BEST PRACTICES FOR

Seamless Integrated
Transportation
Management
 welcome
Time for integrated trans-
portation management

W
hile freight
transportation
management

contents has historically been

one of the most critical
elements to any effi-
Best practices for seamless integrated cient and successful
transportation management 4 supply chain opera-
Few companies are putting transportation management best practices to work in
tion, in recent years it has been treated
their supply chain operations. However, when executed correctly, a transportation
management solution is an effective way to improve cost efficiency and serve evolving as a necessary cost center—an easy place
customer needs. to cut back when times got tough. Well,
those days are long gone.
Major modes join e-commerce mix 10 In today’s e-commerce/omni-channel
While last mile carriers receive much of the attention, the traditional modal heavyweights distribution environment, savvy supply
are in charge of connecting the growing web of facilities that enable e-commerce. Today,
chain management professionals are get-
all modes as well as freight intermediaries must be poised for growth and flexible enough
to keep evolving. ting the wake-up call and putting trans-
portation management best practices at
The future of trucking: the core of their strategy.
Digital transformation or all hype? 15 By establishing efficient and effective
infrastructures that incorporate advanced
If automation, optimized digital networks and changing consumer habits come to fruition
as some experts predict, it could completely upend trucking as we know it today. technology, optimization and visibility, sup-
ply chain managers are not only improving
Strategic transportation sourcing: their transportation operations, but also
5 tips to improve your position 18 helping their organizations improve pro-
With the complex economic and global trade environment pushing rates higher and ductivity while adding to the bottom line.
capacity tighter, shippers and their procurement teams are under pressure to nail down For this exclusive digital edition,
the right suppliers and transportation partners—while squeezing as much value as the editorial staff of Supply Chain
possible out of their transportation network. Management Review has curated articles
designed to help supply chain profes-
Solution showcase: LEAN warehouses simplify sionals understand the benefits of a more
complicated distribution 22 integrated transportation management
program; how the major modes need to be
Editorial Staff managed to hit e-commerce-driven service
Michael A. Levans Bridget McCrea Peerless Media, LLC levels; and how a more strategic approach
Group Editorial Director Contributing Editor,
Technology
Brian Ceraolo can help manage both cost and capacity.
Bob Trebilcock Group Publisher and Presi-
Executive Editor Maida Napolitano dent
Francis J. Quinn Contributing Editor,
Kenneth Moyes
Editorial Advisor Warehousing & DC
President and CEO
Patrick Burnson John D. Schulz EH Publishing, Inc.
Executive Editor Contributing Editor,
Transportation Michael A. Levans, Group Editorial Director,
Sarah Petrie Editorial Office
Peerless Media
Executive Managing Editor Christopher Lewis 111 Speen Street, Suite 200 Comments? E-mail me at
Jeff Berman Creative Director Framingham, MA 01701-
2000 mlevans@peerlessmedia.com
Group News Editor Wendy DelCampo Phone: 1-800-375-8015 Follow me on Twitter: @mikeleva
John Kerr Art Director
Contributing Editor,
Global Logistics

2 Ryder.com
Best Practices for Seamless Integrated Transportation Management

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 BEST PRACTICES FOR

Seamless integrated
transportation
management
Few companies are putting transportation management best
practices to work in their supply chain operations. However,
when executed correctly, a transportation management
solution is an effective way to improve cost efficiency and
serve evolving customer needs.
T
ODAY’S SUPPLY CHAIN managers face a host of theory, this process requires a calcu-
challenges when it comes to managing their trans- lated approach that targets customer
portation network. Meeting rising customer expecta- service, cost control, risk management
tions, maintaining visibility over orders and inventory and supplier management, among
other considerations.
through the life cycle of raw materials to finished goods to end
In today’s e-commerce/omni-
user, and ensuring on-time delivery are just a few of the hurdles
channel distribution environment,
that professionals are being asked to overcome in the competi- the supply chain is fraught with
tive business environment. roadblocks that include—but aren’t
The good news is that through a use transportation management prac- limited to—shorter lead times, tighter
focus on building efficient and effec- tices to transform their freight trans- delivery windows, a driver shortage
tive infrastructures that incorporate portation management operations, and the need to make more frequent
advanced technology, optimization, improve efficiencies and manage both and smaller shipments, as opposed to
and visibility, supply chain managers cost and capacity. big palletized deliveries.
can meet their departments’ goals “With the complex economic and
while also boosting profitability and Maximum value from your global trade environment pushing
productivity for their organizations. transportation strategy rates higher and capacity tighter, ship-
Over the next few pages, we’ll Effective supply chain management is pers and their procurement teams
explore those issues further and illus- about getting the right product to the are under pressure to nail down the
trate how supply chain managers can right place at the right time. Simple in right suppliers and transportation

