Tucker Blog

Friday, September 22, 2017

The 2017 Capacity Crisis: Lessons From the Past, Advice for the Here & Now
Commentary: Jeff Tucker, CEO, Tucker Company Worldwide (tuckerco.com)


Trucks are harder to find and more expensive than ever before. We saw a glimpse of things to come during June and July of this year, but no one could be prepared for how September has progressed. Suddenly, rates that would once be considered ridiculous for the most straightforward lanes are to be expected. Options are limited: freight expeditors, who typically charge premiums over and above market price, are booked days in advance. Truckload carriers of any size, both temperature control and dry van, are equally hard to come by.  As a result, every carrier is prioritizing the customers it’s willing to serve, based on the return on investment. Case in point: one large shipper we know called a mandatory conference call for its primary carrier providers this month to discuss a large number of loads that were missed – and only a small handful of loyal providers attended the call!

Shippers are angry and frustrated, and we’re fielding calls from our customers asking whether things have settled down yet. The answer is a firm but disappointing “No.” The market for trucks is moving at light speed. As quickly as availability appears, it’s gone!

For those of us who have the benefit of tenure in this crazy business, market conditions are reminiscent of third quarter 2003, a crisis that didn’t let up until 2005. At that time, (2001-2) we were emerging from recession, and trucking was lackluster. Truck volume was up one quarter, down the next.  President George W. Bush and Congress passed a stimulus package in the 3rd quarter of 2003, giving rise to an 8.2% GDP for that quarter.  That remarkable and historic increase in spending, coinciding with peak 3rd quarter shipping overwhelmed the trucking industry overnight.  Shippers went from operating on autopilot, to vigorously competing with each other for trucks. Core providers disappeared. With capacity at crisis levels, January 2004 saw new hours of service (HOS) requirements, reducing the number of hours drivers could drive. As a result, capacity decreased again, at 3-4% at the worst possible moment. Truckload freight flooded LTL carriers and trains. Train speed suffered, forcing some freight back to truck. Capacity was impacted for about a year and a half before the market caught up.

The current conditions feel similar, with different variables. I’d argue that we’re looking at a worse situation, and I’ll explain why. Trucking isn’t nearly as loose as it was in 2003. We’ve experienced a sort of equilibrium between supply and demand in the market for the last several years, which makes us more susceptible to disruption.  A snowstorm in the West upends the nation’s supply chain for days- sometimes weeks. Today’s massive hurricanes in the Caribbean, in Texas and Florida have had a more adverse effect on the market than the Bush 2003 tax credit. Plus, we’re on the cusp of peak 3rd quarter shipping once again, in the midst of a current capacity crisis, and to make matters worse – the ELD mandate is upon us.

Conservative estimates place the loss of hours, or productivity, that the marketplace will experience as a result of the ELD mandate at 3%-7%. That’s equal to, or more than, what we lost in 2004. And we had more supply in 2004. We’ve been warning our customers for two years about the ELD mandate, but we couldn’t have foreseen the impact of the recent hurricane season to disrupt the market even sooner.

There’s currently no end in sight, but there are a few recommendations I would implore shippers to consider. You’ll need to be limber in order to keep your business moving, as it’s going to be more competitive than ever. To start, I recommend reexamining budgets throughout your organization, from procurement, to finance, to planning, to customer service, your production facilities, vendors, customers, and please don’t forget about any distribution centers owned or leased. Trust me, you’re not the only company doing this, and some wise organizations are ahead of the curve. Second, your ability to be flexible will be your key to beating out the competition for capacity. Provide as much advance notice as possible, and keep your options open. You may have to push out pickup one day or more – but now is not the time to dismiss availability if you’re lucky enough to find it. The trucking market is as alive as the stock market. It’s far more stable and predictable, but it moves up and down, and nobody—not the largest shippers, the largest carriers, and the largest 3PLs combined, control it. It does what it wants. If you’re able to budget accordingly, incorporate flexibility, and strengthen partnerships with your loyal carrier and broker friends, you’ll be able to weather this crisis, while beating your competitors to the trucks and to the shelves. 



