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b2ap3_thumbnail_Estes---Saia_20170407-192111_1.jpgThe big news on the LTL scene in Canada over the past few weeks has been the severing of ties between Estes Express, the number 14 ranked carrier (on the Transport Topics list) in the United States and TST Overland Express, a large Ontario-based LTL carrier that is one of the major divisions of TFI International (formerly known as TransForce), Canada’s giant trucking conglomerate. This is a partnership that has endured for many years.

Estes Express Lines will be teaming up with two regional Canadian less-than-truckload carriers to offer LTL freight services to Canada under an Estes freight bill. Estes will be working with Speedy Transport of Brampton, Ontario, and Pacific Coast Express Ltd. (a division of the Landtran Group) of Surrey, British Columbia, to offer Estes Canada service. The new alliance will start May 22, according to Estes.

The company stated that U.S. shippers will work with only one carrier, Estes, from pickup to delivery, and all freight will be delivered on an Estes delivery receipt. In effect, Speedy Transport and Pacific Coast Express will become agents of Estes. When asked what drove the need for Estes to convert its Canadian service to a direct model, Ed Alderman, Vice President, International and Offshore Sales for Estes, said Estes wants customers to have the same quality Estes customer service experience from shipment to delivery as they have come to depend on domestically.

As reported in Transport Topics, Estes said it is forming dedicated account teams in Canada to provide the same service level that U.S. customers receive. Freight will move across the border in Estes pup trailers equipped with captive beams and Estes’ proprietary Webb walls. This direct method of cross-border shipping is meant to reduce handling of freight and decrease risk of damage, the company said.

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b2ap3_thumbnail_Scan_20170318-185343_1.jpgThe following is my annual report on the state of the LTL Freight Industry in the United States and Canada.

Revenues Stagnated Again in 2017

Here are links to the top 100 carriers in Canada (http://www.todaystrucking.com/top100) and the top 25 LTL carriers in the United States (http://www.joc.com/sites/default/files/u48801/truck-tables_1_0.jpg).

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b2ap3_thumbnail_dreamstime_xl_36296918.jpgIt was sad to read that Meyers Transport, a Canadian motor carrier that has served the needs of shippers in Ontario for 90 years, closed its doors on January 20. Meyer’s Transport has been one of those “salt of the earth” family run businesses that has been a part of the Canadian trucking scene for almost a century. This news caused me to reflect on the changes taking place in the Canadian freight industry.

The Meyers closing comes very shortly after the news that TFI (TransForce International) had acquired National Fast Freight in late December. TFI has been consolidating Canada’s east-west intermodal business through the acquisitions of Clarke Transport, Vitran and the Quiktrax division of QuikX. It should be noted that Clarke Transport and Vitran were the product of various consolidations over the years (i.e. TNT Railfast, CSR and Cottrell Transport in the case of Clarke). While there have been a few new entrants to this segment of the industry over the past 20 years (i.e. Quiktrax, M0 Freightworks), the number of independent players has been shrinking.

If one steps back and looks at the entire LTL sector of the Canadian freight industry, it is clear how much consolidation has taken place during this period. TFI now owns TST Overland Express, Kingsway Transport, QuikX Transportation, Concord, Tripar Transportation in addition to Clarke Transport, NFF, Vitran, Quiktrax and a host of smaller players. In Western Canada, the Mullen Group has acquired the Gardewine Group, Grimshaw Trucking, the Highway 9 Group of Companies, Jay’s Transportation, the Kleysen Group and other smaller companies, each of which has LTL operations. The Manitoulin Group has also been active in acquiring LTL carriers. Over the past few years, it has purchased the LTL business of Penner International, Smooth Freight, Jomac Transport, the LTL division of Highway 13 and Ridsdale Transport.

Of course, there has been consolidation in other segments of the Canadian transportation industry. TFI made big news a few years ago, by acquiring the Contrans Group that it added to its diverse portfolio of purchased truckload carriers. More recently it acquired the truckload operations of XPO logistics. Canada’s other major transportation companies have also been active in acquiring truckload carriers. In the small parcel sector, TFI owns Canpar, Dynamex and Loomis.

There have also been some big changes in Canada’s logistics service provider industry. Radiant Logistics of Bellevue Washington purchased the Wheels Group last year and in December of 2016, Transplace of Dallas Texas acquired Lakeside Logistics. Two of Canada’s leading freight management companies are now under American ownership. Clearly there has been much consolidation in the traditional sectors of Canada’s freight industry - - - small parcel, LTL, truckload and third party logistics.

