Many Third Party Logistics companies (3PL's) churn through customers, repeating the same expensive customer churning cycle, year after year, customer after customer.  Sadly, client loyalty and retention is not a primary focus for many business owners in our industry. 

But, at Southwest Transport we pride ourselves in standing far outside of that industry norm.  And with that, we'd like to share some simple tips that allow us to improve our service and support for your transportation needs.

Churning through providers is bad for companies and 3PL's alike.  Why?  Anyone involved in this churn cycle will agree there are costs to changing providers.  And, it can often be painful for everyone involved. 

Time is money.  And, time is the biggest resource lost when jumping from company to company.  Plus, any predictable services you may have experienced before can be lost with the first shipment if you have the misfortune of hooking up with a 3PL provider who is more focused on turning loads than they are on your customer services.

So what do 3PL's like Southwest Transport do that enable us to keep our customers for year after year, while others can't seem to keep their customers for more than a few months? 

Answer: 3 Stages of Communication

There is a three stage cycle of communications that a company and their 3PL repeatedly go through that determines whether their relationship will continue, or if a new bid package will be sent out.  If the cycle is recognized and acted upon, a 3PL can extend and improve relations with a company for years to come.  If any part of this cycle is ignored, it will eventually result in a change in operators.

The first stage is "Setting Expectations."  In a new operation this is when the company outsourcing clearly expresses their goals and expectations to the 3PL.  Likewise, the 3PL makes commitment on the service that is to be provided.  In the beginning of the relationship, these terms may be captured in a contract.  Ongoing however, as exceptions, special projects and changes occur, each party must insure both expectations and deliverables are communicated verbally and in writing.  The expectations and deliverables must be mutually understood and agreed to prior to any substantive action taking place.

The second stage of communications is "Ongoing Updates."  Again, this is a dialogue of sorts between the solutions provider and the company that has outsourced to them.  This is where many 3PL's drop the ball.  This is where you have ongoing communications about what is going on in the operations on a day to day basis.  At a tactical level, there is generally a manager talking to a single point of contact every day about operational issues.  Just as important, there is a strategic conversation that must take place, at least monthly, between a senior executive from the 3PL and the executive decision maker.  These strategic discussions insure alignment between the two entities. And, it will also insure expectations are clearly understood and performance is explained.

The third stage of communication is "Exception Management."  This is often the most important stage in communications between a company and the 3PL.  Remember, companies outsource either because they don't have the internal core competency required, or because they want to focus their energies and resources on other critical parts of their business, or both. 

Put simply, companies pay 3PL's to lose sleep over their operations so the company's executives don't have to!  3PL's get paid to provide a level of expertise, identify issues before they get out of control and to do a really good job of managing the exceptions and minimizing the impact of operational issues.

In any complex operations "stuff" is going to happen.  It is how a 3PL deals with these irregularities that separates the best in class from the rest of the crowd. 

A top quality service provider will be the one who identifies the issue or problem and informs the customer.  They will consistently go the extra mile and do whatever it takes to make things "right."  This is our motto at Southwest, and if we are falling down on this promise at any time - we want to hear from you.

Not only are we the first to tell our customers when issues arise, but we do so with a plan in our pocket and recommendations for action to resolve things in a timely way.  Solution providers should be expected to act as a red flag mechanism, supported by a proactive team that will take steps to minimize risk and maximize your profits.

Communications is key.  As a solutions provider, we are only as good as our ability to communicate in each of the three stages of communications with our clients.  And, we always welcome your feedback and questions regarding any areas of our services that we can help you with.

In Your Service,

The Southwest Transport Logistics Team

www.swtransportlogistics.com

        

From the American Trucking Association ...

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.7 percent in November, following a 0.2 percent contraction in October. The latest gain boosted the SA index from 103.6 (2000=100) in October to 106.4, its highest level in a year. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 100.8 in November, down 8.0 percent from October.

Compared with November 2008, SA tonnage fell 3.5 percent, which was the best year-over-year showing in twelve months. In October, the index was down 5.2 percent from a year earlier.

