Transportation Consulting Blog

Last Thursday night, I had the distinct pleasure of participating in a Shipper-Carrier Roundtable along with a number of old friends and colleagues.  The event was organized by CITT, sponsored by Shaw Tracking and moderated by Lou Smyrlis, editorial director of Business Information Group, publishers of Canadian Transportation & Logistics and MotorTruck Fleet Executive.

As I was driving home, I tried to reflect on some of the most important messages I heard from my fellow panelists that night.  There were two that stood out.

First there was a comment from Doug Munro, president of Maritime-Ontario Freightways, about the importance of delivering good service.  While this may seem so obvious that it is not worth mentioning, it was the passion with which Doug delivered this message that stood out for me.  Doug made reference to the airline industry and noted that there is no acceptable norm other than 100% arrival of its planes.  Nothing less can be tolerated.  While it is fine for a surface transportation freight carrier to report a 98 or 99% on time service ratio, these statistics acknowledge that the company is failing 1 or 2 times out of every hundred deliveries.

Doug mentioned that one of the keys to his company’s success is to provide excellent service.  He highlighted that Maritime-Ontario Freightways is able to gain market share either through the service failures of his competitors or poorly executed acquisitions. He emphasized how he and his management team which he highlighted was the best he ever had, were all focused on instilling this message in their employees.

This message repeats itself in almost every shipper project that my company gets involved in.  During a carrier procurement exercise, shippers focus as much on service as they do on price.  A carrier that submits competitive pricing, but has not been able deliver consistent service will often find itself replaced during a freight RFP process.

A second major theme that emanated from the discussion was the concept of delivering solutions, not just transportation service.  This idea was mentioned by both Heather Felbel, vice president, logistics of Indigo Books & Music, and J.J. Maislin, president of Maisliner, a Quebec-based freight carrier. Shippers are looking for transportation organizations that are problem solvers and can pull together a combination of resources to meet each cluster of customer needs. Shippers are looking for solutions providers that can provide a range of services and modes, that can offer storage when requested, and that can make available value-added information services as needed.

J.J. highlighted how his asset based company has tried to acquire or build organically a unique combination of international and domestic freight transportation services.  Being a solutions provider is at the heart of his company’s business strategy.

This message was repeated when Lou Smyrlis asked the question about the rise of logistics service providers and whether this trend will continue.  It was my view that 3PLs have done a good job, in some cases, of assembling a group of carriers and/or warehouses and/or value-added services.  In many cases they have replaced carriers as the direct interface with the shipper. Certainly as many carriers look down their list of customers, they will find many more logistics providers and freight brokers than they did a decade ago.

Delivering consistent, quality service and being a solutions provider are two of the keys to success for service providers to the freight transportation industry.