody is on a Hershey’s team or a VASF team or an auto zone team, they feel passionate about that. And they feel that stress of not being able to just easily take care of customer issues. They feel that stress of all the things you mentioned. And it really is all modes, all geo. So, we don’t have any teams that have a break. You know, we have some teams that are primarily they’re shippers or primarily LTL, others that are heavy truck load, others that have a significant percentage of intermodal shippers that are in this region, that region, in every region, Mexico, U.S., Canada. And it’s just all modes, all geos. And I think it does make it harder to sleep.

Karin Bursa (05:06):

Yeah. Definitely. And I don’t think people fully appreciate the fact that people like you and your team members that are serving so many businesses. Now, Transplace has about $11 billion in freight under management and is managing one of the world’s largest transportation and logistics networks. So, you are living this exponentially, but that’s pretty good news for us. The reason I say that, Ben, is because you’ve got a point of view of how you’re helping numerous customers to mitigate some of these risks and really control what can be controlled in today’s environment. And I want to dive into that in just a minute.

Karin Bursa (05:48):

But, Ben, I know you’ve got about 25 years or more of experience in supply chain. Remind me of how you got into these roles. How did you, you know, set off on a career in supply chain? Because 25 years ago – I’m trying to remember – I’m not even sure we were calling it supply chain yet. It may have simply been logistics at that point in time.

Ben Cubitt (06:11):

It was logistics. And I’ll come back to that. But I got out of the Army after college and spent four years in the Army, and started in a career path that was not supply chain. But the company I worked for had a big cross training kind of people development program. And so, I was in Seattle, a completely different field, and they said, “Hey, we want you to go manage the Seattle warehouse.” And I was like, “I don’t want to manage a warehouse.” “No. It will be good for you. It’s important.” And so, I went and managed the warehouse.

Ben Cubitt (06:41):

And I was lucky that a couple cool things happened. One, you know, it was a really interesting and challenging job. And I enjoyed working with people and solving problems. And the company was doing some innovative things. But then, also, within a year of me coming into the field, they sent me to the CSCMP Annual Conference. And it was down in San Diego, which wasn’t bad. But that was great. You know, the profession was new. There were 4,000 people there from around the world. And it just, you know, was a great intro to the broader view of supply chain.

Ben Cubitt (07:14):

And then, within probably the first two or three years, they sent me to the one week executive logistics management course. I think it was probably logistics management at Michigan State, which is one of the leading programs.

Karin Bursa (07:27):

Yes. Absolutely.

Ben Cubitt (07:27):

[Inaudible] just some of the giants of supply chain. And I joke that, you know, we really were out of content by that Wednesday afternoon, Thursday morning, because everything that was known about supply chain really could only feel three days, not five days back then. So, yeah, that’s how I got started. And then, you know, I had five different supply chain jobs in six years with that company. And kept kind of growing in responsibility and seeing new parts of the supply chain, inventory management, warehousing.

Ben Cubitt (07:57):

So, it’s interesting you asked that question. I was lucky that in the first five years, I really had interesting challenging jobs, a variety of jobs, and got exposure to the bigger supply chain. The last thing I’ll say is, I remember CSCMP. I got involved with CSCMP probably five years in, and there was a year where we were debating, is there a difference between supply chain and logistics? So, it was probably just expected, Council of Logistics Management.

Karin Bursa (08:25):

I’m totally with you, logistics early in my career as well. And then, certainly, grew in to looking at all of the aspects of, you know, predicting the goods to be produced or sourced, as well as the inventory optimized, and through production, right through to distribution and logistics of goods. So, thanks for that background. I think that’s really important for a number of reasons, because I think that that underscores some of the value proposition that you bring into serving your customers at Transplace as well. So, Transplace, again, is about 11 billion under freight management. And so, you and your team members are living this every day. So, I’m looking forward to getting just a few insights into how to mitigate the risks that are happening today, but also how do we get a little more proactive and think about our 2022 plans? What are those roadmaps look like? What do we do with our playbooks?

Karin Bursa (09:18):

So, let’s dive in and really start about, you know, the topic of the current uncertainty in the global market. So, it’s not just North America, it’s not just Europe. This is a global challenge where a lot of assets are out of position, a lot of assets are backlogged. And, certainly, there’s a general shortage of labor, skilled labor, to help move these goods to their final destinations. So, what do logistics and supply chain leaders do? Do they just throw out their playbook then? Where do they start each new day fresh and moving forward?

Ben Cubitt (09:59):

Yeah. You know, it’s a great point. And we’ve had all the challenges for the past year-and-a-half through new markets, COVID-constrained markets, and supply chains have been out of kilter and you just have these rolling challenges by mode and by geo. But when you talk about some of the inputs, let’s take labor, I heard on CNBC this morning, there are 6 million unemployed, but there are 11 million jobs. And we’re really seeing that shortage. You know, our shippers don’t have enough labor in their DCs. And so, what that means is they can’t unload trucks. They keep trailers longer. They can keep containers longer.