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Some large LTL carriers have announced rates increases this fall. Old Dominion, XPO Logistics, YRC Freight and UPS Freight have all declared 4.9 percent GRI rate increases on non-contract LTL freight that took effect in September. In survey after survey, shippers have claimed that cross reductions are their number one priority. How can these two conflicting strategies be resolved?

It is important for LTL shippers to realize that LTL carriers are serious about making these increases stick. Despite somewhat muted demand for LTL service, carriers are making a determined effort to secure these increases.

One of the major reasons for the focus and discipline is balanced capacity. Most of the large LTL carriers shrank their networks considerably in the aftermath of the 2008-09 recession. As a result, there’s not a lot, if any, excess LTL capacity. Yield management is the priority this year. With limited capacity, there is little value in triggering a price war. A race to the bottom does little to help carriers raise their margins. LTL carriers are looking at their margins per lane and per account and taking action on contracted and non-contracted freight to improve yields. What can shippers do to mitigate these GRI increases?

For companies that have significant volumes of freight, they can put their business out for bid, leverage their volumes and sign multi-year contracts with minimal rate increases in subsequent years. There are a number of Best Practices that can be employed to make your freight bid a productive process (http://www.dantranscon.com/index.php/blog/entry/freight-bid-tip-1-obtain-buy-in-and-participation-from-the-operating-divisions ). For shippers that routinely do this on an annual or bi-annual basis, there are other avenues to pursue.

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The last blog in this series examined road and rail transportation within Canada; this blog will focus cross-border freight transportation. Please note that there are a set of processes and procedures (http://www.dantranscon.com/index.php/blog?view=entry&id=241 ) that must be followed in order to move goods successfully between the United States and Canada. Please refer to the second blog in this series for details.

LTL Service

It should first be noted that only a small number of American LTL carriers have a network of terminals across Canada. Con-Way, FedEx Freight, YRC Reimer and ABF service the major points in Central and Western Canada. They work with interline carriers to service the remaining points in each province and territory. There are no Canadian LTL carriers that have extensive LTL networks in the United States. While some Canadian LTL carriers have terminals in selected US locations (i.e. Chicago, Los Angeles), most LTL carriers work with partners on the other side of the border.

The following chart displays the logos of some of the major LTL carriers that service the cross-border freight market.

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This blog will focus on road and rail transportation within Canada; the next blog will look at cross-border freight transportation.

Rail Transportation

As outlined in the first blog in this series, Canada is large land mass with limited population. As a result, Canada’s two class 1 railways, along with the country’s short line carriers, play a very important role in meeting the needs of Canada’s freight industry. The networks of Canada’s two major railways, CN and CP, appear below.

CN Rail is a tri-coastal railway. It connects Canada’s major ports in Eastern Canada to the ports of Vancouver and Prince Rupert, BC, and the major cities in between and then goes through Chicago, IL all the way down to New Orleans, LA on the Gulf of Mexico. CN connects to the major American class 1 railways to supply cross-border service for the points that it does not serve on a direct basis.

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Every few years I like to take a look at the segment of the freight industry where I got my start, the LTL sector. As I reviewed the landscape for this year’s blog, I am struck by the significant changes taking place in both the United States and Canada.

Revenue Growth Stagnated

Here are links to the top 100 carriers in Canada (http://www.todaystrucking.com/top100 ) and the top 25 LTL carriers in the United States (http://www.joc.com/sites/default/files/u48801/truck-tables_1_0.jpg ). The strong surge in revenue that less-than-truckload carriers enjoyed in 2014 stalled last year, as weaker demand and lower fuel surcharges dragged down LTL trucking’s top line. The combined revenue of the 25 largest U.S. LTL trucking companies declined 0.5 percent in 2015 to $32.1 billion, after shooting up 9.1 percent to $32.3 billion in 2014, according to The Journal of Commerce’s 2016 ranking of the Top 25 LTL Carriers, prepared by SJ Consulting Group. The report concludes that the decline in revenue may have as much to do with falling fuel prices as lower industrial demand.

