Tag: carriers
2022 Supply Chain Outlook
Globally this past year, supply chains and shipments slowed down which subsequently caused material shortages and impacted our growing consumer consumption of literally everything. These disruptions emphasized just how interconnected we are worldwide.
Manufacturers and distributors who cannot produce or supply as much as they did prior to the pandemic are in disarray for a variety of reasons, including labor shortages and a need for more key components and raw materials.
As we move into 2022, supply chains are still facing challenges and are struggling to rebound from subpar.
We sat down with our resident supply chain guru, LeAnne Coulter, vice president of Freight Management for Penske Logistics to discuss just when she predicts the disruption will alleviate and what businesses need to do to contribute to the progressiveness of the industry.
Q: When do you believe the supply chain will be able to catch a breath from all of this?
A: The national supply chain doesn’t work as one connected organic system; it is made up of many intricate puzzle pieces. When visualizing the different connection points in supply chains, there are practically bottle necks at every tributary. From material shortages to parts shortages and the labor force constraints across the entire supply chain – manufacturing, warehousing and transportation are all impacted. Inventories have been depleted for months and are still below where they need to be for supply chains to function effectively and smoothly. For resolution to happen there needs to be a concerted effort between data, technology, and logistics – across the industry. In this current climate, I feel, we are looking at supply chain congestion and disruption [due to supply and demand constraints] through Q2, 2022.
Q: What are some supply chain “best” practices to help get suppliers through these times?
A: To get through this every organization should evaluate its current state and ask, “are we creating a backlog?” Equipment and driver shortages are severe and are contributing to greater strain on the national network. For fast action, Companies need to look inwardly and determine if their scope of business has changed and adjust accordingly. In terms of the supply chain, carriers need to be turned as quickly as possible, equipment needs to be unloaded quickly and available for the next shipment, organizations need to understand where its supply chain gaps are and efficiently address carrier concerns as they arise. By focusing on near-term through put, shippers can help themselves gain access to capacity, even while supply chains are choppy. Additionally, what we see today is that organizations have their data and processes in many different silos, which creates supply chain inefficiencies and, in turn, a lack of organizational understanding. Bringing data together and managing transportation is a critical component at both organization and industry levels.
Q: How can Penske Logistics help resolve these issues?
A: Penske’s technology base and supply chain professionals help organizations with these types of problems; bringing solutions to them so they can start to get ahead of their crisis areas, and dissolve backlogging. Penske Logistics does this with its ClearChain® Technology Suite, including ClearChain® Control Technology which drives end to end visibility and collaboration. By focusing on synchronization of data and technology, and employing supply chain expertise, shippers can begin to move their critical human resources to truly shift their focus to hitting business objectives and strategies, and out of daily crisis management. Decision-makers need to simply not be afraid to seek help where they find inefficiencies. Penske offers sophisticated technology systems and platforms and processes and expertise to drive supply chain performance.
As we officially move into the new year, we wish everyone the best in health and safety – and hope to see the supply chain diffuse back into balance and come out even better than it was before.
By "Move Ahead" Staff
Penske Truck Rental Helps Fleets Deliver During the Holidays
Retailers are expecting a record number of holiday shoppers on Thanksgiving weekend placing parcel delivery companies in the spotlight to meet consumers' holiday expectations.
Explosive e-commerce growth during the pandemic coupled with last-mile deliveries has made it necessary for fleet managers to turn to companies like Penske Truck Rental for additional equipment.
Penske, which has one of the largest rental fleets in North America, works with parcel delivery companies throughout the year to anticipate rental truck needs heading into the holiday season.
"We meet with our providers and vendors in the first quarter of the year to evaluate the previous year. And then, we meet several times throughout the year to discuss preparations for the upcoming holiday package season. We have a great working relationship with the delivery companies and value our partnership." said Jeff Werner, director of commercial rental sales for Penske Truck Rental.
