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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Oct. 7, 2022

Trip Report: CSCMP Edge 2022 Part 3

Review and Comment on Breakout Sessions, with One Clear Winner


Many of you read my overall review and comment two weeks ago on CSCMP's annual Edge conference in Nashville. (See Trip Report: CSCMP Edge 2022).

Then last week, I took a look at the conference's mostly good keynote presentatations. (See Trip Report: CSCMP Edge 2022 Part 2.)

In a final effort, this week I offer some review and comment on the breakout sessions I attended.

Gilmore Says....

The huge surge in container volumes and delays over the past two years laid bare a number of "legacy issues" that need to be addressed.

What do you say?

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The best session I saw at the conference was Monday afternoon, in a panel discussion titled "Driver Shortage: The Great Debate and Research too!" - and I missed the first half of it due to another commitment.


The "Great Debate" had to with whether the long cited acute US truck driver shortage is real.


But I was thankfully able to catch the research part of the session, during which David Correll, from MIT’s Center for Transportation and Logistics, presented some rather extraodinary data on this topic.


Correl said he looked at two+ years worth of data from two different carriers, and found this astonishing result: truck drivers are only driving about 6.5 hours per day.

That of course is far below the 11 driving hours allowed under current HOS rules.

Now consider this: The ATA estimates the current driver shortage at about 80,000 – around 4.5% of the current number of drivers.


There are also about 1.8 million CDL license holders


So Correll took his data and did some simple math.


If all drivers on average drove about just 20 more minutes per day, that would absorb the 4.5% driver shortage referenced before, Correll said.


In other words, maybe the easy answer is not to get more drivers into the industry, as seems to be the focus now, but to increase utilization of current drivers (now at about 60% versus daily hours available), even just a little bit.

An interesting side note: drivers seem to drive less per day the longer they have to wait to be loaded and especially unloaded. It’s as if, frustrated at the long waits, drivers call it an earlier day.


The attendees were clearly fascinated at the research, but some pushed back on the proposed solution, saying it isn’t easy to create routes that allow drivers to be more fully utilized.

One noted the ideal deliveries are either 200 or 400 miles. The first allows drivers to deliver and come back the same day. The second like the first will much more fully utilize the driver.


But of course most deliveries aren’t 200 or 400 miles away. And you have to think about the return trips.

But let’s agree that while it may not be easy, a focus on driver utilization may be the most fruitful path to addressing the US driver shortage. More on this soon.


Then Correll showed additional reseach from an MIT model that can predict, with a very high degree of accuracy, when a driver is soon to leave a carrier. And it has to do with declining hours driiven per day.


So after whatever I missed and then the Correll research, the large session audience was polled on their view of the driver crisis. The plurailty response: it's largely made up it. Interesting.


On Tuesday I attended a session titled "Supply Chain Strategy Step 1: Admit You're Wrong," which caught my eye. It was led by Karl Siebrechot CEO of Flexe, a provider of on-demand warehouse space, so he was talking his book a bit with his point that most supply chain forecasts are wrong (hence the need for additional DC space).


He cited some interesting anecdotes, such as the high levels of forecast inaccuracy (mean forecast error), and also how NFL teams, despite spending millions on scouts and technology, still get about half the draft picks wrong. That includes Tom Brady, maybe the GOAT, drafted number 199 - well  after several several other college quarterbacks that year who simply never made it in the pros.


So this was all building to a call by Siebrecht to focus a lot less on forecasting, and a lot more on building a flexible network infrastructure that is more fully designed to deal with uncetaintly.


I was intrigued, and with plenty of session time still to go was awaiting the next part of insight on just how to craft this responsive supply chain - except the presentation ended right there. I think I was not the only one looking for "the rest of the story."


On Wedesday before the closing keynote from Pfizer's Jim Cafone, we again this year got a choice of "megasessions, with actualy just two offered here in 2022.


I opted for a session moderated by my friend Mike Regan of TranzAct Technologies. He was joined by smooth talking (a compliment) Noel Hacegaba, Deputy Executive Director/COO of the Port of Long Beach, and Michael Sussman,  founder of consulting firm OnTrackNorthAmerica.


All three had interesting things to say.


Hacegaba noted the ports are a "system of systems," with each player naturally looking to optimize their own operations, and no one really able to optimize the whole. He also noted that the huge surge in container volumes and delays over the past two years laid bare a number of "legacy issues" that need to be addressed. He also said the ports involve many players without a real governance structure.


Hacegaba also noted that there should be adequate number of chassis at LA/Long Beach, but due to the flow and dwell issues there was a major shortage, which in turn exacerbated the overall delays, in a vicious cycle.


What can be done? Not sure. Long Beach is developing 130 acres of land for container storage, and there plans for expansion of an inland port in Arizona, if I have that right, that would be fed by West Coast ports. There was a lot more from this interesting discussion, and I would recommend you watch it if CSCMP makes it a recording and port issues interest you.


I also attended a case study of sorts on reducing CO2 that featured in part a speaker from Shell. I initially thought the case study was for a Shell DC. But no, it was Shell acting as a consultant on defining and cost justifying changes to reduce CO2 emissions at a DC in the food sector.


A couple of takeaways: (1) it takes a very organized and knowledgeable approach to identify potentials projects, and rank them matrix style in terms of CO2 impact and cost/ROI; and (2) while some initiatives are no brainers, with big reductions and high ROI, many have less stellar returns - and companies need to make a call.


On Tuesday, I also attended a session titled "3PL Evolution and Contractual Cost Components," which in great summary had panel moderator and my friend Joe Dunlap of the supply chain group within real estate firm CRBE saying shippers are really looking for more detail from 3PLs on their fixed and variable costs.


It's an interesting topic, but we didn't get quite the debate I was hoping for, probaly because the 3PL and shipper panelists were in a outsourcing relationship. But it was OK.


Alright, I attended a few more sessons, but will end it here. All told, pretty good, but as I have noted before I am somewhat dismayed by the growing dominance of panels as opposed to company presentations - but I understand why that is happening.


Did you attend Edge 2022 or any of these breakouts or others? Let us know your thought at the Feedback section below.

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