John Wiehoff, CEO of C.H. Robinson, is one of the keynote speakers for the Connections 2018 supply chain conference, which will take place June 25-27 at the Greenbrier Resort in West Virginia. He recently spoke with SMC³, which has served as one of the 3PL’s long-time partners, about emerging technologies in the industry, unique supply chain opportunities, and how C.H. Robinson uses technology to optimize its business.
What are some of the major trends you’re currently seeing in the LTL marketplace?
Demand for LTL is higher than we’ve seen it in nearly 10 years. This shift is an especially significant change when paired with supply changes. Both manufacturing and e-commerce are extremely strong right now, and both have close ties to LTL.
Online orders are driving smaller shipments to the LTL space, not just in the final mile area. Smaller orders are becoming more common for the middle mile – from one distribution center to another.
LTL capacity is tight because carriers have not added a significant amount of equipment to their fleets in recent years. But even if there was an influx of tractors, there aren’t enough drivers available. Historically, the driver shortages that affected the truckload market remained mostly out of the LTL space, but even that is changing. Growth in other sectors that have a shared labor force with truck drivers mean more LTL drivers are leaving for options that are more lucrative.
As LTL carriers look to be more productive, we are seeing them place a large emphasis on optimizing their networks. With the data, analytics and tools like dimensionalizers available to them, LTL carriers are paying more attention to accepting the right freight in the right lanes at the right time. More isn’t absolutely better anymore.
How has the ELD mandate impacted the domestic transportation market?
The ELD mandate, combined with an already tight capacity market, has really heightened reassessments of desirable freight and appropriate pricing. Organized and efficient loading/unloading times will become even more important.
Both carriers and shippers are analyzing their networks and processes to identify and solve capacity shortages and potential rate increases from the mandate.
How does C.H. Robinson use new technology to optimize its business, and are there any emerging technologies that will be game changers for the supply chain industry?
You can see the importance technology has within C.H. Robinson by the number of IT staff and the investments we have made and continue to make; we’ve added more than 800 IT staff and invested over $1B in the last decade.
As our business grows, we increasingly rely on technology. For example, through our Navisphere technology platform, we connect with more than 200,000 companies and now execute 45 million digital transactions for customers each month.
We are building and innovating to be better, faster and smarter in our own internal operations. Today, we continue to evolve our technology with an eye toward speed and efficiency – helping our people do more, think more and solve more complex supply chain challenges.
The Connections 2018 supply chain conference is positioned at the midpoint of the year, giving speakers a chance to sum up the first half of 2018. What supply chain themes have defined the first half of the year, and what will we be talking about during the second half of the year?
For the first half of the year, we saw efficiencies in utilizing capacity climb to a truckload-utilization of over 95 percent, according to FTR Transportation Intelligence. At the same time, new trucks increasingly entered the market to replace retiring trucks.
For the second half, these factors will combine for a focus on hyper-efficiency in most effective use of capacity. We’ll be able to see if the strong truck sales of the first half of the year will add capacity or primarily serve as replacement capacity, especially when new driver hiring challenges continue. We’ll also be able to put our finger on the real effects of ELD.
Are there unique supply chain opportunities out in the marketplace, and how can shippers and 3PLs better position themselves to take advantage of these developments?
As supply chains grow in both size and complexity, transportation management technology will be an important way for 3PLs to help shippers gain a competitive advantage and exceed their customers’ expectations. Cloud networks, analytics and machine learning, mobile applications, API visibility connections, and blockchain process automation will all combine to drive significant change and opportunity for innovation.
While it’s important to understand these new tools that are coming to the industry, it’s more important to focus on what the innovative supply chain of the future will look like and recognize that it will take people, processes and technology to bring positive change.
Digitalization of supply chains is our opportunity to continue bringing technology to our customers and their supply chains that makes them smarter and more efficient. The technology we are able to bring today and into the future has to go beyond freight matching to encompass the complexities of today’s and tomorrow’s supply chains.
To hear more from John Wiehoff and other industry experts, sign up today for the three-day supply chain conference Connections 2018 to learn about emerging trends, current challenges and new innovations in the supply chain. Register here by April 30 to take advantage of early-bird pricing.