Chances are during peak holiday delivery periods a Penske rental truck will be there to help your favorite parcel company deliver during the holidays.
Holiday Shopping List
The National Retail Federation (NRF) predicts holiday sales in November and December will increase to between $843.3 billion and $859 billion, an increase over 2020. Consumers are expected to spend an average of $997.73 during the holidays.
The holiday shopping period – Thanksgiving Day through Cyber Monday – will feature nearly 2 million more shoppers than last year, according to the results of a survey by the NRF and Prosper Insights & Analytics.
"We're expecting another record-breaking holiday season this year, and Thanksgiving weekend will play a major role as it always has," said Matthew Shay NRF president and CEO.
Two-thirds of holiday shoppers surveyed plan to shop on Thanksgiving weekend, with more than 30 million planning to shop in-store or online on Thanksgiving Day.
Black Friday remains the most popular shopping day with 108 million consumers planning to make purchases followed by Cyber Monday and Small Business Saturday.
Meeting the Need
In previous years, late October and November have been months when rental truck requests from parcel carriers and others would start to increase. This year, the increase has occurred much sooner.
"Customers are purchasing items earlier to ensure they have them for the holiday season, which is causing the delivery companies to pick-up the trucks earlier than in past years. This will also ensure they have the necessary equipment for the last-minute holiday rush."
In addition to parcel delivery companies, Penske also supports the needs of small and medium-sized businesses that experience similar spikes in holiday demand.
"There are businesses (large and small), that are in need of extra equipment over the holiday season." Werner said. "With Penske's large fleet, we are able to work with the customers to provide equipment."
Penske draws on years of holiday rental demand experience to balance the needs of large parcel carriers and regional and local businesses. "Our teams are working hard to ensure there is equipment available for every type of business," Werner said.
While the holiday shopping season is in full swing, Werner advises businesses seeking rental trucks to act now.
"We constantly have new trucks coming in and customers returning trucks, so there is constantly an inventory turn around," Werner said. "Our teams do a great job of positioning equipment to take care of all of our customers."
Preparation is key.
"Customers need to plan ahead and give us a call at the earliest time they think they will need equipment," Werner said.
Penske offers a wide variety of rental trucks from large commercial semi-tractors and trailers to small box trucks. Penske encourages retailers and businesses to make reservations by calling its hotline for business rentals, 1-800-PENSKE1.
By Bernie Mixon
Penske Logistics Receives Supplier Excellence Award from Novelis
Penske Logistics was recently recognized with a North America Supplier award from Novelis, the world leader in aluminum rolling and recycling. As a leading provider of dedicated transportation to Novelis North America, Penske is an essential component of its closed-loop aluminum supply chain serving top automakers.
The Novelis North America Supplier award was given to Penske Logistics for demonstrating an outstanding performance in overall logistics while receiving the best score from Novelis' key carriers throughout North America in 2020. This is Penske's second time receiving the North America Supplier award, accepting its first in 2019.
Penske Logistics executives receiving Supplier Excellence Award from Novelis
"Delivering performance and innovation is guided by a deep sense of responsibility at Penske," explained Jeff Jackson, executive vice president of operations for Penske Logistics. "With Novelis, we are committed to providing quality, reliability and a true partnership which resonates through the North America Supplier award."
Penske's dedicated trucking operation utilizes Novelis' closed loop recycling system and shuttles aluminum coils from Oswego, New York, to automotive stamping plants in Michigan. The aluminum scrap from the stamping process is then transported back to Oswego to be recycled and formed into new coils. This process runs 24 hours a day, 365 days a year – with a loaded Penske truck heading out on the road every 40 minutes.
"We are inspired by the work and passion Novelis has for a circular economy and are grateful to partner with them and receive the North American Supplier award for the second time," said Marc Althen, president of Penske Logistics. "Leading our success is our dedicated team of safe, professional drivers and well-trained staff. I would like to send my appreciation to that team for their focus and commitment to the network's infrastructure and procedures."
