This year at Worldwide Express, Tom Madine, the company’s CEO, has been seeing logistics industry insiders operate from a position of strength and profitability. While the supply chain is humming along, there are also some signs for concerns. Madine recently spoke with SMC³ about how he sees the current logistics arena in advance of the Connections 2019 supply chain conference, where he will speak during the “Building the Next Generation 3PL” thought leader panel on the opening day of the educational logistics event.
From a carrier perspective, what are some of the major trends you’re currently seeing in the LTL marketplace?
Following a very robust and profitable 2018, most of our carrier partners have been making very strategic investments in their businesses. Many are using the tailwinds from last year to make sure their businesses aren’t just getting bigger, but stronger in the years ahead by making smart decisions about their fleets, terminal footprint and the technology stack they use to enable their businesses.
Their investment in technology really seems to have ramped up, particularly in areas to help remove the friction-causing activities in the shipment lifecycle. Half a decade ago, most carriers were midstream in the process of implementing tools to better capture characteristics of freight. Now they’re finding ways to use that data to make better yield-management decisions and are using it in concert with visibility solutions to help their internal teams and shippers/3PLs know what’s happening with their shipments at any given time. These tools are really giving carriers the opportunity to be much more strategic in how they’re running their networks and, in turn, be more selective about the business that they choose to haul.
What supply chain themes have defined the first half of the year?
Settling into the “new normal” after a banner 2018 has been an interesting transition for many companies. There was a lot of noise in the first quarter with weather, trade uncertainty and a fallout in truckload pricing; overall, the first half of the year was still very positive for Worldwide Express and many of our carrier partners. It was certainly a much softer freight environment than last year, particularly in truckload, and that seems to have given shippers a chance to catch their breath and consider their supply chain strategies for the year ahead. Despite a bit of a slowdown, we’ve still found a lot of opportunities to create value for new customers within our core business segments.
We’re looking forward to a strong remainder of 2019. Our crystal ball is probably as bad as everyone else’s in forecasting GDP, but we’re cautiously optimistic about what’s ahead. Shippers are going to continue to look for ways to reach their customers more quickly and reliably, which should be a boon for final-mile companies and providers of multimodal capacity solutions across TL, LTL and parcel. We also expect to see more consolidation in the non-asset 3PL space, as companies like Worldwide Express expand their reach and find new, innovative ways to meet the needs of shippers they have today and those they’ll bring on tomorrow.
What new regulations will have the most impact on the domestic transportation market?
It seems as if the impacts of the ELD mandate have been largely worked through, but ELDs certainly had a significant role in the tightening of capacity that we experienced in 2018. We don’t expect it to necessarily be as disruptive on that scale, but do foresee the implementation of the National Drug and Alcohol Driver Database, currently slated for January 2020, being pretty impactful to the transportation market. There are obviously a lot of safety benefits in having this information available about the potential bad actors out there, but it will definitely have an impact on the available driver pool and transportation rates, as a result.
What are the main needs of your customers in the current transportation arena, and what are you doing to address those requests?
Customers want ease and simplicity. They want to work with capable partners who can act as an extension of their business, who will take the time to sit with them to understand their needs and be able to offer them technology-enabled solutions that solve real problems in their supply chains. They may have complex challenges, but they’re looking for simple solutions.
Sometimes the solution is just “give me a website where I can quote and book and a number to call if something goes wrong” and that’s fine – we have those customers, and we create value by offering those products to them. But we’re increasingly finding others who want someone to walk the dock with them, go through their shipping procedures, and to support them in finding innovative ways to improve their supply chains. That’s not a new concept, but even as more parts of the world become digitized, we find customers wanting more from us to help manage their entire supply chains.
We don’t believe in developing technology for the sake of technology, but in building practical tools to enable our customers’ businesses and to remove the friction of shipping for both them and us. We don’t want to remove the human element from shipping. In fact, we believe in the opposite. Our people take a lot of pride in working with customers of all sizes to understand their needs and craft solutions to help their businesses operate more smoothly whether they’re shipping packages, pallets or full truckloads. Don’t get me wrong, we invest a ton in tech, but we believe it should be more of an enabler for the business, and that our people should be at the forefront for how our more than 90,000 customers think of us.
Are there any emerging technologies that will be game changers for the supply chain industry?
With the number of customers, sales and support people we have spread across the country, our biggest challenge is to be able to understand what’s going on in real time, interface with our carrier partners efficiently and get a solution in place as quickly as possible. To that end, having a highly integrated and API-enabled infrastructure is absolutely critical for our business. We can’t afford to wait on information, whether that’s from a customer or from a carrier, so we’re investing a ton in technology that brings that information to the forefront and is paired with the right tools and data analytics so our teams can take immediate action on it.
It seems like we’re finally getting to a point where people are understanding that there’s not a silver bullet with technology. Blockchain probably isn’t going to upend the transportation industry. AI doesn’t solve all the world’s problems. APIs aren’t worth anything if you don’t do something of value with the data you consume. We continue to believe that technology is a tool that enables the business and its customers. The real “game changer” will be how talented people use those tools to make smarter decisions and create incredible customer experiences.
To hear more from Tom Madine and other industry experts, sign up today for the three-day supply chain conference Connections 2019 to learn about emerging trends, current challenges and new innovations in the supply chain.