Ben Cubitt (10:37):

You know, if you took one stat that’s interesting about the network right now, because you have the CEO of one of the larger ocean carriers emailing every customer and saying, “Please return our containers.” You have J.B. Hunt’s CEO talking on a quarterly earnings call, “Please return our trailers.” And then, I had a shipper tell me yesterday that the CEO of one of their major trucking companies was calling them talking about an accessorial. Because the carriers, they don’t want to charge accessorials, but it’s such a challenge right now from an infrastructure, from an availability of trailers. And there’s a real trailer challenge/prices in the U.S. right now. And they want accessorials that get shipper’s attention, you know, that say, “Hey, if my driver gets there in my trailer pool, you haven’t unloaded it, and they have to drive 50 or 150 miles to get another trailer, I need a bobtail fee or I need a detention fee.” And so, nobody likes to have accessorial discussions, but it’s reaching that point. So, shippers, they now have that extra, that network that’s taking capacity away.

Ben Cubitt (11:49):

So, what do you do if you’re a shipper, your volume is coming back. You look at some people who’ve had this explosion of grocery business and maybe their food service business was down. Or restaurants in most parts of the country are open, if they can get staffing, they’re doing business. So, the food service has grown again. A whole new input of demand. And so, I think we put shippers in two or three camps. So, there are shippers who aggressively have a new playbook for this market and they’re working it hard. They’re taking the best of their own market. They’ve thrown out what didn’t work in that playbook. And they’re really calling plays for this market. We have shippers who still have the old playbook. It really worked for them. They’re trying hard to make it work. And the reality is, it’s not working, but they’re trying hard. And then, we have some shippers, who we see, who just haven’t acknowledged that this is a new market. They just haven’t come to terms with it.

Ben Cubitt (12:46):

And then, the second thing I’d say, hopefully quickly, Karin, is, people are still working those playbooks aggressively in the best or working a new playbook, but they’re also looking out over the horizon and saying, “I got to fight the daily fight, the weekly tactical fight, but what can I do to get in front of this.” So, we can come back and talk about that more.

Karin Bursa (13:04):

Yeah. Absolutely. I do want to come back to that. And thanks for kind of breaking that down. It is so frustrating and fascinating at the same time to hear on the daily news and on the daily business reports the stats, some of which you shared, just, you know, from looking at CNBC this morning. But the numbers are just astounding, right? So, even if we just look at Southern California and we say there are 90 container ships that are waiting for dock time. Waiting to be unloaded. And those have roughly half-a-million 20 foot shipping containers on them. So, when you talk about “Please return our containers,” I mean, there’s a chunk of capacity right there just waiting to move goods back out once those are unloaded. So, it just illustrates the positioning of those assets throughout the global network as well.

Karin Bursa (13:57):

It’s going to take months, I have heard even up to a year, to really work out the system and get back to levels of efficiency that we operated at before COVID came in. And, certainly, that was before some of the labor constraints that we’re experiencing now. So, let me ask you this, Ben, so when your customers are reaching out to Transplace and you’re helping them put their strategies together, are there a couple of quick areas that you look at? Or what’s kind of your first go-to move in your playbook to help them figure out the next right step, given the current variables in where we are today?

Ben Cubitt (14:42):

Yeah. It’s a great question. And we have 11 billion in freight network, additional billions in parcel, but then we also do about four billion in consulting and kind of people who are not in our managed transportation. And more and more of those are year-round relationships where we have a group of three or four people just working with those very large CPG, retail, manufacturing suppliers, some billion dollar shippers, own strategy and procurement. And so, when we look at a customer for the first time or in an ongoing relationship, we’re really looking, first, to see how is their network performing, how is their carrier performing. And this kind of goes to the new playbook. We’re not looking at how is it doing versus benchmarks of two years ago. We’re looking at current market conditions and sometimes people don’t do that.

Ben Cubitt (15:35):

So, for instance, primary tender acceptance, you know, I have a carrier. They were awarded it. They’re supposed to be taking it. You know, good performance a few years ago was 94 percent, 92 percent. Pretty good performance was 88 percent. Today, good performance is upper 70s. Okay performance is mid-70s and there’s people in the 60s. Imagine that, your every day having to scramble to cover 40 percent. But good shippers – and I’ve had some very good shippers who have good conversations. “Hey, Ben, 70 percent of my freight is working. It’s contracted. It’s at 30 percent that’s just killing me. It’s causing me so much overspend.”

Ben Cubitt (16:18):

So, the first thing we look at is how are they doing versus current benchmarks. And then, again, we kind of have this playbook. We know what’s working in this market, what’s not working. We see are they applying best practices of the day. Are they cleaning the best practice? So, I’ll give you an example. And we see kind of a decisiveness, so where are they performing? What tactics and strategies and tools and processes are they applying? And then, how decisive are they? So, we’ll look at shippers who, you know, the old playbook was, I have a carrier. I did it. I’ve got a low rate. I am going to beat on them and hold them accountable to take that. And we see shippers, they tendered it to the same primary carrier 84 times and they’ve taken it twice. You know, we want to kind of have a therapy session. They are not going to take it. They are telling you that train is not coming back. And it’s painful because, now, I’m going to abandon a $900 rate. I’m going to go resource it. And it’s going to be $1,100. And that’s painful to me. But boy, that beats the heck out of paying 2,000 for bad service in the spot market. So, are they being decisive?

