newsworthy
“We can’t talk out of both
sides of our mouth anymore”
HE DIDN’T ASK FOR THE MANTLE, BUT A CASE CAN BE MADE THAT
Tom Carpenter, director of North American logistics for giant International
Paper Co. (IP), has become the conscience of the nation’s shippers.
At the Council of Supply Chain Management Professionals’ (CSCMP)
2010 Global Conference in San Diego, Carpenter was asked if shippers
should be taken to task for using the economic downturn and truck overca-
pacity to beat up carriers over pricing. He replied that “if the marketplace is
giving us [excess capacity at low rates], we have a fiduciary responsibility to
bring some of it back.”
At the 2011 CSCMP conference, Carpenter’s comments took on a more
strident tone. “The shipping community has done a good job of managing
our carriers’ margins,” he said with unmistakable sarcasm.
Big shippers like IP are tough negotiators
with high expectations, and are accustomed to
demanding and receiving superior service at
low rates, Carpenter said. But in a world of
shrinking capacity, a diminishing supply of
qualified truck drivers, and escalating truck life-cycle and regulatory compliance costs, the days
of shippers’ having it all are fast disappearing,
For shippers, what lies ahead could be as challenging as what Whittaker fears.
From 1980, when the trucking industry was deregulated, to the year 2000, the
market experienced price deflation as a plethora of new players—and capacity—entered the market, emerging technologies fostered greater efficiencies,
and operating costs held relatively steady. During that period, the cost of transportation fell 65 percent in real terms, according to Noël Perry, managing
director and senior consultant at Nashville, Ind.-based FTR Associates.
The last 11 years have been the inverse of the previous 20, according to
Perry. Since 2000, fuel, labor, asset, and regulatory costs have climbed, barriers to entry have increased, and in the past 12 to 18 months, truckload
capacity has been taken out of the market. Add to that the obsession of
many shippers with maintaining lean inventories and their increasing
reliance on truckers to serve as a sort of “mobile warehouse,” and it’s clear
the issue of available capacity—and the costs of procuring it—will define
the industry for the rest of the decade, Perry said. p. 18
MHIA names George
Prest new CEO
The Material Handling Industry of
America (MHIA) has named George
W. Prest to be its next CEO. Prest will
succeed John Nofsinger, who will
retire on Dec. 31.
Prest brings over 30 years of experi-
ence to Charlotte, N.C.-based MHIA,
both in managing and owning materi-
al handling manufacturing compa-
nies, MHIA said in a statement
announcing the decision. “Over the
years, Mr. Prest has been recognized
for his volunteer leadership of indus-
try manufacturers and distributor
associations, local government, and
charitable foundations.”
Prest has served as president of the
Rack Manufacturers Institute (RMI)
and the Material Handling Education
Foundation Inc. (MHEFI), as executive
chairman of Material Handling
Industry (MHI), and as a member of
the Manufacturers Board of Advisors
(MBOA) of the Material Handling
Equipment Distributors Association.
In the statement, Nofsinger said of
Prest, “his strategic vision has been a
key contributor to advancing MHIA’s
efforts to [increase] not only member
value but awareness of the value of
material handing and logistics solu-
tions to the manufacturing and supply
chain end user community.”
Colin Wilson, MHIA’s executive
chairman, added, “George’s previous
experience as the CEO of a major
material handling manufacturing
enterprise gives him a unique perspec-
tive on the needs of both MHIA mem-
bers and end users, and will serve him
well in his new role.”
Prest said, “I am honored to be
given the opportunity to build on the
solid foundation John is handing off. I
want to thank the Board of Governors
and John for the confidence they have
in me.” ;
