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Brian Thompson is chief commercial officer for SMC3. He oversees the company’s sales, marketing, and industry education departments.
Before joining SMC³, Thompson worked at YRC Worldwide for 17 years, most recently serving as vice president of pricing and yield management. During his time at the carrier, he gained experience in pricing, sales operations and sales strategy, serving as a leader in developing customer-centric solutions.
As a long-time industry expert, Thompson helps tailor SMC³ tools to address new developments and changes in the transportation arena. His vast experience serving shippers and 3PLs gives him a detailed understanding of what these customers need in a transportation solutions provider.
Thompson holds an MBA from the University of Missouri and a bachelor’s degree in chemistry from Truman State University.
What do transportation markets look like for the rest of the year? Freight capacity continues to be tight. And the Council of Supply Chain Management Professionals plan to meet this month virtually. We'll tell you how it will all work.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director of DC Velocity. Welcome.
Logistics Matters is sponsored by DCV-TV. Five channels of streaming video are yours for the viewing on DCV-TV. Major improvements have recently been made to the DCV-TV platform to enhance the viewing experience by greater search capabilities and expand the capacity of the video library well beyond the 3,000-plus videos already in the archive. Be sure to check it all out at DCVTV.com.
Victoria Kickham is off this week, so pinch hitting for her is Diane Rand, the managing editor of CSCMP's Supply Chain Quarterly. But to begin: What's going on with the transportation industry, and the less-than-truckload markets specifically? To answer those questions, here's our senior news editor Ben Ames and today's guest. Ben.Ben Ames, Senior News Editor, DC Velocity :
Thanks, Dave. With us today we have Brian Thompson, who's the chief commercial officer at SMC3, less than truckload data and technology solutions provider. Brian oversees SMC3's sales, marketing, and industry education departments. And before joining SMC3, he worked at the LTL carrier YRC Worldwide for 17 years, most recently as vice president of pricing and yield management.
Thanks so much for joining us today, Brian.Brian Thompson, Chief Commercial Officer, SMC3 :
Thank you, Ben. It's pleasure to be here.Ben Ames, Senior News Editor, DC Velocity :
Well, what a year we've had. It seems that the whole market changes week to week, month to month. But wanted to check in, of course, about the pandemic. What are some of the greatest impacts of the pandemic on the transportation and logistics industry that you've seen?Brian Thompson, Chief Commercial Officer, SMC3 :
Yeah, thank you, Ben.
Obviously, it's been a crazy six months so far, right? The pandemic? No, I don't think anybody saw that coming. It's quite a black-swan event.
Anytime you've got businesses shutting down and people getting shut in, it definitely disrupts supply chains, disrupts consumer behavior, disrupts the manufacturing process. So basically, I mean, it's, it's an aggregation of quite a few effects that have made people have to adjust extremely quickly. And I think one of the things we definitely saw was an acceleration of a number of the trends that were already in progress prior to that pandemic—in particular, interest in technology as well as a shift shift to e-commerce. And to some extent those things both still kind of go hand in hand, because e-commerce, you know, demands a certain level of investment in technology, visibility, tracking connectivity across multiple systems and multiple partners to, to make it happen. So we've definitely seen that play out across all modes, not just LTL.
But LTL has also had its, its share of of impact from this, you know, specifically, especially, just to focus on that area of e-commerce. And it was a trend that we were already seeing with the growth of e-commerce, but the decentralization of warehousing and fulfillment really drove the need for smaller, more frequent loads. So, to some extent, that really has, obviously strained parcel networks, but also thrown additional business into LTL, as you get those one to six pallet loads, is really the area where LTL specializes. And you've got quite a few of those needed in order to replenish, get them to the right areas, Because now, instead of distributing from one warehouse, right, you're trying to service each metropolitan area and deliver in one to two days or less, as fast as possible. So rapid replenishment. And you really need the technology in order to support that kind of a, that kind of a shift.