Ben Cubitt (17:35):

And then, I’ll give you another thing, appointments. Matt Harding, who’s our Chief Data Scientist, just did some cool analysis across that 11 billion in data. And he said, how hard are we working to cover loads? And so, we looked at how many tenders does it take? Did you tender the first carrier, they say no. Did you tender to the next carrier, they say no. Did you tender to a backup and then you take it to the spot. And what we thought it was about double. Our volume run significantly, but it’s double the effort to cover our load. Appointments, you get an appointment. The carrier can’t meet the pickup appointment. You have to reschedule. The shipper doesn’t have the load ready. So, you got the carrier, right. I’m ready to pick it up. They tell you, “Hey, it’s not ready. You know, it’s not going to be ready until tomorrow.” You have to reset that pickup appointment. Now, I may have to reset the delivery appointment. And so, how many people have come to terms with that?

Ben Cubitt (18:31):

We’re using a robotic process with that? We’re using different robots to help automate that. We centralized that team. So, are you addressing this appointment challenge as a net new problem? Are you applying the same thing and just really struggling? So, now, instead of covering loads, you’ve got resources in that appointment term, if you will.

Karin Bursa (18:54):

So, Ben, so many good things in what you just shared with us. I think that the first piece of advice that I want to make sure everybody hears is, stop comparing your current performance against your historic performance. The world has changed. So, we need to –

Ben Cubitt (19:11):

That’s a good point. And change your carrier expectations. Because that’s another one. I think that’s a major one. We see people still holding carriers to the same standard. And I believe most carriers want to perform. They want to meet their committed volume. But if they’re held up at the previous shipper, they don’t have that elasticity they used to have. So, if I have lots of trucks available and there’s a problem, I can put in another truck. And if you look at FTR’s statistics right now, they say we’re at about 98, 99 percent truck utilization. So, I have a truck and a driver, it’s planned that day. That means if I have a disruption, I can’t meet it. And I had a carrier tell me – I thought it was one of the more provocative comments of last year. It’s a long-term COO friend for 30 years, they’re a really great carrier. I said, “What are good shippers doing right?” And they said, “They’re not firing us for bad service.” And you can’t fire your way to success in this. You’ve got to re-establish what you think good carrier performances. You’ve got to grade and work with carriers. You’ve got to understand their challenges. And sometimes shippers don’t do that. And they think that the carriers are behaving poorly out of malicious bad intent. They’re taking too much spot freight. And while a little bit of that’s going on, I don’t think that’s our challenge. The challenge is capacity doesn’t meet demand.

Karin Bursa (20:35):

Yeah. So, I think that’s fundamental, capacity doesn’t meet current demand in the marketplace. And something worth remembering that was woven into what you just said is, it’s a terrible time to be a bad customer. It’s a terrible time to treat your trading partners poorly in the market, because it’s just going to add insult to injury.

Ben Cubitt (20:56):

Yeah. I’d say the penalty for being a bad actor, the penalty for bad processes, the penalty for being a bad shipper is higher than it’s ever been.

Karin Bursa (21:05):

Yeah. Yeah. And I firmly believe that we are laying the foundation for some long-term strategic relationships as we emerge from this period of extended disruption. So, I think that’s important. Ben, here on TEKTOK one of the things that we do focus on is that digital element, digital supply chain, digital planning capabilities. You mentioned several things in your comments just a moment ago and I want to revisit those. When we think about how do we accelerate the visibility, the current environment, how do we look at appointments and scheduling and tendering, talk to us a little bit about what you’re doing at Transplace to really help your shippers in this battle, if you will, to get products to market, and to be a good customer, and to work as collaboratively as possible with their current providers.

Ben Cubitt (22:05):

You know, when we think about digital processes and efficiency, we look at it in probably three buckets. The first is capacity. The second is service. And the third is efficiency or process. And I think we’re seeing innovations in all three areas. You know, we’re in the middle of an acquisition and a partnership with Uber. And so, I’m learning more about their capabilities as we’re getting to know them a little bit better, and kind of some preliminary pre-close. But you look at digital brokers, you look at block chain, you look at visibility.

Ben Cubitt (22:42):

So, the first area, I think, shippers should be interested in is what does digital, what does innovation do for me in capacity? Because I need capacity like I need air right now.

Karin Bursa (22:53):

And we need to match, right? We need to match the type of capacity, the timing, the lanes, all of those elements. So, the complexity layers on. And, Ben, I am shocked, shocked by the numbers of companies that are still planning their logistic operations in spreadsheets. It’s frightening to me.

Ben Cubitt (23:16):

And during your procurement. And then, once they plant it in a spreadsheet, they email a carrier, and the carrier emails them back, hopefully.