ryder.com 5
Best Practices for Seamless Integrated Transportation Management
partners—while squeezing as much value as possible out
of their transportation network,” Patrick Burnson writes
in his recent piece on strategic transportation sourcing in
Supply Chain Management Review. “To add to the com-
plexity, logistics procurement strategies also vary by trans-
portation mode, whether truckload (TL) sourcing, less-
than-truckload (LTL) sourcing, ocean sourcing, airfreight
sourcing or multi-modal transportation procurement.”
Navigating those complexities has become increasingly
difficult in the current transportation environment, where
rising freight costs, globalization, and even cross-border
shipment challenges can all impact a company’s ability to
effectively maximize the value of their networks and sup-
ply chains.
Not only have these factors created challenges for
supply chains, but they also have affected the trans-
portation industry as a whole. To effectively meet
customer demands, for example, companies need
transportation networks that integrate perfectly with
their operations. This is a goal that’s not always easy to
attain, but companies that achieve this level of trans-
portation optimization are more than likely leading
their respective industries.
6 Ryder.com
Meeting rising customer demands
Look around at today’s transportation market and you’ll see
a lot of uncertainty. Take freight tonnage, as an example.
Over 70% of all the freight moved in the U.S.—-10.5
billion tons last year—goes on trucks, according to the
American Trucking Associations (ATA).
Yet, the transportation environment experienced a
yo-yo effect over the past year, with large month-to-month
swings. “Looking ahead, there are some positive signs for
freight tonnage,” says Bob Costello, the ATA’s chief econo-
mist. “This includes continued spending by consumers,
larger wage gains, and home construction.”
At the same time, freight rates—which have been
ticking up after bottoming out in 2015—are forecast to
continue their upward climb over the next few years. As
capacity and active truck utilization were down slightly in
2016, freight transportation consultancy FTR is estimating
a tightening in capacity and forecasting truck utilization to
be above 98% in 2017.
“The economic outlook has solidified for 2017, and freight
growth is expected to accelerate versus what we saw in 2015
and 2016,” says Jonathan Starks, FTR’s chief operating offi-
cer. “While we have reduced our assumptions of productivity
Best Practices for Seamless Integrated Transportation Management
hits to truck fleets and drivers from the regulatory environ-
ment, the acceleration of freight growth is enough to keep
utilization rates high, and climbing, during 2017.”
These and other factors play a significant role in
driving the market forces that could keep supply chain
managers from meeting their customers’ rising demands.
In their attempts to address these challenges, too many
private fleet managers, for example, base their decisions
and actions on their own internal networks. Instead, they
should be looking outside of their “four walls,” so to speak,
and explore the external factors that are preventing true
network optimization and cost savings.
“To overcome these challenges, supply chain managers
should focus on effective routing, dock scheduling, driver
management, backhauls and fleet right-sizing,” says Scott
Nemeth, group director of transportation management at
Ryder System, Inc. “In return, companies gain the benefits
of better dynamic planning capabilities, the flexibility to
manage variations in demand, and increased network vis-
ibility regardless of mode.”
Once optimized, transportation networks can also
help companies mitigate capacity changes and asset
utilization; improve business intelligence and analytics;
compare costs for fleets versus for-hire carriers; and make
better strategic decisions going forward.
Good transportation management in action
Few companies are currently using transportation manage-
ment optimization and business analytics in their supply
chain operations. In fact, a Fortune Knowledge Group
survey of more than 300 supply chain executives uncovered
that more than 70% of the respondents recognized a need to
re-evaluate their supply chain strategy. Transportation man-
agement is a good place to start as an effective solution can
improve cost efficiency and serve customers’ needs.
For example, one Florida plant nursery sought an inte-
grated transportation solution to help it manage dramatic
shifts in demand during peak season. The solution, which
was contracted to Ryder, includes a dedicated fleet and
transportation management.
The nursery ships plants to retailers in Florida, Alabama,
Georgia, Arkansas, Mississippi, and Louisiana, and its fleet
consists of a half-dozen dedicated trucks and drivers, which
is sufficient for the majority of the year. However, when
spring arrives, its capacity needs surge by 400%, as it rises to
the task of stocking retailers’ garden centers.
The nine-week peak season from March to May
accounts for nearly 80% of the nursery’s annual revenue.
Of course, all businesses have peak seasons, so a flexible
transportation network that can handle volume fluctua-
tions is imperative. For many companies, this is no easy
task, especially when deliveries must occur without inter-
ruption and on time to keep customers happy.
Before partnering with Ryder, the nursery managed its
own transportation network. It found itself running two
businesses—a nursery and trucking company. This took
time and money away from their core operation of growing
and selling high quality ornamental plants.
By leveraging an integrated transportation management
solution that incorporates a dedicated fleet, the nursery
has been able to successfully improve service levels and
cut operating costs.
Ryder.com 7
