3pl americas - international warehouse logistics association · 3pl americas summer 2014 7...

3PL Americas

WEARABLE TECHNOLOGYTRANSPORTATION ADVISORY COUNCIL

COMMERCIAL WAREHOUSING INC.

www.IWLA.com

PM 42128520

THE MAGAZINE OF IWLA IN NORTH AMERICA • SUMMER 2014

™

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PUBLISHED FOR:

International Warehouse Logistics Association Steve DeHaan, president & CEO 2800 River Road, Suite 260 Des Plaines, IL 60018 USA Tel: (847) 813-4699 Email: [email protected]

Managing editorJohn Levi, IWLA Canada

Copyright © 2014, International Warehouse Logistics Association (IWLA). All rights reserved. No part of this publication may be reproduced by any mechanical, photographic or electronic process, nor may it be stored in a retrieval system, transmitted or otherwise copied (except that members of IWLA may copy all or part of this publication exclusively for personal use or use in the operation of that member’s business, but excluding any publication) without prior written permission from IWLA. For permission, contact the publisher, J.M. Levi & Associates Ltd.

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3PL AmericasTHE MAGAZINE OF IWLA IN NORTH AMERICA • SUMMER 2014

™

Cover photo: www.dreamstime.com

3PL Americas

WEARABLE TECHNOLOGYTRANSPORTATION ADVISORY COUNCIL

COMMERCIAL WAREHOUSING INC.

www.IWLA.com

PM 42128520

THE MAGAZINE OF IWLA IN NORTH AMERICA • SUMMER 2014

™

6 Keys to IWLA Success: Advocacy & NetworkingBy Steve DeHaan

7 Shape IWLA: Get InvolvedBy Tom Herche

8 An Introduction to Wearable TechnologyBy Louise Taylor

11 Understanding Key Terms for 3PLs in Information Technology AgreementsBy Marc Blubaugh, Jeffrey Kosc and Matthew Thielemann

13 IWLA Events Calendar

14 What Does the Future Hold?By Kim Biggar

15 2015 IWLA Convention + Expo

16 Developing DashboardsBy Ken Ackerman

18 What It Takes to Succeed in Warehousing and LogisticsBy Kim Biggar

20 The Future Supply Chain WorkforceBy Lori Smith

22 Commercial Warehousing, Inc.: Organized for Its Customers’ SuccessBy Kim Biggar

25 Disaster Looms: Why Today’s Global Supply Chains Are At RiskBy Robert Bowman

26 Advertiser Index

27 The FMCSA Driver Coercion Rule and its Impact on Warehouse OperatorsBy Nathaniel Saylor and Eric J. Meyers

29 Ensuring Business Sustainability During Disasters, Disruptions and Service FailuresBy Kristi Montgomery

31 The Crucibles of LeadershipBy Chip Scholz

32 Future Issues of 3PL Americas

33 Transportation Advisory Council: New Name, New Plans, New IssuesBy Morgan Zenner

3PL Americas — Summer 20146

PRESIDENT’S MESSAGE

Keys to IWLA Success: Advocacy & Networking

IWLA just finished its July board and strategic planning meeting in

Seattle. Our Chairman, Tom Her-che, covers the major elements of our discussions and directions in his column. I will focus on advocacy and networking, the two topics that rose to the top.

IWLA’s advocacy efforts depend on having people (senators and rep-resentatives) who are willing to listen to and learn from the voices of others (including our members). IWLA does a great job in preparing to tackle the issues, and we have a great track re-cord of success. Success still requires that we elect people that are willing to listen and learn.

I ask that you do one of the fol-lowing (or all of them) and step up to protect your business from future adverse laws and regulations:

1. Allow yourself and others in your company to be solicited for an IWLA Political Action Committee contribution – and then make that contribution. IWLA-PAC uses these funds to identify congressmen that lead or serve on committees that have the most influence on our industry’s issues. The donations help us put people in office that will listen to our voices.

2. Become a “Congressional Contact” for a represen-tative or senator that you know personally:

– Contact your representative somewhat regularly on behalf of IWLA and our industry.

– Invite your representative to your warehouse for a tour and to meet your people (the voters) in an environment that helps them understand the issues better.

– Attend the IWLA Legislative Fly-in (usually in Sep-

tember of each year) and visit your congressmen.

3. Help educate your employees on the issues that are important to our industry and our everyday work. Some employees do not enjoy politics (actually, most people outside of D.C. don’t) and do not realize the impact that they can have on the issues that affect their work, your company, and their family.

I regularly hear that IWLA’s net-working provides real profits for members, both for their companies and for members as leaders of those companies. The IWLA convention and education programs continue to grow. Attendees are asking for more networking groups following each of the programs. They want to connect with people that they have learned from, and have a great desire to con-tinue to add a higher level of excel-lence in all that they do.

We often tell new members that it is not just joining the association, but

it is getting to know the members of the association that will make a difference for your business. I see it in play at every function I attend and it soon becomes the best part of being a member of the association.

Summer is coming to an end. Make sure you are get-ting out there to enjoy some of it.

Steve DeHaan, CAE President & CEO International Warehouse Logistics Association

Success still requires that we elect

people that are willing to listen

and learn.

3PL Americas — Summer 2014 7

CHAIRMAN’S MESSAGE

Shape IWLA: Get Involved

THE IWLA Board of Directors meets in-person three times a

year. As I write this, we have just wrapped up our summer gathering in Seattle, Wash. We spent a morning working on refreshing our strategic plan to guide IWLA through the next three years.

We also reviewed directives and goals from past meetings. One 2014 goal was an IWLA brand refresh and an improved website. The IWLA Branding and Website Task Force un-veiled the new logo and beta website during this meeting. Seeing it for the first time was very exciting. I’m confi-dent that both warehouse and partner members will enjoy the new look and functionality of the website. Watch for more in the coming months.

Here are some other board meet-ing highlights:• The committee status reports

showed active participation by our members and chairmen.

• IWLA’s financials are in better shape at this juncture than they have been in the last four years.

• IWLA membership is growing and attendance at our in-person educational events is outpacing last year’s.

• The government advocacy program is strong. This includes our fundraising efforts for the IWLA Political Action Committee (IWLA-PAC) and our Public Policy Center.All of this has been accomplished by an outstanding

staff and a wonderful, dedicated group of volunteers.

■ Your Role

Having said that, I ask you, our members, to help us help you. We have five in-person educational events dur-ing the year, all of which present an opportunity for our members to increase their knowledge and enhance their contributions to their companies.

There are still great things planned in 2014. Register via IWLA.com for these opportunities:• the 2014 IWLA Safety & Risk

Conference, Sept. 10 & 11, in Fort Worth, Texas;

• the 2014 IWLA Essentials of Ware-housing Course, Oct. 7-10, in Adel-phi, Md.; and

• the 2014 IWLA Technology & Op-erations for Warehousing Solutions Conference, Nov. 12-14, in Chi-cago, Ill.Don’t forget that many IWLA we-

binars are free with your member-ship. My company is medium-sized, and we sit in on every webinar. I allow time to do this because we always learn at least one thing. I would urge other members to do the same.

Networking is a primary IWLA benefit. You will get a chance to net-work by attending the 2015 IWLA Convention & Expo, next month’s Legislative Fly-in (Sept. 17-19), or any of our educational events.

A great way to network is to volunteer and contrib-ute your time to IWLA. Working with other members toward a common goal or cause brings people closer together. IWLA staff and committee chairmen are always looking for new members to bring fresh ideas. If you want to volunteer, please reach out to me or any IWLA staff person. We will match you to the best volunteer op-portunity for you.

I hope everyone is enjoying a great summer and I hope to see you at an upcoming event.

Tom HercheChairmanInternational WarehouseLogistics Association

IWLA membership is growing and

attendance at our in-person educational

events is outpacing last year’s.


WITH THE EXPONENTIAL RISE of smart devices in recent years, the powerful com-

bination of computing technology and Internet connec-tivity has moved from our offices and homes to our bags and pockets. Now, experts are predicting that devices that can be worn on the body, or even inside the body, will be the next major step in this trend toward more pervasive or even ubiquitous computing – the idea that computing technology and the Internet will be accessible anywhere as an integrated part of our environment.

These new devices hark back to the calculator wrist-watches of the 1980s and are akin to Bluetooth mobile or audio headsets, but are usually defined by their greater functionality and Internet connectivity. They often oper-ate in partnership with a smartphone, which acts as the Internet hub for the device and powers related apps – al-though this may change as new, more sophisticated devices emerge. They generally use cloud platforms for data storage and processing.

Google Glass is arguably the most well-known example of wearable technology to date. This prototype “smart glass” device, which has recently become gen-erally available, can take videos or photos and project information from the Internet into the right eye of the wearer via a tiny display. Wearables that are perhaps less well-known, but which currently have greater market penetration, are fitness and health-monitoring devices, such as Fitbit, Nike+ and Jawbone UP. These wristbands can track the wearer’s location and activity.

Other types of consumer wearable devices on the market or in development include wearable cameras, smart watches and smart clothing. Along with these consumer gadgets there are industrial, medical and military wearables.

■ A Burgeoning Market

Some market analysts envision huge growth potential for wearable tech, and most tech-industry predictions for 2014 include commentary on the continuing rapid rise of this market segment. Deloitte analysts said in January that “smart glasses, fitness bands and watches should

APPLIED TECHNOLOGY

An Introduction to Wearable TechnologyBy Louise Taylor

sell about 10 million units globally in 2014, generating £2 billion.” Canalys researchers assert that this year, wearables will become a “key consumer technology,” and Credit Suisse reckons the entire wearable-technology market will be worth $50 billion by 2018.

Other commentators, however, note that the numbers above are small compared with figures for the global smartphone market, which International Data Corporation said totalled 1 billion units shipped globally in 2013 – and question whether the long-term return on wearables will be worth tech-vendors’ investment.

■ Business Applications

Along with the consumer market, device manufac-turers and suppliers are targeting the nascent business market. This encompasses devices designed for specific

industries – such as sensors built into construction helmets for assessing job-site safety – and consumer gad-gets used by the enterprise – such as airport workers wearing smart glasses to enable hands-free working and re-mote interaction with IT systems.

So far, the business market has consisted primar-ily of early adopters assessing this technology. This group includes Virgin Atlantic, working in partnership with air-transport IT specialist, SITA, which recently launched a trial of Google Glass and Sony SmartWatch technology at Heathrow. The aim of this pilot scheme is for Virgin Atlantic concierge staff to use the technology to deliver highly personalized customer service to its “Upper Class” passengers. A few firms have also gone from pilot scheme to full-scale roll-out. For example, health insurer, Pru Health, offers a Fitbug health and fitness wearable device to members as part of its “Vital-ity” program.