The LTL Industry has become a “Big Boys” Game

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b2ap3_thumbnail_dreamstime_xl_66940210.jpgIt was just a few years ago that the airline industry appeared to be teetering on the abyss. During this tumultuous period, many airlines merged or went out of business. Passengers had the upper hand and played one carrier off against another to their best advantage. One of the tools that helped salvage the industry and significantly boost its financial results has been pricing.  The airlines have become very clever in monetizing every aspect of their business.

If you want food on a plane, you have to pay for it. If you wish to reserve a seat or obtain a seat with more legroom, you pay for it. On many airlines, you pay for every bag you check. If a passenger travels to a specific set of destinations on a repetitive basis, some airlines will create a package deal (i.e. offer a block of tickets at a preferred rate).

The size of a plane utilized is tailored to the volume of passengers on the route. Certain larger size planes are utilized on heavy volume routes during the day and then assigned to less frequent evening fights on lower volume routes. Smaller planes or small regional partner airlines are utilized for flights to remote locations.

Now, with dynamic pricing, airlines adjust their fares based on seat availability, time of day, day of the week and other variables. Low fares are available in the early stages to create critical mass. As a flight fills up, rates go up. Passengers are “manipulated” into taking flights at slower times of the day to balance loads and maximize profits.

The brokers of the freight industry, online travel agents such as Expedia, are also skilled at managing travel data and selling flights, hotel rooms and car rentals. The LTL freight industry is in the process of learning from the airline industry.

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During the Great Recession, the LTL freight industry experienced a “near death” experience as declining freight volumes, excess capacity and falling rates conspired to dramatically reduce revenues and profits. The LTL market shrank from more than $33 billion U.S. at the peak in 2006 to $25.2 billion at the recession's trough in 2009. As we approach the mid-point of 2015, the fortunes of this industry look much brighter. Here’s why.

The industry has consolidated

Looking back over the past 25 years, only 4 of the top 50 carriers are still in operation. Over the past 10 years, there has certainly been a changing of the guard at the top. As noted in a recent Stifel transportation report, “Old Dominion has replaced FedEx Freight/Con-way Freight as the most profitable carrier in the industry. USF was bought by Yellow Roadway to become YRC Worldwide before it nearly went the way of Consolidated Freightways, Overnite became UPS Freight, Central Freight Lines went public then private, Vitran was sold in pieces, Saia sold Jevic (which then went bust), and Roadrunner acquired Dawes and Bullet to become the only national asset-light general commodity LTL carrier. The industry is more concentrated than ever . . . “

The report goes on to report that “the top-5 (U.S.) carriers have roughly 55% of the market. And those top-5 - FedEx Freight, YRC Worldwide, Con-way Freight, UPS Freight, and Old Dominion Freight Line - are all either historical disciplined pricers or have been burned in the past by their undisciplined ways or have no choice but to push price to improve margins.” The Canadian market is quite similar with TransForce, Day & Ross and Manitoulin dominating the LTL sector. Unlike the truckload sector, consolidation means more leverage and pricing power for the top LTL players.

Today’s LTL Carriers are leaner and meaner

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Freight costs have historically been calculated on the basis of gross weight in kilograms or pounds. By charging only by weight, lightweight, low density packages become unprofitable for freight carriers due to the amount of space they take up in a trailer or container in proportion to their actual weight.

Dimensional weight is also known as DIM weight, volumetric weight, cubed weight or density-based pricing. The concept of Dimensional or Cube Weight is gaining popularity in the LTL freight industry as a uniform means of establishing a minimum charge for the cubic space occupied by a carton or pallet. Three of the largest LTL freight carriers, UPS Freight, FedEx Freight and YRC introduced dimensional LTL freight pricing this year. Currently FedEx Ground only applies dimensional pricing to packages measuring three cubic feet or greater.  Effective January 1, FedEx and UPS will apply dimensional pricing to all packages.  

The implication of this change in pricing methodology has caught the attention of the media (see article in Wall Street Journal). Experts say the impact could result in increased shipping costs of 5 to as much as 25% - - - if shippers don't take action. This blog will provide shippers with a guide to prepare for the introduction of this LTL pricing methodology.

