The carrier bashing reverberated throughout the Broward County, Fla., convention center. A panel of air, rail, ocean, and truck shippers, surrounded by a group of 60 or so highly sympathetic and frustrated shipper brethren, yesterday took the collective carrier universe to the woodshed for any number of infractions, legitimate or otherwise.
The panel, presenting at the National Industrial Transportation League's annual meeting in Fort Lauderdale, Fla., bemoaned the capacity shortages that have struck every mode. It also sharply criticized carriers for inefficient, unreliable, and inconsistent service that they said only continues to worsen.
Elton Poisler, DuPont Co.'s international logistics manager for ocean transportation, said the company, which uses ocean services mostly for export traffic, regularly manages "from a crisis perspective." Between domestic infrastructure problems—half of DuPont's exports originate at inland port locations—and the well-documented problems at gateway ports across the country—DuPont is seeing a steady decline in carrier service and reliability, Poisler said. On some lanes, on-time delivery rates exceed 90 percent, on others it has been as low as 58 percent, he said.
Advanced information systems would help the cause, but most carriers are not boosting their use of technology, Poisler said.
Paul Newbourne, senior vice president for operations at Armada Supply Chain Solutions, a third-party logistics provider (3PL) with a strong niche in the restaurant business, said a shortage of qualified commercial truck drivers is making life difficult for shippers and their providers. The driver shortage that was initially and most keenly felt in the truckload business has spread to the dedicated and less-than-truckload (LTL) segments, Newbourne said. Shippers are increasingly arranging for shipping dates further out in the future to improve their chances of getting a rig and a driver, he said.
Shippers who for years were accustomed to capacity assurance are finding that, unless they tender their carriers' profitable freight, they may not have access to a truck. If they do, they will be paying far more than they have in the past, Newbourne said. He told a story of a trucker seeking to shed an unattractive shipper by notifying the customer that it would only haul the freight in return for a 40-percent rate increase. The shipper readily agreed, Newbourne said.
On the rail side, Randy Brown, vice president for transportation logistics, North America, for agricultural and food service giant Cargill, said rail carriers are giving the red-hot crude-by-rail higher priority than intermodal and carload traffic, a decision that has been a source of chagrin for all nonenergy shippers. He said major railroads have been slow to hire and train crews, even thought the process takes about a year before crews are sufficiently qualified to be productive. Brown singled out eastern rail company Norfolk Southern Corp. as the chief offender in this area. He also said the congestion problems in Chicago, the nation's main rail hub which serves six North American Class I carriers, is a "25- to 50-year problem that will never get fixed."
Brown said carload traffic is currently approaching 2006-07 levels, the last period of very strong demand. Unfortunately, today's rail network, beset all year by congestion problems that began before the terrible winter weather that paralyzed large chunks of the network, is at the "breaking point," he said. Brown said anywhere near a repeat of last winter's conditions would be close to apocalyptic for the rail system.
The shipper panel didn't blame absolutely everything on the carriers. They acknowledged that they could do a more accurate job of forecasting and communicating freight demand, noting that a part of today's problem stem from underestimating demand trends. They all said that carriers are doing a better job of listening to shippers and that dialogues have become more productive.
Newbourne of Armada said discussions among his company, shippers, and carriers have helped reduce the amount of time a driver has to wait at a shipper dock or terminal to either load or unload freight. Two years ago, the driver dwell time stood, on average, at 89 minutes. Today, it is down to 61 or 62 minutes, he said.
Gartner, Inc.
