I was present at the press conference, front row, and took notes of the Q&A session after.
The opening question focused on the significant challenges each of the panel saw in 2012, and was the outlook optimistic or pessimistic:
Marc Althen (president of Penske Logistics) said Penske saw an upturn as more shippers looked for 3PL services to help adjust for greater complexity in the networks: he is optimistic.
Brent Beabout (Senior Vice President, Supply Chain for Office Depot ) said that the B to B business is not recovering quickly, and they continue to see pressure to improve operations by serving omni-channel demand through the same network. Cautious optimism.
Steven Bobb (exec VP at BNSF) said BNSF structural changes in demand volume shifted from coal and grain to intermodal, oil and oil related industrial movements. Cautious optimism.
Beth Ford (chief supply chain officer at Land O'Lakes) reported that her company saw robust growth in food commodity movements, more on a global scale. She is optimistic.
Paul Svindlands (COO of Pacer) said that Pacer is cautious about its optimism, that while there will be growth, it will not be exciting growth. Paul is new at Pacer - and did not really comment about 2012.
The most interesting questions and answers:
Paul - Dray carriers will not be impacted anywhere like regional and long haul carriers. What kills the dray carriers productivity is the time at the ocean terminals. Rail ramps are efficient and drivers do not see the 2 - 3 hours delays that drivers see in LA or Newark.
Marc - Penske expects a 3% hit to productivity.
The panel all comments. Roz pointed out that the opportunity to pick up the young drivers is when they get out of High School, but they can't get a CDL until they are 21. By that time the kids are already down a different path and not likely to change careers. Beth - the Daughter of a Truck Driver - said that the changes in the industry, and the options, makes driving less attractive.
Biggest concern for 2013:
Marc - Human Capital. Beth chimed in on this later, and it worked in with more driver shortage comments. Beth spoke about "The War for Talent" where she goes to colleges and finds it difficult to get the business school students excited about supply chain and logistics. She talked about a need to "change the dynamic of how people look at the career, and the impact logistics has on many parts of the organization." She went on to talk about finding people that could communicate and collaborate, not only internally, but to help "educate the front of the house to understand what the back of the house does."
On the Human Capital issue, Steve had one of the best quotes:
"For our front line supervision, as a railroad we are an outdoor sport. So we turn to the military to look for the front line leaders we need to put in the field."
On the question about conversion from road to rail, the specific question asked about the length of haul where it makes sense to convert.
Steve commented that it is more of a structural issue, that BNSF network is a long haul railroad, so by design the distances are longer than in the East. "We have ample opportunities with the structure we have, so we will focus to increase our take of what our current network supports."
David K. Schneider
David K Schneider & Company, LLC