Karin Bursa (23:24):

When, literally, minutes and hours matter in the current constrained marketplace, that’s got to be as automated as possible.

Ben Cubitt (23:33):

Well, we talked about that, and when we talk about the playbooks, I’ll just talk about that for a second, and come back to digital. But we still have people who go seven, eight deep in their route gut, and they do a blast. So, they needed to get capacity in the morning when it’s most available. And they’ve got this process, they sit into a period, give them two hours to respond. Maybe you don’t need two hours. Maybe you need an hour. And don’t go the eight tiers. If you’re two primaries haven’t gone, you need to need to reach out to everyone. You need to send out an all bulletins alert and efficient way. Our fan process. You need to go access capacity. You can’t be waiting seven, eight hours.

Ben Cubitt (24:11):

So, if you come back to digital, I think that matchup is really important. So, what are people doing with digital? They’re saying, “Let me try to find a driver who’s emptying very close to the next pickup.” So, that driver, the average deadhead is, let’s say, 68 miles. If we can cut that in half, that’s adding an hour. If we can turn that truck quicker. But that match is important. The other match that we’re doing, one of our investments is partial load matching. So, if you think about that, somebody has a load from Ohio for 15,000 pounds. Another one of our customer has an 8,000 pound shipment. They would have either both shipped the partial truckload or one would have shipped partial, we match those up at scale across, say, a hundred shippers every day and there’s other people doing it.

Ben Cubitt (25:00):

But I’m very familiar with what we’re doing. We have a group that’s doing that all day every day. If you think about that, that’s perfect. You know, that’s efficient supply chain. We’re now building a fuller truck, maybe with three shippers goes to California, makes two deliveries. But instead of the supply chain needing two or three trucks, they need one truck. And that makes that driver more efficient. So, you know, there’s a lot of things happening with capacity. We’re doing dynamic, continuous moods. We bought Lanehub. And so, again, Lanehub is that kind of digital nd process. They looked at 28 billion of freight. They looked at our, you know, 11 billion and they find continuous move matches.

Ben Cubitt (25:36):

So then, the next thing you want to do, you found all these matches, you want to build confidence that people can collaborate. So, visibility is really important. And visibility that says this truck is in route. It’s going to make the pickup time, or it’s a little bit later, what do I need to do? So, visibility and having visibility to all your shipments, knowing where they are, being able to efficiently automate. That’s some of the promise of digital.

Ben Cubitt (26:02):

Then, we look at things like you think about how long it takes. Now, I post a load. I’d send a Tinder. They have two hours. Now, they say yes, but then they have to go find a carrier. And if they’re doing that manually, all that’s inefficiency and lost time. If I plan the load so that the carrier – we haven’t even touched base on planning in a spreadsheet. We, really, as shippers, haven’t built in that carrier’s time. We just know they’re going to pick up. We’re not helping them plan efficiently. You talked about, I think this is going to help us do things long-term and be more strategic in the supply chain. I think it will too.

Ben Cubitt (26:46):

And I think that’s one of the things that’s exciting. How do we improve planning? When I’m planning a truck, I should know how many hours that driver has available and the shipper and the carrier collaboratively should plan for the best truck I should put on this load. It’s this one. Not this one. Because I may bring the carrier and I may waste four of his hours. I may waste, you know, the delivery tomorrow has been delivered too late for him to pick up another load. So, that driver is going to have to shut down six hours early. So, we haven’t even scratched the surface on that. Then, when we think about blockchain digital, when you think about it, right now a driver has to have a manual bill of lading. They have to wait and get it signed. They have to – God forbid – fax it back to somebody. There’s better but there’s some facts, and we can’t recognize the revenue. We can’t pay the carrier. You know, paperless operations are in our future. And those type things where things need to be concrete.

Ben Cubitt (27:45):

When you think about COVID, that random driver were coming interacting. You’re controlling the entrance to the front desk real strong, but you’ve got all these drivers coming in. That should be done paperless. We shouldn’t be passing paperwork back and forth, you know, in a regular efficient world, but suddenly in the world with the challenge like COVID.

Karin Bursa (28:06):

Yeah. Absolutely. I mean, when we think of truckers and drivers in a network, I think it was really eyeopening for a lot of people in the business world when truckers and drivers were immediately considered essential workers. You know, that’s not where their brain went immediately. But the ability to move those goods to market, whether they are healthcare products or food and beverage, whatever it might be, it’s really essential to all businesses that are moving products.

Karin Bursa (28:38):

And you’ve mentioned a few moments ago, Ben, you were talking about some of the advanced work that your team is doing around data insights, and AI, and machine learning to really map all of these variables and these opportunities, if you will, together, are there any aha moments that you’re seeing?

