Rapid rise in shipments could pinch capacity
Larry Thomas -- Furniture Today, June 25, 2013
ATLANTA — The recession took a heavy toll on specialized furniture carriers, but a trucking industry panel said conditions could get worse if the furniture business returns to pre-recession levels.
Speaking at Furniture/Today's annual Logistics Conference, several panelists said a robust furniture business wouldn't necessarily translate into boom times for trucking companies that move their products.
"There is going to be a capacity problem if business picks up a lot," said Ray Kuntz, CEO of Watkins & Shepard Trucking. "That's why it's important to develop relationships between vendors and truckers. It could help alleviate that problem a bit."
Retailer Edward Massood, president of Thomasville Home Furnishings of New Jersey and a former trucking executive, told conference attendees that capacity problems already flared up during a small spike in business in January and February.
"It created havoc all over the supply chain," Massood said. "I'm concerned about the ability of the supply chain to respond to a (long-term) demand increase."
Kuntz and other panelists said the difficulty of making rate increases stick in the hyper-competitive trucking business often hampers profitability and restricts a company's ability to expand capacity in anticipation of higher demand.
"If a carrier is not profitable now, when business turns around, he will be out of business," Massood added.
Joining Massood and Kuntz on the panel were Jack Hawn, president of Zenith Global Logistics, and Joe Wade, president of Shelba D. Johnson trucking.
Hawn told conference attendees his company already uses electronic logs throughout its fleet, and pointed out that the system requires a much more thorough exchange of information between the carrier and vendor. Such exchanges will help truck drivers stay within their allotted 14 hours of "on duty" time each day.
"Sometimes, we find ourselves actually running out of hours at the customer's dock," Hawn said, noting that waiting time is considered "on duty" under federal trucking regulations. "The biggest issue is that ... the product is not ready to load when we get there."
Wade agreed that information sharing is the key, and said his company has invested in technology upgrades that should help keep costs down in the long term.
"One of our holy grails is to give our customers information about their shipments before they ask for it," Wade said. "If we can control these costs, we can share that savings all along the supply chain."
Wade and Hawn agreed that there still is a critical shortage of truck drivers, but both said they're hampered by restrictions from liability insurance carriers that prohibit them from hiring a driver with less than three years' experience.
"Given that unemployment is still pretty high, the fact that we've got a shortage is pretty ridiculous," Kuntz added. He urged trucking companies to either train their own drivers or provide scholarships to privately owned training schools.