Bill Stankiewicz Copy Of 11 5 2010 Lq16 2 Final

PM40032602 IDEAS FOR LEADERSHIP IN LOGISTICS AND TRANSPORTATION©
Volume 16, Issue 2, 2010
LogisticsQuarterly.comLogisticsQuarterly.com
Geoffrey Bennett,
President and Co-founder, Kelron Logistics
Jim Butts, Senior Vice President, Transportation,
C.H. Robinson Worldwide, Inc.
Craig Callahan, Vice President,
Logistics and Corporate Sales, Werner Enterprises
David J. Closs, PhD, LQ Executive Editor, and
the John H. McConnell Chaired Professor of the
Eli Broad College of Business, Department
of Marketing and Supply Chain
Management, Michigan State University
John Cutler, General Counsel, NASSTRAC
Alicia Duval, Vice President, Healthcare,
GS1 Canada
Jim Eckler, President, Eckler Associates and
former President and CEO, SCI Group Inc.
David Faoro, Director of Supply Chain,
The International Group, Inc.
Kevin Fletcher,
Executive Vice President, Logistics Services,
Landstar Transportation Logistics, Inc.
Thomas Goldsby, PhD,
Associate Professor, Supply Chain Management,
University of Kentucky
Melissa Gracey, President, DTA Services
Bill Graves, President and CEO,
American Trucking Associations
Ajay Gupta, CITT, Director of International Supply
Chain Logistics & Operations, Sterling Agility
Jim Handoush, Co-Chief Operating Officer,
Landstar System, Inc.
Cameron Joyce, President, Accuristix
John Langley, PhD, Professor of Supply
Chain Management and Director of Supply
Chain Executive Programs, Georgia Tech
Mike Ledyard, Co-founder,
Supply Chain Visions
Clifford F. Lynch, President,
C.F. Lynch & Associates
Valerie McSween, CITT, Vice President,
Eastern Region, Mactrans Logistics Inc.
Chris Norek, PhD, Senior Partner,
Chain Connectors, Inc.
Andrew Paxton, CITT,
Vice Chair, Development, CITT Board
Nicholas Seiersen, B.Sc. (Hons.), MBA, P. Log.,
LQ Executive Editor
Reuben Slone, Executive Vice President,
Supply Chain, OfficeMax
Ginnie Venslovaitis, CITT,
Director, Transportation Operations,
Hudson’s Bay Company
Kate Vitasek, Lead Researcher and Faculty
Member, for the University of Tennessee’s
Center for Executive Education and
Founder, Supply Chain Visions
Geoffrey Bennett,
President and Co-founder, Kelron Logistics
Jim Butts, Senior Vice President, Transportation,
Craig Callahan, Vice President,
Logistics and Corporate Sales, Werner Enterprises
David J. Closs, PhD, LQ Executive Editor, and
the John H. McConnell Chaired Professor of the
Eli Broad College of Business, Department
of Marketing and Supply Chain
Management, Michigan State University
John Cutler, General Counsel, NASSTRAC
Alicia Duval, Vice President, Healthcare,
GS1 Canada
Jim Eckler, President, Eckler Associates and
former President and CEO, SCI Group Inc.
David Faoro, Director of Supply Chain,
Kevin Fletcher,
Executive Vice President, Logistics Services,
Thomas Goldsby, PhD,
Associate Professor, Supply Chain Management,
University of Kentucky
Melissa Gracey, President, DTA Services
Bill Graves, President and CEO,
American Trucking Associations
Ajay Gupta, CITT, Director of International Supply
Chain Logistics & Operations, Sterling Agility
Cameron Joyce, President, Accuristix
John Langley, PhD, Professor of Supply
Chain Executive Programs, Georgia Tech
Mike Ledyard, Co-founder,
Supply Chain Visions
Clifford F. Lynch, President,
C.F. Lynch & Associates
Valerie McSween, CITT, Vice President,
Eastern Region, Mactrans Logistics Inc.
Chris Norek, PhD, Senior Partner,
Chain Connectors, Inc.
Nicholas Seiersen, B.Sc. (Hons.), MBA, P. Log.,
LQ Executive Editor
Reuben Slone, Executive Vice President,
Kate Vitasek, Lead Researcher and Faculty
Member, for the University of Tennessee’s
Center for Executive Education and
Founder, Supply Chain Visions

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3LQ™ Volume 16, Issue 2, 2010LogisticsQuarterly.com
6 Contributors
LQ’s Executive Interview Series: Insights from
leaders in logistics and supply chain management
Today’s marketplace has made it more challenging than ever
before to implement breakthrough ideas. An unpredictable
economic landscape has called on companies to find new
ways to create value, and not surprisingly many are looking at
their supply chain to create profit and ultimately, shareholder
value. How can logisticians translate their efforts into mean-
ingful and compelling cases to be included on the agenda in
the boardroom suite of an organization? This LQ executive
interview series examines this question by focusing on new
ways to reinvent business.
8 Craig Callahan, Vice President, Logistics & Corporate
Sales, Werner Enterprises
10 Jim Butts, Senior Vice President, Transportation,
12 Geoff Bennett, President & Co-founder, Kelron Logistics
15 Jim Eckler, President, Eckler Associates
and former President and CEO, SCI Group Inc.
16 Jim Handoush, Co-Chief Operating Officer,
Landstar System, Inc. and
Kevin Fletcher, Executive Vice President, Logistics
Services, Landstar Transportation Logistics, Inc.
19 Reuben Slone, Executive Vice President,
22CITT Column: How Do You Mitigate Risk and
Invest in Outsourcing Your
Transportation Requirements?
You’re meeting with the CEO of one of your
stellar carriers. The CEO has some troubling
news to share; it’s crunch time and they need to
renegotiate their contract with your firm. What’s your best
course of action?
24 NASSTRAC Column:
Fall Elections Promise Worse Gridlock
Virtually all U.S. elections in “off years” (i.e.,
when votes are cast for Members of Congress
but not for president), lead to gains by the
party not in power. In 2010, several factors
appear likely to increase losses by Democrats. These factors
include a weak economic recovery, concerns about federal
deficits and the bank, auto industry and AIG bailouts that
contributed to them, the rise of the Tea Party movement,
dramatic increases in campaign ads supporting Republican
candidates, and gridlock in Congress.
25 LQ’s Recommended Reading:
The New Supply Chain Agenda:
The 5 Steps That Drive Real Value,
by Reuben E. Slone, J. Paul Dittmann,
and John T. Mentzer
27ATA Column: Taking a Look at the Road Ahead
As we race toward the mid-term elections,
there are a plethora of issues at the forefront
of voters’ minds — not the least of which is the
economy. Everyone wants to know what will be
done about job creation and economic growth.
28The Latest System for the Toolkit
The increasing volume of international supply
chain transactions, along with a combination
of agreements to both motivate trade and impose
restrictions on what can be traded, has height-
ened the value of technology capability to
monitor and track these transactions. These regulations,
restrictions and constraints have dramatically increased
supply chain management opportunities and risks.
30GS1 Column: Global Standards Proposed for
Canada’s Healthcare Supply Chain
The Canadian Healthcare Supply Chain
Standards Survey is a national poll conducted
for GS1 Canada by the Innovative Research
Group Inc. (INNOVATIVE) as part of the
Canadian Healthcare Supply Chain Standards Project. The
survey polled 294 Canadian healthcare sector stakeholders
representing a blend of healthcare institutions, Shared
Service Organizations and product suppliers. Here is an
overview of the results.
32Technology Toolbox: The IT Gap Faced by
Third-Party Logistics Providers
There is a noticeable and significant gap
between what shippers perceive 3PL providers
need to offer in the information technology
arena and whether shippers are satisfied with
the IT capabilities offered by third-party logistics providers.
33Playing to Win
How do the best companies win at the game of
outsourcing their supply chain? Here is an
overview of how to build stronger relationships
and gain greater value from your outsourcing
relationships, based on the book Vested
Outsourcing: Five Rules that will Transform Outsourcing.
CONTENTSLQ™

