Yesterday I attended Markel’s Let’s Talk seminar on profitability, which provided one of those rare opportunities to hear shippers and carriers voice their concerns under the same roof. Representing shippers during a panel discussion were Allan Kelly, director of logistics with food company Casco and Neil McKenna, vice-president of transportation with Canadian Tire.
They spoke candidly about what a carrier must do to gain a piece of their business.
“It is difficult to crack Canadian Tire’s supply chain as a regular carrier,” admitted McKenna. His company uses about 20-30 carriers as well as its own private fleet. Most carriers who haul for a desirable shipper such as Canadian Tires have gone to great lengths to understand – and keep – their business, he noted.
Kelly said companies that hope to woo some freight from a top tier shipper should first research that shipper’s requirements. He said a fleet won’t get very far into a discussion if they haven’t done their homework and demonstrate an understanding of the shipper’s products and their handling characteristics.
Kelly also said “We’re looking for more sophistication” from carriers and he suggested they arrive at the table with statistics, such as on-time delivery percentages and lead-time requirements. He also prefers dealing with carriers that keep him informed about what’s happening in the trucking industry.
In Canadian Tire’s case, McKenna said it’s best not to try to pull the wool over their eyes. Since the company operates its own trucks, he pointed out “We know the cost to move our freight. We know the cost of equipment, fuel and labour.”
As an aside, it was interesting to note that Kelly said his company is diverting more of its product from rail to road. He recently switched a London-Chicago lane from rail to truck because as the railroads continue to increase rates, the savings are no longer worthwhile. And of course, rail still can’t touch trucking’s superior service. He urged other shippers who use short-line railways to give trucking a closer look.
My first reaction was that it was frightening that there’s a trucking company out there that can make a London-Chicago run for the same price as a railway. But in listening to Kelly speak further, it was clear he’s not one of those shippers who would make a modal switch or carrier selection based on the lowest bid. He made it clear he’s not interested in contributing to a carrier’s demise by insisting they haul his product at or below cost.
With north-south freight volumes drying up, it’s encouraging to hear the railways may be pricing themselves out of some of this business.
And speaking of quality shippers, here’s a tip from MacKinnon Transport’s Ray Haight which could serve as a useful tool for other fleets. His company surveyed all its drivers to determine their three favourite shippers to haul for as well as their three least favourite. The top three were rewarded with a plaque and a big ol’ thank-you. The bottom three received a visit from MacKinnon Transport execs, aimed at getting to the bottom of driver treatment issues and resolving them. Talk about looking out for your drivers. No wonder this company recently won a driver retention award.
Future issues of Truck News and Motortruck Fleet Executive will contain further coverage of this interesting event.