Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
Everybody's got a customer service story, and it's rarely a happy one. The surly or inattentive clerk. Pressing "1" on the handset over and over again in search of a human voice—with a recorded voice telling you just how important your business is to rub salt in the wounds.
Those homely daily experiences illustrate that there aren't many players in business today who really get what customer service is about—or how it can translate into competitive advantage.
But why is customer service important in the context of supply chain management? It's simple. The supply chain doesn't really begin with sourcing and procurement, as some would have it. It begins with customers—their demands and those of their customers, their profiles, their locations, and their buying habits. Customer service dictates where we locate facilities, how we design distribution networks, and what processes and technologies we deploy and employ.
As for who these customers are, from the standpoint of supply chain operations, it can be just about anyone. We may be dealing with end-consumers. Or maybe our customers are other businesses—manufacturers, distributors, retailers, etc. At minimum, other departments inside our company—and the people in them—are our individual or functional customers. We'll focus here on some consumer examples, but the concepts and principles apply to customer relationships throughout the supply chain.
What is customer service, really? If you ask a group of people, you'll find there are a number of thoughts on the topic. But only once in our lives has anyone spontaneously come up with the answer that makes the most sense to us. A guy attending our Supply Chain Short Course at Georgia Tech stood up and simply said, "Everything." And he meant it. Everything. Everything that a customer might see, touch, or hear, before, during, and after a transaction is part of customer service.
At the retail level, for example, that would mean the look, feel, and smell—and location—of the store, the availability and display of goods, and the knowledge, helpfulness, and attitude of associates. On a Web site, it would include the site's appearance and ease of use by customers, whether they're placing orders or seeking answers to questions. And for call centers, it would encompass telephone service clarity and speed, complaint resolution, and staff knowledge.
What should customer service be about?
What do customers want? It might seem that they want the sun, the moon, and the stars, but research has shown that they really have only a few basic expectations:
Quick response/recognition. Whether it's in the store or on the telephone, no one wants to wait to be acknowledged or recognized, and no one wants to wait (five minutes tests the upper limit) for a response following recognition.
Human contact. The fact remains that people like the social experience— and flexibility—of dealing with other people, especially when there's a problem.
One-call problem resolution. This may be the gold standard for both "fixes" and information, but it's certainly not unachievable. And remember, costs go up—and customer confidence drops—with each succeeding call.
Expeditious solutions. That doesn't necessarily mean same- or next-day service, but it does mean a reasonably timely—and reliable—response. You're better off hitting a consistent three-day commitment than promising something in one day and delivering in two.
Positive attitudes. A smile in the voice goes a long way toward disarming an irate customer.
Technical knowledge. That means knowledge not just about products and how they work, but also of customer service processes and how they work. A representative who can lead a customer through the company's internal resolution process can make a business friend for life. Much of the above refers to the service department's daily interactions with customers. But true service leaders build customer service into the fabric of the company in ways that make doing right by the customer nearly automatic. They anticipate what customers might seek, as when Ford Credit mailed customers in Florida payment-forgiveness notices after the 2004 hurricanes. They empower employees at all levels to fix problems and correct errors and omissions. They focus on overall results—and the value of "customers for life" rather than on the cost of a single event or solution. They treat customer service as an investment, not a cost, and understand that customer service is a differentiator and competitive advantage.
Does this pay off in today's dog-eat-dog world? Some research indicates that customer service leaders enjoy better-than-average stock price performance. Think about some recognized leaders, the image conjured up by the name, and the quality of experience you've had with them: Infiniti in automobiles, Ritz-Carlton in hospitality, Nordstrom in retail, L.L.Bean in consumer-direct. Then think about how most people feel about the legacy airlines. Customers at all levels can tell the difference between those who talk the talk and those who walk the walk.
