The value deficit

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I can tell you for many years the shipping community has not really given damn, quite frankly, about safety. That’s the reality of it; and it explains a lot about why things have been the way they’ve been.” –Steve Williams, president and CEO of flatbed carrier Maverick USA, at a conference of the future of freight transportation held last December at the Swedish embassy in Washington, D.C.

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Many shippers will rightly take issue with the above comment made by Steve Williams (at right), president and CEO of flatbed carrier Maverick USA (and a former chairman of the American Trucking Associations to boot), a freight conference I attended last year.

That’s because many shippers DO value safety, of course, as they expect the trucks they hire to not only safety transport their goods from point A to point B, but do their part to protect the safety of the motoring public encountered on the highways along the way.

Yet there’s also no denying the truth in Williams’ statement, either: for the utmost concern for bulk of those tendering freight is usually the cost of transportation. Let’s face it: by and large, the great preponderance of shippers view trucking as a commodity. Trucks are faceless, interchangeable; one is just as good as another.

Now, however with a whole range of new safety regulations coming into play – such as the Federal Motor Carrier Safety Administration’s Compliance Safety Accountability (CSA) program, formerly known as Comprehensive Safety Analysis 2010 (CSA 2010) – that “low value” mindset is starting to change, and change fast. But for many in trucking, this about face is regarded as too little, too late.

[You can view more of Williams’ comments below from the Moving the World: The Future of Freight Transportation conference, hosted by Volvo Trucks North America (VTNA), Volvo Group North America, and the ATA at the Swedish embassy in Washington D.C. last December.]

Think about that word “value” here, for a moment, as it applies to trucking. For too long now, we’ve been witness to on ongoing decline in the perceived “value” of trucking. Even though trucks carry some 80% of the freight in the U.S. and are often the only freight transport method available to large swaths of the American nation, they – and the drivers that pilot them – continue to be viewed with disdain by much of the public, if they are even thought about at all.

Chuck Forsaith, corporate director of supply chain security for pharmaceutical drug maker Purdue Pharma Technologies Inc., put this startling perspective a few years back at the 2009 National Cargo Theft Summit.

Forsaith (below) – a former officer with the New Hampshire police department, with 21 years of experience under his belt – deals probably with some seriously high value freight, as his firm makes OxyContin; a powerful opiate-based pain killer. Obviously, the threat of theft for this drug is very high and Purdue Pharma takes an awful lot of care planning the transportation and storage of it. Yet many pharmaceutical companies still don’t; a view Forsaith couldn’t fathom.

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For example, he recalled talking to one of his peers about how they transported drugs and found their loads we’re being subcontracted out – that the shipper didn’t even know WHO was hauling their products; all for the sake of wringing a few dollars more out of the freight bill.

“We spend millions on research and development, scientist salaries, manufacturing, background checks, and the latest in high-tech facility security. Then what do we do? We turn it all over to a guy making $25 an hour driving a truck who probably doesn’t know what he’s hauling,” Forsaith said at the time. “It’s amazing – absolutely amazing.”

He didn’t say that to disparage truck companies or drivers – Forsaith stressed that several times. Rather, it was to show that the shippers of these incredibly expensive goods simple did not put any value on the transportation component of the supply chain; even though their goods would be exposed to the highest risk of theft or damage during the transport process.

It’s a dichotomy that continues to bedevil the industry today; shippers want safe, environmentally friendly trucks picking up and delivering their goods on time, in all sorts of bad weather, and they want to pay a rock-bottom freight rate for it.

[Just take a look at what goes into a modern truck today, even before you get into pricey emission control technology, etc.]

The point is, until the role of truckers and truckers starts being valued appropriately, capacity is going to remain tight, as fleets will keep their investments at a minimum, while drivers will become scarcer and scarcer – for who wants to work in an industry where its workers are still viewed as unskilled labor (YOU go try and drive and 18-wheeler and tell me it does not require skill) and many must remain on the road away from friends and family for weeks at a time?

That’s why the value deficit where trucking is concerned needs to be fixed.

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