It remains to be seen whether businesses seize on smart glasses as another means of monitoring their premises, but this subcategory of wearable technology may be an attractive prospect. Security guards wearing smart glasses while patrolling grounds could share footage of any intruders in real time without having to wait to trawl through hours of CCTV tape.

The law is playing catch-up

with issues raised by wearable

technology.


It seems inevitable that, this year, more organizations will start ex-ploring the potential commercial applications of this technology or begin offering wearables to employ-ees, business partners or customers. In addition, 2014 will no doubt see many more tech-savvy employees bringing personal wearable technol-ogy into work, for a host of reasons, including improving productivity, health benefits and ubiquitous con-nectivity. This BYOWD (Bring Your Own Wearable Device) trend rep-resents the next wave of the gen-eral BYOD trend, which began with smartphones and tablets.

■ Privacy Issues

Wearable technology is still at an early-adopter stage in terms of pub-lic and commercial use. For exam-ple, Google Glass has only recently been released to the general public following a more-limited release to developers. However, concerns are already being voiced about the pri-vacy implications of this market segment.

By their very design, many of these wearable devices can capture a great deal of personal data about the wearer and – in the case of Google Glass, for instance – individuals in the vicinity of the wearer. Google Glass can capture both video and audio with the potential to take pho-tos, shoot video and record conver-sations of anyone near the wearer, to upload the content to Google’s servers and, potentially, to share that data with anyone via the Internet (e.g., via email or social media).

Privacy campaigners (such as the Stop the Cyborgs movement) have criticized this aspect of the technol-ogy, highlighting that surreptitious footage and sound recordings can be uploaded to the cloud, and used and distributed without the subjects’ knowledge or consent. A private argument or your child’s meltdown in the supermarket could appear on YouTube or Facebook without you even being aware that these inci-dents were being recorded.

This is already possible using

smartphones and tablets, but the is-sue is seen as one of scale. Although ubiquitous, smart devices are rela-tively easy to spot as they need to be held in the direction of the subject and operated by the user, whereas Google Glass is in the same position in record or non-record mode and can operate on voice command or with a tilt of the head.

huge amount of personal data can be collected from many of these devices. For example, health and fitness gadgets can capture sensitive details about a person’s health, and send it automatically to the cloud for potential processing by the tech vendor, who may then wish to share it with third parties for “big data” mining and profiling.

As well as privacy issues in rela-tion to the general public, the gath-ering of personal data about the wearer of such devices gives rise to other data-protection issues. For example, certain health and fitness gadgets can have GPS location func-tionality and can capture a huge amount of data over time about a person’s location, activity and even health. This personal data may then be uploaded into the cloud and ana-lyzed by the technology provider. This is fine, provided that the tech-nology provider is being transparent about how the data is being used, shared and transferred, the wearer has given informed consent about what is being done with their data, and the provider has put in place ad-equate security measures to protect it. Whether this happens in practice is another matter.

A key challenge for consumer and business markets alike is that a

Smart glasses and wearable cam-eras also present a number of new challenges for employers consider-ing whether to permit or support BYOWD. These gadgets can capture images and footage of individuals in the vicinity of the wearer, po-tentially surreptitiously. This raises important privacy issues, which are likely to resurface in the wake of the general release of Google Glass. As well as updating employment contracts and related policies such as social-media policies, disciplinary policies and dress codes, employers will need to consider the impact of the devices on other employees’ ex-pectations of privacy.

Alongside privacy, data security is another important consideration. If hacked, some wearables could expose a huge amount of intimate and extensive personal data about an individual, such as their health, location and behavior. This can, of


course, already happen with lap-tops, tablets and smartphones, but the potential scale and intrusiveness of breaches involving wearables is unprecedented.

■ Looking Further Ahead

Potential future developments of wearable technology seem unlikely to dampen the privacy and other concerns outlined above. On the contrary, such concerns are likely to deepen as smart technology be-comes increasingly ubiquitous and intimate.

For example, some commenta-tors have highlighted that devices worn inside the body, with huge potential healthcare benefits, are in development. And there are already examples of people connecting the inside of their body to the Internet in “bio-hacking” experiments. Even if not taken to this extreme, how-ever, smart wearable technology makes the human body generate large quantities of personal data and become an integral part of a

colossal, growing, networked eco-system.

Additionally, smart glasses look likely to become modular and able to attach to prescription glasses, or be inserted directly onto the eyeball as contact lenses. Further, smart glass wearers may be able to use facial-recognition software to iden-tify people in their vicinity even if the wearer doesn’t know them. This would raise a host of privacy is-sues for the person being identified if, for example, their identity and location are logged by the technol-ogy provider, whether they like it or not.

■ The Challenge for the Industry

Although the future rate of growth or size of the wearable-tech-nology market is uncertain, wear-ables have captured the attention of consumers and technology vendors. As the 2014 Consumer Electronics Show made clear, many companies – from multinationals to start-ups and

their backers – are already investing heavily in this area. And although wearable technology is still at an early-adopter stage in terms of com-mercial use, many more businesses this year will explore the potential benefits and pitfalls of these gadgets. Some of them will be forced to by their employees bringing these de-vices into work.

The key challenge for the indus-try is that – as is often the case with emerging technologies – the law is playing catch-up with issues raised by wearable technology. Until it does catch up, however, it falls to the industry to grapple with these issues. Crucially, this means that in order to realize the benefits of wearables, current regulatory issues need to be considered properly, right now, by relevant stakeholders, in-cluding manufacturers, vendors and employers.

Louise Taylor is senior counsel at in-ternational law firm Taylor Wessing LLP. She is based in London, U.K.

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TECHNOLOGY increasingly forms an essential component of every sophis-

ticated warehousing and logistics operation. The prudent development and use of such technology (including, but not limited to, warehouse management software, warehouse control systems, ware-house execution systems, transportation manage-ment software, and the like) can frequently dis-tinguish one operator from another in the eyes of a prospective customer. Indeed, ef-ficiency – one of the most critical qualities that any warehouse offers – can usually be linked directly to an organization’s techno-logical savvy.

In light of the benefits and the importance of information technology (IT), warehouse operators and other third-party-logistics pro-viders must have strong agreements in place relating to critical IT systems, particularly in light of the recent move to cloud-based services. This article provides an overview of the critical areas that are general to all IT agreements and those specific to outsourced or hosted (cloud) services. While many ware-housing and logistics operators may be in-timidated by such agreements, this overview will give you a starting place for your next negotiation with an IT services provider.

■ Areas Generally Applicable in All IT Agreements

Scope of the License or ServicesWhether licensing software for use in-

house or outsourcing a particular function, the initial focus of any negotiation with a potential IT vendor should be defining the products or services being licensed or pro-vided by the vendor to your company. This

INFORMATION TECHNOLOGY

Understanding Key Terms for 3PLs in Information Technology AgreementsBy Marc Blubaugh, Jeffrey Kosc and Matthew Thielemann

Marc Blubaugh

Jeffrey Kosc

Matthew Thielemann

fundamental concept is important as it sets the expectations of the relationship for both parties. In general, IT vendors do not sell or transfer ownership of their technology, but license the ability to use the technology

subject to restrictions on its use (for example, how long you can use it, how many users may access the technology and the locations where it may be used). The restrictions re-

quired by an IT vendor may limit (or impose additional costs on) the ability to expand use of the technology if your organization grows or requires additional license pur-chases. As you will likely have more leverage at the time of the initial transaction than at any other point, you will want to consider negotiating future needs in light of the scope of the license or services, such as the cost of additional user licenses, caps on increases in pricing, pricing for additional data volume and so on.

Confidentiality and Data SecurityEach party to an IT agreement must con-

sider the nature, as well as the sensitivity and value, of the information being exchanged between them over the course of their rela-tionship. The need to protect confidentiality is readily apparent where the software or services will process sensitive or non-public data. Well-phrased confidentiality clauses will specifically identify categories of con-fidential information, impose an affirma-tive obligation to protect that confidential information, and include a specific standard of care to which the parties’ respective treat-ment of the other’s confidential information will be held. For outsourced services, you may want to apply specific data security controls and even specific audit standards

Warranties tend to be one of the

most important (and divisive) issues

in an IT agreement.


related to the handling of confiden-tial information. (Sarbanes-Oxley compliance for publicly traded enti-ties is necessary where data affecting financial controls is processed by third-parties.) For instance, you will want to be sure to protect the con-fidentiality of your customer lists, pricing, performance metrics or key performance indicators, and the like.

WarrantiesThe warranties tend to be one of

the most important (and divisive) is-sues in an IT agreement. This notion should not be all that surprising considering the conflicting inter-ests of the par-ties. Vendors will inevitably seek to limit the form and nature of any warranties in order to limit their liability and obligations to the great-est extent possible, while you will almost always favor more expansive guarantees to protect your invest-ment. With this in mind, the follow-ing guidelines can significantly ease your company’s warranty concerns where almost any form of technol-ogy is involved and irrespective of whether the warranties are made in the agreement itself or in an accom-panying service-level rider.

• First, the warranties should fo-cus on what the vendor can actually control. Vendors will understand-ably resist guaranteeing the products and services of others (e.g., third-party products used in connection with the vendor’s product). Your company may, therefore, find its vendors far more willing to make warranties concerning the function-ality and interoperability specific to the vendor’s product or services, to agree to repair or replace third-party components that are non-compliant, to agree to make efforts to avoid less-foreseeable third-party prob-lems, and to agree to implement specific security standards.

• Second, warranties should focus on the risks unique to the particular product or services being licensed and your company’s intended use

of the product or service, so careful consideration should be made on a case-by-case basis of any require-ments necessary to protect your in-vestment.

• Third, the agreement should specify the consequences of a breach of warranty. With respect to rem-edies, vendors will commonly seek exclusive remedies that only re-quire repairs to (or commercially reasonable measures to repair) a non-functioning product or prod-uct component. While promising to

make repairs is certainly a great starting point, re-pairs alone may not achieve the primary purpose for which your

company entered into the agreement in the first place – obtaining the ad-vantages of functioning technology. A good approach, then, is to press for three generalized remedies: the shortest obtainable repair timelines, pro-rata refunds during downtime and, assuming a failure persists, the right to terminate the agreement and to receive a refund (partial or full). These combined remedies are arguably the most effective means of guaranteeing performance because they condition payment and the fu-ture of the relationship upon the technology’s operability.

RemediesDepending on the role the partic-

ular technology plays in your opera-tion, seeking a product damage and loss provision may also be advisable. These types of provisions generally hold vendors liable for damages (in-cluding product loss or delay) they cause to the products deposited in your warehouse. For instance, what if the vendor’s IT services result in a misshipment of goods that results in damage or loss of the goods, or what if the vendor’s IT services break down, resulting in goods not deliv-ered with reasonable dispatch?