Novelis joins technology and strength innovation in the automotive industry. Due to fuel efficiency requirements, light weighting demands and the evolving mobility ecosystem, automakers enlist Novelis aluminum for sustainable solutions that enable the next generation of vehicles.
"At Novelis, our purpose is shaping a sustainable world together, and our supplier award winners demonstrate that commitment every day," said Tom Boney, executive vice president and president, Novelis North America. "We congratulate Penske Logistics on this accomplishment and look forward to an even more successful partnership in the years to come."
Novelis selects suppliers across 10 award categories each year that support its 16 manufacturing facilities throughout the United States and Canada.
Penske Logistics provides dedicated contract carriage services through its expansive network in North America with safe, professional drivers, and a modern truck fleet integrated with advanced safety systems, transportation management and real-time freight tracking systems. Penske Logistics handles deliveries for a variety of leading companies in industries including automotive, CPG, food, grocery, beverage, manufacturing, quick-service restaurants, healthcare, and convenience store chains among them. Penske is currently hiring truck drivers nationwide. Visit https://driver.penske.jobs/ for available positions.
By Tana Korpics
National Private Truck Council (NPTC) Survey Highlights Value, Performance of Private Fleets
The National Private Truck Council 2021 Benchmarking Survey Report provides fleets with new industry standards to evaluate performance and identify opportunities for improvement.
"Information is power," explained Jim Lager, senior vice president for Penske Truck Leasing. "Fleet operators need real-time data to make informed decisions about their business. They want to know if what they are doing is best-in-class or underperforming, and how they can improve. Being able to see that information helps them identify areas of opportunity within their operations."
Lager added that every aspect of the supply chain is stressed right now. "I think it is even more critical to have good information and good partners to talk to about it," he said.
The 2021 NPTC Benchmarking Survey Report, which is sponsored by Penske, captures critical metrics from the 2020 calendar year, which was a time like no other.
"The purpose of this report is not to critique any fleet's performance, but rather to give them the tools so when they need the answers and the metrics in their continuous improvement efforts that they can grab onto those metrics in the report and move on," said Tom Moore, executive vice president of NPTC.
Even with the challenges, private fleets performed well and used their advantages to navigate supply chain challenges, hauling more shipments and volume than they did in the previous year.
Moore continued: "The thing that really impresses me, despite everything that is going on in the pandemic, is the stability that occurred in our private fleet management. We didn't see extreme swings in terms of equipment buying or a lot of change in the driver hours, even though the DOT extended those hours. Those folks stuck right in that core business. I thought that was a telling statement for how private fleets position themselves for success."
Supply chain challenges have helped private fleets raise the awareness and importance of transportation generally within their companies.
"In the last three to four years, companies have decided to start their own private fleet from scratch because of the vulnerability in finding transportation," said Gary Petty, CEO of NPTC. "I think a lot of companies are saying, 'We can manufacture the greatest product around, but if we can't get it in a way that has no damage and no loss that is timely, it doesn't matter.'"
Many private fleets shined during COVID disruptions and were able to navigate capacity constraints and surging costs others faced within the transportation market, strengthening the case for having a private fleet.
"Private fleets are resilient and flexible," Lager said, adding that more and more companies are considering and transitioning to private fleets. "That is a result of the spot market and the carrier situation driving them toward that so they could control their destiny. They don't want to trust that to a carrier. They want to do it with a partner like Penske."
Petty stated 75% of the private fleets in the study are operating as cost centers or, as he calls them, contribution centers. "They're in it to provide outstanding customer cost in the most effective and efficient manner possible. Whatever financial model, the goal is to deliver exceptional levels of customer service in the most efficient manner possible," he said.
As in years past, the primary reason companies report operating a private fleet is to provide exceptional levels of customer service that are unavailable on the open market, especially at a time when transportation and logistics capacity has been relatively constrained.
In the latest study, more than 92% of the respondents, in response to the open-ended question, 'What is the primary reason your company operates a private fleet?,' answered customer service.