Best Practices for Seamless Integrated Transportation Management
Saving money and time
In the oil and gas industry, timing is everything—especially
when moving products and materials to and from well
sites. Your supply chain and transportation network are an
integral part of keeping your customers satisfied.
To attain this goal, a Houston, Texas based oil field ser-
vice company, conducted a cost comparison against com-
petitors and found their transportation costs were moving
in the wrong direction. As a company, they decided sup-
ply chain and transportation management were not their
core competency. In 2011, they partnered with Ryder to
improve performance across all its division.
At the time, the company had 11 carriers under con-
tract, but more than 400 in use. Rates were being negotiat-
ed at the facility level and freight bills were being manually
audited and account coded.
The company and Ryder initially focused on providing
solutions for orders flowing through SAP directly to the
8 Ryder.com
latter. Those orders were then executed with contracted
and vetted carriers at published rates—a move that imme-
diately lowered overall spend. In addition, Ryder engineers
provided them with metrics highlighting KPIs, savings and
areas of opportunity, providing much needed visibility.
With over 90% of the orders made for same day/next
day delivery, the teams targeted the decision point of trans-
portation to make better asset selection. As a result, the
company’s freight payment turn increased and its team can
see what they were paying in a specific lane for a specific
shipment—they know where and how they are spending
their money. This portion of the solution increased effi-
ciency more than 60% and led to a total cost savings of
25% to 30%.
As the partnership evolved, so did the solution. With
the control tower now fully implemented, the teams are
working together and continuing to improve the operation.
Because of the solution, shipment delivery times improved
Best Practices for Seamless Integrated Transportation Management
seven to 10 days to move the freight. A dedicated shuttle
was implemented to lower the time. What took 10 days to
deliver, now takes six and at a lower cost.
In an industry where volatility and unpredictability play
such an important role, having a supply chain solution
in place that has improved efficiency and visibility, while
decreasing costs is a strategic advantage.
In the end, everyone wins
An integrated transportation network is attainable for any
company in any industry. It requires continually analyz-
ing the transportation network to achieve the balance best
suited for each unique operation. By embracing a dynamic
transportation management strategy, as opposed to a static
or fixed plan, organizations can maximize the benefits of
significant operational efficiencies—resulting in savings.
“An integrated solution can improve operational effi-
ciencies, reduce empty miles, right-size fleets, minimize
costs,” adds Ryder’s Nemeth, “and ensure a steady work-
6 Steps to Effective Transportation Management
Following these six transportation management best prac-
tices can help supply chain managers transform their
operations and effectively overcome the challenges
outlined:
1 Develop effective baselines that can be used for
comparison to actual results. It’s difficult to quantify
progress if you don’t know where you started. You
should make it a point to understand monthly, quar-
terly, and annual performance baselines and the
accompanying network profile.
2 Utilize business intelligence tools to enable swifter
data analysis. There are many cost-effective tools
available in the marketplace that can turn “big data”
into actionable information very quickly. This will
enable your team to spend more time interpreting
the data versus data gathering and reporting.
3 Establish a four-step approach as the basis for
managing and controlling network cost and service
performance. Performance + Variance to Plan +
Root Cause = Action. Utilize Pareto charts (i.e., bar
graphs where the lengths of the bars represent fre-
quency or cost, and are arranged with longest bars
on the left and the shortest to the right).
RyderShare™ provides the ultimate in load location
visibility, tracking, and customized communications of all
transportation modes from one source. The cloud-based
solution gives you actionable analytics with dashboard
and diagnostics for on-time performance, load validation,
and customized reports. This ensures you execute on key
performance metrics and helps you plan for future shipments.
load for dedicated drivers.”
In the end, both shipper and provider achieve their
intended goals while ensuring customer demands are met.
Everyone wins.  
4 Conduct regular management reviews. When devel-
oping your weekly/monthly performance bundle for
the management reviews, the information, charts,
and dashboards that you put together should
answer the question, “So what should be the take-
away from this?” Too many times interpretation of
the information is left in the hands of the audience
with no direction from the subject matter experts.
5 Get into a “rhythm of review.” Establish a weekly
and monthly cadence for a network checkup.
Consistency of review will eliminate network
performance issues lingering for several weeks
before being addressed.
6 Partner with a 3PL like Ryder. With over 80 years
of experience in the transportation industry, across
several industries Ryder is able to leverage trans-
portation network best practices from over 20 sec-
tors and engineer a unique optimization solution
for companies. This solution combines business
intelligence, routing, equipment, drivers, procure-
ment from a network of over 2,100 approved for-
hire carriers, and administrative management to
improve efficiency and lower costs.
Ryder.com 9
 Best Practices for Seamless Integrated Transportation Management