A Definition of Dimensional or Cube-Based Pricing

Dimensional weight is a calculation of a theoretical weight of a shipment. This theoretical weight is the weight of the package at a minimum density chosen by the freight carrier. If the shipment is below this minimum density, then the actual weight is irrelevant as the freight carrier will charge for the volume of the package as if it were of the chosen density (what the package would weigh at the minimum density). Furthermore, the volume used to calculate the Dimensional Weight may not be absolutely representative of the true volume of the shipment. The freight carrier will measure the longest dimension in each of the three axes (X, Y and Z) and use these measurements to determine the shipment volume. If the carton or pallet is a right-angled box, then this will be equal to the true volume of the package. However, if the package is of any other shape, then the calculation of volume will be more than the true volume of the package.

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As I look at the LTL freight transportation today, it is hard to believe that just a few years ago, this was one of the most battered sectors of the freight industry. The LTL freight industry took a tremendous pounding during the Great Recession as business volumes contracted by about twenty-five percent. As operating margins shrunk, LTL carriers closed or consolidated terminals and cut staff in an effort to right size ether businesses. Shippers took advantage of the situation by conducting multiple freight bids to leverage their volumes to extract rate concessions.

Seven years later, the industry has changed dramatically and the pendulum has swung back in the carriers’ favour. As volumes return to pre-recession levels, LTL carriers are finding their networks full of freight. As the North American economy improves, manufacturing is on the rise. The near shoring movement is also bringing some manufacturing jobs back to America. In addition, the driver shortage is making it difficult to find drivers, particularly for long haul truckload routes. A clogged intermodal system is limiting the opportunities to divert over the road truckload freight to the rail system. The net result is that some of this freight is being diverted to large LTL shipments so it can move with an LTL carrier. In other words, this is creating traffic for an already full LTL system.

Unlike the truckload sector where even the largest players control only a small (single digit) percent of the total truckload sector, the LTL industry is highly concentrated among a core group of companies. The top 9 LTL carriers in the United States (e.g. FedEx Freight, Con-way, YRC, UPS Freight, Old Dominion, Estes, USF Holland, Reddaway and New Penn, ABF, R & L Carriers and Saia) control almost seventy percent of the LTL market. In Canada, the major players, TransForce (e.g. TST Overland, Canadian Freightways, Kingsway, QuikX, Quiktrax, Clarke Transport and Vitran), the Day and Ross Group and Manitoulin would also control a major share of the LTL market. With limited capacity and pricing discipline, this gives this group of companies considerable pricing power. With high quality costing models, these companies can now seek meaningful rate increases or de-market poor paying accounts. In other words, the “fun” is back in this business.

To further improve yields, FedEx Freight and UPS Freight are introducing density based or dimensional or cube-based pricing. I wrote about the potential of this trend years ago(http://www.dantranscon.com/images/downloads/mtr%20sep_oct%202009.pdf) and it is finally starting to take hold. Just as airlines charge for “bums in seats” and adjust their plane sizes to each route and the potential passenger traffic, LTL freight carriers are going to become much more diligent about charging shippers for the cubic space occupied on their trailers. Shippers with poor packaging, who don’t nest their products effectively or don’t design their products well or load them smartly, will face a nasty surprise. With so much industry consolidation, it won’t take long before dimensional pricing becomes more standard across the industry.

Another reason why LTL carriers are having more “fun” is in their attitudes toward logistics service providers. A few years ago, 3PLs were viewed as the enemy. They were seen as trying to poach LTL customers and replace their carriers by taking control of the direct customer interface. Times have changed. LTL carriers are increasingly viewing 3PLs as business partners. They are forming alliances with companies that have common objectives and customer profiles so they can collectively bring value to the customer. The large LTL carriers are going a step further by creating their own internal logistics or at least freight brokerage arms.

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As the year 2013 winds down, it is time to reflect on the major transportation trends of the past year.  While I saw and read about a wide range of developments, these are the ones that resonated most with me.

1.Technology Comes to Freight Transportation

Last year I predicted that we would see a flurry of new technologies come to freight transportation.  They did and I wrote about some of these new companies on several occasions during the year.  Technology was successfully applied to the freight brokerage business, freight portals, LTL density calculations and to other segments of the industry.  Buytruckload.com, PostBidShip, Freightopolis, QuoteMyTruckload,  and Freightsnap were featured in various blogs during the year.  They are changing the way business is done in freight transportation.  Watch for more of these companies to surface in 2014.