LogisticsQuarterly.com4 LQ™ Volume 16, Issue 2, 2010
EDITOR & PUBLISHER
Fred Moody
fmoody@LogisticsQuarterly.com
LQ EXECUTIVE EDITORS
David Closs,PhD
Nicholas Seiersen
Thomas Goldsby, PhD
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CIRCULATION MANAGER
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Contact Fred Moody
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LQ™ Inc.
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Email: fmoody@LogisticsQuarterly.com
Logistics Quarterly (LQ™)
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EDITORIAL POLICY
The opinions expressed in this
publication do not necessarily reflect
the policy of LQ™ Inc. The editors
reserve the right to select and edit
material submitted for publication
and are not responsible for unsolicited
material. LQ™ Inc. is a Toronto-
based corporation and publisher.
All rights reserved © by LQ™ Inc.
2010. Reproduction without written
permission of the publisher is
forbidden. LQ™ welcomes your
comments, letters to the editor, or
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(LQ™ is available on-line at:
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LQ MAGAZINE’S
STATEMENT OF OWNERSHIP
The trademark LQ™, LQ Magazine
(ISSN 1488-3309), LQ Newsletters
and the LQ Conference, including the
“Executive Exchange,” its trade marks
and published material are wholly
owned by LQ Inc., privately-owned
and operated corporation.
For more information on LQ’s
Executive Exchange, held twice
annually, we invite you to visit:
www.LQSummit.com
For more information on LQ’s
readership visit: www.LQreader.com
Volume 16 Issue 2
Graham Allen
Senior Program Manager of BPS
Supply Chain Secretariat,
Ontario Ministry of Finance
Christopher Barry
Senior Director,
Infrastructure Planning,
Research In Motion (RIM)
Fred Berkheimer
Consultant and
Former Vice President, Logistics,
Unilever (USA)
Jim Butts
Senior Vice President, Transportation,
David J. Closs, PhD
Department of Marketing and
Supply Chain Management,
Michigan State University
Executive Editor, LQ
Jim Davidson
President, Performance Logistics
Russ Dixon
Director, Corporate Marketing
and Communications,
Sunteck Transport Group
Russ J. Doak
Director, Supply Chain Management,
Washington Marine Group (WMG)
David Faoro
Director, Supply Chain,
Sarah Friesen
President, Friesen Concepts Inc.
Susan Gadsby, P.Log.
Director, Procurement,
Shared Services West
Joe Gallick
Senior Vice President, Sales,
Penske Logistics
Thomas J. Goldsby, PhD
Associate Professor, Supply Chain
Management,University of Kentucky
Melissa Gracey
President, DTA Services Ltd.
Victor Groot
Supply Chain Director, Day4Energy
Scott Hooper
Director, Supply Chain
Excellence, Ryder
Ed Kearns
President,
Kearns Transportation Services
Contributing Maritime Editor, LQ
Lucas Kuehner
Managing Director, Panalpina USA
Arun Kumar
Consultant
John C. Langley Jr., PhD
Director of Supply Chain
Executive Programs,
The Logistics Institute (TLI),
Georgia Institute of Technology
Derek J. Leathers
Chief Operating Officer,
Werner Enterprises
and President,
Werner Global Logistics
Clifford F. Lynch
President, C.F. Lynch & Associates
James Mahoney
Vice President, Global Accounts,
Agility
Robert Martichenko
President, LeanCor
Brian McDonald
President, Montship Inc.
David Mills
Vice President of Global
Manufacturing and MCE,
McCain Foods
Diane Mollenkopf, PhD
Assistant Professor,
University of Tennessee
Jeff Moore
Managing Director,
Lakeside Logistics Inc.
Tom Nightingale
Vice President, Communications
and Chief Marketing Officer,
Con-way Inc.
Christopher Norek, PhD
Senior Partner, Chain Connectors, Inc.
and Contributing Editor, LQ
Robert Novack, PhD
Associate Professor,
Business Logistics,
Penn State
Susan Promane
Director, Supply Chain,
Whirlpool Canada
Peruvemba S. Ravi, PhD
Associate Professor,
Wilfrid Laurier University
Kurt M. Ritcey
Partner, Deloitte Consulting
Nicholas Seiersen
Senior Manager, KPMG
and Executive Editor, LQ
Reuben Slone
Executive Vice President,
Allan Smith
President and CEO,
BCG Logistics Group
Donald Tham, PhD, PEng
Professor & Industrial Internship
Program Coordinator, Dept. of
Mechanical & Industrial Engineering,
Ryerson University
Ray Tribe
Director Operations,
Lynden International Logistics
Walter Zinn, PhD
Professor, Ohio State University
LQ™ ADVISORY BOARD
LQ:IdeasforLeadershipinLogisticsbyAmericanandCanadianExecutives
To view LQ’s online freight index,
which covers all modes of transportation
each month, across 32 U.S. states, visit:
www.LQindex.com.

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VOLUME 16, ISSUE 2, CONTRIBUTORS
LQ’s mandate to provide “Ideas for Leadership in Logistics” is clearly evidenced in this
issue, with articles written by professionals and logisticians
from America and Canada who are leading and transforming
business by creating new roadmaps and definitions for leadership in this exciting field.
OUR CONTRIBUTORS
GEOFFREY (GEOFF) BENNETT is President and
co-founder of the Kelron Logistics family of com-
panies, one of Canada’s largest third-party
transportation logistics companies, headquar-
tered in Mississauga, Ont. Prior to founding
Kelron, Bennett held senior level positions in var-
ious major Canadian companies, including
Director of Operations at Gelco Same Day (now
Dynamex Express) and Sketchley Cleaners.
JIM BUTTS, Senior Vice President of Trans-
portation for C.H. Robinson Worldwide, Inc.,
has been with the company since 1978, and
joined the executive team in 2002. Butts is
responsible for the relationships with several
key customers in the retail, consumer products,
paper, manufacturing and agriculture indus-
tries, aiding them in logistics and supply chain
systems design, including the use of third-party
logistics services in supply chain planning and
execution. He is also responsible for C.H.
Robinson’s transportation corporate sales and
marketing activities.
CRAIG CALLAHAN, Vice President of Logistics
and Corporate Sales for Werner Enterprises,
began his career at Werner in 1995 as a man-
agement trainee. Callahan has held various
leadership positions in customer service, oper-
ations, and sales. In his current role, he is
responsible for leading Werner’s business
development efforts with their strategic
account base, which comprises a large portion
of their domestic truckload business and rep-
resents the foundation of the company.
Callahan is also responsible for driving growth
in the logistics area of Werner’s business in
both the United States and Mexico, a key cor-
nerstone to Werner’s future.
Callahan serves on the board of directors
for College World Series of Omaha, Inc. and on
the planning committee for the Food Shippers
of America Association.
DAVID J. CLOSS, PhD, is an LQ executive editor
and the John H. McConnell Chaired Professor
of the Eli Broad College of Business,
Department of Marketing and Supply Chain
Management, Michigan State University. He
has consulted with more than 100 of the
world’s Fortune 500 corporations regarding
logistics strategies and systems. Closs is an
active member of the Council of Supply Chain
Management Professionals (CSCMP).
JOHN CUTLER, General Counsel of
NASSTRAC, has over 30 years of experience
as a transportation lawyer representing
shippers of freight. He is a principal with
the Washington, D.C. law firm McCarthy,
Sweeney & Harkaway, P.C.
ALICIA DUVAL, Vice President of Healthcare at
GS1 Canada, spearheads activities to introduce
global standards and supply chain practices to
the Canadian healthcare and pharmacy sectors.
She is also responsible for the development and
implementation of strategies to increase public,
government and stakeholder awareness of GS1
Canada’s mandate, and for advancing GS1
Canada’s standing as an important supply chain
partner and stakeholder. Alicia is GS1 Canada’s
lead representative on the global GS1 healthcare
initiative, an effort to lead the healthcare indus-
try to the effective utilization and development
of global standards, with the primary focus on
improving patient safety.
JIM ECKLER is President of Eckler Associates
and former President and CEO of SCI Group
Inc. SCI is the parent of three leading Canadian
supply chain management service providers:
Progistix-Solutions Inc., SCI Logistics Ltd.
(including Assured Logistics & AMG Logistics),
and First Team Transport Inc. Eckler’s back-
ground includes over 30 years of experience in
the supply chain management field. His busi-
ness focuses on developing and operating high
performing supply chain outsourcing services
for companies that demand complex, high
value services. Eckler is a past chairman of the
Supply Chain and Logistics Association of
Canada and a frequent speaker on a wide range
of supply chain topics. He is also a founding
member and a director of the Centre for
Outsourcing Research and Education (CORE).
DAVID FAORO is the Director of Supply Chain
for The International Group, Inc., a $400-mil-
lion manufacturer of waxes and wax-based
industrial products. He is responsible for cus-
tomer service, purchasing, logistics and invento-
ry management. Faoro has worked in the supply
chain field for over 20 years in the chemical,
food and beverage, office products and whole-
sale distribution sectors in all aspects of supply
chain management. He has his MBA from the
Ivey School of Business and his B.Comm.
(Logistics) from the University of British
Columbia. Faoro is a past president of the
Toronto chapter of CSCMP and is a member of
the LQ Advisory Board.
KEVIN FLETCHER, Executive Vice President of
Logistics Services for Landstar Transportation
Logistics, Inc., joined the company in 2005. His
focus is the development, implementation and
ongoing improvements of logistics solutions
that deliver greater supply chain efficiency and
cost-effectiveness to Landstar’s customer base.
Fletcher is responsible for third-party trans-
portation and warehousing services, freight
under management, logistics engineering, and
logistics technology services.
Prior to Landstar, Fletcher was Director of
Transportation for Menlo Worldwide Logistics
where he was responsible for transportation
procurement and operations. He has also held
management positions for carriers in the LTL,
small package, and global air cargo arenas.
Fletcher earned his B.Sc. in Transportation
and Physical Distribution from Auburn University.
THOMAS GOLDSBY, PhD, is Associate Profes-
sor of Supply Chain Management at the Univer-
sity of Kentucky. He has held previous faculty
appointments at the Ohio State University and
Iowa State University. Goldsby holds a B.Sc. in
Business Administration from the University of
Evansville, an MBA from the University of
Kentucky, and a PhD in Marketing and Logistics
from Michigan State University. Prior to entering
academe, Goldsby was a logistics analyst for the
Valvoline Company. He previously worked for
the Transportation Research Board of the
National Academy of Sciences in Washington,
D.C. and as a research fellow at the University of
Kentucky Transportation Research Center.
MELISSA GRACEY, President of DTA Services,
learned about the logistics and transportation
industry from her father, who bought the com-
pany after acting as general manager of the
National Traffic League and part founder of
CITT. She is now full owner. Melissa studied at
McGill before entering the investment business
and joining her family business.
BILL GRAVES is President and CEO of the
American Trucking Associations in Arlington,
Va. Prior to joining ATA, Graves was a two-term
governor of Kansas.
AJAY GUPTA, CITT, the Director of Interna-
tional Supply Chain Logistics and Operations
for Sterling Agility, is an international opera-
tions and supply chain professional with over
25 years of experience in marketing, sales,
warehousing and inventory management,
customer order processing and fulfillment
operations, customer service, export controls
and compliance, and global logistics, in
multi-national and multi-cultural settings. He
has worked in India, the United States, and