Like warranties, these remedies should essentially focus on three points. First, they should establish a standard of care to which the vendor

will be held. A general negligence standard is most common, though a low product value coupled with minimal vendor interrelation with the product may justify a higher stan-dard such as gross negligence. Sec-ond, well-crafted damage and loss clauses should identify those circum-stances under which the vendor will not be liable at all. Damages resulting from other parties (third-party trans-portation providers, for example) or damages to a product resulting from manufacturing defects or the acts and omissions of the manufacturing com-pany’s personnel are, understand-ably, circumstances where it may be appropriate to exclude liability for the IT vendor. Third, the product damage and loss clause should also identify the remedies available to your company in the event that the vendor fails to adhere to the agreed standard of care, and the vendor’s li-ability for damages or losses resulting from events other than those explic-itly excused by the contract’s terms. Because your company will likely want to control its own services (and your own customer’s goods), repair or replacement may not be preferred remedy options for these types of clauses. Instead, a more appropriate remedy might focus on replacement costs for your customer’s goods or the cost of substitute services. The goal in drafting these types of clauses should not be to punish the vendor, but rather to reasonably approxi-mate the actual reduction in value to the products or services caused by the vendor’s conduct.

■ Areas Specific to Cloud-Based Services

Availability/Service LevelsFor any cloud-based service, the

availability of the service is obvi-ously important as the service can-not be used if it is not accessible. The industry standard for availability for cloud-based solutions exceeds 99 percent. IT vendors will gener-ally seek carve-outs for necessary maintenance and for issues created by third parties, but will usually commit to a specific uptime mini-

A strong (but fair) pro-user IT services

agreement will enhance your ability

to provide value-added services.


mum. Other necessary service lev-els should also be considered on a case-by-case basis. While IT vendors will usually try to limit remedies for failures to meet service levels, you should ensure that the remedies for the vendor’s failures to meet service levels address both chronic failures and catastrophic failures, while ul-timately allowing for termination of the services in the event of ongoing or major problems.

Accessibility and Data IntegrityA company’s ability to access its

data is extremely important. In ad-dition to the confidentiality and da-ta-security issues addressed above, any cloud-services agreement should contemplate how and when you can access and retrieve your data. Will remote access be permitted? Will periodic data exports be pro-vided? Also, under what circum-stances can the vendor suspend the services? While many vendors will push for a suspension provision, it is very common to have no suspension right where the services are mission-critical. Likewise, the responsibility for ongoing data integrity should be addressed. The agreement should properly document which party will be responsible for backup of the data and what, if any, disaster-recov-ery requirements will apply (includ-ing committed recovery-time and recovery-point objectives).

Functionality of the ServicesCloud services are usually subject

to change as the vendor’s product matures and is enhanced over time. If, however, specific functionality is an essential reason for your use of the services, it is important to ensure that the vendor commits to main-tain the specific functionality during the term of the agreement and that specific features or functionality will not be removed.

Transition Upon TerminationAn agreement for cloud services

should address what happens to the parties’ information after the agreement ends. Requesting the re-turn or destruction of confidential or proprietary information follow-ing termination of the agreement

or, at minimum, imposing ongoing confidentiality obligations, can help to ensure that your company’s sensi-tive data is protected long after your services term has expired.

Incorporation of Additional Terms

A common concern with agree-ments provided by IT vendors is the incorporation of terms outside of the actual document that is signed by the parties. Vendors will incor-porate various terms and conditions that are posted to their websites or require the acceptance of additional click-through agreements upon a user’s log-in to a service. Any agree-ment with a cloud-services vendor should ensure that the agreement of the parties is not subject to being altered or superseded by these extra-neous terms.

In short, understanding the fore-going fundamentals will give you the appropriate footing for commencing negotiations with your IT services vendor. Having a strong (but fair) pro-user IT services agreement in place will not only protect your busi-ness but also enhance your ability to provide value-added services to your customers. Remember: Each of your customers’ supply chains is only as strong as its weakest link. Don’t let the technology agreements that you negotiate become that weakest link.

Marc Blubaugh and Jeffrey Kosc are partners with Benesch, Friedlander, Coplan & Aronoff LLP, and Mat-thew Thielemann is an associate at the firm. Contact information for the firm and the authors can be seen at www.Beneschlaw.com.

IWLA Events Calendar★ IWLA Legal Documents Webinar

August 28

★ 2014 IWLA Safety & Risk ConferenceSeptember 10 and 11 – Fort Worth, Texas

★ 2014 IWLA Legislative Fly-in & 2014 IWLA Chemical Council MeetingSeptember 17 to 19 – Washington, D.C.

★ 2014 IWLA Government Affairs Update WebinarOctober 2

★ 2014 IWLA Essentials of Warehousing CourseOctober 7 to 10 – Adelphi, Md.

IWLA-Canada Fall ConferenceOctober 30 – Vaughan, Ont.

★ IWLA Board of Directors MeetingNovember 12 – Chicago, Ill.

★ IWLA Technology & Operations Solutions ConferenceNovember 12 to 14 – Chicago, Ill.


TRANSPORTATION management software helps anyone in the business of managing or track-

ing the movement of freight. As a reader of 3PL Ameri-cas, you are undoubtedly familiar with the processes such software supports, including planning, optimizing and tracking shipments, managing carrier contracts, con-necting to trading partners, allocating costs, invoicing customers and so on.

Technology evolves at a fast pace, and the technology of transportation man-agement systems (TMS) has not been immune to that force. If your op-eration makes use of a TMS that is, say, five years old, you lack fea-tures that might be useful. In another five years, further changes will likely increase the automated functionality of the systems, improving the efficiency they deliver.

Dan Sellers, VP, 3PL Segment Leader for MercuryGate International, Inc., a developer of TMS based in Cary, N.C., says that users of today’s TMS benefit from their configurability. Older systems, he notes, still suit the needs of some 3PLs, but those with fairly complex sup-ply chains can certainly gain from the flexibility current ones provide. “A transportation management services provider,” Sellers says, “can transform and supercharge a TMS to meet its unique requirements for the ever-changing demands of its customers.”

Sellers cites as examples the ability of a 3PL using recent technology to customize, by customer, the infor-mation included in EDI transactions, to offer unique reference numbers for billing and cost allocation, and to accommodate specific service requirements by location. Older systems limited users to exchanging preset data items. Greater flexibility enabled by technology advances has also allowed for more-detailed data analysis. “For example,” says Sellers, “it is not uncommon for a manu-facturer or brand marketer to require its 3PL to provide analysis to tell them the cost to serve its various custom-ers, which will have an impact on pricing and sourcing locations. It is no longer just a matter of looking at the transportation cost; a TMS must have a broader view of the entire supply chain.”

The modern TMS enables the new transportation-re-

TRANSPORTATION MANAGEMENT SYSTEMS

What Does the Future Hold?By Kim Biggar

lated services that a typical 3PL is driven to provide as it evolves its value proposition with the changing needs of its customers. While it might start its life providing out-sourced transportation services, a “typical” 3PL might then find it needs to expand into brokerage to garner additional capacity and/or have opportunities for freight forwarding. “Increasingly,” notes Sellers, “shippers are asking for expertise in parcel-shipment management, just as they would for truckload, less-than-truckload and intermodal shipments. Most 3PLs have all of these services on their radar screen and select a TMS that has a completely integrated suite of features and functions.”

In addition to increased configurability, up-to-date TMS provide opportunities for cost savings through the simplified optimization of orders, and for efficiency im-provements with their usability on mobile devices.

How are TMS likely to evolve in the near future? Sell-ers believes that most advances within the next few years will be made in the area of automation. Like today’s widespread manufacturing automation, he thinks that transportation systems will become highly automated, and the systems will provide information for exception management to 3PL employees, which will allow them to focus less on the day-to-day automated workflow.

In future TMS, says Sellers, instead of an employee keying in data for orders, order information will enter

Increasingly, shippers are asking

for expertise in parcel-shipment

management.

Continued on page 21


TO MY FELLOW WAREHOUSING AND LOGISTICS PROFESSIONALS,

I attend the International Warehouse Logistics Association Convention & Expo each year. And I am not alone: My peers from warehouse logistics organizations across North America also come to this annual event to renew (or make new) connections and find new product and service information.

And, IWLA leaders like me are especially grateful to the supplier partners who support the industry through sponsorship and exhibition.

IWLA understands your marketing dollars require a clear ROI. If your business plans include growth in the warehouse-based 3PL vertical, the 2015 IWLA Convention & Expo in Savannah, Ga., is where you need to be.

I invite you to attend, exhibit at and sponsor the 2015 IWLA Convention & Expo, from March 8 to 10. The IWLA event promises you unique opportunities to build relationships with warehouse-logistics leaders. And, the 2015 theme “Connect. Discover. Innovate.” means that the convention’s content and

focus will have attendees primed to hear your message.The IWLA Convention & Expo offers you a traditional trade show... with a twist:

• IWLA hosts an evening reception, two breakfasts and two lunches in the hall. In addition, many breaks are in the Expo Hall.

• AND…Your company, as an exhibitor, will be assigned an IWLA Board Member Buddy for the event. This buddy will help you meet the warehousing-logistics professionals who are your hottest targets. These buddies will also help you solve any issues during the Expo.

• Attendees have access to a mobile app that will allow you to enhance your brand presence, increase engagement through the activity feed, and track and contact those who come by your booth.As a sponsor, you can solidify your message throughout the convention. Review the offerings in

the prospectus (www.IWLA.ca/prospectus.pdf), then contact Jay Strother of IWLA headquarters, at [email protected] or (847) 813-0114, to secure the offering you want. Of course, if you have an idea not listed in the prospectus, feel free to suggest it. IWLA will work with you.

Some of the best business is conducted on the golf course – and IWLA facilitates that possibility, too. You can sponsor the IWLA Golf Classic and play in a foursome. IWLA works to place you in a four-some with a customer or prospect you want to contact.

If you commit now, you will be listed in all formal convention-related communications. And, IWLA will work with you to segment its mail/email lists for you to use to contact prospects and attendees leading up to the event.

I look forward to seeing you in Savannah next March. I am working with Rob Doyle, Bob Bianco, and Jay Strother to make this convention a success. For more information, please contact Jay Strother at IWLA headquarters and we will match your needs with IWLA’s offerings.

Thanks for your support.

Brett Mears President, Palmer Logistics


SOME BUSINESS SYSTEMS are data rich, information poor (DRIP). Like the dashboard on your car, the system should be designed

to provide the essential information that warehouse managers must have in order to know how their operation is performing. Because so much informa-tion is available on contemporary warehouse management systems, some managers cannot resist the temptation to put more metrics on a dashboard than they need. The result is predictable: When the manager has too much data, he or she will find it difficult or impossible to convert the data into ac-tionable information. Let’s get specific.