2013 has been called the Year of the Network by numerous supply chain and transportation industry thought leaders.  Companies that built a successful supply chain trading partner network focused on three elements:

Connectivity— unite disparate systems and trading partners

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If your trucking company hasn’t been purchased or doesn’t get purchased by TransForce, will it be in business in five years?  That is the question that came up in a recent discussion with a long time industry colleague.  The response I received was that he didn’t think his company would survive.  I was a bit surprised by the response and asked him for an explanation.  This led to an interesting discussion on what it is going to take to make it in the trucking industry in 2014 and beyond.

We both agreed that while the trucking industry has changed in some ways over the past decade (e.g. more use of technology, better cost controls after the Great Recession, LNG vehicles, greater use of 3PLs as customers), the industry is not that much different from ten years ago.  The slow economic turnaround since 2008 has created a challenging environment and there is little reason to expect a major improvement in the short term.  Rate increases are hard to come by, even with a tight driver situation.  Even more of a concern is the lack of innovation in the industry and the threat that such changes could wreak on so many complacent companies.

The warning signs are there.  As a Canadian, you don’t have to look much further than Nortel and Blackberry to see what can happen to industry leaders that were not able to keep up with changing consumer needs and quality competitors.  At the same time, one can observe what companies such as Amazon and Apple have been able to do to change the paradigm of some long established industries. 

Some of the large trucking industry players are making investments in technology and people.  They are integrating back offices and focusing on achieving economies of scale.  They are thoughtfully expanding their service portfolios and geographic footprints. 

Some of the small players are offering solutions that are very tailored to certain industry verticals and geographic areas.  Companies that are focused on same day delivery, refrigerated intermodal service, pooled LTL service, energy distribution and other emerging capabilities are creating a space for themselves in the industry.

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At the end of each year, I like to take stock of the major freight transportation stories of the past twelve months and look ahead to the trends that will drive the industry in the coming year.  The two blogs that I write are prepared from my perspective as a consultant to shippers and carriers.

This year I would like to hear from you.  Those of you who follow this blog observe trends in your segment of the industry.  Please take a minute to share them with me.  Please post them on this blog or send a private e mail to dan@dantranscon.com

Please feel free to select any major trend or trends that are having or will have a major impact on our industry, whether regulatory, economic, technological, demographic, consumer behavior, environmental, modal shifts or business strategy.

To broaden the range of inputs and perspectives, I will also post this request on Facebook, LinkedIn and Twitter.  In the coming weeks I will be preparing my two lists.  The lists will include a blend of my observations and yours.  Look for these two blogs in mid-December.  Thank you to those of you who take the time to share your observations with me.

 

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Last week the Council of Supply Chain Management Professionals released its 24th annual State of Logistics Report. Last year, business logistics costs were once again 8.5 percent of U.S. Gross Domestic Product (GDP), the same level they hit in 2011, the new report says. That means freight logistics was growing at about the same rate as the GDP. Inventory carrying costs and transportation costs rose "quite modestly" in 2012, said the report's author Rosalyn Wilson. Year-over-year, inventory carrying costs (interest, taxes/obsolescence/depreciation/insurance, and warehousing) increased 4% y/y as inventory levels climbed to a new peak. Meanwhile, transportation costs were up 3% y/y predominantly from an increase of 2.9% in overall truck transportation costs.

This "new normal" is characterized by slow growth (GDP growth of 2.5% to 4.0%), higher unemployment, slower job creation (which will primarily be filled by part-time workers due to higher healthcare costs), increased productivity of the current workforce from investment in machinery/technology (and not human capital), and a less reliable or predictable freight service (as volumes rise but capacity does not increase fast enough to meet demand). Wilson noted that slow growth and lackluster job creation has caused the global economy to wallow in mixed levels of recovery. "This month will mark the fourth year of recovery after the Great Recession, and you're probably thinking that here has not been much to celebrate," said Wilson. "Is it time to ask, 'Is this the new normal?'"

For logisticians, the "new normal" means less predictable and less reliable freight services as volumes rise but capacity does not. In areas such as ocean transport, Wilson said, this can mean slower transit times. "I do believe the economy and logistics sector will slowly regain sustainable momentum, but that we'll still experience unevenness in growth rates," Wilson predicted.

For cutting-edge logistics managers, however, the current environment also means great opportunities to secure increasingly tight capacity in an era of shrewd rate bargaining. This is partly because the trucking industry, in particular, is facing a lid on capacity because of higher qualifications for drivers while top carriers are becoming increasingly selective in their choice of customers and in the allocation of their assets.

