Digital Edition

Aug.21, 2017

Issue link:

Contents of this Issue


Page 12 of 63 THE JOURNAL OF COMMERCE 13 COVER STORY that's out there. So, in some ways we're doing exactly what we were doing 35 years ago, but the sophistication and the data have really moved up. In trucking, location services are already here, but come Dec. 18 they're going to be universal, and that's a big deal. JOC: Is there a knock-on effect on how shippers operate? How they schedule shipments? How they work their docks? WIEHOFF: There's going to be a lot of ripple effects. When we talk with customers, the good shippers want feedback on how their freight is seen by carriers. What's it like to pick up at their locations. Because drivers will turn down freight if there's a high prob- ability that they're going to have to wait four hours to load it. They don't get paid to wait unless there's a separate accessorial charge for detention time. So, we're not only going to have more efficient access to capacity, but we're going to be collecting better metrics around yard efficiencies. So, we'll definitely get more data about who's causing ineffi- ciencies in the supply chain. JOC: How do you marshal all this data, and then how do you analyze it and act upon it? WIEHOFF: One of our core themes in tech- nology is advanced analytics and machine learning. Most of these analy tics and cloud service companies, they're assuming unlimited storage and unlimited comput- ing capacity, which is mind-boggling. When you're collecting data every 15 seconds, you can get real-time visibility. But then you've got to decide how frequently you take a snapshot of the data and how you build your data warehouse to make sure you've got a rich amount of history, but not so much that you can't sift your way through it. So, we're investing in data engineers and ana- lytical people who are skilled at that. We're constantly thinking about what's the right amount of data and the right way to struc- ture it. And then, what do you do with that data? What's the value proposition? There's a bunch of startup companies in that space, and most companies like us are investing heavily in analytics capabili- ties. Shippers all want to gain competitive advantage from their supply chains. They all want perpetual improvement in their networks and analytics. For all of us provid- ers, the race is on to think about how you come to them with innovation and creativity and data that help them improve. So much of what we do today is based on exception management. I think in the early stages a lot of the improvement is going to come from predictive analytics. JOC: Turning back to the international busi- ness, what's your growth strategy there? Do you see Europe as a growth region? The Asia- Europe trade? WIEHOFF: When we went public 20 years ago, one of our stated ambitions was to continue to grow aggressively in global forwarding. Now we're coming up on the five-year anniversary of the Phoenix (International Freight Services) acquisition. The integration (with Phoenix) has gone extremely well. When we put the two teams and the two platforms together, we were able to grow the business substantially without adding a lot of cost to it. That's really improved our profitability. Then we added APC Logistics in Aus- tralia-New Zealand about a year ago. At any point in time, if you look at the Robinson- Phoenix merger or the APC acquisition, when we strip those out we've still had positive growth every quarter organically, separate from them. Not only have the investments been good, but they've enabled us to leverage our platform better and organically open gateways and other offices. We've been opening offices across Asia, and we've been opening offices in Europe. Global forwarding is very network- oriented. You leverage your procurement with the steamship lines and airlines. It's about density. We do a lot of LCL (less- than-containerload) freight where we're consolidating shipments, so the greater the density, the better it gets. In the global forwarding business, when you're growing and you're gaining scale and density, it's a beautiful thing. And when you're not, it's terrible. It's a momentum game, and we've got good momentum right now. It took us 20 years and a very strategic acquisition to tip us over. But the exciting part is we think there's a lot left to do. JOC: Where do you see the greatest opportu- nity overseas? WIEHOFF: We are the leading NVOCC (non- vessel-operating common carrier) from China to North America. We're building on our relationships with the carriers, building on gateway consolidation, building on our efficiencies. As you get more dominant in one corridor, it provides more opportunity. Asia-to-Europe is one of our key initiatives. A lot of our Australia-New Zealand cus- tomers that have North American freight are looking at service to Europe. A lot of the organic growth has come from cross-selling current customers where we've had a 20- or 30-year North America surface transporta- tion relationship. But you have to earn that freight. They won't just give it to you. We're looking for other parts of the world where we can expand. We've got capital, and we've got the desire to do more. The investments we've made in our global platform, our tech- nology, give us an even better competitive advantage outside North America. JOC: You mentioned disruption earlier, disrup- tive technology. We hear the word a lot today. It's being thrown around all the time, right? WIEHOFF: It gets annoying, doesn't it? JOC: I'm sure it does. Is transformation really a better description of what we're seeing? WIEHOFF: One of our key internal initiatives focuses on network transformation. We're changing and automating a lot of business processes. The positive term is "network transformation" or "reinvention." We're trying hard to stress the more positive connotations of all the change that's com- ing. But the pressure on all of us, not just in logistics but probably every industry right now, is to embrace this technological change and figure out how to capitalize on the opportunities and avoid the threats. When everything's moving so quickly, it stresses your capital allocation, your decision-mak- ing, your resource prioritization. And when the word "disruption" gets tossed in, it gets annoying because you're just emphasizing the threat, and not the opportunity. The reality is they're both present, and the chal- lenge is to stay balanced between them. JOC The government wants visibility so it can monitor HOS compliance. But the value of that visibility from a commercial standpoint is probably way greater than the compliance cost.

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - Aug.21, 2017