As a motorist, consider the critical things you need to know when you look at your car’s dashboard. If you have a lead foot, the speedometer is the most critical indicator, since it tells you how fast you can travel without the risk of arrest. Second in criticality is the fuel gauge, since it will prevent you from running out of gas. The odometer tells you (and the next buyer) how far the car has been driven, and it also shows when the vehicle is due for oil changes and other services. Some indicators are obsolete relics from an earlier age. Temperature indicators are seldom needed today, since engine overheating is rare in today’s automobile. Oil pressure indicators are seldom needed, since modern engines rarely experience pressure abnormality. Some manufacturers group these obsolescent references in a warning light labeled “check engine.” While the motorist is told that something is wrong, only a car dealer can iden-tify the specific problem. Another indicator that is meaningless to the average driver is the RPM (revolutions per minute) indicator. All of this demonstrates that automotive engineers, like software gurus, are often guilty of providing data that the average operator neither needs nor wants.

Unfortunately, distracting data indicators are more common in WMS software than in automotive dashboards. As the variety of available data continues to grow with improved technology, system designers cannot resist the temptation to publish data that warehouse operators do not really need. As a result, the dashboard becomes increasingly distracting and, therefore, difficult to read or understand. We enter the land of DRIP.

Three Productivity Dials. Every dashboard needs a dial to reflect vol-ume, just as every car needs a fuel gauge. The simplest way to do this is to show total number of units handled, and usually that is the total number re-ceived plus the total number shipped. While some managers may need a break out, the only information that every manager needs is the total number of pieces moving through the warehouse. One dashboard that we saw itemized three different types of receiving figures, plus three more varieties of shipping numbers — a perfect example of DRIP. Warehouse managers are better served by having a single volume number on the dashboard, with further detail avail-able only if and when the manager actually needs it.

The dashboard should also measure productivity, and the simplest way to do this is to track units per hour (UPH). In most operations, this will vary depending on the type of work being done. Shipping may be slower than re-

PERFORMANCE METRICS

Developing Dashboards

By Ken Ackerman

System designers cannot resist

the temptation to publish data

that warehouse operators

do not really need.


ceiving, or vice versa. When processing is involved, UPH productivity will be affected. However, over time, these differences will tend to balance out. A common mistake is to create a dashboard that reflects productivity with receiving, picking, staging, bulk, and other different types of work, again overwhelming the manager with more data than is really needed. When the productivity number moves in a surprising way, that is the only time to get into further detail.

The best measure of receiving effectiveness is called “dock to stock” time, usually measured in hours. That is the time elapsed between the moment when an inbound shipment is completely unloaded and when that product is available for shipment. In other words, it measures the processing time necessary to record the receipt and enter the merchandise into inventory records. This measure is critical because goods are sometimes sitting in a ware-house but cannot be shipped until every detail of the transaction has been processed. Particularly at times when inventory is scarce, an abnormally slow dock to stock time can do great damage to a warehouse operation.

Dials for Quality. Two measures are associated with quality control: accuracy rate and percentage of on-time shipments. Accuracy rates of over 99.9 percent are frequently found today, thanks to the use of automatic identification systems like barcode scanning and voice recognition. While it is obviously important to avoid shipping errors, the consequences can be very different in a closed-loop distribution system. For example, a warehouse shipping to a chain of retail stores may find minimal impact if blue sweaters are shipped instead of red ones, since the retailer can probably sell the product anyway. A dashboard that includes processing accuracy and bill of lading accuracy is guilty of DRIP. The only critical measure is the accuracy of the order delivered to the customer.

A decent record of on-time shipments is an important quality measure. At the same time, the date of customer receipt is more important than the date of shipment, since the customer expects the warehouse operator to control transportation. In order to maintain a client re-ceipt record, it will be necessary to trace every shipment.

The Missing Dial. One metric that is missing from most dashboards, and should be included, is a record of employee retention. As the economy improves, shortages of labor will become common. Such a shortage already exists with truck drivers. Retention is very simple to mea-sure: If you had 100 employees on the first day of January and lost two of them during the month, the retention record would be 98 percent. A sudden or significant change in the retention record is a clear sign of ineffective recruiting, improper compensation or poor line supervi-sion. One expert calculates that the cost to replace people in certain positions is as high as 2.5 times annual salary. Surprisingly, relatively few companies include employee

retention in their dashboards.To summarize, a warehouse operations dashboard

should be little or no more complicated than the dash-board in your car. If you expect your operations people to be as interested in quality and productivity as you are, you would be foolish to bury them in so much data that they cannot discover the truly essential information.

Ken Ackerman is president of K. B. Ackerman Company in Columbus, Ohio: www.warehousingforum.com.

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My clients are:• Clear on what’s important to them• Focused on results• Paying Attention to new opportunities• Intentionally creating the future, not just letting it happen

Is your business where you want it to be? Are you where you want to be? If not, call Head Coach Chip Scholz or check us out on the web to learn more about taking your success to the next level.

Work with an executive coach and look in the right places.

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Call 704-827-4474www.scholzandassociates.com


WOMEN IN LOGISTICS

What It Takes to Succeed in Warehousing and LogisticsBy Kim Biggar

THIS ARTICLE features five dynamic women who love their work in logistics and warehousing.

It is certainly not a coincidence that all are women, but it’s also not really an article about women in the field. We wanted to know what women think is required to succeed in logistics – because this was, after all, predomi-nantly a man’s world for many years – but imagine that their answers are pretty typical of what any group in the industry would say nowadays.

Logistics and warehousing have changed a lot over the last few decades, becoming high-tech environments that would likely surprise outsiders. “It’s undervalued in sexiness,” says Ann Drake, chairman and CEO of DSC Logistics in Des Plaines, Ill. At least, she believes, the misconception is declining. Ann Christopher, VP and corporate counsel for Kenco in Chattanooga, Tenn., agrees. “Interest in the field is growing,” she says. “More people are making a deliberate choice to work in the supply chain.”

In fact, work in warehousing and logistics is “excit-ing,” says Drake. “No two days are ever alike.”

Twenty years ago, bored of her work as a securities broker in the financial-services industry, Wendy Schaefer found her passion in an entirely different field. Com-placency is plainly a thing of the past. Now operations manager for Standard Distribution Co. in Cedar Falls, Iowa, Wendy describes her work as ever changing, new every day and never boring.

While she may have needed a “thick skin” in the early days of her career, when she was one of few women working in transportation operations, Schaefer now doesn’t count that among the array of skills needed to succeed in warehousing and logistics. “Above all,” she says, “you need excellent people skills.” And, be-cause different situations arise with different customers throughout the day, she emphasizes that you need to be able to deal with people at all work levels and in various functional areas.

Wearing “a lot of different hats” is something that Leslie Greer is used to in her role as VP, sales at TEAM Logistics in Fair Lawn, N.J. A small company with just 13 employees, TEAM provides opportunities for Leslie

to get involved not only in sales, accounts receivable and pricing work, for example, but also in more hands-on jobs. “[Our work] is all about helping customers expe-dite their business; it’s very customer-service driven,” she says. And so, it’s always different, as customers’ specific requirements make for unique assignments.

For Faye Armstrong, owner and general manager of Armstrong Warehousing in Mississauga, Ont., variety, a fast pace and interaction with customers, suppliers and employees are what make her work rewarding. She looks for employees who are able to – and love to – solve prob-

Are Women Still an Untapped Resource?

EXISTING and anticipated shortages of skilled workers in the supply chain, particularly in manufacturing, regularly make the news. Finding ways to deal with those shortages will be critical to productivity.

Untapped labor is an obvious partial solution to this challenge. And women continue to be an underutilized resource in this sector. So, does that mean that employers now see women as equally viable candidates for jobs?

New to the industry, having started her warehousing business in January 2013, Faye Armstrong believes the 3PL industry is progressive and open to women. She has been met with respect by customers and suppliers alike.

Leslie Greer says she’s never been overlooked for a job because of her gender or faced many obstacles because of it. She can’t say if she’s made slower progress or less money than a man might have; it’s possible. Her guess, though, is that gender doesn’t make much differ-ence anymore in the 3PL world. She sees more women now attending industry events, so gauges that they’re making headway in the labor force.

Likewise, Wendy Schaefer feels that she’s not been disregarded because she’s female, but suspects that it’s happened to women she knows in the field. She believes that anyone can advance if they’re committed and have the education they need.

While women may be making inroads in warehousing and logis-tics, it’s fair to say that they’re still outnumbered by men, particularly in senior management roles. Until they’re working in the industry in equal numbers, women remain a source of labor that can be utilized to fill growing vacancies.


lems, who use and rely on common sense, and who understand custom-er needs. She wants participants on her team, people who are responsive and will jump in to ensure timely fulfillment of orders. Christopher adds that, beyond having a compre-hensive understanding of customer needs, a good 3PL employee will learn to anticipate those needs. His or her customer focus will be sup-ported by a proactive approach, knowledge and versatility.

Drake likens the warehouse and logistics workplace to a newsroom, where you need to stay close to your sources and be able to respond rap-idly to get the story out while it’s newsworthy. Staying close to cus-tomers and responding to their needs

are critical in the 3PL environment. To be good at those tasks, people must be flexible, both intellectually and interpersonally, and creative, with problem-solving and collabo-ration skills. Drake says successful employees enjoy working as part of a team and are willing to contin-ue learning and developing their skills. To make it into middle management and be-yond in a large company, she says, they need a relevant college degree.

Working in sales, Greer knows the value of understanding the op-erations side of the business. That knowledge is a huge confidence-builder and asset for anyone try-ing to sell or promote 3PL services. Armstrong sees it as sometimes es-pecially favorable to women to dem-onstrate a real knowledge of 3PL operations; perhaps such knowledge is still seen by some as surprising in women and, for that reason, more

Achieving Women’s Excellence in Supply Chain Operations, Management, and Education…AWESOME

IN OCTOBER 2012, Ann Drake, CEO of DSC Logistics, became the first and only woman to receive the Distinguished Service Award from the Council of Supply Chain Manage-ment Professionals (CSCMP) in the award’s 47-year history.

Recognizing the need to advance women in supply chain leadership, Drake started AWESOME three months after win-ning the award. The organization brings together women in senior supply chain roles to develop and leverage a network of women executives. Already, 500 women are part of that network.

The group has held two all-day sympo-siums, in May 2013 and 2014, as well as an Executive Forum and a series of events at the CSCMP 2013 annual conference. For the latter’s 2014 conference in September, AWESOME has planned a full track of ses-sions.

To participate at this stage, women must be at a senior level in business, gov-ernment or academia, or lead an industry organization. However, the group is now exploring ways to involve “Up-and-Coming Leaders” by expanding its activities.

Learn more about AWESOME at www.awesomeleaders.org.

“We need people who can lead

in an unpredictable environment

and across silos.”

impressive where it exists.Schaefer notes that, as well as

being able to work well in a team, successful 3PL employees are self-starters and natural leaders. Drake, too, asserts the importance of lead-

ership skills. She be l ieves that , because the na-ture of 3PL work is changing, the kind of people who need to lead

in the industry is changing. “We need people who can lead in an un-predictable environment and across silos.”