Ben Cubitt (28:57):

Yeah. I’ve been doing this, as we mentioned, for 25 plus years, and I think one aha moment for me is the opportunity is so much bigger than it’s being realized. So, what we’re seeing in that $15 billion network, and growing rapidly, is that, when we go look for collaborative opportunities, when we look for dynamic continuous moves, we’ve got 30 loads coming into Atlanta. They could match with, you know, 60 loads going out of Atlanta. We’re not scrambling to find opportunities. We’re constraining it and constraining it. Literally, we looked at some of our AI. If we’ve got 300,000 opportunities in the next four or five days for this solution set, let’s constrain it. But the first constraint takes it to 150. We put the next, it takes it to 80. We put two more, we tighten it, so we’re going for best potential ones. We’ve still got a vast number of potential ones.

Ben Cubitt (29:59):

And then, the second thing we see is that, shippers are really starting to embrace it. We just finished an assessment for a very large ship where part of what good shippers are doing, as I mentioned, is looking over the horizon. So, we’re doing a lot of assessments right now where people say, “Hey, evaluate our people, our technology, our process. Tell us what our quick wins are. Tell us we ought to audit and change our network.” And we’re really overlaying people’s networks and saying, “Here’s all the things you can do within your own network. But if you expand your horizon or you can have larger dedicated fleets, you can fill more backhauls. You can put continuous moves together.” So, we see more opportunity in that. We’re not scrambling to try to find a few pilots. We’re quickly going from pilots to scale, to expansion. And there’s just more opportunities than we can get at, so we’re looking for those best. And we’re finding more and more shippers who, after they do that, they’re in kind of the same mode. They’re finding more of these. These bring me capacity. And as we mentioned, these bring me capacity with good service and good cost. And so, you can find capacity at bad cost. You can find capacity at bad cost at bad service. Obviously, that’s not the goal.

Karin Bursa (31:18):

That’s not what we’re looking for. Yeah.

Ben Cubitt (31:20):

Yeah. And that’s the aha, too, it gives us capacity with good service and good cost. Now, good cost versus today, not good cost versus two years ago.

Karin Bursa (31:31):

Yeah. And I do think that’s worth reminding everybody of continually. The market has changed. Right now, we’re grappling with a number of constraints that are just kind of changing how we evaluate what good looks like. It’s good in the context of the current challenges in the market. And that doesn’t mean this is going to be this way forever. But, certainly, we’re looking at some extended periods. So, all the way through COVID, we were seeing some constraints before COVID started. I mean, if we’re being honest, strengths, labor constraints, and shipping constraints, and container constraints before COVID.

Ben Cubitt (32:10):

It was a very strong economy before COVID. And we had an emerging labor issue. I mean, if you remember, before COVID, everybody talked about we were really at full employment. We were at three or four percent unemployment, which essentially is full unemployment. We think this is going to be with us. And I think the consensus is that, at least, through the middle of next year. That’s unfortunate. I think it could go longer.

Ben Cubitt (32:34):

I thought your comment earlier about people having a longer view, you know, six months ago, we were talking to people about their production, production couldn’t keep up with demand. We were talking about labor. And people were like, “Boy, we’re really scrambling.” And I think their thought was, “We’re going to fix this. And, goodness gracious, in 60 days, we’re going to be in a better place.”

Ben Cubitt (32:55):

Now, I hear more and more and more big shippers saying, “This is going to be with us for a year. It’s going to take us a year to catch up our production with our inventory. We’re going to overproduce.” I was in a grocery store yesterday, and seen some pictures. It’s a sign of the times. I don’t know if it’s a meme. But people send each other pictures of empty shelves, “Hey, look at this aisle. Look at this aisle.” And long lead times. Your holiday shopping, I think you should be doing your holiday shopping now.

Karin Bursa (33:26):

I think so, too. And I’m not an early shopper. But I have started just personally to think of that as well. But we’re hearing that from all of the major retailers, that if you see something on the shelf that you want or that looks like a gift item for someone on your list, buy it. Buy it now and hold onto it.

Karin Bursa (33:46):

So, Ben, as we look at this, you and I agree these challenges are not going to go away in the next 90 days. We’re going to be looking at this well into 2022. So, how do good shippers, what are they doing to really counteract this sobering reality? How are they putting their plans together for 2022?

Ben Cubitt (34:08):

Yeah. You know, you mentioned proactive earlier, so first of all, I think any good shipper is doing two things. They’re accepting the current market and they’re getting as much information about it as possible. I do five to ten customer connects a week just talking about how we see the market. What are market conditions? You know, those can be quick calls, they can be long calls. A lot of people are in planning. What do I need to do for my budget? We got a lot of education of upper management. So, the first thing I think we’re seeing good shippers do is accept the current market, understand it as much as they can, and educate the C-suite, the sales team, the planning team, that information is getting shared.