Major
modes join
e-commerce
mix
While last mile carriers receive much of the attention, the
traditional modal heavyweights are in charge of connecting the
growing web of facilities that enable e-commerce. Today, all modes
as well as freight intermediaries must be poised for growth and
flexible enough to keep evolving.

A
S AMAZON CONTINUES its inexorable march toward
distribution and order-fulfillment dominance, logistics
managers are examining the opportunities all modal
players are promising as they build out their e-com-
merce supply chains. As a consequence, the nation’s industrial
transportation networks have been largely transformed.
According to the CBRE Group, the “The massive warehouses and DCs
world’s largest commercial real estate have sprouted from Southern California
services firm, there’s been a prolifera- to Philadelphia, clustering around
tion of warehouses and distribution metro areas that provide the combina-
centers (DCs) spanning 1 million tion of road, rail, air and sea access that
square feet or larger across the nation. e-commerce users covet,” says David
And while “last mile” carriers receive Egan, CBRE’s head of industrial and
most of the attention these days, the logistics research in the Americas.
traditional modal heavyweights are in To date, 117 such facilities were
charge of connecting this ever-growing built across the United States from
web of facilities. 2010 to 2016 for a total of 141.2 million

BY PATRICK BURNSON, executive editor

10 Ryder.com
Best Practices for Seamless Integrated Transportation Management

Ryder.com 11
Best Practices for Seamless Integrated Transportation Management
square feet—a significant increase from
the 99 facilities built between 2003 and
2009, according to CBRE data.
The markets in which the most
big-box construction occurred over the
past six years are led by Philadelphia,
California’s Inland Empire and Dallas/Fort
Worth. By way of forecast, CBRE says
the Inland Empire, Chicago, Philadelphia
and Atlanta lead the busiest markets for
on-going construction of 1 million-square-
foot DCs. Across the 10 busiest U.S. mar-
kets for this type of construction, 29 such
facilities are now underway.
Egan maintains that this trend
foretells several different things. “The
proliferation of big-box facilities under-
scores the rapid growth of e-commerce,
because these mega-facilities serve as
the backbone of retailers’ fulfillment
networks, distributing goods across
multi-state regions,” he says.
Furthermore, says Egan, develop-
ers prefer to build these big boxes in
industrial-powerhouse “metros” that offer
Total e-commerce sales via a website, by industry sector
(2015, including micro-enterprises)
Wholesale ($93.81 billion)
Retail ($47.75 billion)
Other ($33.42 billion)
Information and communication ($32.3 billion)
Transport and storage ($31.68 billion)
Utilities ($24.35 billion)
Manufacturing ($19.13 billion)
Accommodation and food ($12.67 billion)
Construction ($2.73 billion)
the best combination of exceptional trans-
portation access and close proximity to big
populations favored by e-commerce users.
“While massive warehouses aren’t purely
a phenomenon of e-commerce, the two
are closely related,” he says. “E-commerce
users typically need two to three times
12 Ryder.com
the amount of warehouse and distribution
space that traditional users do.”
That’s mostly because e-commerce
fulfillment requires more inventory,
labor and automation. According to Lexi
Russell, a senior research analyst with
CBRE, the strongest trend to watch
now is “build-to-suit,” which custom-
izes warehousing for truck, rail and
intermodal service. “The dimensions
of the warehouse are determined by
the client,” she says, “to maximize traf-
fic driven by e-commerce in the new
demand cycle.”
New air cargo hubs
The impact on air cargo operations
is already being felt by upstarts
like Greater Cincinnati/Northern
Kentucky International Airport (CVG),
which will now serve as Amazon’s
centralized hub for its newly-launched
Prime Air Cargo service.
“Amazon advised us of several fac-
tors important to them, including site
32.3%
14.0%
11.5%
11.1%
10.9%
8.4%
6.6%
4.4%
0.9%
Source: Office for National Statistics
availability and infrastructure,” says
Candace McGraw, CEO of CVG. “CVG
owns more than 7,500 acres of property,
four runways, plenty of taxiways, and
we’re a cost-effective airport. To top it
off, we’re committed to invest $5 million
in infrastructure improvements that will
assist the airport and the overall proj-
ect,” adds McGraw.
Meanwhile, it appears that the
“middle-mile” of e-commerce will also
be served by established hubs like
Dallas Fort Worth International (DFW)
Airport. This international cargo gate-
way recently began installing a cold
chain facility that will be operated by
AirLogistix USA.
Expected to be operational this sum-
mer, the new transfer facility will give
DFW the ability to precisely control
warehousing temperatures for ship-
ments of pharmaceuticals, flowers and
fresh foods. John Ackerman, executive
vice president of global strategy and
development at DFW, calls it “a natural
choice” for the AirLogistix facility, given
the airport’s location in the center of the
United States.
Aaron Ahlburn, senior vice president
and director of research for the indus-
trial property consultancy Jones Lang
LaSalle, concurs, noting that DFW
enjoys a certain geographical advantage.
He says location—as well as market
timing—is key. “Obviously, there are
broad industrial and logistics real estate
implications as e-commerce supply
chains are perfected,” he says.
Middleman in the mix
According to Brandon Fried, execu-
tive director of the Airforwarder’s
Association, implications for today’s
freight intermediaries due to the double-
digit growth of e-commerce are equally
complex—regardless of mode.
“Freight forwarders have tradition-
ally been focused on the business-to-
business supply chains, but are now
making some inroads into business to
consumer deliveries,” says Fried. “We
see this in many of our members deliv-
ering appliances, large electronics and
Best Practices for Seamless Integrated Transportation Management