Canada, and handled short-term assign-
ments in West Asia and Europe.
Gupta holds an MBA in Marketing and
Finance, as well as IATA/UFTAA, CITT, and
P.Log. designations. He is a member of Supply
Chain & Logistics Association Canada (SCL),
Electronic Commerce Council of Canada
(ECCC, now GS1), the Council of Industrial
Advisors (Gerson Lehrman Group), and a
national director on the board of CITT,
amongst other affiliations. In 2007 Gupta co-
founded Sterling Agility, a boutique consulting
firm based in Toronto, Ont.
JIM HANDOUSH serves as Co-Chief Operat-
ing Officer for Landstar System, Inc. He is
responsible for Landstar’s supply chain trans-
portation integration companies — National
Logistics Management (NLM) and A3
Integration LLC (A3i) — Landstar’s warehous-
ing, intermodal and international service
offerings, as well as national and internation-
al account development.
Handoush joined Landstar in 1996 with
more than 10 years of experience in the trans-
portation and logistics industry in the areas of
finance, administration and operations. He
has held several positions at Landstar since
being named Landstar Logistics Vice President
of Finance in 1996, including Landstar Global
Logistics Executive Vice President of Finance
and Administration and President of Landstar
Global Logistics. Handoush holds a B.Sc.
degree in Accounting from San José State
University in California.
CAMERON JOYCE, President of Accuristix (for-
merly McKesson Logistics Solutions), leads the
company at an exciting time as it begins oper-
ating under its new name and with a renewed
focus on client-centric innovation. As presi-
dent, Joyce and his team are dedicated to
advancing healthcare logistics.
Joyce is currently on the board of directors
of the International Warehouse Logistics Asso-
ciation (IWLA) and is Co-chair of the Canadian
Council of the IWLA.
JOHN LANGLEY, PhD, is the Supply Chain &
Logistics Institute (SCL) Professor of Supply
Chain Executive Programs. Langley serves as
SCL’s principal liaison with the logistics and
supply chain business communities, teaches
executive education programs, including the
Executive Masters in International Logistics
program, and serves as Faculty Director of the
Georgia Tech Supply Chain Executive Forum.
Langley received B.Sc., MBA, and PhD
degrees at Penn State University in mathemat-
ics, finance and business logistics. He joined
the faculty at the University of Tennessee in
1973 where he served for 28 years, most recent-
ly as the John H. “Red” Dove Distinguished
Professor of Logistics. Among his awards and
honors, Langley served as president of the
Council of Logistics Management (CLM), and
was the recipient of the CLM Distinguished
Service Award and the Outstanding Alumnus
Award in Penn State's Business Logistics
Program. He also co-founded the Center for
Logistics Research, Supply Chain Forum, and
Office of Corporate Partnerships at the
University of Tennessee.
He has co-authored three major texts in
the areas of business logistics and supply
chain management and has authored numer-
ous logistics-related articles, technical reports
and presentations. He is an active member of
several professional associations and serves
on the boards of directors of Averitt Express,
Inc., Forward Air Corporation, and UTi
Worldwide, Inc., and participates as an advi-
sory board member to numerous firms in the
supply chain technology business. He is active-
ly involved with business and executive devel-
opment and has extensively consulted in both
the public and private sectors. Langley is rec-
ognized world-wide for his expertise in logis-
tics and has addressed countless conferences,
forums, universities, groups, and industries.
MIKE LEDYARD is a veteran of international
sourcing, manufacture and importation of
product and tooling, especially from China and
Eastern Asia. He is an author and frequent
speaker on process measurement and
improvement, and was selected as one of the
Top 20 Logistics & Supply Chain Executives of
2001–2002. Ledyard is also a co-founder of
Supply Chain Visions.
CLIFFORD F. LYNCH, President of C.F. Lynch
& Associates, has provided management advi-
sory services in logistics since 1993. During the
previous 35 years, he was Vice President of
Logistics for the Quaker Oats Company and
President of Trammell Crow Distribution
Corp. Lynch holds an undergraduate degree
from the University of Tennessee and an MBA
from the University of Chicago. He is a certi-
fied member of the American Society of
Transportation and Logistics and is a member
the editorial review boards of the Journal of
Business Logistics, the International Journal of
Physical Distribution and Logistics Management, and
Supply Chain Management Review. He is also a
member of the Warehousing Education and
Research Council and the Advisory Council to
the Dean, College of Business Administration,
University of Tennessee. Lynch is a member
and past president of the Council of Logistics
Management and has received numerous
awards in the logistics field. He is an adjunct
professor at the University of Memphis, a fre-
quent lecturer at other colleges and universi-
ties, an author of numerous articles on the
subject of logistics and has written two books
on logistics outsourcing.
VALERIE MCSWEEN is Vice President, Eastern
Region, for Mactrans Logistics Inc., a third-party
logistics provider specialized in North American
freight transportation. She began her career 15
years ago with Speedy Transport where she was
introduced to all aspects of the LTL transporta-
tion. She also worked at Day & Ross as an
account manager. McSween earned her CITT
certification in 2004, and completed an MBA in
Transportation and Logistics in 2008 at the
Université du Québec. She has held her current
position with Mactrans Logistics for the past
three years and is the Montreal CITT Council
Chair and a Director-at-Large with the CITT
National Board of Directors.
CHRIS NOREK, PhD, Senior Partner with
Chain Connectors, Inc., has over 20 years of
experience in supply chain and logistics in a
unique combination of consulting, industry
and academia. He has consulted for
Accenture and CSC and worked for Apple
Computer, Kimberly-Clark and Office Depot.
In addition, he has held tenure track faculty
positions at both Auburn University and the
University of Tennessee.
ANDREW PAXTON, CITT, has over 20 years of
experience in the transportation and logistics
industry. He has worked for third-party logis-
tics providers and transportation users with
product ranging from consumer electronics to
insulation. He currently works in the food
industry. Paxton has been involved with the
CITT Toronto Area Council since he graduat-
ed in 1994 and served as the Chair. He has
been on the CITT Board of Directors since
2004 and currently holds the position of Vice
Chair of Development.
NICHOLAS SEIERSEN, B.Sc. (Hons.), MBA, P.
Log., is an LQ Executive Editor who specializes
in supply chain consulting, particularly strate-
gic sourcing and supply chain planning and
operations, and teaches executive development
at universities in Europe and North America.
REUBEN SLONE, Executive Vice President of
Supply Chain for OfficeMax, joined the com-
pany in November 2004 as Executive Vice
President of Supply Chain. He is responsible
for inventory management, supply chain oper-
ations, real estate, store development, facili-
ties, and indirect procurement for the compa-
ny. Prior to joining OfficeMax, Slone held var-
ious executive positions with Whirlpool,
General Motors, Federal-Mogul, EDS, and
Ernst & Young. Harvard Business Review pub-
lished two of his articles: “Leading a Supply
Chain Turnaround” and “Are You the Weakest
Link in Your Supply Chain?” Slone is co-
authoring a book based on the latter article
entitled Driving Value through the Supply Chain:
Shaping the Agenda, to be published by Harvard
Business School Press.
GINNIE VENSLOVAITIS, Director, Transporta-
tion Operations, Hudson’s Bay Company,
started her career in the U.S. Customs Clear-
ance industry. She holds her U.S. Customs bro-
ker’s license and spent many years qualifying
goods for free trade in private industry. After
moving to Canada, Venslovaitis worked in the
food industry managing the domestic and cross
border transactions for Borden Catelli. Since
that time, she has had numerous opportunities
and experiences on SAP project implementa-
tions and gained a great understanding of the
total business enterprise. In 2010 she joined the
Hudson’s Bay Company. Venslovaitis is Vice
Chair of Finance for the CITT, Chair of CITA,
and a member of the SCL. She holds both CITT
and P.Log. designations.
KATE VITASEK is a thought-leader in the area
of supply chain management and is a well-rec-
ognized authority on performance manage-
ment and performance-based approaches for
business. She is the lead researcher and facul-
ty member for the University of Tennessee's
Center for Executive Education, working in the
area of outsourcing and performance-based
approaches. She is also the founder of Supply
Chain Visions, a Top 10 supply chain manage-
ment boutique consulting firm.