Thursday, August 31, 2017

GLOBAL TRADE MAGAZINE LEADING 3PL HONOR

Global Trade Magazine Names Tucker Company Worldwide among America’s Leading 3PLs for 2017

Tucker Company Worldwide was thrilled to be chosen as one of Global Trade Magazine’s Leading 3PLs – an annual list that honors 100 of the best, biggest and brightest 3PLs based on a year’s worth of study that includes industry reputation, innovation and exceptional operational excellence.

Tucker Company Worldwide is featured by Global Trade Magazine as a “Specialty Cargo” focused 3PL: reflecting our dedication to all types of difficult freight. “Oversized, delicate, high value, hazardous… each of these freight types is wildly different,” said Jeff Tucker, CEO of Tucker Company Worldwide, “however - they have one thing in common: all require the utmost care, and must be handled by competent professionals and carefully designed procedures. At Tucker, we’ve spent over 56 years perfecting our approach.”

We are grateful to Steve Lowery, Senior Editor of Global Trade Magazine for this recognition!


ISO 9001:2015 CERTIFICATION

TUCKER CERTIFIED FOR NEW ISO 9001:2015 STANDARD


Part of Tucker’s differentiation in the transportation market has always been our focus on excellence. And whether it’s in our industry, or within our company or service offerings, we feel that nothing worth doing is easy. In late 2007, we put our company through an expensive and rigorous 9-month training program to become certified to the international quality Standard known as ISO 9001, a disciplined quality management system designed to ensure that companies consistently meet and exceed the needs of customers and other stakeholders. To stay certified, firms must undergo annual on-site audits by independent third party firms. Tucker has been ISO 9001 certified continuously since 2008.

This past June, the annual audit was particularly challenging because we were being audited against the newest ISO Standard issued in 2015. Though the deadline for compliance to the new 2015 Standard is September 2018, we are so very pleased to report that we’re now ISO 9001:2015 compliant - and over a year ahead of time!

 “As a risk management focused company, I particularly appreciated ISO 9001:2015 for its higher emphasis on performance monitoring, and the introduction of a more disciplined approach to engage in risk-based thinking in everything we do. As an intermediary that serves the needs of so many parties in every single movement, the 2015 Standard really complements and enhances the way we operate the business,” said Jim Tucker, president and COO. 

Tucker is proud of our team for putting in the extra hours, and the hard work it took to learn a new Standard and earn this prestigious certification.


INBOUND LOGISTICS' TOP 3PL DISTINCTION

TUCKER AWARDED INBOUND LOGISTICS' TOP 3PL DISTINCTION IN 2017


Inbound Logistics editors informed Tucker that we’ve once again earned a spot on their “Top 100 3PL” list in 2017. This marks 17 years of consistently being ranked among the top. In an industry with nearly 16,000 licensed 3PLs, that’s some rarified air.

From Felecia Stratton, Editor, Inbound Logistics: “Tucker Company Worldwide  continues to provide the logistics, transportation, and supply chain solutions Inbound Logistics readers need to achieve the visibility and control that drives successful supply chains. Tucker is flexible and responsive, anticipating customers’ evolving needs. Tucker deserves recognition for providing the innovative solutions empowering logistics and supply chain excellence in 2017.”


On behalf of our company and all of our tremendous staff, our CEO Jeff Tucker thanked Ms. Stratton and the editors at Inbound Logistics, as well as our customers and carriers who value what we do. As our company evolves from a traditional transportation service provider to a data-centric, organizational behavior modifying 3PL, we appreciate the recognition of our team’s hard work. 