Consider the customer, then invest
The customer service all-stars also consider how changes in business practices will affect their customers. Well-designed technology, for example, can leverage the human investment in customer service. But poorly designed Web sites and automated menus can sabotage everything you're trying to accomplish. Before investing in a particular piece of technological wizardry, figure out what you want it to accomplish. Is it to reduce labor costs? Handle the easy, routine stuff in order to free up skilled humans for the sensitive and difficult issues? Increase responsiveness and augment other information and service channels? Or—and it really seems this way sometimes—is it to provide the appearance of a customer service commitment without investing in substance and reality?
Off-center technology includes Web sites that are organized logically (to a technology professional, anyway) but are not aligned with customer behavior; sites that are difficult to navigate; sites with rigid search capability; menus that don't raise the most common options immediately, regardless of their "logical" positioning or sequence; and menus that don't offer an avenue for all possible options.
Offshoring is another decision to approach with care. Its relatively low cost is seductive, for sure. And there are real issues domestically in finding qualified and motivated staff at any cost. But anyone considering an offshore solution for elements of the customer service equation must determine customers' sensitivity to the dynamics of problem solving with someone with a different cultural background. There is also the question of when spoken English may not be perceived to be English—on either side of the exchange.
Finally, there is the tragedy of enterprises that are committed to customer service, are willing to spend money on it, but are tone-deaf regarding what customer service truly is. Misdirected customer service can be worse than bad customer service. Customer service is crucial, yes, but you can go too far. Ask yourself these questions. How much service should you lavish on "C" customers, for instance? Do you need to deliver the next day to customers who would be thrilled to get things in two or more days? What is the point of "delighting" customers who are buying commodities on price alone? Who has the courage, and the wisdom, to tell the customer he or she is wrong, and that there's money to be made doing things a different way? Have you met the basics of service before striving to "exceed the customer's expectations"?
Do take time to consider the importance of satisfying customers in all phases of the supply chain. It's what we are here for, and serving customers in all dimensions of a commercial relationship can help to fulfill all of our core reasons for being in business.
In their 2006 book, Satisfaction: How Every Great Company Listens to the Voice of the Customer, authors Chris Denove and James D. Power IV echo many of our contentions. Most significantly, they argue that there is a clear link between customer satisfaction and profitability. Simply put, the bottom line is that customer service is all about, well, the bottom line.
Some of Americans’ favorite condiments include ketchup, salsa, barbecue sauce, and sriracha. Toppings like marinara and pizza sauce are popular as well. The common denominator here is the tomato, and food producers need many tons of them to make these and other tasty products.
One of those producers is Red Gold, an Elwood, Indiana, company whose brands include Red Gold, Redpack, Tuttorosso, Sacramento, Vine Ripe, and Huy Fong. The company works with more than 30 family-owned Midwestern farms to source sustainably managed crops.
In the 80 years since its founding, Red Gold has grown to become the largest privately held manufacturer of tomato products in the U.S., with 23 different product categories and nearly 400 combinations of flavors and cuts. Today, it serves both the grocery market and institutional customers like schools and hospitals.
But a food supply chain of this scale can be expensive to operate. So Red Gold recently launched an initiative to modernize its logistics processes with an eye toward boosting efficiency and increasing resilience while also cutting costs.
The timing was right for such a project. Freight rates in the trucking sector have been depressed for nearly two years, giving the company a rare opportunity to invest some of its savings into process improvements, the company said. “The current transportation market is extremely shipper-friendly and has been for the past 18 months,” James Posipanka, Red Gold’s supply chain manager–logistics, said in a press release. “Now is the time for us to plan and prepare for when it swings the other way and carriers can choose which customers they want to work with. When that happens, we want to be a ‘Shipper of Choice.’ By putting strategies and processes in place now, we’ll be successful when the market does flip.”
STEP-BY-STEP SAVINGS
For help streamlining its processes, the company turned to Loadsmart, a Chicago-based logistics technology developer that specializes in helping clients optimize freight spend, increase efficiency, and enhance service quality. Step by step, Red Gold began implementing three of Loadsmart’s technologies and digital services, moving to the next phase only after it had realized a return on its investment in the previous one.