Reinvention in Supply
Chain Practices
LQ: Tell us what you’re most proud of
last year and what’s carrying you over
for 2010.
Craig Callahan: In 2009, one of the
significant accomplishments of our
organization was to come out of the
recession healthier than we went in.
We are a company that is very proud of
that, because there aren’t very many
companies in this position. We went
into the economic recession in a strong
financial position with no debt; we
came out of the economic recession
with a leaner, meaner organization and
debt-free with cash flow, putting us in a
position to expand where needed and
necessary in 2010.
LQ: What’s your position on the cost of fuel? Is that worry-
ing you?
Craig Callahan: For a company like us, where over 80
percent of our revenue is generated in the trucking busi-
ness, the cost of fuel in the trucking business is the
largest operating cost. For us, both the price and the
volatility bring significant concerns. The volatility can be
extremely difficult to manage. Our customers require us,
to the extent that we can, to try to limit the volatility so
that they in turn can limit the volatility on the shelf price.
Because we are a large company, we leverage our size and
our procurement model to get the lowest per gallon cost
that we can with our suppliers.
More importantly, there are the improvements we’ve
made on the efficiencies that we have gained from miles
per gallon. Everything we do with our equipment and with
the training of our drivers revolves around two important
items: fuel consumption and safety. The advantages and the
performance that we’ve been able to achieve in the last two
years have helped us save millions of dollars. We in turn,
are able to put ourselves in a position to be more competi-
tive in the market.
LQ: Have you seen a change in the importance of the sup-
ply chain in your organization in the current economic
context?
Craig Callahan: We make our living at solving problems
in supply chain. Supply chain has gained more importance
and more exposure in most companies around the world. As
you think of all the inputs associated
with the supply chain, specifically, the
cost associated with fuel, as well as the
inventory and carrying costs, those have
leant more exposure to supply chain as a
whole. This has helped our firm to
expand our horizons around the prob-
lems we solve. It’s no longer just a point
A to point B solution our customers ask
for. Our customers are asking us to help
them provide visibility to their goods
from the factory in China to the store in
the U.S. You can only do that if an organ-
ization commits itself to technology sys-
tems and talent.
LQ: Can you give us an example of an
organization you are doing that for and
some of the impact that’s had?
Craig Callahan: I think one example
that we can look to from an import solu-
tion environment, is a major big box retailer. This particu-
lar retailer is importing thousands of containers a year from
Asia to the United States. Their current model calls for a
consolidation method to happen overseas in Asia (from a
factory to a port in Asia where it is consolidated into con-
tainers and shipped to the United States). It is then decon-
solidated in the United States and rebundled into store-spe-
cific containers or shipping boxes and shipped directly to
distribution centers.
That’s a more traditional model. Our position on that
was, rather than bring all of the goods into a deconsolida-
tion model in the United States where all of your input costs
are going to be higher, why not look at a deconsolidation
method overseas? This particular big box retailer is buying
enough goods to have one or two or three containers built
specifically for their store. Those containers leave Asia
already designed and built to land at their store in the
United States. It saves them the associated costs with hav-
ing to reconsolidate and rebuild the containers in the U.S.
LQ: What impact has that had for the customer?
Craig Callahan: In this particular model, when you look
at it from that perspective, it actually saves both costs asso-
ciated with labor and it actually saves costs associated with
how many containers that you need. In both cases, costs
savings are in excess of 15 percent on one major project.
LQ: In the drive to reduce assets that are committed to the
supply chain, more of the players are trying to push the
warehouses, the trucks, the ships, and even inventory and
A Conversation with Craig Callahan,
Vice President Logistics & Corporate Sales, Werner Enterprises
Interviewed by LQ’s Executive Editor, Nicholas Seierson
L Q ’s E X E C U T I V E I N T E R V I E W S E R I E S
Continued on page 20

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Chain Practices
LQ: How does your firm set about becom-
ing the best customer for your clients?
Jim Butts: We would look at it as an
opportunity to be the best transportation
provider or supply chain partner, depend-
ing on our role. There are a lot of things
that we have to take into consideration
when we enter into any customer rela-
tionship. One of the first things is that
C.H. Robinson is non-asset based. When
you don’t own the assets then everything
looks like a resource. The question
becomes: What is our value-add to any
customer as we are doing business with
them? Frequently, it’s our people. If the
strength of our organization is our peo-
ple, then the way that becomes real to
our customers, who we define as both carriers and shippers,
is through account management. That’s the daily care of the
customers — finding out what their needs are, their expec-
tations — and fulfilling them from an execution standpoint.
LQ: Your assets are your relationships. How do you manage
those relationships?
Jim Butts: It is based on a combination of our people hav-
ing a great understanding of the customer, their needs and
expectations, and the nuances of their business. They have a
great understanding of the customer’s industry, or some-
times a competitive position within that industry. We take
our knowledge of what we assimilate through surveying
35,000 shippers and 47,000 asset owners, in terms of carri-
ers, whether they’re truckload carriers, LTL carriers,
steamship lines, or airlines. We take that knowledge and
blend it in such a way that we provide some pretty unique
solutions for our customers.
LQ: The new competitive arena is innovation. What are you
doing?
Jim Butts: It’s a challenge, and we understand that all of our
customers have to have, in some way, a competitive advan-
tage or seek to establish a competitive advantage through
supply chain practices. We talked about our people being our
assets. The other asset that we bring to the table is our tech-
nology. When you take the knowledge of our people, their
understanding of the customer through account manage-
ment, and our special application of technology (depending
upon the customer situation), we feel that innovation is the
true value-add. As a service-based compa-
ny, what we’re attempting to do within the
industry is develop intellectual property.
What we bring to the table is not the phys-
ical asset to move their equipment,
although we do that through the relation-
ships that we have. The actual value-add
we have is the knowledge of the customer,
and what we understand of the industry,
and applying practical ideas. It’s ideas and
practical input that we can give to a cus-
tomer so that they can make meaningful
changes within their supply chain, and
develop a competitive advantage.
One of the things we’ve noticed is that
a leader can continuously improve and
remain competitive. But many of the cus-
tomers out there don’t feel that they are
in a leadership position; they either feel
that they are in the middle of the pack, or
some of them feel that they’re a laggard. If you are a laggard
or if you are in the middle of the pack and you want to estab-
lish a competitive advantage, you’ve got to do that through
innovation. That takes sharing of information, and a true
partnership approach, and a situation where I, as a trans-
portation service provider, need to have a good understand-
ing that the ideas and the innovation that I collaboratively
produce with you as a customer, is something that is going
to be valued by you, not only today, but tomorrow. My role is
fairly secure going forward, based upon my own perform-
ance. But I have to have an adequate reason to bring to you
the best practices that I have an understanding of.
As we talk about innovation and how we enter that
process with a customer, we must have a good understand-
ing of where the customer is; are they seeking tactical or
strategic solutions? Innovation is a challenging responsi-
bility. We’re asked frequently: “Come to us with your inno-
vative ideas.” The best way we’ve been able to do that with
customers is through a rhythm of review where perhaps
every quarter during a typical business review we’ll come
up with three or four ideas on things that we see would
really make improvements within their supply chain. If our
role is just to be a plug and play transactional provider, it’s
difficult for us to do that. For one thing, we may not have a
good understanding of the ins and outs, and the true oper-
ational scope of their supply chain. Also we look at our
ideas as something that we provide as great value to the
industry. To a certain degree we’ve got to be selective about
A Conversation with Jim Butts,
Senior Vice President, Transportation, C.H. Robinson Worldwide, Inc.

Chain Practices
LQ: Your firm provides a number of
domestic and cross-border transporta-
tion services from Canada. How have
you had to reinvent your business in the
last year or so?
Geoff Bennett: Like most Canadian
companies, we’ve had to adapt to the dol-
lar, which would certainly have been the
major change driver. From our perspec-
tive, we’re a seller of services. We found
the Canadian dollar has changed our
pricing model and our expectations in
terms of both the cost of buying
Canadian transportation in the U.S.
market and, to a great extent, our busi-
ness model, which at points in the past,
was largely a labor play on selling servic-
es to a significant percentage of our customers, who are U.S.
customers, and selling them our labor from Canada.
LQ: How have the recent changes with security and border
crossings impacted you? How do you deal with them?
Geoff Bennett: As a third party, we’re in a challenging posi-
tion. The carriers have very challenging requirements in
order to comply with the border crossing requirements. We’re
forced into managing remotely the type of provider we’re
going to bring to our customers, specifically customers who
might have signed on as North American or international
businesses, to provide either C-TPAT or the Canadian version
– the PIP Security system – and to become partners in those
programs. We, as a Canadian-based company and a non-asset-
based company, aren’t yet eligible for participation in the C-
TPAT program, though that will happen soon, but we are
members of the PIP program, which is accepted by the U.S. as
equivalent. For our customers, the requirement for them to
work with Kelron involves having us check the carriers, make
sure that they are appropriately secure and that their process-
es and their people meet the required tests. In a lot of cases,
where there might not be an absolute requirement to use a
certified carrier, we’re still providing a level of assurance that
we’ve done the required vetting and a contractualization
process with the carrier that most customers themselves
don’t have the time or the people to conduct.
LQ: You’re in a somewhat unique position as a non-asset-based
provider. You still have to compete with a lot of the full-service
providers in several aspects. How do you accomplish that?
Geoff Bennett: We have three separate
streams of business that all run relative-
ly seamlessly together. We have a very
transactional business that meets the
requirement of somebody who’s gotten
caught short. Potentially they had a reg-
ular carrier on who can’t handle the
surge in volume, or it’s a sporadic move
where a non-asset-carrier might view
that as being a preferential lane where
they’d want to commit to having avail-
ability all the time.
We have a business where we act very
much like a carrier to the customer — in
many cases these might be Fortune 1000
organizations with a very predictable
requirement to move product between
production and warehouse or warehouse
and customer, on a very predictable time-
line. We would provide the same or bet-
ter service and meet or beat the carrier cost in order to be
awarded those lanes.
Then we have engagements where we’re a transportation
management organization where we handle all of the freight
requirements for that customer for a particular entity or for
the whole organization.
LQ: How do you deal with capacity constraints? Obviously there
has been an ebb and flow of over and under capacity at various
times, depending on what the U.S. economy is doing.
Geoff Bennett: Clearly, we need to understand what is
actually driving the operator of the equipment. As the mar-
ket is changing a lot right now, that’s much more of a real-
time process. In the last five years, up until what we thought
was a capacity surge four years ago, generally I could get a
good read on what the carrier was trying to accomplish.
Generally that would be relatively consistent. It would last a
while — it wouldn’t be a month-to-month change. Right
now, because of the draw down on inventory that we had
over the last year and a half, we’re seeing a big stretch in
terms of everybody building inventory back up. Nobody
wants to get caught short when the customer goes to the
store and they don’t want to be caught without product.
We’re getting surges that are very unpredictable. The carri-
ers who haven’t really kept all of their equipment running,
or let some of the older stuff go and haven’t replaced it yet,
are finding that challenging. They’re adapting by deciding
what lanes make the most sense for them — where can they
get the least amount of empty miles, where can they get the
A Conversation with Geoff Bennett,
President, Co-Founder, Kelron Logistics
Interviewed by Cameron Joyce, President, Accuristix