other substantial-sized goods Top 10 online retailers: U.S. Intermodal imperatives

into private homes.” The Intermodal Association
Because forwarders are of North America (IANA)
Amazon 39.4%
traditionally “asset light,” they examined the rise of e-com-
can be quite nimble in adapt- merce and the future of
ing to changing e-commerce expedited intermodal at its
market needs, adds Fried. Walmart 6.7% last annual conference, and
“We are seeing this now in Apple 6.0% will likely address the issue
Staples 5.3%
the online ordering environ- Macy’s 2.4% Other 31.2% in greater detail throughout
ment where forwarders are Home Depot 2.1% the year.
Best Buy 1.9%
supplying distribution centers, QVC 1.9% “E-commerce and asso-
either the actual brick-and- Costco Wholesale e 1.8% ciated services have fueled
Nordstrom 1.3%
mortar retail outlets or e-com- ever-increasing service
merce fulfillment facilities with Top 10 online retailers: Europe expectations on the part
a wide range of shipments from of shippers,” says Derrick
suppliers to maintain their Broome, vice president
inventory,” says Fried. of intermodal for C.A.T.
Indeed, building custom- Amazon 15.5% Global, a multimodal ser-
ized solutions for complex vice provider. As an IANA
Otto 4.1%
supply chain challenges is Apple 2.4%
board member, he also
where freight forwarders excel, Tesco 2.3% notes that the mission for
Home Retail Group 1.5%
Fried contends. Unlike the Cdiscount 1.4% surface mode transport pro-
Other 67.8%
“old days” of the 20th Century, Zalando 1.4% viders will now be to deter-
E. Leclerc 1.2%
forwarders are less mode-cen- Next 1.2% mine how the marketplace
tric and more focused on actu- Shop Direct 1.2% requirement is evolving
(Littlewoods)
al solutions where the form of under increased pressure in
transportation is only part of Source: eMarketer for U.S. data; RetailMeNot, Centre for Retail Research, the demand cycle.
ibusiness and Veraart Research for Europe data
the overall logistics scheme. “For intermodal to
“The freight forwarder role in e-com- “digitized” commerce. remain in the game, intermediaries are
merce tends to support suppliers moving “Across the board, results were going to have to move light years ahead in
industrial goods—both finished and in not encouraging and many forwarders the way they process information,” says
actual components—which may or may don’t appear to be fit for a competi- Broome. “This not only speeds up busi-
not end up in the consumer goods sup- tive cyberspace presence,” says Hanke. ness, but creates a closer bond with the
ply chain,” he says. “Many sites suffer from slow speed, are shipper as transparency is enhanced.”
But while transport infrastructure not optimized for mobile devices, lack Logistics terminals that facilitate the
and warehousing is moving at warp information on their handling of digital transfer of goods between rail and motor
speed, the learning curve, as well as the customer data including information on carrier are now being increasingly co-
pace of adoption among forwarders, is cyber security measures.” located in high-density business districts
being brought into question by air cargo According to Hanke, most forwarder with facilities that can process a range of
industry experts. websites are poorly designed, and have commodities and distribution centers for
Dr. Michael Hanke, founder and a small, if any, presence on social media finished, containerized goods, notes Bill
managing director of SkaiBlu, an platforms. “This is just a snapshot of the Renicke, partner at the global manage-
e-commerce consultancy assisting cli- findings,” he says. “Essentially, if any of ment consultancy Oliver Wyman.
ents in the aviation industry, says that these companies want to be relevant for “Compressing distances in these
recent analysis of the top 50 airfreight their customers, these e-basics have to be ways could drive the development of
forwarders found them unprepared for addressed soon,” he says. new regional services, including blended