I will say, on the positive side, as far as the pandemic goes, congestion has really eased up with people working remote. And I will tell you, that's positive from the carrier's perspective. That's helped them to both serve their customers more cost effectively, as well as improve service, because you have fewer unknown disruptions to the transporting of goods, right? Fewer traffic jams, fewer accidents, and fewer of those of us driving in my little Honda Civic getting in the way of a big van. So anyway, that's on the positive side, just to touch on a few of the impacts to logistics.Ben Ames, Senior News Editor, DC Velocity :
Yeah, that's really interesting. And the congestion, of course, is in reference to the roads that we all drive on, and it's because it's changed traffic patterns, it's changed, you know, gas consumption—really, so many sort of domino effects of this whole complicated chain.
You mentioned that people have to adjust quickly. That seems like an understatement. How have you seen LTL pricing be affected? I know you mentioned some changes, like smaller, more frequent loads, it sounds like that might make more work in loading and unloading.Brian Thompson, Chief Commercial Officer, SMC3 :
Yeah, and you know, in LTL, it's interesting that pricing is more stable and static than it is in other modes—particularly truckload—because in LTL, very little business actually moves on spot rates. Over 95% of LTL shipments are rated on negotiated common-carrier tariffs or contracts. So, in order for pricing to change quickly, you know, [a] carrier can Institute surcharges, but those customers under contract, you know, may or may not be subject to those those surcharges they put in place. And I mentioned that, but we haven't seen a lot of surcharges put in place by LTL.
I mean, shortly after the pandemic started, we heard through, you know, the second-quarter announcements for a number of public carriers—so we saw freight volumes in April drop from 10 to 25%, depending on the individual carrier. Those freight volumes improved sequentially month over month from April to May, May to June, and even now, July to August. What we're hearing in the market is that freight volumes have continued to improve and are probably—I don't have exact numbers—but, are probably approaching year-over-year flat volumes, which, you know, I bring that up in light of a pricing question, because obviously, capacity and prices are directly correlated. But in LTL, it takes—the pricing teams look far out to kind of predict what's coming the next 6, 12, 18, 24 months down the road when they're setting their prices. So they didn't have time to quickly. lower rates when business volumes are dropping, and they don't have time, you know, when capacity starts tightening. It takes a lot of work and effort in order to raise rates. So LTL rates stay pretty static. But we are definitely seeing, now, some optimism, some tight capacity—optimism from the carrier side—some tight capacity as the volumes have recovered nicely over the summer and we are still hearing about rate increases in the mid-single digits. So, stability and prices and slightly on the upside for the short—for the foreseeable near term.Ben Ames, Senior News Editor, DC Velocity :
Really interesting trends. Thank you for describing them for us. One of the big ways in which a lot of us have seen volumes recover is in e-commerce. So many people are working from home, schooling from home, living at home that we're buying a lot of the things that we used to do in person online and having them delivered. Is that also affecting transportation?Brian Thompson, Chief Commercial Officer, SMC3 :
Yes, absolutely yes. As I mentioned earlier with LTL, it's definitely driven some of those volumes in LTL, which has caused some tightness and reduction in available capacity for the LTL carriers. You know, just to touch a little bit more on that capacity front, you know, I'm hearing some carriers, anecdotally, that are focusing on existing customers, not necessarily entertaining new business, especially in lanes or locations where they are heavily imbalanced or heavy outbound, where they're having trouble finding the trucks.
But, really, the other trend with e-commerce that is driving LTL carriers—it's driving them to make investments in technology. And they were, already were prior to the pandemic, but this is another one of those trends that's really been brought to the forefront, even more so with the pandemic. If they want to go, carriers want to go paperless, you can't go paperless without technology. You can't hand over—you know, they really want to drive the industry to an electronic bill of lading. They really want to stop the potential passing of a contagion through paper. You see the suspension of required signatures as another example. So this is, you know, this, they had already been investing in APIs, but we're seeing a lot more interest in that and continued development in that area. So, you know, it's been good from that front.