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Reinvention in Business
Executive Exchange
LQ: Jim, you’ve been in the industry
for quite a long time. I hear there are
some changes for you. Could you tell
me about them?
Jim Eckler: It’s been just about 15
years that I’ve been CEO of SCI Group.
We’ve had a great track record and a
great run. But it’s also time for me to
pass the torch and to move on. So I’m
shortly going to be moving from being
CEO to being non-executive vice
chair. I’m looking forward to seeing
some fresh blood, but at the same
time for me, I’m going to be looking
back at my years as CEO of a logistics
company and start to move into an
advisory role for other firms in the
area of logistics and outsourcing — which also gives me
an opportunity to take a look at the industry and perhaps
comment on it.
LQ: We’ve been talking a lot about innovation. What is the
state of the logistics industry today?
Jim Eckler: To begin with, I’m concerned about the
logistics services industry. If I take a close look at the
published industry data in detail, I see a year-over-year
decline in the annual growth rate for the industry, which
says that the 3PL industry has reached a mature state.
In the life cycle of an industry, when maturity occurs,
you have to reinvent it. Otherwise the business will die.
Without reinvention, this is a real possibility. We have
to take a look at why that’s happening. I think that one
of the big issues for the industry is insufficient innova-
tion in the industry.
LQ: What’s the state of innovation in the logistics servic-
es today?
Jim Eckler: Unfortunately, it’s not nearly as good as it
could be or should be. There’s a big gap here. There are
some challenges. If I take a look at true innovation in the
logistics industry, there haven’t been a lot of fundamental
innovations that the 3PL organizations have created them-
selves. While there have been many innovations in the sup-
ply chain field and new IT, new capital equipment, continu-
ous improvements in quality initiatives — these are initia-
tives and innovations that the clients could create as well as
the 3PL. So you have to look at what the true value-add that
the 3PL will bring — what’s its unique
differentiator? I’m not seeing enough of
that. It is concerning. There have been a
few innovations, but not anywhere near
where it should be. When a company
chooses to outsource its logistics activi-
ties to a 3PL, what in fact they’re doing is
asking that 3PL to take up the mandate
of innovation on behalf of the client
organization. If that’s the case, then they
need to really be pushing and developing
a lot of new and innovative things that
the organization itself couldn’t have
done on its own.
LQ: What, in your view, is restricting
the innovation in these 3PLs?
Jim Eckler: There are some real
structural constraints to that innova-
tion, and that’s concerning. One of the
biggest structural constraints is the
conflicted motivation that exists in a typical logistics
service relationship with its client. A logistics provider,
if on its own, goes out and introduces an innovation
that’s going to improve productivity. If they’re successful
with it, guess what’s going to happen? Their revenue is
going to go down. As their revenues go down, their mar-
gins go down. Shareholders of these logistics companies
don’t want to see that. So the motivation of a logistics
company to actually innovate, and thus reduce its rev-
enue and reduce its margins, is not there. These are
called perverse incentives and we need to find a way to
overcome that.
Another constraint that we’ve seen is the fact that most
of these contracts are long-term. Sometimes the compla-
cency factor sets in. It certainly shouldn’t, but it does.
There’s a third issue that comes in as well. It’s the lack
of willingness to take risks. The logistics industry is not a
high-margin business — it’s very low margin, and the
industry stats prove that. In a low-margin business, there’s
not a lot of latitude to take risks because it means that
you’re perhaps going to fail sometimes. You need to have
that ability to take risks. Most companies have not been
very innovative because of an aversion to risks. We need
to find a way to change that.
(This interview is an abridged and edited edition of LQ’s
Executive Insight Interview Series, held on June 10, 2010,
at the Toronto Board of Trade’s Country Club.)
A Conversation with Jim Eckler,
President, Eckler Associates and former President and CEO, SCI Group Inc.
Interviewed by Melissa Gracey, President, DTA Services, and LQ Board Member

LQ: What initiatives does your firm use
to develop talent with a combination of
supply chain management (SCM) and
information technology (IT) knowledge?
Do you expect the appropriate talent to be
developed through universities or is your
firm using unique career paths to devel-
op the appropriate combination of skills?
(David Closs, PhD)
Jim Handoush: Landstar has experi-
enced positive results with recent grad-
uates of logistics and supply chain man-
agement programs. Due to the increas-
ingly critical role that technology plays
in SCM, universities recognized this gap
and made changes to their core logis-
tics/supply chain curriculum. While
some schools relied on more traditional
methods of study, others employed vari-
ous technology applications to provide
students with a hands-on approach to
supply chain design and optimization.
Overall, I feel that students coming out
of logistics/supply chain programs today
are much more proficient in supply
chain technologies from a practical as
well technical standpoint than their
predecessors.
LQ: A combination of retiring baby
boomers and recession‐induced layoffs has
caused the collective knowledge of these
employees to escape from their respective
organizations. Is there a fear among ship-
pers that outsourcing supply chain IT serv-
ices will create a further loss of supply
chain knowledge? (David Faoro)
Kevin Fletcher: I don’t necessarily feel
there is a fear among shippers, but rather
a situation where shippers are ration-
alizing what makes the most sense for
their respective firms. Some may feel
that supply chain technology is a core
competency and competitive advantage
they want to keep in-house. Others do
not see this as a competency and in
some cases even see it as a weakness.
These firms recognize value in shed-
ding the costs and responsibilities
associated with keeping it in-house
and outsourcing these services to a
3PL such as Landstar or a technology
provider that affords them attractive
and cost-effective solutions.
LQ: Given the majority of shippers
use internal supply chain applica-
tions, do you think one of the reasons
could be a perceived lack of flexibility
and customization in 3PL IT service
offerings? If so, how do you change
this perception or is this perception a
reality? (David Faoro)
Jim Handoush: While I think this
perception may have had more legiti-
macy in years past, leading 3PLs have
acknowledged this gap and either
have or are in the process of develop-
ing solutions that are more flexible
and scalable. Concerning the cus-
tomization aspect, it typically comes
down to a cost-benefit decision on the
part of the shipper in evaluating the
“nice to haves” versus the “must
haves” since extensive customization
can quickly drive up cost. What may
start out as a very long list of desired
system functionality is sometimes
A Conversation with
and Kevin Fletcher, Executive Vice President, Logistics Services,
LQ’s questions for its Executive Interview Series on 3PL Excellence in Supply ChainTechnology have been prepared
by members of LQ’s Board: David Closs, PhD, Michigan State University and LQ Executive Editor; David Faoro,
Director of Supply Chain,The International Group; Clifford F. Lynch, President, C. F. Lynch & Associates; John Langley, PhD,
Professor of Supply Chain Management, Georgia Institute ofTechnology; Nicholas Seiersen, LQ Executive Editor.
Jim Handoush
Kevin Fletcher

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scaled down to essentials when the amount of time and
money required for mass customization is determined. At
Landstar, we promote the flexibility and scalability of our
robust transportation management system (TMS) solutions
as a market differentiator.
LQ: How can a 3PL ensure that as customer needs change,
their offerings change and adapt to meet customer require-
ments? I can think of examples where shippers have asked
for enhancements and were rebuffed due to cost or a lack of
resources on the 3PL’s part. (David Faoro)
Kevin Fletcher: One area to look at is what type of rela-
tionship exists between the customer and the 3PL. Is the
3PL viewed as a strategic partner and included in the cus-
tomer’s business and logistics planning processes? If so,
then the 3PL should be well aware of the customer’s chang-
ing needs and would have had multiple opportunities to dis-
cuss these requirements with them. If it is more of an arms-
length transactional relationship, then the changing need
is probably handed to the 3PL with little warning and in
some cases almost as a directive. As long as the customer
and 3PL organizations are aligned and lines of communica-
tion kept open, then the changing needs should come as no
surprise and potential resource and cost requirements have
at least been initially discussed. When very little notice is
given and a short timeline has been established by the cus-
tomer, 3PLs sometimes have no choice but to weigh other
scheduled projects in the pipeline that can impact resource
availability and cost.
LQ: I can think of a situation where a shipper contracted
with a 3PL to provide IT tools to manage a part of its sup-
ply chain. As the shipper grew through an acquisition, the
solution no longer met its needs. How would you handle
this type of situation? Would you ever tell a customer your
application can no longer meet their needs? (David Faoro)
Jim Handoush: Landstar consistently solicits feedback
and evaluates ways to deliver greater value to our cus-
tomers through enhanced technologies. It is for that exact
reason we acquired two technology-based companies in
mid-2009. These acquisitions allow us to now provide cus-
tomers supply chain transportation integration solutions in
a Software-as-a-Service (SaaS) environment. After evaluat-
ing and exhausting all possible options to meet the technol-
ogy needs of a customer, the 3PL should discuss the gaps in
their solution with the customer and determine the direc-
tion moving forward. A “smoke and mirrors” approach will
not go unnoticed for long and do more damage to the 3PL’s
reputation in the long run.
LQ: Do you believe that state-of-the-art IT capability
should be simply a cost of doing business for a 3PL?
(Clifford F. Lynch)
Kevin Fletcher: I would not necessarily say it should be
simply a cost of business for a 3PL, but rather a strategic
business decision. While there are some 3PLs that feel
their business model and strategy demand significant
investment in state-of-the-art IT capabilities, others do
not place as great an emphasis and choose to rely on more
manual processes. In addition, a 3PL may hesitate to make
a significant investment into the special technology needs
of a customer without first getting a longer term commit-
ment to the relationship. Situations also arise where there
is a very visible disconnect between what a customer
expects to receive at no cost versus what the 3PL is willing
to offer. Landstar strives to provide our customers with
leading-edge technology solutions that are flexible and
scalable, deliver improved visibility, offer greater efficien-
cy through automation and drive supply chain savings, all
in a cost-effective manner.
LQ: What are some of the “keys” to successful relationships
between 3PLs and their customers in relation to IT needs?
What are some of the reasons that may be responsible for
the lack of success in some instances? (John Langley, PhD)
Jim Handoush: As the key component to supply chain
planning and execution, IT can be viewed as the major con-
tributor to the overall success or failure of the relationship
between a 3PL and a customer. Both organizations must be
closely aligned, share common goals, maintain an open flow
of communication and be willing to collaborate. If there is a
lack of trust or flexibility on the part of either party,
progress will be greatly diminished. Customers look to 3PLs
as their “experts” in this field, and as such, expect 3PLs to
be forward thinkers and innovators when it comes to IT
enhancements and value creation. Relationships become
strained when a customer feels that their 3PL is not meet-
ing their expectation as it relates to bringing forward new
ideas and solutions to drive supply chain efficiencies. Also,
integration, access to data and the cleanliness of that data
is paramount to develop meaningful and timely key per-
formance indicators (KPIs) and performance reporting to
effectively manage the business.
LQ: What steps are you taking as a 3PL to better respond to
your customers’ IT needs? (John Langley, PhD)
Kevin Fletcher: First and foremost, we place great
emphasis on our customers’ input. Listening to and being
attentive to customer feedback gives us insight to not only
their short-term needs, but longer-term strategic direc-
tion. Our 2009 acquisitions allow us to provide web-based
IT solutions that are highly configurable and easily imple-
mented, from basic transportation to very complex enter-
prise level supply chain order management. These solu-
tions reduce total supply chain cost and improve business
processes through optimization and automation in a real-
time operating environment for shippers while also afford-
ing greater visibility, business intelligence, and KPI/per-
formance reporting. Customers can choose to purchase
only the technology on a subscription basis or elect to have
Landstar also perform the execution. Our customers have
come to expect us to bring new solutions and technologies
that allow them to operate their supply chains more effi-
ciently and cost-effectively which ultimately makes them
more competitive in their particular market.
LQ: Looking ahead into the next three to five years,
what do you feel will be your customers’ top priorities in
terms of IT needs where 3PL involvement will be helpful?
(John Langley, PhD)
Jim Handoush: In general, I would say that customers
will place greater emphasis on web-based technology that
allows them to reduce total supply chain costs and improve
overall business processes through optimization and