Ryder.com 13
Best Practices for Seamless Integrated Transportation Management
trains—with a mix of bulk commodity,
automotive and containerized traffic—
and more direct point-to-point services,”
says Renicke.
Waterborne worries
Shippers are rightly concerned about
the wave of ocean carrier consolidation,
but they should also consider the “digital
divide” keeping some players out of the
e-commerce marketplace.
To date, the most significant news in
this regard surfaced last January when
global container shipping giant Maersk
announced that it will partner with
Alibaba—a Chinese e-commerce pro-
vider. This endeavor will enable ocean
shippers to book space on Maersk ves-
sels through Alibaba’s booking service
called OneTouch,
According to John Fay, CEO of
INTTRA, a leading provider of e-com-
merce services for the ocean freight
industry, that gap may be widening.
“The main impact of consumer-driven
e-commerce on ocean shipping is not on
deployments and schedules, but rather
shippers’ needs for more efficient logis-
tics management,” he says.
Fay’s company recently announced
that it generated 16% growth in 2016
over 2015 in container orders, which
include bookings, shipping instruc-
tions and shipping orders. According to
Container Trade Statistics, INTTRA pro-
cessed 38.5 million container orders on
its platform, while containership sailings
in the industry rose by just 3% in 2016.
“We played a significant role in 2016
as the rate of technology and digitization
accelerated rapidly in the ocean indus-
try,” says Fay. “We believe that digitization
is now indispensable.”
NavisWorld, a biannual conference to
help port terminal operators optimize the
movement of containers with the use of
14 Ryder.com
E-commerce: dramatic shift in service sector
A new report released by the London-based think tank Transport Intelligence (Ti)
notes that the logistics industry has undergone a “transformation” with a dramatic
shift in service sector domination.
According to research contained in Ti’s latest report “Global e-commerce logis-
tics 2017,” a powerful mix of demand and supply side factors means that further
re-structuring is possible—if not probable.
“The global logistics industry is vast, both in terms of market size and the huge
numbers of people employed in the sector,” says Professor John Manners-Bell,
CEO of Ti. “It’s therefore surprising that its role in the development of the global
economy is generally overlooked.”
Ti estimates that the global e-commerce logistics market grew by 18.1% in
2016 and has forecast a 2016-2020 compound annual growth rate of 15.6%.
Low, expected and high forecast scenarios have been presented.
“E-commerce is making everything more unpredictable,” says Ti analyst Ken
Lyon. “To cope, organizations will need to react faster by breaking down functional
silos to enhance communication and reaction, use systems that support flexibility
rather than rigid process, and establish operational networks and alliances that
can respond and flex to demand,” he says.
David Buckby, an economist with Ti, observes that e-commerce volume now
accounts for 20% of DHL Express total volumes, up from about 10% in 2013.
“That’s not necessarily all international volume growth, but I reckon a good portion
of it is,” he says.
For Alex Leroy, a Ti analyst, another obvious impact is that cross-border
e-commerce is proving to be a major “shot in the arm” for airfreight. “DHL’s lat-
est report claims that cross-border e-commerce accounts for about 15% of total
e-commerce, and has an annual growth rate of 25%, with one in 10 dollars spent
on shipments,” he says.
In addition to the roles of the contract logistics and freight forwarding sectors,
the Ti report also examines the dynamics of the express parcels, container ship-
ping, air cargo, trucking and intermodal industries.
“While global macro-trends are highly important to the long-term future of these
sectors, conversely it’s the structure and competitive nature of these sectors that
has a ‘bottom up’ influence on supply chain management and hence global econ-
omies,” concludes Manners-Bell.
—By Patrick Burnson, executive editor
advanced technology, will also focus on flows from the upstream container move-
e-commerce this month when it convenes ment from vessel arrival through to con-
in San Francisco. “While the main impact tainer availability and yard management
of e-commerce to date has been around that feeds the gate and rail process.
last mile logistics and warehouses, it’s “Terminals and ports will see greater
interesting to think how e-commerce can demand for providing visibility and
link back to what’s happening in the ter- predictability to container moves for
minal and port,” says Andy Barrons, senior logistics providers and shippers,” adds
vice president for Navis. Barrons. “This in turn will drive more
According to Barrons, the new ware- automation of processes.” j jj
housing infrastructure and downstream
processes need to be reinforced with Patrick Burnson is executive editor of
accurate and near-real-time information SCMR
Best Practices for Seamless Integrated Transportation Management