CAPACITY WOES



CAPACITY'S TIGHT

So tight, in fact, that large trucking firms are turning away hundreds of loads per day. One of our carrier friends is turning away hundreds of EDI tendered loads (typically, contract rates and lanes) per week. So what’s going on? There are more causes than you can shake a stick at, but here are just a few:
  • We’re 4 months from the USDOT’s ELD mandate, expected to remove 5-10% of capacity from an already tight marketplace.
  • We’re 4 months into the FDA’s Food Safety Modernization Act (FSMA), which is shuffling the deck of carriers that food shippers risk using—shifting from owner operators to more sophisticated fleets. ATA reported in 2016 that only about 5% of the nation’s products move in temperature controlled equipment. With much of that typically being moved by owner operators, the shift to more advanced outfits, coupled by higher rates, are seriously impacting temp control markets. Making things worse for trucking - but good for our farmers - 2017 was largely a more “fruitful” growing season, further straining capacity.
  • Major retailers who are trying to catch Amazon have instituted very aggressive new compliance fees, penalizing suppliers for things like late deliveries, rescheduled appointments, early deliveries, and so on. A vendor can get dinged for its carrier being late, and again for rescheduling a delivery. You can’t argue the need to pace Amazon, but restricting flexibility during a time of tight capacity - which is only expected to worsen - spells missed sales, huge fees, unhappy consumers, and a nightmare for retail suppliers’ customer service teams.

Typical reactions to capacity tightening involve shippers using more intermodal, but maybe not this time. The nation’s third largest railroad, CSX is having a heck of a time right now as it seeks to revamp its network toward higher productivity. According to Cowan & Company, “more than 80% of respondents to a CSX Service Quality survey say they’ve experienced service issues,” since the switch, and “67% of respondents have transferred freight to a trucker.” Other reports indicate Jacksonville, Memphis and Atlanta are among the hardest hit areas. Coincidentally, those markets have been toughest on truck capacity! 

ELD ROULETTE

ELD Roulette: “I’m not worried: my carriers are compliant and the mandate will probably be delayed!” Not so fast!  

If you’re not worried, you should be. Even if all of your carriers really are compliant, they will still be fielding a gold rush of calls from other shippers whose carriers aren’t.  In brief: the ELD Mandate requires all commercial motor vehicles to be equipped with technology which tracks drivers’ hours of service before December 18, 2017. ELDs replace paper logs, which are fraught with errors. Despite having 3 years notice, many experts estimate that nearly 50% of all commercial motor vehicles still haven’t met the ELD requirement, a mere four months from the mandate. Every buyer of freight will be impacted if even a small portion of those currently noncompliant carriers choose to leave the industry. And compliant carriers lush with load offers will likely give their trucks and drivers to the highest bidders.

When the mandate takes effect, two things are certain. First, many carriers won’t be ready, and will be placed out of service until they become compliant. That means other shippers and brokers will pay top dollar to steal your carriers and your capacity from you. Secondly, experts who are studying the impact of converting paper logs to ELDs find some fleets are driving 100-120 additional miles per day! That’s nearly 20% excess/illegal hours. If 50% of fleets lose 20% of miles, it’s as if 10% of the nation’s capacity disappears. Even if it’s only 5%, it’s a heck of a lot worse of an impact than the 2003-2004 crisis, when hours of service were reduced.

A challenge to delay the ELD mandate failed in the U.S. Supreme Court in June. A bill was introduced in the House of Representatives (HR 3282) which is designed to delay the mandate. The bill does not have support of house or committee leadership, and there’s no support in the Senate. To put it simply: it’s doomed to fail. Planning a business around a delayed ELD mandate is a fool’s game. 

Friday, February 3, 2017

ONE WAY TUCKER’S BETTER THAN MOST BROKERS

ONE WAY TUCKER’S BETTER THAN MOST BROKERS
Most brokers make prolific use of the owner operator fleets—one driver with one truck. At Tucker, we deal almost exclusively with small, mid-size and large fleets. Why? It makes a huge difference in service and capacity. Our customers like the predictable and familiar feel Tucker has in their list of core providers.
Since Tucker’s capacity relies on small, mid-size and larger fleets, tapping rarely if ever, into the owner operator fleet. This is designed so we establish strong working relationships with ownership, management, operations personnel and especially the drivers on every load, to improve service and performance for our customers.
For most brokers, who heavily rely upon owner operators, when an owner operator drops off a load, the office scrambles to find another owner operator (who may also decide to drop the load). The cycle may repeat itself, resulting in service failures, and reluctance by the shipper to deal with brokers. In fact, it’s probably the biggest hit against most brokers.

Tucker’s carriers have resources, so when a carrier commits to haul from A to B, and one of their drivers is delayed, more times than not, another of their drivers is already on the load, seamlessly and invisibly to the customer! That is solid carrier relationships. That’s one of the many Tucker benefits.