I think long term, it's definitely going to benefit—obviously there's some short-term pain anytime you have an event like this pandemic and this sudden growth of e-commerce. It's a little bit uncontrolled. But, it is driving the carriers and everybody, really, to be interested in technology, gaining efficiency. Everybody's trying to do more with less, as well as change business processes to be much more efficient.
So we're not just hearing from carriers, but we're also hearing from shippers and logistics companies that maybe tasks that they did manually in the past, now they're trying to do—they don't want to visit a website, they don't want to call carriers' customer service center. They want to be able to self serve. They want to be able to implement something quickly. Long term maybe they want to invest in a TMS, but over the summer, they were looking for immediate solutions, so something that's already available out there. And there are quite a few solutions. So, it's just an interesting trend and, like I said, long-term, the whole industry is going to be operate more efficiently, service reliability is going to improve, and [I'm] very optimistic about kind of where that's all headed in the long term.Ben Ames, Senior News Editor, DC Velocity :
Got it. Got it. Well, boy, between, you know, move to electronics, move to paperless, move to APIs, it sounds like we'll all have a whole lot of interesting trends to keep our eyes on in these coming weeks and months.
Brian, we really appreciate your taking some time to join us on the podcast today.Brian Thompson, Chief Commercial Officer, SMC3 :
Thank you for having me.Ben Ames, Senior News Editor, DC Velocity :
Right. Back to you, Dave.David Maloney, Editorial Director, DC Velocity :
Thank you, Brian and Ben. Now let's turn to some other supply chain news from the week. And, Ben, let me go back to you. You reported this week on a couple of stories on the freight sector that shows some rebound, but continuing take capacity. What did you find?Ben Ames, Senior News Editor, DC Velocity :
That's right, Dave. To follow up on a point that Brian had just made, we've been seeing freight volumes drop off a cliff in March and then rebound slowly and steadily from April through August. Another measure of that was the LMI—that's the Logistics Manager' Index—that has been climbing steadily. Even so, the total cargo volume is still below 2019 rates—a year ago.
However, despite the low total volume numbers, the markets have tight capacity, both for trucking and for air. And that's just because a lot of vehicles are not being used. On trucking, there's a lot of disruption in the market, like the continuing hurricane season. We just had Laura in Louisiana. There's some truck-driver shortages that are exacerbated by the Covid-19 pandemic. And in air cargo, it's because so few passengers are flying—again, there's a lot of concern about the pandemic—that the airlines have cancelled an enormous number of flights. And when they do that they lose what's called the belly cargo capacity, which, airlines often fly with freight in the belly compartment of a passenger flight. And so, when those planes aren't taking off, then they don't have the capacity to move that freight.David Maloney, Editorial Director, DC Velocity :
Are there any solutions that can help shippers find reliable capacity as they continue an economic recovery?Ben Ames, Senior News Editor, DC Velocity :
Yeah, there are Dave, it's interesting. Again, Brian was just talking about a lot of the benefits of technology, and adoption of electronic means. One specific example is that the 3PL GlobalTranz recently shared a solution that it calls a pop-up fleet, where shippers can book capacity ahead of time. However, that's aimed at high-volume shippers and shippers with private fleets in need of supplemental capacity. So it doesn't really address the small and medium shippers, who are going to be left using the spot market in the meantime.
An even bigger puzzle we see an air cargo, because IATA—that's the industry group called the International Air Transport Association—says air cargo is the much stronger side the business than the passenger side right now. But again, the two are closely linked, because airlines use the same planes to move both types of loads. So, it looks like the air cargo puzzle really won't start to change significantly until people start flying again.David Maloney, Editorial Director, DC Velocity :
Yeah. And there's no telling how long it will take for a full recovery in that air market, of course remains to be seen.