The New Supply Chain
Agenda: The Five Steps
that Drive Real Value
LQ: The recession has been a really
tough time. Tell us how you’re working
to become the customer of choice for
your suppliers.
Reuben Slone: OfficeMax has been in a
turn-around mode since April 2006. We
completed our turnaround in March 2010.
We have been very reliant on our suppli-
ers to help us fix our business. The reces-
sion allowed us to put that cooperation
on “steroids.” The economic pressures
became all that greater — our suppliers
felt those pressures, as did we. There was
a mutual understanding that if we worked
together we would both survive the storm;
if we worked in a confrontational way,
we would both suffer, or perhaps one of us could disappear.
LQ: This sounds like common sense. Why isn’t everybody
like that?
Reuben Slone: I think it’s a problem of perspective. You have
to have a view of the longer term, and you have to have trust.
If the trust hasn’t developed or doesn’t have reason to exist
between the customer and supplier, then it is impossible to
collaborate. When that trust is gone, the parties have to dis-
solve the relationship. Or, if it’s been attacked, but not com-
pletely gone, then you have to figure out how to rehabilitate it.
LQ: Could you give us an example of what might have been
a home run?
Reuben Slone: Let me give you a customer example with
Boeing. We are one of approximately 14,000 suppliers to
Boeing. We won their Supplier of the Year Award in 2009 in
in-direct. They spend billions on in-direct procurement and a
tiny fraction of that they spend with OfficeMax. OfficeMax
and our predecessor company, Boise Office Solutions, has
been a supplier to Boeing for over 45 years. We won this
award because we collaborated with Boeing using lean tools
to both reduce costs and improve the sustainability profile of
Boeing. We implemented a returnable totes program as well
as a managed delivery program that reduces the number of
truck deliveries to Boeing, thereby reducing their carbon
footprint without deteriorating product availability.
LQ: It sounds like you are putting a lot more into those
relationships. How are you finding the resources to do that?
Reuben Slone: From a business perspective, you need to
find out who are your best and less desirable customers.
Basically, the customers where the sup-
plier creates the greatest value for both
parties are the supplier’s best cus-
tomer. A good way to determine this is
to calculate the economic profit of each
of your largest customers. Once you
know this, it is simple to determine
where to invest the people into which
customer relationships.
LQ: You mentioned a number of times the
financial sustainability risk — it could also
be commodity price risk, or supply risk on
commodities in short supply. How does
your firm mitigate risk in the supply chain?
Reuben Slone: Supply volatility is a
risk that we must manage as a customer.
We usually manage this through a form of
redundancy. For example, we have identi-
fied critical SKUs to our business. A
plausible event that might occur is a
typhoon that paralyzes the Pearl River
Basin. We have identified key SKUs where we have dual
sourcing that spans different continents where those SKUs
are primarily imported from China out of the Pearl River
Basin. In the case of a tornado or a hurricane in the U.S., we
have redundancy between our customer fulfillment centers.
With regard to Katrina and New Orleans, we were able to
leverage our fulfillment centers in Atlanta and Orlando to
support Louisianna. We have some of the largest property
insurance companies in the United States as customers. We
were able to very effectively support them in the hurricane-
ravaged areas so they could quickly set up claims locations
for their customers.
LQ: We have talked about work with the best customers,
making room for innovation in the relationship, managing
risk and who owns what risk and how to deal with this. What
are your final thoughts to share on value of the relationship
in businesses?
Reuben Slone: I would say the most important thing to
build a truly collaborative relationship is how you build
trust and establish a system for managing the relationship.
It goes back to understanding that relationships between
companies are relationships between people. The rules
about how you build or destroy a relationship between one
person and another are often similar to the relationships
between companies.
Executive Insight Interview Series, held on June 10, 2010, at
the Toronto Board of Trade’s Country Club.)
A Conversation with Reuben Slone,
Executive Vice President, Supply Chain, OfficeMax

automation. These solutions will include multiple segments
of the overall supply chain in a real-time operating environ-
ment. Key facets of these solutions will include material
order management, dynamically optimized network plans,
execution of transportation orders, payment to service
providers, and reporting of critical business intelligence in
a multi-lingual, multi-currency environment. I also antici-
pate an increased dependence upon integration as integra-
tion platforms become more and more flexible. I expect a
broader acceptance of IT on a subscription or on-demand
basis for a number of reasons that are making it more
attractive and cost-effective. Customers will continue to
place significant value on a 3PL’s ability to provide real-time
supply chain visibility, deliver innovative and scalable solu-
tions that are also flexible, and afford timely and accurate
KPI/performance reporting to better manage the business.
Ultimately, a 3PL’s involvement will only be helpful if the
business and IT communities of the customer and 3PL are
strongly aligned.
LQ: In the future, do you see 3PLs developing more of their
own software and IT, or do you see them relying more so on
the commercial sector? (John Langley, PhD)
Kevin Fletcher: I see it being a combination of both.
Some 3PLs see this as a core competency and are very
comfortable developing their own IT solutions in-house
and keeping the resources needed to enhance and main-
tain their systems. Others may not feel as strongly about
their internal capabilities and choose to rely more on the
commercial sector for their expertise. I’ve also seen some
cases where the commercial sector was used instead of
the 3PL’s existing in-house IT department specifically to
support a speed-to-market strategy. In general, it boils
down to a build versus buy decision based upon the 3PL’s
cost-benefit analysis.
LQ: To what extent are contemporary technologies such as
“cloud computing” relevant to your current and/or future IT
plans? (John Langley, PhD)
Jim Handoush: Contemporary technologies such as
“cloud computing” are very relevant to Landstar’s current
and future IT plans as evidenced by our 2009 acquisitions.
These solutions have a cost, speed, and ease of implemen-
tation advantage over traditional software that must be pur-
chased, installed and maintained. Contemporary technolo-
gies must be viewed as viable solutions given the trends of
expanded broadband capabilities, global IT hosting centers,
new and more powerful server technology and software,
worldwide acceptance and usage of the Internet, and the
availability of inexpensive PC hardware.
payment terms off to third parties. Is there anyone who is
going to want to own those assets and how are they going
to make that work?
Craig Callahan: We’re certainly a part of that strategy.
When we look at our asset networks, our number of trucks
has decreased from a high of 9,100 to a current number of
7,300. So we’ve gone through a significant right-sizing of
our own fleet. From a capacity perspective, although we
don’t have that capacity to offer on our own assets, we cer-
tainly try and gauge outside trucking companies through
our brokerage model to bring in that buffer capacity to offer
to our customers. So to answer the question — we have
7,300 of those assets and that’s because we want to. We
don’t want to own any more than that. Recent history has
indicated that that’s a losing proposition because you find
yourself oversized and underleveraged.
LQ: Isn’t that just pushing the problem one arm away?
Craig Callahan: I don’t think so. The way we see it,
we’ve got very good relationships with many of our third-
party carriers. We’re a big, well-known organization that
does business with many of the Fortune 100 companies.
Some of the smaller carriers would never have that oppor-
tunity to engage with customers of that size — they can
through us. We are truly taking these Fortune 100 compa-
nies’ capacity that they otherwise wouldn’t have exposure
to or wouldn’t want to.
LQ: Do you see the same thing happening with risk on the
supply chain, pushing it off to third parties?
Craig Callahan: When we think about third party, we
think about the work we do in outsource contract logistics.
In many cases, what our client may see as risk, we see as
reward. That’s how we make our living. We would certainly
want to have a conversation with our customers on how
they would want to insulate themselves from that risk. If
you think about the business that we’re in, in transporta-
tion, and if you think about the liability cost associated with
running a large fleet, a fatal accident, for example, is a real-
ity that we live in. Most of those events are going to come
with five-, six-, seven-million-dollar price tags. If you are a
retailer or a manufacturer running a private fleet, do you
really want to expose yourself to that type of liability? If you
are a carrier, and that’s how you make your living and you
are the experts in that specific area, then you are best posi-
tioned to insulate yourself from that risk and take that
responsibility and risk away from your customer.
LQ: We’ve just seen one of the worst years in the memory
of today’s leaders. Are there any lessons that we can take to
try and bust the old business cycle and try and keep supply
chain improvement on a path of continuous improvement?
Craig Callahan: I think if there’s anything that can be
learned, as a country in general, we’re guilty of overspend-
ing. From Werner Enterprises’ perspective, it has certainly
helped crystallize the business plan that we have always
held. As I mentioned, we’re a debt-free organization. Being
fiscally responsible has been priority one in this organiza-
tion since the founder started it back in 1956. We’ve always
held the position that we will take calculated risk, but at the
same time, we don’t want to put ourselves in a situation
where we no longer have leverage. In going forward, we
plan to even use a more conservative strategy so that we
can remain financially sound and debt-free and to continue
to be in existence for the next 50 years.
Executive Insight Interview Series, held on June 10, 2010,
at the Toronto Board of Trade’s Country Club.)
Continued from page 8

