cscmp 2014 technology and transportation—creating, deploying, and benefiting from innovation - c...

Technology and Transportation—Creating, Deploying, and Benefiting

from InnovationMatt Douglass

Director of Planning & Optimization

Celadon Trucking

Overview

• Market Analysis – Carrier Perspective• Proactive Approach to Profitability• Systematic Approach to Cost Effective Planning• Commitments – Maintaining Network Stability

Celadon Trucking

• Established in 1985• Public: NYSE (CGI)• HQ = Indianapolis, IN• Approx. $800M Revenue• Equipment:

– 3,800 tractors – 9,200 trailers– 300 temp-control trailers

• OTR (600+ mile LOH)• Specialized Services:• Expedited• Local• Dedicated• Intermodal• Brokerage Division• Temperature Control• Mexico/Canada

Background Services

Market Analysis – Carrier Perspective

Customer Questionnaire

Do you discuss the relationship with your shipping partners?

Do you think there is value in a Core Carrier program?

Have you noticed a shortage within the last 6 months?

0% 50% 100%

YesNo

Current State of the Industry

• Average Driver Age = 55 • Estimated Driver Shortage in

2014 = 125,000-250,000 • Driver Shortage by 2020 =

330,000 • Stagnant Fleet Growth • Increased Equipment Costs • ~ 3-7% Decrease in Utilization

Proactive Approach to Profitability

Proactive Approach to Profitability

• Traditional Methods – Rate and Volume• Non-traditional Methods – Multiple Solutions

– Rail and brokerage

• Data Driven Methods – Profit Analyzer– Identifying lanes that are profitable not only for the current move but

where will you go in the future

Proactive Approach to Profitability

• Historical Analysis – Profit Analyzer– Identifying lane level Operating ratio– Identifying lane level Opportunity cost

Celadon’s Customer Scorecard

Metrics

1. Profitability

2. Fuel Surcharge

3. Accounts Receivable

4. EDI Capability

5. Transit

6. Empty Miles

7. Drop & Hook

8. 24/7 Access

Uses• Feeds Freight Selection Tool

• Drives Pricing Decisions

• Identifies Growth/Partner Accounts

Systematic Approach to Cost Effective Planning

Systematic Approach to Cost Effective Planning

• Weighted calculation to cover all freight in the network every couple of minutes– Over 150 tables are hit with every potential combination

• Balancing operational costs, driver happiness and service• Ability to Autoplan trucks on loads based on “Home Run”

Scenario – Currently around 10% of dispatches• Model accounts for 70% of all plans

Systematic Approach to Cost Effective Planning

• Universal program for customer service, driver management, planning and tracking– Allows for a collaborative effort to service the customer and the

driver

Commitments – Maintaining Network

Stability

Commitments – Maintaining Network Stability

• Commitments are king– Annual, monthly, weekly, daily, project based– Point to point, zip to zip, region to region or any combination

• Balanced total network allows for proper flow of capacity and utilization of resources

Commitments – Maintaining Network Stability

• Network Balance– Clear view of what is being recommended to balance each individual

region as they interact with each other– The map constantly updates with new data (~1-2 minute cycle times)

– LA takes into consideration the most profitable decisions that can be made with commitments and historical volume

Commitments – Maintaining Network Stability

• Load Solicitation • Chosen based on need – What will balance the network while generating the most profit?

• Need also determined by:

– Existing Commitments

– Profitability

– Tractor capacity

– Weekly historical volumes

– Regional values

Commitments – Maintaining Network Stability

• Capacity shifts– Excess tractor capacity in a region that is near an overbooked

market will lead to shift recommendations– Pre-emptive recommendations to communicate network balance

needs– Assists with planning when determining what to do with additional

capacity or when trying to plan for a region that will be overbooked the next day

Matt DouglassDirector of Planning & OptimizationCeladon Trucking

MDouglass@celadontrucking.com9503 E 33rd StreetIndianapolis, IN 46235317.972.7000 x22047

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