Thank you, Ben.
Ben Ames, Senior News Editor, DC Velocity :
David Maloney, Editorial Director, DC Velocity :
And I would like to welcome our pinch hitter today. Diane Rand is the managing editor of CSCMP's Supply Chain Quarterly, our sister publication. She also serves as associate editor of DC Velocity. Welcome, Diane, good to have you with us.Diane Rand, Managing Editor, CSCMP's Supply Chain Quarterly :
Thank you for having me. I appreciate it.David Maloney, Editorial Director, DC Velocity :
And you've been knee deep the past month or so in preparations for CSCMP's EDGE live, which will take place this year in a couple of weeks, on September 20 through 23rd. But instead of being in person in Florida this year, as originally planned, everything will be virtual because of the pandemic and travel restrictions. So how will this all work?Diane Rand, Managing Editor, CSCMP's Supply Chain Quarterly :
Well, it's gonna be a little different, but CSCMP has partnered with a virtual event platform company called Elastic Solutions to bring us EDGE this year. The conference itself is going to be much the same as attendees are used to. We will be able to experience some live keynotes, speakers, sessions on Monday and Tuesday, and our very own Ben Ames will be participating in a fireside chat with Lily Shen, CEO of Transfix. So, education is still a key component of the conference. So, there'll be 22 dedicated education tracks, and over 120 sessions available for attendees, spanning the entire end-to-end supply chain. So if you miss a live broadcast session, no worries. Attendees will have access to sessions on demand after the live broadcasts for several weeks. So, there's a lot that will be the same, but we will have more time to listen and participate in the conference over a period of time. So we're looking forward to it.David Maloney, Editorial Director, DC Velocity :
You've been working on a guide to help users navigate the various sessions. What can you tell us about it?Diane Rand, Managing Editor, CSCMP's Supply Chain Quarterly :
Well, every year, the Quarterly puts together a show guide. We focus more on the Supply Chain Exchange exhibition that goes along with the conference. So we will, in the guide, you can look at the agenda, you can see the two special Supply Chain Exchange track sessions that will be available. We highlight the keynote speakers as well. And then, we really want to allow attendees to look through our guide and see the 70 exhibitors who will be participating in the exchange this year. And we're really excited, because we're going to basically have an interactive show floor experience, virtually. So you can meet with exhibitors, and we also have, new for 2020, innovation demos. So you'll be live. It'll feel like you're on the show floor. You'll be able to see these live demos, chat with any one of the exhibitors and ask questions live. So it should be, it should be good experience. So the guide is just to help you get an idea of what will be available, so you can plan ahead before the show starts on the 20th.David Maloney, Editorial Director, DC Velocity :
Right. And I understand that the guide will be available for registrants within their electronic folder that they'll receive, correct?Diane Rand, Managing Editor, CSCMP's Supply Chain Quarterly :
Yes, yes. There is a printed version that, it was—will be shipped with our State of Logistics issue that is at the printer right now and about to head to homes pretty soon, or businesses. And then, yes, there'll be a virtual guide as well for all attendees. You can go on and register at cscmpedge.org.David Maloney, Editorial Director, DC Velocity :
Great. And I've seen some of the virtual environment from the conference, and it will be great. We hope our listeners will be able to join us for EDGE live. We'll all be there in force. And we'll have information on registering. It's also, as Diane had just mentioned, at the website, I think also in the notes section seen on many of the podcast platforms. There'll be direct links there, where you could just go to cscmp.org for more information. Thank you, Diane.Diane Rand, Managing Editor, CSCMP's Supply Chain Quarterly :
Thank you.David Maloney, Editorial Director, DC Velocity :
Also, please go to DCVelocity.com to find out more on the stories that we talked about today.
And again, our thanks to Brian Thompson of SMC3 for being with us. We encourage your feedback on all the topics that we discussed today. You can email us at email@example.com.
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