Opportunities for career develop-ment in the logistics field are excel-lent, say all of the participants in this article. Although Greer acknowl-edges that the size of her company limits growth opportunities within, she agrees with the others that the industry’s expansion will provide work for an increasing number of people. And that most certainly in-cludes women.■

Counsel for the Road Aheadsm

Over the years, Benesch has provided legal consultation and pragmatic business advice to well over 100 Transportation Brokers, Surface Freight Forwarders, Ocean Freight Forwarders, NVOCC’s, Air Freight Forwarders, Warehousemen, 3PLs, 4PLs, and other Freight Intermediaries of all kinds. They know that when it comes to corporate structuring, mergers and acquisitions, transportation and logistics contracts, best practices, regulatory challenges, insurance and risk management, freight loss and damage or freight charge disputes, catastrophic personal injuries, and independent contractor relationships — Benesch knows Intermediaries.

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MEMBER

MEMBER MEMBER

SM


THE CENTRAL THEME of the Gartner Supply Chain Executive Conference held in Phoenix, Ariz., in May, was all about supply chain

leading the next decade. I too believe this will be the case – both out of neces-sity and because of the progressive evolution of the function. But a function doesn’t lead, people do.

So who are these people that will manage and contribute to supply chain management in the next decade? Well, going by the sessions at the Gartner conference, there will seemingly be a lot of roles that will be difficult to fill, and for those roles that are occupied, they will be increasingly held by women and millennials. The face of supply chain is most certainly changing, and it’s happening at the same time as the profile and dependency on supply chain is intensifying. Ironically, for an industry that is all about balancing supply and demand, there doesn’t appear to be much balance when it comes to its own human resources going forward. It’s time for sup-ply chain organizations to do a reality check and apply some basic planning and course-correction initiatives within their own inter-nal organizations.

Consider these opposing trends that are driving significant resource gaps (thanks to keynote speaker, Linda Topping, Vice Presi-dent, Chief Procurement Officer at Colgate-Palmolive, for some of the stats included in Table 1).

There is one trend that is going in the right direction, I believe: the increas-ing quantity and prominence of women in supply chain.

I know this topic has been talked to at length, but it hit home again for me at the Gartner conference. It was satisfying and inspiring, to say the least, to see that women represented the majority of the main-stage sessions – five out of eight speakers, in fact. And they were informative and engaging speakers on top of that, leaving no doubt for anyone of their credibility and effectiveness…not that this was something they needed to prove. These were not women supply chain leaders; they were simply supply chain leaders. And to me, that should be the goal as we look toward defining the next decade. It shouldn’t be about categories of people, but about their skills, experience and success.

Having said that, I do believe that, if we were to generalize, today’s en-vironment does favor a woman’s strengths. I think Tom Peters (influential business thinker and co-author of In Search of Excellence), also a Gartner keynote, said it best: “Guys do hierarchy well, women do ambiguity well.” In a time of complexity and variability, effective supply chain management be-comes about consensus decision-making and collaborative trade-offs. There is certainly an argument to be made that managing in these conditions could come more naturally to females (the same could be true for millennials, with

HUMAN RESOURCES

The Future Supply Chain WorkforceBy Lori Smith

“Guys do hierarchy well, women

do ambiguity well.”

Can supply chain organizations balance their own demand and supply?


FUTURE from page 14

their innate social and collaborative predispositions).

The mission will be to make sure companies enable these leaders with the organizational structure, pro-

Fact 1 Fact 2 Challenges

Increasing demandNumber of supply chain jobs will rise 25 percent in next decade.

Shrinking workforce25 percent of labor force will reach retirement by 2015.

How do you fill more jobs with fewer people?

Increasing capabilities requiredFewer than 20 percent of today’s labor force participants have the skill set required.

Depleting experience and lagging academiaAs experienced employees retire, key supply chain competencies will depart along with them. And while the number of supply chain university programs is increasing, the scope and depth of the curriculum are lagging behind current needs.

As supply chains become more complex, the sophistication of the supply chain function is increasing and so too must the analytical capabilities of the people that run it. Where will that come from?

More millennialsMillennials will account for 36 percent of the labor force by 2015, and 75 percent by 2025.

Slow-to-change organizationsMillennials expect:• Personally fulfilling work• Sense of culture and community• Flexibility• Career movement• Flatter, less-hierarchical organizations• Social and collaborative environments• Highly technology-enabled work

Millennials want more out of their work environ-ments and, because of the industry’s resource constraints, they will have the power to demand it. Who will fight or face this fact?

Increasing capability needsAccording to the session, “Revelations from Gartner’s 6th Annual Supply Chain User Wants and Needs Study” by Gartner analyst, Dwight Klappich, the basic conclusion is that while organizations talk about the urgent need for transformational and innovative technologies, for many, their activities and investments remain very tactical and focused on maintaining exist-ing technologies.

Despite survey respondents citing that, among their top supply chain challenges were the inability to orchestrate the end-to-end supply chain, and the lack of cross-functional col-laboration, 61 percent of technology investments are made with the goal to reduce operating and support costs.

Continued investment in legacy technology systemsParaphrasing the presentation, companies con-tinue to spend on the technologies they already have in place; they are investing in what they know, instead of what’s new.

There is a disproportional amount of money going to just “keeping the lights on.” Less than 20 percent of budgets is spent on technologies intended to transform the business, whereas upwards of 50 percent to 70 percent is spent on technologies that run the business.

Make no mistake, technology is a resource issue. Technology can enable efficiencies that allow a company to employ fewer people. Technology is what can arm supply chain decision makers with the advanced analytical capabilities that today’s supply chain complexity necessitates. Technology is what can satisfy the millennial’s appetite for effective and “cool” ways to work.

Ultimately, technology is what will enable the supply chain to lead in the next decade.

Table 1

cesses, culture and technologies that are required for new and evolving roles. Given the demand, those that don’t take this to heart will no doubt be scrambling for supply.

Lori Smith is director, marketing communications and analyst rela-tions for Kinaxis. She can be reached at [email protected] or (613) 907-7617.

the system directly from a ware-house-management or other order-management system. The system will select a carrier based on rate and reliability data, and automatically submit a tender to the chosen pro-vider. The carrier’s TMS will, contin-ues Sellers, automatically accept the tender and initiate the next steps in the process to fulfill the order.

While the concept of automat-ing processes always meets with the negative feedback of those who believe automation robs people of jobs, it’s possible that automation in transportation will help to relieve the North American industry of its growing worker shortages, at least in some occupations.

Automation of the routine allows individuals to focus on problem-

solving and being creative in deliver-ing new and outstanding service to their customers.

A lot of the components required to enable further automation of transportation management are al-ready doable, according to Sellers. Pulling them together to function in a single system will presumably be a goal for the software developers in this arena for the next few years.■


MEMBER PROFILE

Commercial Warehousing, Inc.: Organized for Its Customers’ SuccessBy Kim Biggar

GROWING at a rate of 25 to 30 percent a year, Florida-based Commercial Warehousing Inc.

(CWI) is certainly a 3PL success story. Its motto, “Orga-nized for Your Success,” probably explains this growth. The company has achieved its own success promoting the success of others.

Interestingly, some staff emails close with a quotation from Ronald Reagan: “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.” While that sums up the experience of any good 3PL provider, it also illustrates the CWI outlook on getting the job done as well as possible on behalf of the customer.

CWI employees are reminded every day of the value of working hard, and being creative and flexible, but not with motivational posters. They wear their bold “kick butt” and “bust a gut” t-shirts to display a company commitment to hard work and competitiveness. Their

“get a brain” shirts emphasize the value of their brain power and what it adds to the operation. The shirts are fun and meaningful, a reflection of a company culture that is both fun and focused.

■ Company Overview

Commercial Warehousing, Inc., an affiliate of Comcar Industries, is both an asset- and non-asset-based logis-tics provider with its home office in Winter Haven, Fla. Founded in 1966, the company provides multi-tempera-ture warehousing, transportation and value-added pack-aging services across a network of 15 facilities located in the southeastern U.S. Operating in excess of a million square feet of dry warehouse space, 660,000 square feet of cold storage space, and 800,000 square feet of con-tract warehouse space, CWI supports the logistical needs of a broad range of industries, including food and bever-age, consumer products, retail, construction materials and industrial manufacturing. Major customers include Coca-Cola, Walmart, The Honey Baked Ham Company, Restaurant Depot, Campbell Soup Company, Nestlé and Pepperidge Farms.

The company began providing packaging, repackag-ing and kitting services to its customers in the 1990s. In 2012, it opened a temperature-controlled packaging facility capable of supporting shrink film with printed graphics across a wide variety of products, primarily club and promo beverage packs. It can handle anything from small-volume, custom projects to full-service, high-volume program needs.

Commercial also helps food companies with shelf-life research. Its incubation room, which runs at a tempera-ture of 100°F, is designed to handle large sample sizes from beverage production runs for QA review and ap-proval.

Transportation-related services include freight consol-idation, cross-docking and brokerage. The company also makes direct store deliveries, bypassing the traditional DC network and thereby helping clients reduce costs.

Family-owned parent company Comcar is now run by the second generation of the Bostick family, with mem-bers of the third generation also on board as the company

Area Operations Manager John Macleod, President Kevin Margeson, Vice-President of Business Development Rob Doyle


CWI employees are reminded every

day of the value of working hard,

and being creative and flexible.

continues down a long-term path for growth. Comcar, its subsidiaries and affiliates retain a small-business cul-ture, says Rob Doyle, CWI’s VP of business de-velopment, “but offer top-quality t e c h n o l o g i e s , processes, staff-ing, training and standards.” The company is profit-driven, focused on return, rather than top-line rev-enue. Doyle notes that Commercial’s

CWI staff sporting active wear with an attitude.

purpose in acquiring a Jacksonville company in May 2014, for example, was to add new import/export and

foreign-trade-zone services in a Customs-bond-ed facility, and to have a pres-ence in a city and port poised for

growth, not just to grow for the sake of growth. It was a good com-bination of geography and specific services that led to the acquisition.

A colorful stack of drinks in the warehouse.

The company is currently consider-ing several other acquisitions.

CWI has an aggressive 10-year growth plan to increase both rev-enue and operating profit by a factor of four.

While it’s not necessarily inter-ested in being the biggest 3PL out there, Commercial does strive to be the best. Named “Warehouse of the Year” by the Honey Baked Ham Company for the last two years, Commercial is clearly doing well in that regard.

When Commercial took on Res-taurant Depot as a new customer, it had only two weeks to ready itself to handle hundreds of thousands of cases and more than 60 truck loads a week across multiple shifts. Pulling staff from other warehouses on its campus and hiring additional staff, the company was prepared on time

CWI temperature-controlled packaging line.