Measuring on-time performance remains the primary means of tracking customer service, although other metrics are growing in acceptance.
This year 68% of the fleets report measuring on-time performance as opposed to 82% last year.
This erosion in on-time deliveries makes room for a bevy of other metrics, according to the NPTC report, most notably safety scores, tracked by 56% of respondents (53% last year); cost-per-mile, tracked by 55% of the respondents (35% last year); and customer comment, tracked by 32% of the population.
Shipments for private fleets were up from last year by 9.7%, and volume was up by 5.6%. This growth is supported by an overall mileage increase of 5.7%, which means that fleet respondents accomplished these gains rather efficiently, according to the report.
Even still, private fleets do face challenges, with driver-related issues being the No. 1 challenge listed. Driver-related issues are cited by nearly every respondent, often more than once. Rounding out the list of issues cited by fleets are: Cost-related issues; equipment and maintenance; customer service; regulatory and safety.
While driver issues remain top-of-mind, private fleets perform better than the for-hire population. "While everybody is feeling the driver shortage, it is less at private fleets," Penske's Lager said.
This year's survey found that driver turnover fell to 15.8%, nearly three full percentage points down from last year's 18.5% turnover rate and much lower when compared to the for-hire segment. Private fleet's average driver turnover is 14.25% over the 15-year history of the survey, and the average driver in the NPTC survey stays with a carrier for more than ten years. "That is extraordinary," Petty said.
NPTC started tracking metrics surrounding the time to hire and the hiring process for the first time. NPTC found that the average fleet has to review, screen and/or interview 19.7 candidates to fill one driver's seat, and the average time to hire a driver candidate is 34 days.
"Private fleets understand you get what you pay for," Moore stated. "They changed the mentality from speed-to-hire because they want to hire the right person.
The three top reasons for turnover are discipline issues, drivers leaving for another job, or retirement.
Moore noted: "For those leaving for another job or discipline issues, that tells me a private fleet can do a better job in the hiring process. If you're asking the right questions in the interview, you can identify what drivers are more likely to leave or will have discipline issues."
For the first time, NPTC asked fleets how much it cost to bring a driver on board. It is about $7,500 for the typical heavy-duty operation, and $3,400 for medium-duty fleets.
The survey also examined which freight movements private fleets haul and which they contract out. Private fleets typically handle about 2/3 of the outbound flow of goods and work with third-party carriers to handle the rest.
For-hire motor carriers handle 17% of all outbound freight movements, while dedicated contract carriers perform 12%. When deciding how to position the private fleet, survey respondents mention numerous inter-related and overlapping factors. The most frequently highlighted are cost, service, geography, and proximity to customers, and backhaul loads.
Empty mileage rates decreased, with an empty mileage of 26% down from last year's 33.3% and the previous year's 28.4%. NPTC found that 28% of respondents reported improved empty mileage, and Lager said reducing empty miles is top-of-mind for carriers. "There is not the luxury of being inefficient right now."
Penske Truck Leasing helps customers analyze their network to determine the best lanes to handle internally and the best to outsource.
"We have the engineering capability and capacity to analyze a customer's entire operation and make a recommendation," Lager said. "We can process the data and optimize it in several ways. It isn't always about cost; it is about delivery windows and meeting schedules. We can display all of that and help them make those decisions."
Use of on-board safety technology continues to increase, and not one respondent indicated not using on-board safety technology.
"If you're not safe, you're not going to be efficient, and the rest of the metrics don't matter," Moore said. "The safety record continued to get better and stronger and was one of the best years we ever had."
Survey participants can request customized data pulls that compares data of peer or like-kind fleets in the same market.
Petty: "It is apples-to-apples numbers they can use. This is powerful information internally. We have found once companies get on the track of scoring themselves against peers, it gives the whole benchmarking exercise a powerful boost of credibility."
By "Move Ahead" Staff
Latest Intelligence