ATA Chief Economist Bob Costello said that tonnage is moving in the right direction. “Slowly, but surely, truck freight has started the recovery process and November’s solid increase is a very positive sign,” Costello noted. He said that November’s tonnage levels were pushed higher by improved economic activity, as well as by an inventory correction that is near completion. “Truck freight had been hurt by both slow economic output and bloated inventories; however, we now have evidence that the inventories are in much better shape, which will not be such a drag on truck freight volumes.” Costello continued to be cautious about the future though. “While the economy and trucking is improving, the industry should not get overly excited about the sizable increase in November. I continue to believe that both the economy and truck tonnage will exhibit starts and stops in the months ahead, but the general trend should be for moderate growth.”
...
Trucking serves as a barometer of the U.S. economy, representing nearly 69 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.

The economy fell off a cliff in September 2008, so the year-over-year comparisons are getting easier. As ATA Chief Economist Bob Costello noted, trucking benefited from the inventory correct, and he believes that is nearing completion - and trucking will likely "exhibit starts and stops" until there is a pickup in domestic end demand.

Note: I think this is the highest level since January, unless January was revised down.

        

A Reminder . . .

    . . . set your clocks back one hour on Saturday night!

With Best Regards,

Southwest Transport Logistics

        

With a generation of texters soon to become licensed drivers, astudy by Virginia Tech says now is the time to enact a nationwide banon cell phone texting while driving.  Otherwise, “a true crash epidemic”is certain.

Distracted driving was to blame for more than 5,800 deaths in autocrashes in 2008.  This fact led  to a summit this week in Washington, D.C.,held by the U.S. Department of Transportation to try to find solutionsto a problem our Transportation Secretary Ray LaHood called a “menace tosociety.”

The summit also called out drivers under the age of 20 — thegreatest proportion of distracted drivers on the road today and the agebracket responsible for 16% of all distracted driving crashes.

“You can stress the danger of texting a message while driving andmost drivers say they are against it.  But we’ve found those samedrivers are doing the same dangerous thing,” said AAA East Tennesseepublic affairs specialist Stephanie Milani.

The Virginia Tech study released in July goes as far as to recommendspecific legislation that singles out teen drivers and urges a ban oncell phone use for the beginning motorist.

Using your thumbs and hands to text instead of having a full grip onthe steering wheel increases the risk of crash or death by 2.8 timesthe normal level, the study says.  Other recent studies have site up to 5 times the danger.  In any case, it's just not smart or safe.

The document also states that texting a message while driving canrequire a driver to look off the road for an average of 4.6 seconds —that equates to a car traveling the length of a football field at aspeed of 55 mph.

Milani agreed with another study fact: Hands-free devices in the cardo little to decrease the risk of being in a crash because of theconcentration needed to operate the car or truck.

“Sometimes we’ve heard people say ‘How did I get here?’ afterdriving a long distance. That shows you how even being distracted byyour thoughts can disrupt the driving,” Milani said.

A survey conducted by AAA earlier this year showed that 87 percentof drivers on the road view a texting driver as being as dangerous as adrunken driver. 

AAA wants a nationwide ban on cell phone use and texting whiledriving. Federal dollars for highway projects could be used as anincentive to get states to pass the laws.

The Obama administration has not taken a stand on aDemocratic-majority endorsed bill introduced by Sen. Chuck Schumer inJuly that would take 25 percent of highway dollars away from a statethat does not ban texting while driving. The bill is still underconsideration.

AAA wants drivers to try and go one week without the distractioninside the car as National Heads Up Driving Week begins on Oct. 5.

“We want everyone to make the pledge to not use their cell phone,send a text message while driving, or end any other distraction forthat entire week. We feel like if the habit is broken in a week thatdriver can do without it from now on,” said Milani.

Drivers who want to sign a pledge of no distracted driving next week can go to www.aaafoundation.org/headsup.

        

 
Are "Reading Tea Leaves" as Predictable as ...
"Reading Freight's Future From the White House?"

There are lots of conflicting signs floating around in the U.S. freight market about where things stand.  Like most other economic areas right now, some are positive indicators.  Others are more on the negative side.  In the view of many analysts, at  least in the near term ... freight volumes are seen to be settling and stabilizing.  But for the long term, truckers should expect to be navigating some very unpredictable waters.  The ripple effects of this will continue to matter to shippers, as well.