Ben Cubitt (34:52):

Then, once you’ve kind of done that, the next thing you’re doing is finding the good day to day battle. And they’re doing that with the right playbook. They’re doing that aggressively. They’re doing that with data. Boy, that’s a big difference. And it’s data, not at a global level. It’s data at a line SCAC carrier level. And they’re viewing that performance through today’s filter. And then, I think the next thing people are doing – you mentioned proactive earlier – is they’re being proactive. They’re saying, “You know, we’re working with a couple shippers,” and I find this really interesting, fascinating, cool projects. We’re working, like, on a three-year strategy, because I think the C-suite senior leaders have had a whole career of solving problems. So, they don’t want to hear it’s bad and it’s going to stay bad. If it’s bad and it’s going to stay bad, what are you doing? We see really progressive shippers saying, “I’ve got to help solve the driver challenge. I’ve got to help my carriers.” And I think we’re seeing people do things like that.

Ben Cubitt (35:48):

I saw an ad the other day, it was a shipper and they said, “Come drive for one of our carrier partners.” And we’ve talked to some shippers about doing that. If you think about that, that’s really cool. Because they have a brand. And a lot of carriers are small businesses, right? So, I think that’s really cool. Imagine if some of our larger branded companies said, “Hey, come drive for -” pick your brand. I won’t say it. “Come drive for this logo that you really know, a top ten brand. Come drive for one of our partner carriers.” And then, they had a way to maybe help feed that to their carriers. Because that may help us recruit drivers.

Ben Cubitt (36:27):

So, I think people are being proactive. They’re starting to say, “What is my strategy? If the data tells me I’m having trouble with capacity out of St. Louis, if I’m having trouble with capacity out of Texas, I’m really in good shape in Chicago, I’m in good shape in Florida north.” But then, they’re doing things like, “If I’m a shipper out of Florida or out of the Northeast,” that’s a precious commodity, right? So, am I getting a payback for that? I don’t only need to cover that load out of Florida. But when that Florida load gets to Atlanta or gets to Memphis, that driver, I want to get some of that capacity. So, if I helped you get out of Florida, I want to get your capacity on the next leg.

Ben Cubitt (37:12):

And then, how do I partner better with carriers? And I think we’re still only at the beginning of that. But good shippers are really partnering with their carriers and instead of saying, “You got to help me here wher the carrier can’t help me, where can you help me? And how can you help me?” So, we’re seeing more of that, more of fight the good daily battle. But look out over the rise and then start saying, “Okay. Strategically, what are the things that I can do to start bettering myself?” And if I’m 30 percent unplanned and 30 percent at the mercy of the market, can I move that to 25 percent in 90 days? In 180 days, can I get that to 20 percent?

Karin Bursa (37:52):

Yeah. Yeah. So, that’s a lot of good recommendations in there. Now, Ben, just in listening to you for the past couple of minutes here, it is a really important time in the market. And it’s a great time to have a trusted advisor in this area of logistics. I have heard you speak about doing end to end supply chain assessments for customers. What exactly does that mean? And what does a customer get out of that when they engage with Transplace to do an assessment and to build a plan? Kind of like you just maybe articulated some of the parts, a 90 day, 120 day plan. So, we start to look progressively at longer horizons. What does an assessment do or what kind of value comes out of that for shippers as they put their plans in place for 2022 and beyond?

Ben Cubitt (38:46):

Yeah. So, if you look, we’ve been lucky, really, my 25 years, I’ve been a shipper for about 60 percent of that. So, making sure loads were covered daily. And I’ve always been amazed at how resilient the truckload market is. Because back in the days before this, it was relatively rare that I had a shipment fail. You know, it was a small percentage of the time. But what we see now is that the supply chain is really interrelated. So, when you have these inefficiencies, when you don’t have redundant capacity, when you don’t have these modal options, it’s really exposing how interconnected the supply chain is. If I have a great transportation plan, but my warehouse is not functioning or if my warehouse 3PL is optimizing their performance and not helping me optimize carrier performance, I see that inefficiency.

Ben Cubitt (39:43):

And, you know, we bought LeanCor. And LeanCor has brought a lot of lean thinking to us and a lot of wastes, so if you look at all of this as wastes in the supply chain. So, we’re end to end assessment says, instead of looking at a silo, let’s look at it from orders hitting or in order management through that final payment, and delivery, and then payment. Where’s the inefficiency in the supply chain? And we’re seeing more and more, that DC efficiency, DC planning, inventory planning, customer segmentation, all of that, you know, working with customer service representatives, make sure they have the best information.

Ben Cubitt (40:24):

We talked about buying that gift because it’s on the shelf. What we’re seeing now and it’s causing inefficiency in the supply chain is, retailers are prioritizing, and it makes sense. If I’ve got 500 trailers on my yard, I’m not going to unload the oldest trailer. I’m going to unload the trailers that have the inventory I need on my shelf. When you think about that, if I’m now a supplier, I don’t want to keep dumping inventory into somebody who’s not going to unload it. You know, I need to send it where somebody is going to unload it so I can turn it into cash, turn it into sales, turn it into happy customers. So that, in the end, which starts with planning, starts with order flow, starts with planning, starts with inventory allocation, starts where I’m going to prioritize shipments. And then, through my DC, through my plants, where can I really get velocity? If I’m short, how do I expedite? That’s where we’re seeing the end to end assessments. So, people they’re not planning in a silo.