First, Red Gold implemented Opendock, Loadsmart’s online dock-scheduling platform. That move alone saved thousands of hours of staff time by eliminating the need to make carrier pickup appointments via phone and email. Today, 100% of the carriers that do business at Red Gold’s facilities book their appointments through Opendock—which amounts to some 60,000 appointments annually. Among other benefits, the new platform has drastically reduced the amount of time it takes for a carrier to book an appointment—with Opendock, appointments are scheduled one to two days out instead of 10 or more.
Second, the company installed Loadsmart’s ShipperGuide TMS, a transportation management and request-for-proposal (RFP) management system. The platform helps Red Gold avoid spreadsheets and administrative work. For example, instead of individually emailing RFPs to a few carriers, the company can now send RFPs through the TMS to many more carriers than was feasible in the past and easily compare the rates carriers submit in response. In addition, Red Gold was able to automate some 70% of its load tenders, or about 25,000 shipments, which allowed the company to reduce headcount without any interruptions in workflow.
Third, Red Gold began working with Loadsmart’s digital freight brokerage team to convert some of its full truckload movements to partial truckloads. That move expanded both its carrier base and its freight mode options, saving it $200,000 annually.
All in all, since it began using Loadsmart’s technology and services, Red Gold has reduced appointment leadtimes by 90% and saved 17% on annual LTL freight costs, according to the two companies. Red Gold is so pleased with those results that its logistics team has already begun working with the technology vendor on additional opportunities for improvement.
With that money, qualified ports intend to buy over 1,500 units of cargo handling equipment, 1,000 drayage trucks, 10 locomotives, and 20 vessels, as well as shore power systems, battery-electric and hydrogen vehicle charging and fueling infrastructure, and solar power generation.
For example, funds going to the Port of Los Angeles include a $412 million grant to support its goal of achieving 100% zero-emission (ZE) terminal operations by 2030. And following the award, the Port and its private sector partners will match the EPA grant with an additional $236 million, bringing the total new investment in ZE programs at the Port of Los Angeles to $644 million. According to the Port of Los Angeles, the combined new funding will go toward purchasing nearly 425 pieces of battery electric, human-operated ZE cargo-handling equipment, installing 300 new ZE charging ports and other related infrastructure, and deploying 250 ZE drayage trucks. The grant will also provide for $50 million for a community-led ZE grant program, workforce development, and related engagement activities.
And the Port of Oakland received $322 million through the grant, which will generate a total of nearly $500 million when combined with port and local partner contributions. Altogether, that total will be the largest-ever amount of federal funding for a Bay Area program aimed at cutting emissions from seaport cargo operations. The grant will finance 663 pieces of zero-emissions equipment which includes 475 drayage trucks and 188 pieces of cargo handling equipment.
Likewise, the Port of Virginia said its $380 million in new funding will help to reach its goal of eliminating all greenhouse gas emissions by 2040. The grant money will be used to buy and install electric assets and equipment while retiring legacy equipment powered by engines that burn gasoline or diesel fuel.
According to AAPA, those awards will demonstrate to Congress that the Clean Ports Program should become permanent with annual appropriations. Otherwise, they would soon cease to be funded as backing from the Inflation Reduction Act (IRA) comes to a close, AAPA said. “From the earliest stages of legislative development in Congress, America’s ports have been ecstatic about and committed to the vision of implementing a novel grant program for the port industry that will complement and strengthen existing plans to diversify how we power our ports,” Cary Davis, AAPA’s president and CEO, said in a release. “These grant funding awards will usher in a cleaner and more resilient future for our ports and national transportation system. We thank our champions in Congress and the Biden-Harris Administration for committing to us and we look forward to working closely with our Federal Government partners to get these funds quickly deployed and put to work.”
The majority of American consumers (86%) plan to reduce their holiday shopping budgets this year, with nearly half (47%) expecting to cut spending by more than 50% compared to last year, according to consumer research from Relex Solutions.
The forecast runs against some other studies that predict the upcoming holiday shopping season will be a stronger than last year, with higher sales and earlier shopping than 2023.