where we bring that information and how is it used within
our customer portfolio.
LQ: Can you give us an example of something you’re really
proud of?
Jim Butts: There are numerous case examples, for
instance, a blending of transportation modes, expedited
stack train service, having steamships skip ports using fruit
boats. It’s always a blend of what that customer is looking for,
what the specific requirements are, and what the relation-
ships are that we are able to plug into effectively to make an
improvement within their supply chain.
LQ: It has been suggested by one pundit at today’s sympo-
sium that 3PLs are not always innovative leaders. What
would you say to that?
Jim Butts: I think it depends on who you ask. If you ask
people who are looking at the industry as a whole, then
you’re going to have trouble finding examples, because it is
difficult, based upon the differences within each customer’s
supply chain to have what you would call an aggregate inno-
vative solution. However, if you look at specific industries,
there are examples, particularly specific customers, which is
what we focus upon. How can we help this customer through
innovation, through creativity, through the application of
practical ideas and our technology; how can we help that cus-
tomer establish a competitive advantage? Frankly, it wouldn’t
be our role within the industry to take credit for an innova-
tion solution, because we believe in a collaborative perspec-
tive. You want the customer and the people within the organ-
ization that had to take responsibility to usher the ideas in
and to get all the credit for the results.
LQ: Have you succeeded at bringing external ideas in? What
are the challenges and some successes you’ve had?
Jim Butts: When we talk to customers about innovation and
setting the stage within their organization so that innovation
is welcome, we often learn that there are only very specific
areas where innovation is going to be welcome. Sometimes it’s
a trust issue, sometimes it’s a pride issue, which reflects in
the “not invented here” perspective. What we find, in order to
be innovative, is you’ve got to have somebody within their
organization that’s going to be responsible for the results —
usually somebody from senior management that’s paving the
path for the innovation — and a process by which the innova-
tion is implemented, tracked, and measured going forward.
LQ: What are your closing thoughts?
Jim Butts: I think innovation is going to be the key value-
add of transportation providers going forward. I think, as no
employer can tell any one employee everything that needs to
be done, no organization can tell its transportation or supply
chain partners everything that needs to be done in order to
achieve their supply chain goals. So it’s the setting of expec-
tations, clear communication, and empowering your supply
chain partners to make decisions on your behalf, that leads
to a beneficial outcome for you. I like to compare it to a
neighborhood watch program, where your supply chain part-
ners work in such a way that they prevent bad things from
happening in your neighborhood supply chain.
highest efficiency out of their equipment, or the greatest
return on the miles that they run.
For us, we have a large carrier base that we must under-
stand beyond the larger carriers. You’re often filling an order
with somebody who’s got 20 trucks. I need to know what’s
going to motivate him and be able to bring him to the table
quickly, in the case of a demand that might not have been
there a month ago. An example for us of something that is
ongoing in terms of capacity is a club store that we do a lot
of business for as a transportation capacity provider. We pick
up all the lanes that aren’t regular and repetitive. When you
walk into that club store and you walk down the middle
aisles, they always have a change in product line. They buy
whatever they spot buy and that’s it. When that’s sold, they
don’t have any more of it. From a carrier point of view, I’m
not going to move my network around to go get that product
for two months, and then not have it again because you don’t
have another vendor in that particular location that I could
count on getting other freight from.
From my perspective, typically we know a year in advance
what is going to happen. And then a month in advance, if we
don’t have a sufficient carrier base in that neighborhood, we
will work diligently to build up our knowledge of which car-
riers are most likely, and then we dump that back into our
TMS and get ready to go.
In our world, there’s no shortage of solution providers. We’re
competing with the asset and the non-asset-based groups, from
the global 3PLs down to the 3PL on the corner. I think we’re
positioning ourselves as a broad-based niche transportation
provider in that while we’re providing domestic transportation
within North America, we’re doing it on three different levels.
And, we’re technologically enabled beyond what most providers
that offer the whole gamut of services would be. The large guys
would all have some sort of transportation management offer-
ing, and could potentially offer some solutions in a dedicated
capacity. Most of those people have a hard time getting into the
spot market. In most cases, whether it would be through my
firm or other competitor’s firm on the spot market side, they
would farm out their customer’s requirement for the spot mar-
ket requirement.
A vital element in our world is agility in business. We have
the technology interface, the key performance Indicator (KPI)
definition process, the requirements on less-than-truckload
(LTL) capacity, to have a point of delivery 99 percent on time at
retail locations within a half hour window. We’ve adapted very
effectively in that environment and I think those are some
unique attributes we provide. It is a challenge for any 3PL to
consider how to build a model that allows you to move seam-
lessly between each one of those hats with agility to meet the
needs of each customer but I feel that we do a great job of it.

How Do You Mitigate Risk
and Invest in Outsourcing
Your Transportation
Requirements?
F
ollowing one of the most challenging years in busi-
ness, the CEO of a long-time carrier invites you to meet
with him. When the pleasantries are over, he gets down
to business.The last few months have been particularly
tough on his company, and it’s possible the future of his firm
is in peril if current business trends continue.
You have been putting pressure on keeping his rates down,
as has everyone else,and it’s now known that the CEO’s trans-
portation company has been compelled, in at least a few
cases,to take on business that does not cover their costs.
Like thousands of other companies in the field,they require
a substantial rate increase across the board to keep their com-
pany afloat. How do you respond? Do you quickly end the
meeting and redirect your freight to other carriers,thereby pre-
cipitating their failure, but ensuring none of your freight gets
sequestered in bankruptcy proceedings? Do you discuss what
it will take to keep them afloat,and compute what it will cost
or require your firm to invest in their services? What conces-
sions will you try to get,and how will you sell the new deal to
your management? Do you refocus your freight with them on
lanes that have excellent economics so that they can quickly
pull out of their slump? How do you deal with the other lanes?
Do you maintain the status quo but diversify and use more
transportation providers as a result, or do you invest more in
this carrier and develop a deeper business relationship to mit-
igate risk and realize new value?
Advice from Practitioners in the Field
If this carrier is a true partner,has been a stellar carrier for my
business and provides great service, the opportunity to keep
his business afloat is definitely an important goal.Keeping car-
riers in business is good for competition and providing service
and alternatives to shippers.
Depending on the size and scope of his volume and
lanes to my overall transportation budget I would consider
the following process. The initial discussion would likely
involve a review of how the carrier found himself in this sit-
uation; could it be attributed to the economy, union con-
tracts,another customer’s bankruptcy,etc.? In other words,it
was not a result of the company’s mismanagement or poor
decisions that led to this crisis.
Once we have established a general cause, let’s look at the
CEO’s turn-around plan.I would want to see that there is more
in the turn-around plan than just asking everyone for rate
increases.What has the company done to reduce their internal
operating costs? Is the fleet the right size,have assets been sold
off or leases terminated? Have all these issues been brought
forward to the managers and even the employees and drivers
to allow them an opportunity to understand and appreciate
the situation and examine ways to reduce operating costs? If
this has been done and there is an action plan in place, and
rate increases are a part of the plan to close the gap,I feel this
carrier is likely worth supporting.
Next, I would look at what lanes can be supported with a
rate increase. Are these lanes undervalued and therefore a
rate increase is in order,or are the rates requested substantial-
ly over market value, based on benchmarking? Is there an
opportunity for me to change my business processes,delay in
loading, or time-of-day shipping to be more efficient for the
carrier and thereby reduce additional costs for his opera-
tions? What collaboration can we find to reduce his costs
without increasing mine?
Once a rate increase is determined to be appropriate, I
would calculate the financial impact to my overall transporta-
tion budget based on the proposed volume and the new rate.
Could this increase be offset by other cost savings initiatives
that I have in place and is my total budget still intact? If so, I
have no obligation to senior management to discuss a specific
lane rate increase.
Another avenue to explore is the aging of invoices. If my
payment terms were 30 days, would shortening payment
terms to 15 days change any cash flow or bank obligations
for the carrier? I would expect to have monthly reviews with
the CEO via a quick phone call meeting to assess his current
situation. I would ask my company’s receivables group to
monitor the Dun and Bradstreet reviews on a monthly basis.
In the fullness of disclosure,I would also advise that this sit-
uation is under high scrutiny and I will be looking for a
You’re meeting with the CEO of one of your stellar
carriers. The CEO has some troubling news to share;
it’s crunch time and they need to renegotiate their
contract with your firm. What’s your best course of action?
CASE STUDY

