Solving for the New Normal in Logistics

Fact #1: In 2018, no shipper met their transportation budget.

Fact #2: While shippers are not taking 10-20% increases anymore, they are far from returning to pre-2018 levels. This is the new normal in logistics.

Recently, one of my clients invited me to facilitate a discussion on "Shipper of Choice". I had the pleasure of speaking with a great group with over 60 fellow logisticians representing sourcing, site logistics operations, planning, and safety. The cherry on the top was having the supplier in the discussion. This shipper also invited about 20 core strategic carriers to the event with a single mindset of How can we all collaborate to address the driver shortage and create a sustainable capacity solution?. The shipper like many other leading companies realizes the market hasn't softened because suddenly there is an uptick in supply, and once production levels soar again we will all be up for another capacity crunch, and this time it will be a lot worse. I have read a lot of articles that raise the question, but this was one of those rare occasions where we all invested our time and brainpower to find some answers. As I witnessed some great ideas and energy flow in the room, I wanted to take the opportunity to share a few nuggets with my network. I hope you will find this useful.

1. Let the drivers do what they are best at , i.e drive was the passionate appeal from. Make it easier for them to get in and out of the site as well as minimize the time they spend at the shipper's site.
2. Stay in constant touch with the drivers. I heard many carriers have apps through which they are in continuous communication with the drivers. One carrier offered to create a shipper portal on the app for my client for 3-way communication between the carrier, shipper, and driver.
3. Don't talk to each other only when things go wrong. One of the biggest issues carriers face in attracting drivers is the reputation of the profession. Shippers can help elevate the driver experience with small efforts – better facilities is one of the most common ideas. I heard another interesting one – ‘Driver Appreciation Day’ hosted by the shipper to recognize drivers.
4. It's all about instant gratification or instant feedback. Just like your Uber or Lyft driver can rate you allow drivers to rate how they felt at your site! My client promised to install smiley buttons (the ones you see at the airport security checkpoint) at one of their most problematic sites and find a way to tie the feedback to performance of site logistics personnel.
5. Make is easy for carriers to bring new drivers to you. One idea shared was for shippers to have one-stop centralized portal with site requirements that drivers can visit and get quickly trained with. As well as creating flexibility for carriers when replacing drivers when things get tight. This can also be used for safety procedure education and awareness as well. In international locations where language can become a barrier consider having translations in the local language on the site. 
6. Shippers' customers influence driver experience. How to make them accountable? Share the pain and come up with a solution
7. Some other well-known operational ideas, but still worth sharing them are: 24/7 self-loading on select lanes, for pre-qualified drivers who have access to the site; dedicated lanes for rush orders, etc.

These are just some practical ideas that a shipper of any size can start considering. The point is that there is no silver-bullet that will address the problem all at once. Solving for the capacity problem requires a mindset of joint-accountability both internally and externally, and it was clear how powerful such a forum can be in embracing this philosophy. If you are not tapping into your carrier base for a sustainable capacity solution then you are really missing something. If you are already doing this, move up the collaboration chain and bring the customer into the dialogue as they are an equal influencer in this equation. If you are doing both, please reach out and let's exchange notes :)

Together with my colleagues at A.T. Kearney, I am in the process of writing the 2019 CSCMP State of Logistics Report where we will dive deeper into the topic. If you are interested in sharing your perspectives, please reach out. The report will be launched on Tuesday, June 18, in Washington DC at the National Press Club where my colleague, lead author and partner, Michael Zimmerman will present its key findings on behalf of the A.T. Kearney team. I look forward to sharing a copy and having interesting discussions on The State of Logistics.

Balika Sonthalia is a Chicago-based Vice-President in A.T. Kearney Solutions practice