"Truck capacity is still walking a fine line—few shortages, but industry-high utilization rates," Wilson explained. Truckload capacity continues to remain stagnant (with the majority of new equipment orders for replacement or dedicated fleets and the copious amount of truckload capacity sapping regulations coming down the pipeline) and the assumption that freight demand will continue to modestly increase (as the economy continues to muddle along at low single digit GDP growth in combination with population growth), a less predictable and less reliable freight market is developing (as described in the "new normal").

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In last week’s blog, I shared some ideas from the recent SCL – CITA annual conference on how to improve shipper- carrier collaboration.  Various suggestions were proposed by a panel consisting of two leading shippers and two major Canadian carriers.  Some other thoughts were expressed during other tracks that day.

The panelists presented some suggestions that came out of a joint meeting between the Ontario Trucking Association and the Canadian Industrial Transportation Association.  Here is more of what they had to say.

Removing Waste from the Shipper and Carrier’s Operation

During the panel discussion it was suggested that it is through trust, communication and dialogue, rather than through an RFP, that opportunities to remove waste from a shipper’s operation can be identified, discussed and solved.  The RFP process is typically too rigid to allow for a meaningful exchange of ideas and for the development of action plans. 

Since the focus in an RFP is typically on rates and service, it doesn’t create a forum for dedicated problem resolution.  Moreover, by not creating project teams, action plans and time lines to remove waste, the inefficiencies typically doesn’t get extracted.  The shipper continues to perform the same functions, in the same way, with its existing and/or new carriers.  Drivers continue to be pick up half full loads since opportunities to consolidate freight or change pick-up dates are missed. As one trucking executive mentioned, the savings generated from these types of initiatives can be much larger than the two percent saved as a result of the freight bid.

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For the past week I have been reading with great interest the postings on the LinkedIn Sales Management Group.  As of the date of this blog posting, there have been over 40 responses to the question, “What advice would you give a new salesperson”?  The tips offered were so good that I thought I would share a “reader’s digest” version with the followers of this blog. 

As I read these suggestions on a daily basis, I see two sets of users for these tips.  First, new sales reps should study this list and make sure they take action on every item.  Second, sales managers should take this checklist and cross reference it with their current (and future reps) to ensure they maintain a winning team.  Here are my 21 favourite tips for the new rep.

  1. Achieve mastery of the services that you sell.
  2. Achieve mastery in sales skills.
  3. Seek out the top performers on your sales team and learn from them as to how they dress, their work ethic and their communication skills.
  4. Understand how your services compare with those of your competitors.  
  5. Be a great listener so you understand the needs of your prospects.  There is a good reason why we have two ears and one mouth.  Focus on understanding the needs of your customers so you can solve their problems. 
  6. Get to know your prospects before you turn them into customers.
  7. People buy from people, specifically people they like and trust.
  8. Prospect, prospect, prospect.
  9. Learn as much as possible about your customers.  The more due diligence you do up front, the easier it will be to close the sale at the end.
  10. Be persistent and consistent.  Success comes from a strong work ethic.
  11. Be passionate about your company and its services.
  12. Try to sell solutions rather than products or services.  Learn your company’s value proposition and where it fits best.  Sell the value of your solution, not price.
  13. Learn early on to distinguish buyers from non-buyers (i.e. lack of mutual fit/interest/resources, etc.).  This will go a long way towards increasing your income and your employer’s income while reducing customer acquisition costs.
  14. View yourself as a profit centre.  To be successful, time management is critical.  Spend your time, energy and resources on the most viable opportunities in your sales pipeline.
  15. Be ethical in all of your business.  Remember, you are selling your (and your company’s) credibility and integrity.  If you lose your integrity, you have nothing to sell.
  16. Invest in yourself.  Continually upgrade your product and business knowledge and your sales skills.
  17. At the end of the day, when all of the other sales reps have left the office, make one more call to a new prospect.
  18. Acquire a CRM tool and use it faithfully every day.
  19. If you are having difficulty in one or more areas of your sales pipeline, this is telling you that you have a weakness in specific areas (e.g. prospecting, obtaining appointments, asking for the sale). Take action to turn these weaknesses into strengths.
  20. While the sales job can seem very lonely at times, don’t forget sales is a team sport.  Work closely with your manager and the rest of your team (e.g. drivers, dispatchers) to achieve your goals.
  21. Always ask for the sale.  If you don’t ask, you may not get. 