But Finland-based Relex says its conclusion is based on the shorter holiday shopping period of 27 days in 2024 (five days shorter than 2023), combined with economic volatility and supply chain disruptions. The research includes survey responses from 1,000 U.S. consumers in October 2024.
According to Relex, those results reveal a complex landscape where price sensitivity and decreased brand loyalty are reshaping traditional retail dynamics. That means retailers and manufacturers must carefully balance promotional strategies with profitability while maintaining product availability, since consumers are actively seeking better value and may switch between brands more readily.
"Retailers are facing a highly challenging season, with consumers prioritizing value more than ever. To succeed, retailers must not only offer attractive promotions but also ensure those deals don’t erode their margins. At the same time, manufacturers need to optimize their operations and collaborate with retailers to deliver value without sacrificing profitability," Madhav Durbha, Relex’ group vice president of CPG and Manufacturing, said in a release. The company says it provides a supply chain and retail planning platform that optimizes demand, merchandising, supply chain, operations, and production planning.
"This holiday season represents a critical juncture for the retail industry," Durbha added. "With reduced brand loyalty and a shorter shopping window, there’s no room for error. Retailers and manufacturers need to work together closely, leveraging AI-powered tools to anticipate demand, manage inventory, and run effective promotions," Durbha said.
In additional findings, the survey found:
Brand loyalty is eroding: About 45% of consumers say they're less likely to remain loyal to brands without meaningful discounts, while 41% will switch brands if faced with both poor deals and out-of-stock products.
Digital channels dominate deal-seeking behavior: Store and brand apps (60%) and email promotions (60%) are the primary channels for finding deals, while only 32% of consumers primarily search for deals in physical stores.
Supply chain concerns remain significant: Nearly 85% of shoppers express concern about potential disruptions, with electronics (60%) and clothing/accessories (57%) being the categories of highest concern.
Age significantly impacts shopping behavior: Consumers from age 45-60 show the highest economic sensitivity, with 60% cutting budgets by more than 50%, while shoppers aged 18-29 prioritize product availability over price.
Electric yard truck provider Outrider plans to scale up its autonomous yard operations in 2025 thanks to $62 million in fresh venture capital funding, the Colorado-based firm said.
The expansion in 2025 will be focused on distribution center applications, but Outrider says its technology is also well-suited for use in intermodal rail and port terminals, paving the way for future applications across freight transportation.
“Outrider’s proprietary safety systems; consistent, predictable movement through complex and chaotic environments; and patented robotic-arm-based system for trailer air and electric line connections have allowed us to stay far ahead of any competition," Bob Hall, Chief Operating Officer at Outrider, said in a release.
The “series D” round was led by Koch Disruptive Technologies (KDT) and New Enterprise Associates (NEA), with additional investments from 8VC, ARK Invest, B37 Ventures, FM Capital, Interwoven Ventures, NVentures (NVIDIA’s venture capital arm), and Prologis Ventures. Other investors joining the Series D financing are Goose Capital; Lineage Ventures, the investment strategy of Lineage, Inc.; Presidio Ventures, the venture capital arm of Sumitomo Corporation; and Service Provider Capital. In total , the new backing brings the company to over $250 million in equity capital raised to date.
A team from the University of Tennessee, Knoxville, walked away with top honors at this year’s event. It was the school’s first time competing in the scholarship competition, which was held during IANA’s Intermodal Expo in September.
The winning squad included students Jaren Bussell, Elizabeth Shuler, Brock Sooley, and Kathryn Whittaker and was coached by Dr. Donald Maier, associate professor of practice–supply chain. “It is exciting to see what the students can achieve in five hours. Each team reads, analyzes, and prepares a presentation with no faculty input,” Maier said in a release.
In addition to UT, participating schools included the California State Maritime Academy, College of Charleston, Georgia Southern University, and SUNY Maritime as well as the universities of Arkansas, Maryland, North Florida, North Texas, and Wisconsin at Superior.
IANA’s scholarship awards support curriculums designed to attract students to careers in freight and intermodal transportation. Since the program’s inception in 2007, IANA has awarded over $5.3 million in scholarships.