CWI employee Billy Bamberg stacking drink pallets.

for what Doyle says would typically be a 60-to-90-day start-up because of its complexities. Similarly, with Coca-Cola, Commercial had just one week to staff a 24/7 operation for a high-velocity beverage DC. The operation, says Doyle, “was staffed properly and we hit our start-date with no missed appointments or quality issues.”

Employee James Sherrell loading frozen drums.

■ Resources for the CommunityCommercial donates space and

labor to several non-profit causes, including the U.S. Marine Corps Reserve Toys for Tots Program and Clean the World. It is also a silver sponsor of and donor of warehouse space to the American Logistics Aid Network (ALAN). Through ALAN,

the company supports disaster-relief efforts, providing not only space for storage of emergency equipment and supplies, but also logistics expertise to the multiple agencies involved in disaster planning and relief.

Based in Florida, Commercial is situated, in particular, to help in the aftermath of hurricanes that affect that region. It stores generators that can be put into action, and has con-nections with contractors to supply more generators, if required. Em-ployees participate in ALAN meet-ings and drills – mock emergencies – to ensure that they’re as prepared as possible to make a meaningful contri-bution in real emergency situations.

Its participation in these non-profit initiatives is a reflection, says Doyle, of Commercial’s culture and ownership. It’s an extension of the notion of organizing for others’ suc-cess; in this case, the company is working to help ensure the “suc-cess” – the health and safety – of people in the communities where its facilities are located and beyond.■


THE RECENT OCCURRENCE of faulty ig-nition switches in General Motors cars should serve

as a wakeup call to companies that lack good visibility into their global supply chains. But most have failed to implement adequate supply chain risk-management pro-grams that could head off such problems.

That’s the view of Yves Leclerc, managing director with business consultancy West Monroe Partners. De-spite a raft of natural disasters and quality failures over the years, he said, many companies have yet to step up to the requirements of an effective risk-management effort.

You might think that 13 deaths and the recall of 6.1 million cars since February would have top man-ufacturing executives scurrying to adopt controls that would prevent such nightmares from occurring in their own organizations. And maybe they are. But neither the 2013 floods in Thailand nor the 2011 earthquake, tsunami and nuclear disaster in Japan has resulted in sweeping risk-management measures, Leclerc said. The business world, it would seem, has a short memory.

Many companies remain fixated on boosting share-holder value in the short term. It can be tough to sell top executives on the value of expensive programs that could shield them from disruptions caused by disasters, natural or otherwise. What is the value of a non-event?

Leclerc was disheartened to hear one of his clients brush off the necessity of a plan for coping with lost or delayed containers, even during the critical peak-ship-ping season. “His reaction was, ‘If I’m in trouble, all my competitors will be, too. It’s no big deal.’”

Even the most innovative companies are vulnerable. Leclerc cites the allegedly defective gas pedals that forced Toyota into a $1.2-billion settlement with the U.S. Jus-tice Department, with recalls numbering in the millions. Toyota is considered to be one of the pioneers of assem-bly-line quality and efficiency. Yet it found itself facing accusations of criminal mismanagement.

If multi-billion-dollar enterprises like GM and Toyota can’t avoid costly lawsuits due to quality glitches or poor

RISK MANAGEMENT

Disaster Looms: Why Today’s Global Supply Chains Are At RiskBy Robert Bowman

management, how can smaller companies weather their own supply chain disasters? On top of that, revelations of poor working conditions in overseas factories can have a serious impact on global brands. Regardless of the issue, it all comes down to a lack of visibility, coupled with inadequate response plans when the inevitable problems occur.

The new emphasis on sustainability and safety only exacerbates the challenge. A recent report from the Sup-plier Ethical Data Exchange (Sedex) found inadequate controls and a lack of compliance with both local and

international law among companies doing business in Mexico, Brazil, Colombia and Peru. Management in those countries is failing to meet rules on the environment, health and safety and working hours, Sedex said. The state of affairs extends beyond Latin

America; witness the deadly factory fires that occurred in Bangladesh over the past three years.

Leclerc believes companies need to take a multi-pronged approach to risk management. He cited the concept of the “Triple-A Supply Chain,” a term coined in 2004 by Stanford University professor Hau L. Lee. The idea of supply chains being “agile, adaptable and aligned” can apply just as much to the discipline of risk management, he said. The quality of “alignment” is especially relevant to the conversation about risk: It ac-knowledges the fact that good supply chain management ranges far beyond the walls of an individual company, to embrace multiple tiers of suppliers upstream, and service partners and customers downstream.

A workable action plan, said Leclerc, must be execut-ed at the strategic, tactical and operational levels. From a strategic perspective, companies need to map their global supply networks. In the process, they gain knowledge of the impact that a disruption will have on operations. Tactically, they should look to the end-customer to achieve a full understanding of demand, and how a fall or rise in supply will impact service. Operationally, they should be zeroing in on execution-based tasks like ware-housing and transportation. Functions related to “basic

Companies have yet to step up to the

requirements of an effective risk-

management effort.


blocking and tackling” shouldn’t be overlooked as important means of alleviating global risk, Leclerc said.

In all cases, companies must en-sure continuity of supply, should current feeds be interrupted. Many seek to cut costs and boost purchas-ing power by reducing suppliers to a bare minimum. While that strategy can result in a leaner supply chain, it shouldn’t rule out the use of alterna-tive vendors that can be called on in an emergency.

Good risk management is both a technology and business-process effort, Leclerc said. Companies have spent untold amounts of money on

enterprise resource planning (ERP) systems to manage financials and other basic functions, but they’re less advanced in acquiring systems that enable end-to-end visibility and col-laboration among all supply chain partners. At the same time, they need to tear down the functional “silos” that keep various disciplines from communicating key informa-tion on raw materials, goods in pro-duction and inventory throughout the chain.

This article was originally published at Forbes.com. It is republished with permission.

Supply Chain Risk-Management Planning

Avoiding the kinds of disasters described in this article involves considering the myriad risks in-herent in a supply chain and preparing to deal with them should they strike. Steps in this process include, but are not limited to:• Mapping your supply chain to identify all of the suppliers – of materials and services – in the

network• Determining the suppliers critical to business continuity and analyzing the impact of a disrup-

tion in their service• Assessing where multi-sourcing of commodities would work, in order to lessen the risk of

disruption if one supplier fails; consider using suppliers that utilize different ports of dispatch and different modes of transportation

• Including a business-continuity questionnaire with supplier RFPs, RFIs or RFQs, requesting proof of resiliency, and ensuring that requirements are part of a contract agreement

• Confirming that your supply chain can deal with sudden increases or decreases in demand brought on by catastrophic events

• Evaluating the business-continuity plans of key suppliers, and working with them where re-quired to fill gaps

• Assigning roles and responsibilities to a crisis-management team that includes supply chain partners

• Reviewing and testing business-continuity plans, processes and procedures, and making cer-tain that employees are properly trained in them

• Monitoring for potential threats to the supply chain• Revising plans as suppliers and procedures change• Ensuring that your data is safely and securely backed up off site, and that critical documenta-

tion is off site and accessible• Investigating the purchase of contingent business interruption insurance and contingent busi-

ness income insuranceSome of the varied risks to consider are:• Natural disasters, extreme weather• Fire at a supplier manufacturing plant• Labor action• Power outages• Terrorism• Changes in the regulatory environment• Political instability or excessive bureaucracy• Currency fluctuations• Transportation disruptions

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Editorial and Advertising

Disclaimers

The editorial contents of this publi-cation are educational and informa-tional in nature, and not intended as minimum standards, or legal or other professional advice.

The International Warehouse Logis-tics Association has endeavored to include appropriate and accurate statements, but disclaims any and all warranties and/or responsibility for the statements or their applica-tion. Users should confer with their professional advisers for specific in-put and assistance concerning their respective projects.

Any expressions of opinion or per-spective by authors of articles in-cluded in this publication are not necessarily those of the IWLA.

The inclusion of commercial adver-tisements in this publication consti-tutes neither a recommendation nor an endorsement of the product or service advertised. Although the In-ternational Warehouse Logistics As-sociation will not knowingly publish a false or misleading ad vertisement, no attempt has been made to verify the contents of advertisements in-cluded in this publication unless other than as set forth in writing by IWLA.


THE WAREHOUSING INDUSTRY should take note of a recent proposal by the Federal Motor Carrier Safety Administration

(FMCSA), as it has the potential to result in fines and penalties being imposed on warehousemen and logistics providers, and an increase in potential liabili-ties in civil litigation arising from highway accidents involving motor carriers that transport freight originating at warehouse locations. Dubbed the “Driver Coercion Rule,” the FMCSA has issued a Notice of Proposed Rulemaking (NPRM) proposing regulations prohibiting coercion of drivers of commercial motor vehicles.

The NPRM stems from MAP-21, the highway funding bill passed in 2012 that revised federal law to require that the FMCSA’s safety regulations prohibit a motor carrier, shipper, receiver, or transportation intermediary from coercing a driver to violate the federal motor carrier safety regulations (FMCSR) or the hazardous material regulations. The NPRM was published on May 13, 2014 and provides 90 days for interested parties to comment. Accordingly, the comment period closes on August 11, 2014. Once the com-ment period closes, the warehouse and logistics industry will need to wait to see whether the FMCSA addresses any of the concerns noted below in its final rule. As explained below, there are significant issues in the proposal that warehouse and logistics providers should understand and consider com-menting on.

Ultimately, the Driver Coercion Rule will prohibit a motor carrier, shipper, receiver, or transportation intermediary from requiring a driver to operate a commercial motor vehicle where the carrier, shipper, receiver, or transporta-tion intermediary “knew or should have known” that such operation would require that the driver violate applicable safety regulations. The NPRM defines “transportation intermediary” as “a person who arranges the trans-portation of property or passengers by commercial motor vehicle in interstate commerce, or who arranges the transportation of hazardous materials by commercial motor vehicle in interstate or intrastate commerce, including but not limited to brokers and freight forwarders.” Coercion is defined as threat-ening to or actually withholding current or future business, employment or work opportunities.

The NPRM proposes potential fines of up to $11,000 per offense, as well as revocation of authority for those violators that hold some sort of authority from the FMCSA (such as property broker, freight forwarder or motor carrier authority). In this last regard, it should be remembered that, if a warehouse-man is arranging transportation for a depositor to or from a warehouse with

3PL LIABILITY

The FMCSA Driver Coercion Rule and its Impact on Warehouse OperatorsBy Nathaniel Saylor and Eric J. Meyers

Nathaniel Saylor Eric J. Meyers

The Driver Coercion Rule

has potential impacts on a

warehouseman’s potential liability

for highway accidents.


a motor carrier hired by the ware-houseman, and the warehouseman is profiting from that arrangement, it is quite possible that the warehouse-man should also be registered with the FMCSA as a property broker or freight forwarder. Failure to register can subject the warehouseman to additional fines and penalties sepa-rate and apart from those available under the NPRM.