back-up carrier to be in place in the event of a complete
failure. Potentially, I am putting my company at risk and I
want to be assured there is full visibility for both parties.
I would want to begin by knowing what it would take to keep
them going and ask about the root of their financial problems.
Why are they in financial trouble? Is it mainly due to cus-
tomers paying below market value or are there other factors? I
would also ask the CEO where we rank as a customer and who
his key customers are. I would ask for a financial guarantee. I
would then explain that I need to review with our manage-
ment team and will set a future meeting date after our manage-
ment team’s review of the circumstances.
The CEO has likely been upfront with me in this situation,
but I need to verify the facts by talking to some of the other key
customers and performing a credit check on the carrier. I
would review my carrier base and verify if the carrier is being
paid below market value. If this is true, then there is a strong
case to grant a rate increase.If I am a smaller client I need to
know if other clients are going to do the same, otherwise the
impact of my increase will be negligible.
If I have established that we are a major client of the carrier,
we can likely grant an increase (but not overpay), and if the
CEO will put up a bond I would probably present to the man-
agement team — and make a compelling case as to why we
should continue to do business with this carrier and work to
establish a stronger business relationship.
Ajay Gupta, CITT,
Director of International Supply Chain Logistics
and Operations, Sterling Agility
This is a tough business situation to be in.First,I would want to
develop a deeper understanding of where the carrier CEO is
coming from,including whether the situation is close to being
salvageable or near bankruptcy.This is important in order to
assess my business risks.
My primary inclination is to assess what is needed to keep
them afloat and proceed to work with them as a true partner.
So, I would consider a rate increase — a negotiated one —
while being mindful of a pricing arrangement that is sustain-
able in the market.If this carrier cannot make a living at the rate
I pay them,chances are neither can any other carrier.
Any rate increase agreed to would be time limited, with a
clear understanding of re-visiting the pricing to current and/or
more competitive levels.
In return, I would ask as to what the carrier would do to
work with us in order to streamline processes and reduce costs
and improve efficiencies for both of us, thereby lowering the
costs for both parties — in the short-to-medium term.
Splitting the loads/lanes should be the last option;it is not an
optimal solution for either the carrier or our firm,in my opinion.
In parallel, with these steps, I would likely create a mon-
itoring mechanism; a team consisting of Finance, Opera-
tions, and Procurement (and, possibly, Customer Service)
would be charged with keeping a close watch on the car-
rier’s performance, reporting regularly and raising any red
flags in short order. Also, I would initiate, in parallel, the
process of assessing alternatives and coming up with a
focused risk-mitigation strategy.
Valerie McSween, CITT,
Vice President, Eastern Region, Mactrans Logistics Inc.
Every carrier has developed core lanes for which they seek to
balance the inbound and outbound flows with the objective to
reduce empty mileage.With excess capacity consequent of the
recent economic downturn, carriers may have been tempted
to take on any business opportunity, outsourcing the volumes
that they could not handle to other carriers afterwards.
As a first step,we should go through each lane with the car-
rier to determine which movements are profitable for them.A
benchmark comparison should be completed for the lanes
requiring a rate increase to determine if they are undervalued
or well above the market rates,which would initiate a diversifi-
cation of our volumes amongst other transportation service
providers.In removing some of our volumes from their trucks,
we should also consider our carrier’s key lanes to determine if
we have other movements, currently handled by other trans-
portation suppliers,that we could allocate to their operations.
Measuring each carrier’s core competencies can be a diffi-
cult and tedious task.Before spending an important amount of
time meeting with several other transportation firms,we should
consider outsourcing the transportation selection function to
an expert in the field. An experienced third-party logistics
provider will know precisely the strengths and weaknesses of
transportation providers and have carrier profiles for those
who specifically meet our needs.
If we are dealing with LTL shipments,in addition to knowing
precisely which lanes each carrier seeks to increase freight vol-
umes on, a third-party logistics provider will also have the
knowledge and expertise required to determine which trans-
portation firm specializes in smaller and/or larger LTL orders,
for each of our lanes.For freight that cannot be cross-docked,
they will also offer reduced pricing by combining with other
clients’ freight, thereby offering volume economies on direct
drive services without the costly truckload pricing.
Outsourcing our transportation function to a strong 3PL,
whose core business is transportation, will enable us to profit
from the strength of each individual carrier.It will also allow us
to benefit from a volume economy,a single invoicing process,
superior customer service and the flexibility that comes with
not being restricted to a specific fleet of equipment.
A professional 3PL will encourage us to pursue business
with our current carriers, if it makes business sense to do so.
Our carriers will also profit from the third-party operations who
will work with them to increase freight volumes on lanes
required to obtain a balance and reduce empty mileage.
This CITT column has been prepared with insights from members of CITT’s
Board: Ginnie Venslovaitis, Director, Transportation Operations,
Hudson’s Bay Company; Andrew Paxton, Vice Chair Development,
CITT Board, Ajay Gupta, Director of International Supply Chain
Logistics and Operations, Sterling Agility; Valerie McSween, Vice
President, Eastern Region, Mactrans Logistics Inc., and LQ’s Executive
Editor, Nicholas Seiersen.

NASSTRAC CORNER
ADMITTEDLY,GOOD NEWS seems to be
in short supply. Unfortunately, change
for the better seems unlikely even after
the elections. If Republicans take con-
trol of the House, the Senate, or both,
they are unlikely to be more successful
with their agenda than Democrats were
when they were in the majority.
The main problem lies with the
need, rarely seen in the past but com-
mon today, for 60 votes to enact bills in
the Senate. This requirement, based on
increased threats of filibusters, is bad
enough, but the problem is compound-
ed by the ability of a single senator to
block action through an anonymous
“Hold.”Time after time, bills enacted in
the House have died in the Senate.
If legislative gridlock operated only
to kill pet projects from the extreme left
and right, opening the way for centrist
legislation with bipartisan support, the
situation might be tolerable. Unfortu-
nately,centrist politicians are an endan-
gered species. Too many Republicans
refuse to consider tax increases,even if
only applied to millionaires. Too many
Democrats refuse to consider cuts in
services or programs whose effective-
ness is questionable, or which clearly
deserve elimination.
What does all this mean for trans-
portation, logistics and supply chain
professionals? Needed legislation is
likely to be postponed indefinitely.
Exhibit A is a new highway bill,
replacing SAFETEA-LU, which expired
September 30, 2009. The need for infra-
structure investment is undisputed, and
the pile of supporting studies continues
to grow. On September 23, 2010, the U.S.
Chamber of Commerce issued its
Transportation Infrastructure Index,
showing the lack of investment to be a
“major drag on economic growth.” On
October 4,a report by the NationalTrans-
portation Policy Conference, headed by
two former DOT secretaries, called for
increased funding for the deteriorating
transportation infrastructure.
However, Governor Bill Graves, presi-
dent of the American Trucking Associa-
tions (ATA), and Senator Max Baucus,
chairman of the Senate Finance
Committee,have both predicted that we
are likely to see extensions of SAFETEA-
LU through 2013, and no new highway
bill till 2014 at the earliest.Highway bills
traditionally enjoy bipartisan support,
and economic conditions in three or
four years may (or may not) permit res-
olution of funding issues that are
intractable now.
Federal Aviation Administration and
Surface Transportation Board reautho-
rization are in limbo now, and will
almost certainly not be enacted prior to
the elections this November. After that,
action during the “lame duck” session,
when Members of Congress can vote
without the threat of imminent defeat at
the polls, may be possible. However,
there is little reason to expect 2011 to
be better than 2010 on Capitol Hill.
Neither party is likely to have the votes
to impose its will on the other,and there
is no reason to expect the survivors of a
bruising,polarizing campaign to be in a
mood to reach across the aisle to com-
promise with political foes. And if
Republicans are able to pass legislation,
presidential vetoes may prevent the
bills from becoming laws.
In 2011,the 111th Congress will begin
its first session. For reasons set forth
above, legislation that requires funding
may face insurmountable hurdles. The
best we can hope for may be bills that
streamline and improve regulations and
programs affecting logistics and supply
chains. If such bills do not cost any
more and do not undermine health,
safety or the environment, but make
popular or accepted programs work
better, they may be enacted. There are
some good bills pending which deserve
a fresh start in 2011,even if major legis-
lation that is even a little controversial
must be placed on hold.
Gridlock on Capitol Hill may leave
administrative agencies free to pursue
their policy initiatives, and those of the
White House. Changes in truck driver
hours of service rules are expected,
which carrier groups like ATA and ship-
per groups like NASSTRAC are expect-
ed to oppose.New regulations on secu-
rity and safety are also likely. Members
of Congress may have problems with
these policies, but gridlock will reduce
the likelihood of effective oversight.
By John Cutler Jr.
Fall Elections Promise Worse Gridlock
Virtually all U.S. elections in “off years” (i.e., when votes are cast for Members of Congress but not
for president), lead to gains by the party not in power. In 2010, several factors appear likely to increase
losses by Democrats. These factors include a weak economic recovery, concerns about federal deficits and
the bank, auto industry and AIG bailouts that contributed to them, the rise of the Tea Party movement,
dramatic increases in campaign ads supporting Republican candidates, and gridlock in Congress.

Bill Stankiewicz Copy Of 11 5 2010 Lq16 2 Final

Bill Stankiewicz Copy Of 11 5 2010 Lq16 2 Final

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