Ben Cubitt (41:27):

And we’ve done some really cool projects, where we’re helping people, you know, if my DC is constrained, how do I prioritize and how do I communicate to the carriers? It’s really inefficient if I tell a hundred carriers to pick up tomorrow. But guess what? I can really always ship 70 loads. I’m going to pay penalties. I’m not doing my peers a favor. So, that’s where we see the end to end assessments. It can be full end to end planning to delivery. Or it can be two segments. We’re doing a lot of DC and transportation work. But then, it does come back to inventory and planning. So, that’s where I think end to end and I think it’s also where people are looking out over the horizon. People feel like they’re pretty good with the day-to-day, the tactical. Yes, it’s still painful. But they’ve got an engine working on that. So, now, if I’m going to start being proactive end to end or a broader view of my supply chain, broader view of my transportation, start to becoming essential. And it begins with – if we go back to the beginning of the conversation – “Let me snapshot my current performance of my network, of my plan, of my carriers versus current benchmarks, current reasonable expectations.” Where’s the waste? Where are the gaps? Where can I bring new capabilities, new digital, a new Uber Transplace type capabilities. If we’re bringing innovation, where do I start bringing that in to really change my performance?

Karin Bursa (42:57):

Yeah. I think that’s really important because that’s going to give you clarity on what you can control. And making sure, again, back to you’re the best shipper you can be in the equation. And that you can help your logistics partners to really focus and be more responsive as well. So, you may be narrowing down those that you’re tendering to, but those are the ones that you’re really working with in the long run as well.

Ben Cubitt (43:24):

Use data and be decisive.

Karin Bursa (43:26):

Yeah. Data and be decisive. See, I love that. So, on TEKTOK Digital Supply Chain, we’re talking about actually removing waste, and waste comes in, time, as well as inventory, and cost. So, removing that waste by focusing in and having good data points to understand what you can do, what you can control in today’s highly disrupted world. But lots of good things that you mentioned there that are going to help to reduce friction in the network as well. So, in working with those partners and looking at load sharing in the process back halls, et cetera, so that everybody wins in the long run. There are fewer empty miles, which means we’re making better use of the capacity that is, in fact, available to us today.

Ben Cubitt (44:17):

Yeah. But if I make one comment about that, I think it’s a great summation, and I think it comes back to the driver. You know, you said earlier that drivers were essential. And I think drivers really were one of the heroes of this pandemic. They drove when they weren’t sure if they were going to be able to find parking, where it was really uncertain if they were going to be able to find a bathroom. If you remember, areas were closed. If they’re going to be able to stop for lunch. Is anybody going to be open? So, we owe a lot to drivers. It is a tough, tough job. You know, you start the morning looking for trailer, you end your day looking for parking. It’s a tough job to exercise. It’s a tough job to have normal sleep patterns.

Ben Cubitt (45:05):

And so, I think a lot of the things we were just talking about, network efficiency, keep that driver moving. And I think, hopefully, what comes out of this as a new respect for the driver, a new respect that those folks aren’t paid by the hour. They’re paid for the mile. And so, somebody who is doing such an essential service for the country and for the supply chain, we all owe it to them to keep those wheels moving as much as we can, to respect them by having parking, by having restrooms, by having WiFi when they get to our facilities. But, also, if they’re 30 minutes late, completely out of their control, the answer is not, “Hey, go out in the parking lot. It may be 12 hours before I can [inaudible].” And that’s just not respectful. It’s not efficient. And we all can and should do better.

Karin Bursa (45:56):

Yeah. Yeah. And that’s a great point. I think that we have to remember that, you know, there are humans involved in this process as well. And we all have needs. And I sincerely believe everybody’s striving to provide the best service possible. And that these disruptions are not just with your business, they’re with the businesses that are serving your business as well. So, everybody is grappling with some pretty unprecedented times.

Karin Bursa (46:22):

Ben in your role as senior vice-president in consulting and networking services with Transplace – and we’ve mentioned Transplace has roughly 11 billion – that’s billion with a B – under freight management today – you and the team at Transplace are looking at helping all of your customers make these moves on a daily, hourly, minute by minute basis. You’re leveraging things like control towers, the latest in technology that’s available, artificial intelligence, new data insights just so that you can help your customers make better informed decisions. As they’re putting those plans in place for 2022, any final predictions, Ben, on what we should look for in the coming months?

Ben Cubitt (47:11):

I think the predictions are, first, it’s hard to make predictions in this world. In the 25, probably closer to 30 years, I’ve been doing this, the last two years have had more change, more disruptions, more new entrance. There’s more cool things going on in supply chain technology process innovators than there had been. And so, more change in the last two years than in the previous 25 to 28. I think because of that, we think in scenarios, right? So, sometimes shippers want to say what’s going to happen. And where we come at it is, this is what’s likely to happen. This is the worst case. This is the best case. And I think you have to think about it that way. So, if you’re predicting and you predict that this is going to get better in three months, and it’s going to get this much better first, I don’t know how you predict that. Really, you should be doing something different.