THE FUTURE OF TRUCKING:

Digital transformation
or all hype?
If automation, optimized digital networks, and changing consumer habits
come to fruition as some experts predict, it could completely upend trucking
as we know it today.

By JEFF WARD, partner, A.T. Kearney ANDRÉS MENDOZA PENA, partner,

A.T. Kearney VICTORIA PISINI, senior business analyst, A.T. Kearney

W
HILE THE TRUCKING INDUSTRY outlook remains bright—the American
Trucking Associations predicts freight tonnage to grow 28.6 percent and rev-
enue a healthy 74.5 percent over the next 10 years —trucking, like other logis-
tics modes, seems to be at the beginning of a period of digital disruption.
If automation, optimized digital
networks, and changing consumer
habits come to fruition as some experts
predict, it could completely upend
trucking as we know it today.
In exploring the major industry
disruptors, detailed below, two dis-
ruptive trends are the most uncer-
tain and pose the highest impact on
the future of logistics, and trucking
in particular: changes to the regula-
tory environment and the rate of
technology adoption. The regulatory
environment is dependent upon
the decisions of U.S. policymakers;
many factors could alter the land-
scape in the next few years, such as
new political leadership or actions
taken to alleviate the shortages of
skilled drivers. Critically, the ques-
tion many ask is how will govern-
ment leaders manage the adoption
of new technologies?
Will regulators allow driverless
technologies on the road, or will new
policies slow down adoption? Beyond
that, regulations such as more active

Ryder.com 15
Best Practices for Seamless Integrated Transportation Management

monitoring of truck drivers, environmental standards that In the following section, we look closely at these four
limit emissions (and thereby force older trucks off the scenarios and how to succeed in each.
road), and free-trade agreements that alter import and
export dynamics are just a few regulatory trends that could Super highway
play an outsize role in the future of trucking. In Super Highway, widespread technology adoption and
The trucking market is also ripe for technological dis- open markets lead to a fully automated world in which
ruption, thanks in part to its reliance on a manual broker- the transportation sector is transformed. Consumers
age model. In the next few years, assisted driving in trucks embrace the digital economy, shippers benefit from vol-
to increase driver productivity and safety will become ume reductions, and driverless vehicles go mainstream.
reality; the Internet of Things might allow for greater Disruptors win the day, and the trucking industry as we
accountability and connectivity, connecting consumers know it ceases to exist. Shippers have the advantage in
and producers like never before; crowdsourcing solutions a world of increased options that alters fleet and carrier
could supplant traditional brokers; robotics and predictive options as well as the last mile delivery landscape.
analytics could change warehouse management. New entrants, such as Google and Uber or Original
Automation and “Uberization” seem imminent, even Equipment Manufacturers like GM, usher in self-driving
if the question of whether they will stick remains unan- fleets that drive productivity up and shipping costs down.
swered. And the trucking industry must worry about Access to capital and assets is paramount—without the
the threat of new, technologically advanced entrants— need for human labor, new players unburdened by out-
whether through superior software and TMS offerings or dated infrastructure will emerge victorious.
efficient vehicles and drone delivery.
Based on how these two trends shake out, our research Switching gears
points to four equally plausible scenarios based on whether Widespread tech adoption but heavy government regula-
the world leans toward vast technology adoption or not, and tion struggle to coexist in this scenario. Regulation leads
if regulations become more restrictive or not. to a consolidated carrier base and tightening capacity,
but crowdsourced solu-
tions become prevalent
and trucking maintains its
advantage over other modes
of transportation.
For shippers, this sce-
nario presents a mixed
proposition: technology
improvements improve
carrier-shipper relation-
ships through enhanced
transparency and faster
ship times, but tightening
capacity and a consoli-
dated carrier base drive up
prices and limit options.
Trucking companies face
pressures on their already
tight margins to remain
competitive. Scale, depth
of expertise, and innova-
tion will define success.