One would be hard-pressed to argue that drivers should be actively coerced into violating regulations in-tended to foster public safety on the highways, but upon closer analysis, the proposed regulations, and the FMCSA’s statements interpreting the proposed regulations, are quite concerning. For reasons explained below, this is especially applicable to warehousemen.

There are several problems with the proposed rule from a warehouse-man’s perspective. First, the FMCSA interprets the rule as imposing a duty of inquiry. According to the FMCSA:

The standard “knew, or should have known” is essentially a restate-ment of the common law principle of “respondeat superior,” which holds the “master” (employer) li-able for the acts of his “servant” (employee)…. When a shipper, re-ceiver, or transportation intermedi-ary directs a driver to complete a run within a certain time, it has assumed the role normally reserved to the driver’s employer. As such, it may commit coercion if it fails to heed a driver’s objection that the request would require him/her to break the rules. The shipper, receiv-er, or transportation intermediary will not be excused from liability for coercion because it did not inquire about the driver’s time remaining or pretended not to hear the objec-tion. When directing the driver’s actions, these entities “should have known” whether the driver could complete the run without violating the FMCSR.

As interpreted by the FMCSA, the Driver Coercion Rule, as proposed, imposes an affirmative duty on a

warehouseman or logistics provider to inquire into the driver’s hours of service to confirm enough time is available to complete the trip with-in the regulations. Most troubling is the agency’s statement that “the shipper, receiver, or transportation intermediary will not be excused from liability for coercion because it did not inquire about the driver’s time remaining.” This statement in-creases and transforms the standard of care from should have known into a should have asked.

The FMCSA’s statement appears to indicate that an intermediary, such as a warehouseman or logistics provider, must inquire as to whether the driver can complete transpor-tation of a load with a scheduled delivery within the scheduled time regardless of whether the driver af-firmatively objects to a load sched-ule. This is especially noteworthy for a warehouseman, who is in a prime position to be affected by the rule; the warehouseman, un-like, for instance, a property broker, will inevitably have direct face-to-face contact with the motor carrier’s driver when he or she arrives at the warehouse dock. Presumably, the Driver Coercion Rule requires a warehouseman to inquire as to whether the driver can transport the goods within the amount of time al-lotted by law. To date, failure to do so has not been the basis of a federal regulatory violation.

Next, the Driver Coercion Rule has potential impacts on a ware-houseman’s potential liability for highway accidents. The FMCSA’s reference to respondeat superior is not only ambiguous, it is also inaccurate. Respondeat superior is synonymous with vicarious li-ability, which has been used in the past to impose significant liability on intermediaries and shippers for the conduct of motor carrier driv-ers. To the extent that the Driv-er Coercion Rule creates liability based on the respondeat superior theory, it is inaccurate and unneces-sary. Rather than base the rule on a misapplied theory of respondeat

superior, which imputes liability for the driver’s conduct onto third parties, it would be preferable for the FMCSA to address the interme-diary’s own misconduct in allegedly coercing the driver to violate the FMCSR. Unfortunately, the pro-posed rule’s reference to respondeat superior may be used by person-al injury attorneys and victims of accidents involving motor carrier drivers to argue that warehouse-men are somehow liable for the conduct of drivers that is in viola-tion of the FMCSR. Regardless, the regulations, if passed, could create additional ammunition to be used against warehousemen and logistics companies in arguing that the inter-mediary’s own conduct contributed to a highway accident.

Finally, “coercion” is too broadly defined. As drafted, the failure to inquire into whether a driver will have to violate the FMCSR, in and of itself, is not a violation. There must also be coercion as defined above. However, coercion is broadly defined by the Driver Coercion Rule and may be established in several unexpected ways. For example, it is not difficult to imagine a driver fac-ing an allegation that he or she vio-lated the maximum hours permitted by the FMCSR arguing that he or she was coerced into committing the violation.

These are just a few of the reasons why intermediaries, such as ware-housemen and logistics providers, should take notice of this proposal. We urge you to carefully review the NPRM and consider potential negative ramifications, and to take advantage of the right to submit comments. To submit a comment online, go to www.regulations.gov; in the search box insert the docket number “FMCSA-2012-0377” and click the search button.

Nathaniel Saylor is a partner and Eric J. Meyers is an attorney with Scopelitis, Garvin, Light, Hanson & Feary, P.C. They can be reached at (317) 637-1777 or [email protected].


WE HAVE SEEN horrific natural disasters in recent years that taxed both supply chains and our core businesses. Approximately 85

percent of global supply chains experienced at least one significant disruption during that time. This affects both an organization’s bottom line and its abil-ity to be there for customers.

Businesses that survive natural disasters, operational interruptions and ser-vice failures are ones that plan proactively. Managers at these companies know they must develop a business-continuity plan well before a disruption hits.

Business continuity is activity that ensures critical functions will be avail-able to customers, suppliers, regulators and other entities. It is not something developed during a disaster. It is daily maintenance of service, consistency and recoverability within an organization, and is much more than picking up the pieces after a disaster.

To avoid being caught unprepared, start developing a business-continuity plan now. Though the process requires a significant investment in time and resources, getting started is simple.

■ PrepareIdentify what needs the most protection by asking:

• What are our critical systems?• What are our critical products or services?• Who are our key resources and stakeholders?

Next, gather a representational cross-section of staff to brainstorm all pos-sible scenarios of failure. Think about factors both on the ground and in the cloud, such as access to your physical buildings and equipment, and connec-tions to data, servers and the Internet. Build a matrix of risk and probability for the various failure scenarios.

■ Develop the Plan• Create a matrix of accountability for each system/function. Include a

decision-making chain of command.• Outline a process and contacts for both internal and external communications.• Determine which risks from the matrix must be covered. Do you prepare

for all high-, medium- and low-risk probabilities? Or, is it sufficient to cover just high-risk/high-probability scenarios?

• Map the supply chain people/processes/data identified in your preparation phase.

• Define recovery windows for each critical and key component.• Assess when, how and where to replicate data.• Identify redundancy sources for physical sites, power, circuits, hardware,

software, operators and so on.• Calculate people resources needed for each section of the plan and how they

can be sourced.

DISASTER PLANNING

Ensuring Business Sustainability During Disasters, Disruptions and Service FailuresBy Kristi Montgomery

Businesses that survive natural

disasters are ones that plan

proactively.


■ Train and Implement• Start with internal training. All

employees should know three ba-sic things: 1) Who to contact in an emergency; 2) What to do; and 3) What not to do.

• The key players must be fully trained on all aspects of the plan, since they may be called upon to work outside their normal areas if co-workers are unable to respond. Pre-establish these roles, so gaps can be quickly identified.

• Stakeholders must understand and support the plan.

• Begin implementation by engaging suppliers to set up your redundan-cies.

• Document these suppliers and cre-ate a matrix with 24/7 contact information.

• Install needed hardware/software and set up your data synchroniza-tion.Don’t forget to test the plan both

within departments and with an-nual, company-wide drills. During testing, failures are really successes,

because opportunities for improve-ment are presented and can be cor-rected. During real-life disasters, the situation reverses – failures can have extremely negative consequences. So, it is critical to debrief and update the plan after each test and drill.

Even with the best advance plan-ning, be prepared for surprises when a real disaster hits. As you work through the situation, focus on what is going well and make notes about what is not working as planned. The goal during a disaster should not be to blindly follow your plan. Instead, use both the plan and common-sense flexibility to communicate, cooper-ate, coordinate and collaborate.

Post-event assessments are vital. A business-continuity plan rarely re-mains static. It needs to be reshaped and updated constantly as your own systems, personnel and response

Remember, disaster recovery is a

subset of business continuity.

scenarios change. Ensure there are resources assigned to maintain and update the plan.

As you create your plan, you will be focused on the survival of your own business. But, don’t forget to take care of your people, protect your physical assets, and minimize the impact on your customers. Con-sider how to tap into your network to leverage sustainable business con-tinuity.

Remember, disaster recovery is a subset of business continuity. Many businesses have a recovery plan for hurricanes, tornados or earth-quakes, but what about an acciden-tal gas-main explosion that levels your corporate office, or a nation-wide telecommunications outage? It is crucial to identify not just how you recover from a major natural disaster, but how your business re-mains sustainable throughout all types of disruptions.

Kristi Montgomery is Vice President, IT at Kenco Management Services.


THE ABILITY TO EXTRACT WISDOM from challeng-ing experiences distinguishes successful leaders from their broken or

burned-out peers.Difficult and, in some cases, career- or life-threatening events are called

leadership crucibles. They are trials and tests, points of deep self-reflection that force you to question who you are and what really matters.

After interviewing more than 200 top business and public-sector leaders, authors Warren G. Bennis and Robert J. Thomas were surprised to find that all could point to intense, often traumatic, always unplanned experiences that transformed their distinctive leadership abilities.

Nelson Mandela, Winston Churchill, Franklin D. Roosevelt, Al Gore and Barack Obama have all been willing to talk about their contributions to nation-al failures. As leaders, they thrived because they learned from their mistakes, which inspired confidence, loyalty and commitment even in adverse times.

■ In Search of Leadership Gold

To a scientist, a crucible is a vessel in which substances are heated to high temperatures to trigger a chemical transformation (for example, a steel refin-ery’s blast furnace).

In the leadership context, think of a crucible as a transformative experience from which you can extract your “gold”: a new or altered sense of identity.

As Bennis notes:“Just like the alchemists in history used crucibles in the hopes of turning

other elements into gold, great leaders emerge in their own lives as a result of how they deal with their crucibles.”

Crucibles set the stage for adaptation. We are forced to develop new com-petencies that prepare us for future challenges.

In many ways, our capacity to change hinges on our ability to think creative-ly – to look at a problem and spot unconventional solutions. Adaptive leaders can entertain opposing views. They learn to thrive in the face of uncertainty and negativity. They can tolerate ambiguity and consider multiple options, without defaulting to short-term thinking or premature decision-making.

■ Buried Treasures

It’s inherently difficult for us to reflect on painful moments, so their lessons may be buried or forgotten on a conscious level. But pain forms memories that subconsciously affect our current behaviors.

Viewed in retrospect, a crucible may become a defining moment in your life, even if you cannot recognize it as it’s happening. Ultimately, it’s an op-portunity to question your most basic assumptions and values, and determine how you want to show up in the world.

Conflicts, challenges and early-life difficulties all contribute to crucible moments. For many of us, a crucible may not initially appear to be a loss or hardship. But as you reflect on it, you’ll discover the many ways in which

LEADERSHIP AND MANAGEMENT

The Crucibles of LeadershipBy Chip Scholz

Our capacity to change hinges

on our ability to think creatively.