I am sure there are many more tips that can be added to the list.  What advice would you give to new freight transportation sales rep?  I would love to hear from you.

 

This year’s Surface Transportation Summit will take place on October 16, 2013 at the Mississauga Convention Centre.   Please block out this date in your calendar.  We have some great speakers lined up for this year’s event.

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Transportation Trends in 2013

Posted by on in 2013 Economic Forecast

The New Year will be an exciting one that will likely be shaped by the financial talks currently taking place in Washington.  Here are some of the key trends to watch for in the coming year.

1. The “Fiscal Cliff” Crisis may determine the level of the Economic Recovery in 2013

As the year comes to a close, America is facing a number of economic headwinds (e.g. high unemployment and underemployment, mismatch between job skills required/positions available) and tailwinds (e.g. possible rebound in the housing sector, potential revival of domestic manufacturing, boom in energy production, improving household balance sheets). Senior government leaders in Washington are trying to solve America’s so-called “fiscal cliff” that is casting a dark shadow over the economy. The resolution of this crisis may go down to the wire and will likely set the tone for the economic recovery, or lack thereof, in 2013.  Should America’s leadership come to a good understanding on tax increases and spending cuts, this will place the United States and probably Canada on a more solid path to an economic recovery, even if 2013 is not expected to be a year of robust growth. This will help shippers and carriers in all sectors of the economy.  A failure to reach an agreement, a weak agreement or an agreement to push the problem down the road, will put a damper on discretionary spending, consumer confidence and possibly shove North America and much of the world into recession.

2. America’s Energy Renaissance/ Fracking comes to the USA

America is going through an energy renaissance.  Induced hydraulic fracturing or hydrofracking, commonly known as fracking, is a technique used to release petroleum, natural gas (including shale gas, tight gas, and coal seam gas), or other substances for extraction.  Fracking is allowing America to produce increasing supplies of energy just as the Middle East, the world’s leading source for petroleum, has become increasingly volatile. 

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The decision by Wal-Mart to conduct a pilot of a 60 foot high cube tractor-trailer in Ontario, Canada caught the transportation industry off guard.  The surprise is not so much that a newer and longer piece of trucking equipment is being trialed.  This was inevitable.  The surprise is that the initiative was driven by a large shipper and not by a Trucking Association or trucking company in Canada or the United States.    

The arguments in support of the trial are compelling and are the same arguments that were made when 53 foot trailers and every other innovation in transportation occurred.  A 60 foot tractor-trailer that offers 30 percent more cubic space promises to make the North American economy more efficient.  It places fewer trucks on the road, thereby reducing congestion and lessening the need to refurbish our existing highway infrastructure.  It reduces the impact of a driver shortage.  It would reduce fuel consumption and greenhouse gas emissions.  It permits drivers to accomplish more under HOS restrictions.  It would allow trucking companies to derive a better return on their investment.

The arguments against Wal-Mart’s pilot are the same as those made each time there is a proposed change of this nature.  The most frequently mentioned reservation is that this will make our roads less safe.  It will result in more highway fatalities.  The prototype trailer is not in compliance with existing laws in various jurisdictions.  There will be problems in backing up a tractor-trailer combo of this nature into many existing loading and unloading docks.  Longer high cube equipment will contain heavier payloads that will speed up the damage to our roads and highways.   It will require infrastructure changes to accommodate vehicles of this length.

While all of these comments deserve discussion, it must be pointed out that the transportation industry has dealt with all of these issues before.  Laws can be amended.  Loading areas can be reconfigured.  Bridge crossing can be modified.  Weight configurations can change.  It wasn’t that long ago that Ontario ran a trial on long combination vehicles (LCVs).  What makes a 60 foot tractor-trailer so different?

Perhaps the biggest issue is the impact that the widespread standardization of 60 foot equipment would have on the capital budgets of trucking companies and shippers who have their own fleets.  The industry has billions of dollars invested in 53 foot equipment.  With an economy that is less than robust, trying to “keep up with the Jones” by having to convert part of a fleet to 60 foot equipment is certainly not what the industry is looking for at this time.  This issue alone explains why longer tractor-trailer lengths have not been driven by the trucking industry.  A change of this nature would cost enormous amounts of money.  The cost alone creates a certain amount of inertia and resistance.

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