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China to countries like Myanmar, Pakistan,Cambodia, and Vietnam. While that mightsolve the short-term problem, it introduces complications in the front end of theprocess—like the need to find the rightlogistics service partners in new countries.Everything has gotten a little more difficult.
QHow important is technology in meet- ing today’s challenges?A I’d say it’s critically important—partic- ularly with respect to visibility. One ofthe things customers always want to knowis when their package will arrive. Likewise,my team here wants to know when aninbound ocean container is going to gethere. Technology can provide that kind ofcrucial information.
QWe’ve talked a lot about what has changed—emerging technologies,
shifting consumer expectations, geopoliti-
cal dynamics—over the past 20 years. What
hasn’t changed?
A I think one of the fundamentals that we’ve built our organization on is thatstrategic relationships matter. If you’re ableto develop very strong long-term relationships with your service providers, thestrength of those relationships will helpyou during good times and carry youthrough bad times.
For example, I think the reason SanMarwas relatively unaffected by the 2018 trucking capacity crunch was that we had builtlong-term relationships with our serviceproviders, and they knew we were in itfor the long haul. That’s not to say wedidn’t blow up our budget, because we did.However, we did come through it prettymuch unscathed, largely because we madea conscious effort to become a shipper ofchoice.
As for how that went down, we decidedearly on that this driver shortage was a realdeal and would only get worse, so we beganworking to make sure carriers would seeus as a driver-friendly company—one thatdoesn’t waste drivers’ time when they showup at our facility. They can just drop off atrailer, pick up an empty or pick up a load,and get back out on the road.
Another part of that is letting our carriers
know that we’re going to be a good steward
of their assets—that we’re not using their
trailers for short-term storage and
that we’re looking to get those assets
back into their hands as quickly
as possible. I think those kinds of
efforts really make us somebody
people want to do business with.
QIt’s time for you to dust off the crystal ball that I know youkeep on your desk. What is the nextbig thing? What is on the horizonthat’s going to profoundly changethe way we approach logistics?
AI think one is going to be the continuing escalation of cus-
tomer expectations and the “I need
it now” mentality. I remember sit-
ting on a panel several years ago
when the subject of same-day deliv-
ery came up. I remember thinking,
“Why? Who would ever need some-
thing the same day?” And now,
we’re talking about two-hour deliv-
eries. I think the immediacy of “I
want it now” is going to continue
to drive this industry. That will cer-
tainly be one of the game-changers.
Another is going to be the complications that come with globalization. The planet feels much smallertoday than it did 20 years ago—especially for a company like oursthat now manufactures in a lot offar-away places. That will put pressure on the logistics side to drivecosts out of the supply chain andmove merchandise faster.
I think both of those challengesare with us for the long haul—notto mention shorter-term disruptions like the truck capacity shortage or IMO 2020 [the maritimeindustry’s costly new anti-pollutionregulations], which are croppingup with increasing frequency. Soyou’ve got to be nimble, you’ve gotto be flexible, and you’ve got to beready to adapt to a changing environment. If you can’t adapt, you’rejust not going to survive. n