Adaptive leaders can entertain

opposing views.


events influence your unconscious behaviors. Some underlying memo-ries are carried into adulthood, un-dermining your coping skills until you acknowledge and understand their impact on your life.

■ From Principles to Practice

Business experts once believed we could master leadership skills by reading books and taking classes. It slowly dawned on them that we practice leadership on the job. We learn to be effective leaders by inter-acting with other people and groups.

Thomas offers three important insights in Crucibles of Leadership: How to Learn from Experience to Become a Great Leader (Harvard Business Review Press, 2008):1. Practice can trump talent.2. Outstanding leaders devise a

strategy for transforming cruci-bles into learning.

3. Organizations can grow leaders faster by helping them learn from experience.

■ Discovering Your CruciblesIt’s almost impossible to take

stock of yourself without guidance from a trusted friend, mentor or coach. To be truly self-aware, you need someone to hold a mirror so you can observe past and present behaviors.

Begin the discovery process with writing exercises, which you’ll share and discuss with your coach or men-tor. Determine whether difficult childhood experiences are triggering strong emotional reactions in the present.

In Finding Your True North: A Personal Guide (Jossey-Bass, 2009), Bill George, Andrew McLean and Nick Craig suggest writing a letter to yourself describing key crucibles in your life. Present these experiences in one continuous draft, taking as much time and space as you need to complete the letter. Tell the whole story: context, high point, what changed, the emotions you felt, and the consequences and aftereffects.

Answer the following questions as your write:• What was the greatest crucible of

my life?• Why was this experience so chal-

lenging for me? (List all reasons.)• What was the most stressful, chal-

lenging or hard-to-endure point in my story?

• How did I resolve the crucible ex-perience at the time?

• In retrospect, how would I re-frame it today?

• What resources did I have at the time, compared with those I have now?

• Which emotional scars must be healed for me to become a better leader?

• What fundamental insights did my crucible teach me?

■ From “I” to “We”

Leaders often begin their careers with a strong drive to achieve and succeed. They focus on themselves, their performance and the results they want to achieve. As they mature and rise to higher responsibilities, there must be a shift from “I” to “we.”

Great leaders become teach-ers, role models and mentors, us-ing their influence to groom others. They are ultimately rewarded with the gifts of authenticity, compassion and humility.

As you gain greater self-aware-ness from your writing exercises, add the following questions to the assignment:• How have my crucible experiences

enabled me to discover my pas-sion for making a difference in the world?

• How do my crucibles affect my view of my leadership abilities?

• Can I pinpoint examples of leading from an “I” vs. “we” perspective?

• How much time do I spend focus-ing on others vs. myself?Be sure to review the answers

with your coach or mentor.

Chip Scholz is head coach of Scholz and Associates, Inc. and serves on the IWLA board of directors.

3PL Americas

2014 IWLA Convention & ExpoPassing of the Gavel

World Bank —Logistics Performance Index

www.IWLA.com

PM 42128520

THE MAGAZINE OF IWLA IN NORTH AMERICA • SPRING 2014

™

Future Issues of 3PL Americas

3PL Americas is the magazine of IWLA and provides members and non-members with news and informa-tion on concepts and best practices in warehouse and logistics management. The lead articles for upcoming issues are set well in advance. We welcome reader input on themes and articles for future issues.

Lead article themes and deadlines:

• Fall 2014 – International Logistics

Operations (October 17, 2014)

• Winter 2015 – Pre-Convention

issue (January 16, 2015)

• Spring 2015 – Post-Convention

issue (April 13, 2015)

• Summer 2015 – Addressing the Worker Shortage (July 15, 2015)

Suggestions for authors, articles and themes can be submitted to [email protected].


IWLA formed its Rail Council with two original goals: to fight demurrage charges and educate mem-

bers on moving goods by rail. Those are apt reasons, given that IWLA’s forerunner, the American Warehouse Association, began in the late 19th century with similar aims.

While the role of railways in the supply chain remains constant, rail service and the industry structure have seen dramatic changes. Class I railroads have some of the most sophisticated operations, ef-ficient transportation routes, and on-line load/tracking technologies. With all of that, the railroads have one of the largest lobbying forces in D.C.

“I have worked with the railroads for almost 40 years and I have been in transportation in general since the early 1970s,” says Gary Minardi, IWLA Transportation Advisory Council Board Liaison and president of San Jose Distribution Services Inc., headquartered in San Jose, Calif. “There is a lot of opportunity out there for using rail, as the railroads are getting more efficient at transit times and are developing tracks and industrial areas to have direct access to major metropolitan areas.”

This direct access to cities gets goods only so far: It provides only half the journey in a same-day delivery era.

“There is a huge future in transload from intermodal and boxcar to last-mile delivery,” Minardi says. “The [railroads] are starting to realize the value of a partner who can take their rail shipments to the last mile as ef-ficiently as they do long-haul.”

The rise of intermodal and outsourced, third-party warehousing brings a shift to the IWLA Rail Council. As the group’s focus has broadened, the association re-cently changed the group’s name and focus to the IWLA Transportation Advisory Council. The council monitors regulations, shapes trends and educates members on all transportation-oriented issues.

“The IWLA member infrastructure is throughout the United States and Canada. It is one of the most diversi-fied transportation groups in both countries. We really

IWLA COUNCIL UPDATE

Transportation Advisory Council: New Name, New Plans, New IssuesBy Morgan Zenner

needed a council that addresses transportation on every level,” Minardi says.

■ What is Going on With the STB and Rail Demurrage?

Since early summer, IWLA members have been assess-ing the impact of a surprising decision by the U.S. Surface Transportation Board. The decision allows railroads to set their own demurrage rates/specifications pend-

ing written or online notification to all rail customers and/or drop-off points.

The ruling is a marked change from how demurrage has been handled in past key cases. Prior to this ruling, IWLA members worked to show the

STB and the railroads the importance of third-party warehousing and how warehouse logistics operations compare with big bulk rail users (which is where demur-rage originated and where delays in rail often originate).

“The railroads have always looked at IWLA mem-bers as customers, not partners. We don’t get paid until the rail cars are unloaded. In reality, the railroad is our customer, and it’s in a 3PL’s best interest to load and un-load as quickly as possible in order to collect payment,” Minardi explains.

The demurrage issue is in the center of a perfect storm: Contracts are not negotiated between railroads and 3PLs. Rates are not regulated by the STB. Railroads have no competition as they service the points along the tracks that they own. Shortlines have little incentive to place cars reasonably since all of the money is already gained in the long-haul.

The new decision lumps third-party warehouse logis-tics providers with main (bulk) receivers and has taken away many protections that were specific to 3PLs. In response, the IWLA Transportation Advisory Council is working on a contractual strategy with railroads that will focus on actual placement agreements. The group believes IWLA members’ relationships with their rail providers and mutual benefits of an actual placement

The railroads have always looked

at IWLA members as customers,

not partners.


agreement will motivate the rail-roads to accept.

Are there times that demurrage is a necessary part of doing busi-ness? Indeed, Minardi says. “The original purpose of demurrage was to prevent car delays back into the railroads’ equipment pools. IWLA members have never been the culprit of car delays. Demur-rage serves a useful purpose for shippers and receivers that de-liberately delay cars.

“Overall, the railroads operate ef-ficiently and their web portals track cars very well,” Minardi adds. “We can track and file service complaints through the web portals to stop the problem before it festers. It’s more paperwork on our end, but we are happy to do it to avoid disputes down the line.”

■ Trucking Provides No Relief to the Rail Debacle

The trucking industry is experi-encing its own turmoil, which is not making things any easier.

Driver shortages are making many members nervous that they will not be able to fill positions with-out competitive bidding wars for qualified truck drivers. Or they may be forced to hire unqualified truck drivers and increase liability risk.

The shortage problem is a situa-tion without a real solution.

Over-the-road truckload ship-ments are not as lucrative now that the U.S. Department of Transporta-tion under the Federal Motor Car-rier Safety Administration placed a 34-hour restart limit on drivers every seven days or 168 hours. The break must include two periods from 1 a.m. to 5 a.m., and it man-dates a 30-minute rest period for every eight hours of driving. (This legislation may be delayed pending a vote in the Senate to conduct an objective study of the effectiveness

of the restart limitations using elec-tronic logging devices.)

According to Minardi, the hours-of-service rule has a direct effect on huge intermodal gains: This mode is getting more and more efficient moving shipments from point A to point C.

These recent rulings beg the ques t ion , Mi-nardi says: Are regulatory agen-cies working to-gether to truly understand the complete picture,

rather than having a single goal in mind?

Finally, there is much to debate about the cost of fuel from everyone inside and outside of the industry.

California recently passed a hid-den fuel tax that was approved by the California Air Resources Board (CARB), and is expected to hike up the price of gas by at least 12 cents by January 2015.

The move is designed to reduce greenhouse gases by moving fuels to a state-run carbon market where providers buy “carbon allowances.” This carbon-market is also open to third-party traders, which opens the door for widely fluctuating price increases.

This state-specific case is in ad-dition to a federal fuel tax under consideration: A new Senate pro-posal to support a “long-term, stable funding mechanism for our nation’s critical highway and transit projects” would mean a new tax. The plan would raise the gas tax by 12 cents over the next two years, raising $164 billion in the next de-cade and covering the shortfall in the Highway Trust Fund.

No doubt these infrastructure im-provements are needed and may have a positive long-term impact on the warehouse logistics industry, Minardi says. However, the bill does not include restrictions on diver-sions, the government’s practice of shifting funds from one trust to cov-er a different cost in the budget. To-

day’s infrastructure problems have a lot to do with diversions.

■ IWLA Transportation Advisory Council: Much to Consider

It’s the domino effect: Trucking issues affect rail issues. They all af-fect the ability of warehouses to deliver efficiently and effectively for their customers. This pressure to deliver even with changing obstacles led IWLA to create a council that is focused on finding a solution.

With the extra knowledge the council and its peer-to-peer network provides, customers will see that using an IWLA member means no surprises. These active members can handle all of the little details that customers don’t want to deal with.

“IWLA members have a diverse knowledge of the whole supply chain. We have knowledge on how everything works and integrates,” Minardi says.

And the council hopes to increase knowledge and awareness with reg-ulators and legislators. The unique role of warehouse logistics organi-zations brings with it unique areas of knowledge and specialization. The IWLA Transportation Advi-sory Council is working to educate lawmakers about 3PLs, their place in the supply chain, and the impor-tance of efficient, affordable modes of transportation.

■ Participation on the Council Allows You to be Part of the Solution

If you use rail in your warehouse locations or if you have trucks or deal with delivery, you will ben-efit from participation in the IWLA Transportation Advisory Council. You can join the council any time and be a part of the real solution. To sign up, contact IWLA headquarters at [email protected] or (847) 813-4699.

Morgan Zenner is IWLA’s senior coordinator, marketing & public relations. Contact her at [email protected].

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