In our continuing series of discussions with top supply-chain company executives, Marc Althen discusses discusses Penske's role as a third-party logistics service provider and the market outlook for 2020.
Marc Althen is president of Penske Logistics. Althen began his career as a project engineer with Chevron. He came to Penske following Penske's 1988 merger with Gelco Truck Leasing, where Althen had served as a construction director. His first role with Penske was to manage the environmental services department. During the next 20-plus years, Althen took on positions of increasing responsibility, including vice president of environmental services and vice president of administration.
In 2004, he was named senior vice president of administration and procurement for Penske Truck Leasing. In that role, he was responsible for real estate, facilities, energy, telecommunications, vehicle supply, vehicle remarketing, and non-vehicle procurement.
Althen is a member of the Council of Supply Chain Management Professionals and sits on the board of Fleetwash, a company that is majority-owned by Transportation Resource Partners. He is also a board member for several charitable and cultural organizations in the Reading, Pennsylvania, area. He holds a bachelor's degree in chemical engineering from the University of Kentucky.
Q: For those not familiar with your company, can you describe the work of Penske Logistics?
A: We are a third-party logistics provider servicing the automotive, food and beverage, industrial, manufacturing, and consumer packaged goods industries. The majority of our business is operated throughout North America, and we provide six primary services: distribution center management, dedicated contract carriage, regional truckload services, transportation management, lead logistics provider, and freight brokerage.
Q: How do you view the current transportation market and the prospects for 2020?
A: We are cautiously optimistic. We know there is excess trucking capacity in the market, and therefore there are rate pressures. We are also still experiencing a truck-driver shortage, and at Penske Logistics, we are acting on strategies to ensure that we are hiring the best drivers available.
Today, we see more customers and prospects reaching out to us specifically around the main services we offer—transportation management, dedicated contract carriage, and distribution management. Customers are looking to optimize their networks in an effort to reduce their costs. We are always striving to exceed our customers' expectations, and that's what helps us build trust and win business.
Q: What are the advantages of coming to a company like Penske that offers both warehousing and transportation as well as brokerage and other supply chain services?
A: Shippers look to Penske Logistics for business outcomes—rather than products. They are seeking to better serve their customers, which includes their external customers as well as the internal customers or stakeholders that interact with their supply chain team and processes. They want to improve their cost of operations, as measured by KPIs and financial statements. Our ability to incorporate the people, skills, systems, and resources from across our various product lines into a unique solution to meet their very specific needs—ultimately, the ability to deliver a compelling solution—is what keeps them coming back to Penske.
Q: How are your technology investments at Penske helping you to better serve your customers?
A: The market for supply chain software is growing rapidly. Both established players and start-ups are enhancing their platforms and creating new offerings at a rapid pace. For shippers, off-the-shelf software is difficult to configure to meet the needs of their industry, and shippers are struggling to separate the hype from reality in the burgeoning tech space.
IT talent with experience in supply chain systems is very limited, and shippers' internal IT departments, while skilled, tend to be committed to implementing new digital strategies, not supply chain systems. Penske brings best-in-class platforms, speed of implementation, seasoned IT practitioners, and commitments to measureable results that supply chain executives find attractive.
Over the years, Penske Logistics has acquired and implemented the best commercially available software on the market. This is the same software any shipper or third-party logistics service provider can buy. However, Penske has taken additional steps to customize and develop a proprietary solution—the Penske ClearChain technology suite. We've drawn on our experience to invest in the right tools to drive visibility and insight into the supply chain. This includes portals, analytics, dashboards, scorecards and mobile tools. Penske developers have created dozens of supporting applications, informed by our experience working with customers. These apps are integrated with our core systems, offering users a seamless experience.
Q: You have a background working in environmental services. How have you been able to promote sustainability in your role as president of Penske Logistics?
A: We are constantly evaluating and implementing the newest and best technology to drive sustainability in our fleet and logistics operations. On a daily basis, we continue to optimize customer shipments in a variety of ways, and to operate and maintain cutting-edge trucks. That's why for the fourth time this decade, Penske Logistics was honored by the U.S. Environmental Protection Agency for its sustainability efforts, collecting a 2019 SmartWay Excellence Award in the Truck Carrier category. Penske Logistics also attained SmartWay awards in 2018, 2017, and 2013. We are one of 55 truck and multimodal carriers to receive this distinction, representing the best environmental performers of SmartWay's 3,700 partners.
Q: What value to you feel Penske brings to its customers?
A: At the end of the day, we all know that relationships play an important role and it is critical to be a trusted adviser. That's why we are always striving to challenge the status quo and exceed our customers' expectations day in and day out. Some people consider it to be cliché to say that it's our people who make the difference in our solutions, but we don't. We continue to invest in our talent.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.