Ben Cubitt (48:05):

I think we look at it as scenarios. This is likely, and we think over the next six months, we think things are likely to be tough. They’re going to continue to be tight capacity and demand. Automotive is down for chips. Go try to buy a new car, there are no new cars on the lot. And multiple friends said, “Hey, I bought a car. And I bought this and it’s not going to be ready for two months, but that’s a win.” And these are people who negotiate. So, all that demand is going to come back. And the consumer is sitting on the amount of savings in this country, 1.5 trillion of excess savings. There’s cash. There’s so much dry powder. The government is going to spend money on infrastructure. That’s going to put more demand out there.

Ben Cubitt (49:02):

So, the prediction is, unless you call me to something unusual to watch the economy, the economy is only thing that can help us in this supply/demand. It doesn’t seem like we’re going to be able to get a lot more capacity. So, capacity is, hopefully, going to improve a little bit. The intermodal is going to get better. But watch demand. The only thing that could really help us, and that’s not help, is, if demand got lighter. And I see that as tough, but it could happen. So, look at scenarios, worst case could be that fourth quarter is just unbelievable. And that automotive comes back strong. We could get a surge in demand that would, really, if we don’t get a capacity help, that’s your worst case scenario.

Ben Cubitt (49:43):

Your best case scenario is we are hearing a little bit of relief with drivers, with some carriers, but not across the board. So, we could recruit more drivers to the industry. That helps but it’s a tough job. And there’s plenty of other options out there. So, traditionally, this industry helped itself. All the carriers bought lots of trucks. And they hired lots of drivers, lots of [inaudible] over capacity. Most carriers are 40 percent behind in their truck orders. And the truck queue is way out there. So, we got this delay getting trucks. And even if you’ve got a bunch of trucks, you couldn’t fill them with drivers. So, look at scenarios and accept the market for what it is, be a realist, use data, and think about these scenarios, keep watching your scenarios, and then adjusting.

Ben Cubitt (50:31):

Did what happened kind of happened and is my strategy keeping up? Or wait a minute, it’s a little bit worse. And holy moly, I better do some stuff. Or it’s a little bit better and how do I take advantage of that? And I think the last thing I would say is a prediction. I hope your prediction is right, coming out of this, people don’t go back to short-term thinking, people stay strategic, people just deepen that relationship with carriers, with other supply chain partners. And they come out of this saying, “We could do better. I’m going to do better. And I’m not going to quit working. I’m going to keep working this hard when things get a little bit better so I can move and get back to better performance, and make my bosses happy that I’m hitting goals that are tough to hit right now. And we hear a lot of shippers say this, “Making sure that when the next challenge in prices comes and, hopefully, we get a long rest on that, I’m ready for it.”

Karin Bursa (51:30):

Yeah. Yeah. Hopefully, a long rest. So, a couple of things you said there, so holiday season, if you see it on the shelf, buy it now. So, that’s going to be the first kind of wrap up here. But then, secondly, be a good customer and show respect to those drivers because they are providing just a really important service. And as a part of being a good customer, it means working with those movement providers, whether you’re looking at rail or intermodal or you’re looking at truckerless and truckload. Think about how you can be easy to work with in the process as a shipper.

Karin Bursa (52:10):

And then, I loved what you said, Ben, about evaluating multiple scenarios. So, I think that this is really critical when we talk about being more resilient and more agile, is that, we have to be able to re-plan, literally multiple times during the day or certainly daily for our businesses. So, we’ve got to add that expectation that we’re going to constantly respond to the latest conditions in the marketplace. And we can do that and technology can help us do that. And, certainly, Ben you and the team at Transplace are working hard to provide those types of services to your customers as well. So, thanks so much for being with us today. You’ve given us a lot to think about as we look for ways to take control in this disrupted world. There are opportunities there for us and looking at the current context, I think is a great place to start. So, thanks for that.

Ben Cubitt (53:10):

Yeah. I really enjoyed the discussion. Karin, it really got me thinking about a lot of things. You know, it’s interesting to step back a little bit and think about your questions. And we did cover a lot from kind of day to day to over the rise in the night. I think that’s what we’re all trying to do is fight the good daily battle, but also try to focus on changing things. So, I really enjoyed the conversation.

Karin Bursa (53:33):

Great. Thanks so much. And I hope that these insights are going to help our listeners get the inspiration they need to help their businesses be successful in the current environment and well beyond into 2022. So, maybe you’ll even be able to give Santa just a little help during this holiday season as you look for opportunities to move those goods or fill your sleigh with all kinds of great things.

Karin Bursa (53:57):

Be sure to check out the wide variety of digital content available to you on Supply Chain Now. And while you’re there, please look for TEKTOK, that’s T-E-K-T-O-K, and subscribe. On TEKTOK, our goal is to help you eliminate the noise and focus in on the information and inspiration you need to transform your business and replace risky inventory with valuable insights. We’re going to see you next time here on TEKTOK, powered by Supply Chain Now.