Like usual, there are at least two sides to every story.  On the one hand, the fundamentals aren’t changing.  Unemployment remains at 9.4% to 9.5% in the U.S.  Nothing good about this. Aside from the U.S. stock markets being way off course, the Chinese stock market is experiencing extreme volatility right now, too.  That affects import volumes into the U.S.  And, China freight is carried - largely by trucks.

Fox Business News reported this week that stock traders are paying very close attention to another wave of selling overseas, which sent China’s Shanghai Composite plunging 4.3%.  This index, which ran up even more than U.S. markets, is now 20% off its highs, putting it into another bear market.  For anyone not up on market terms, "bear" means "down!"   And, here is a BIG down!

China has been predominantly responsible for lifting the global economy off its behind in months past.  So, the pullback is having its obvious impact on everyone else - along with our government's economic churning.  Day to day truck haulers and vendors asking for bids and low prices are usually less than aware of this bigger picture.  And, it does not alter the facts of economics in freight transportation today.

On the other brighter hand, based on reports from large transportation companies such as FedEx and United Parcel Service, freight volumes seem to be moderately stabilizing.  This is good news, overall.  And, independent truck availability still remains less than normal - causing every day rates to remain on the up swing.

Increased activity in the economy makes us see trucking stabilize more.  Rates to move freight are higher than many shipper's realize.  And, the predictions are far from over.  The worst of the recession may, or may not, be over.  The transportation sector may soon begin to recover as consumer confidence and spending increases.  Time will tell.  And, we're all watching!

We believe the recession-related drop-off has mostly stabilized; our volumes of shipments have been increasing since May.  And, we expect higher volumes to resume.  Why?  Our customers continue replenishing inventories for the upcoming holiday season.  Other customers are experiencing up trends in a variety of businesses.  We see a shift in overall trends and shipments, regardless of past economic concerns.

Are we optomistic?  Yes, we are.  And, hopefully, so are you!  Optimism out there helps us all, versus the strong dose of bad [economic] news we're bombarded with daily.  What we focus upon ... we create more of.  So, where is your focus?

        

  

Here's a tribute to all the Fathers out there who are recognized differently, based on their child's perceptions!

  4 years:  My Daddy can do anything!
  7 years:  My Dad knows a lot … a whole lot.
  8 years:  My father does not know quite everything.
12 years:  Oh well, naturally Father does not know that either.
14 years:  Oh, Father? He is hopelessly old-fashioned.
21 years:  Oh, that man-he is out of date!
25 years:  He knows a little bit about it, but not much.
30 years:  I must find out what Dad thinks about it.
35 years:  Before we decide, we will get Dad's idea first.
50 years:  What would Dad have thought about that?
60 years:  My Dad knew literally everything!
65 years:  I wish I could talk it over with Dad once more.

Quote's Author:  Unknown

Regardless of your age, and stage, have an awesome Dad's day!

Sincerely,
Sheila & the SWT Team

        

        

Bill H.R. 2707 has been introduced by Rep. Adam Smith of Washington.  If passed, it would create a federal program that would make grants to states to improve highway, railroads and their intersections to improve freight transportation.  The program would be supported by a tax of 1 percent of the value of freight rail and commercial ground transportation.

        

This being our first post for the Southwest Transport News, it seemed appropriate to share some information that effects our industry, national safety, the environment and being street legal.

Groups such as the American Trucking Association have supported the Safe and Efficient Transportation Act of 2009 resulting in safer highways, cleaner air and less costly freight transportion.  The bill authorizes states to allow the operation of trucks on the Interstate Highway System with a gross weight of 97,000 pounds.  Current law limits the weight of 5-axle trucks traveling on the Interstate System to 80,000 pounds.

The new legislation requires that trucks operating above 80,000 pounds must add a sixth axle to compensate for the extra weight. The extra axle adds two more brakes, preventing an increase in stopping distances, and avoids additional pavement damage.

Most importantly, the operation of this new, more efficient vehicle will allow trucking companies to deliver the nation’s freight while making fewer trips. The result will be a reduction in the number of truck-involved crashes, less fuel use — and thus reduced emissions and carbon — and less congestion on our crowded highways. Fewer miles traveled also means less pavement damage, resulting in lowered highway maintenance costs.  A win-win for all!

The bill requires states to report safety and infrastructure cost impacts to the U.S. Secretary of Transportation, who is authorized to discontinue operations in a state if safety problems are detected.

Safe travels!