16 Ryder.com
Best Practices for Seamless Integrated Transportation Management

Traffic jam
Incremental technology adop-
tion and a restrictive regulato-
ry environment in this scenar-
io characterize a U.S. market
in which consumer spending
and economic growth are
both quite weak. The sluggish
environment hurts not only
truckers but other modes of
transportation as well; air and
sea shipments drop, as do
intermodal deliveries. Traffic
Jam scenario represents a
United States, and a global
economy, in recession coupled
with limited investments in
transportation and logistics
improvements.
This situation would affect
trucking the most heavily, but
generally it would not bode
well for any sector of the transportation industry. In this automated, responsive, customer-oriented, innovative,
operating environment, competition is fierce, and only and scalable. The right combination of these traits will
the biggest carriers and brokers can survive, given the depend on which scenario emerges, but it is clear that
tight capacity and weak demand. technological innovation, scale and access to capital
stand out as critical capabilities in almost any scenario.
Open road Whether the future of trucking is all about transforma-
This is the best-case scenario for brokers and logistics lead- tion or just hype is still hard to say. But a strategy that
ers alike, as the United States transportation system in this accounts for these critical factors will lead any company
future would be an evolved version of today’s landscape in to success. j jj

which an open regulatory market is coupled with piecemeal

and slower-paced technology adoption. A reversal of regula- Jeff Ward is a partner and the Global Transportation
tory policy around driver age and origin opens up capacity. Practice Leader at global management consulting
At the same time, automation has not come to frui- firm A.T. Kearney. He is based in Chicago. Andrés
tion as quickly as some expected, leading to slower tech Mendoza-Peña is a partner in the Strategy & Top-Line
adoption, which means that the traditional model remains Transformation Group at A.T. Kearney. He is based in
viable, as the system has little need to innovate. Trucking, Chicago. Victoria Pisini is a senior business analyst at
rail, air, and sea all benefit; those with the most to lose A.T. Kearney. She is based in New York City.
(trucking and rail, in particular) might stand to gain the
most. The key success factor will be enhanced scale and
will provide an edge in a rapidly growing market with
strong supply and demand.
Whatever scenario emerges, the successful trans-
portation company of tomorrow will not look like the
competitors of today: it will be more digital, connected,

Ryder.com 17
Best Practices for Seamless Integrated Transportation Management
STRATEGIC TRANSPORTATION SOURCING:
to improve
your position
With the complex economic and global trade environment pushing rates higher and
capacity tighter, shippers and their procurement teams are under pressure to nail down
the right suppliers and transportation partners—while squeezing as much value as
possible out of their transportation network.
BY PATRICK BURNSON, executive editor
T
ODAY, FREIGHT TRANSPORTATION
management is more than just about
price. But how do shippers put together
a transportation and supplier sourcing
strategy that will earn them the capacity that they
need at a price that works for all parties involved?
18 Ryder.com
Of course, a state-of-the-art sourcing solution
for all modes of transportation has never been a
more difficult proposition. Transportation sourc-
ing, including carrier contract negotiations, is
a complex, large-scale function, and often not
well supported by a transportation management
systems (TMS) or enterprise resource planning
(ERP) suite.
To add to the complexity, logistics procurement
strategies also vary by transportation mode, wheth-
er truckload (TL) sourcing, less-than-truckload
(LTL) sourcing, ocean sourcing, airfreight sourcing,
or multi-modal transportation procurement. In the
meantime, transportation buyers need to look at
both price and non-price bid information from car-
riers in order to make the best possible and lowest
risk decision.
Fortunately, over the past year, several industry
analysts and thought leaders have developed strate-
gic transportation sourcing tips designed to develop
collaborative solutions. Ideally, sourcing, in general,
provides the policies, guidelines and processes for
operative sourcing and purchasing—but there’s
more to it than that. So, what’s so strategic about
transportation sourcing?
Tip 1:
Install the desire to improve
According to Jurgen Anke, a logistics and research
analyst based in Dresden, Germany, logistics
managers must first have the desire to cut overall
Best Practices for Seamless Integrated Transportation Management

spending, reduce dependency on sup-

pliers with high bargaining power, and
improve security of supply with their
transportation partners.
“To get a handle on this, you have
to look at your suppliers, the goods
and transportation services you buy,
as well as the purchasing organization
and its controlling factors,” says Anke.
The elements required to make
this happen are a clear spending
analysis (who spends how much on
what?); a firm understanding of your
supplier management (from whom do
I buy what?); and the details behind
your contract management (which
framework contracts do I have, and
when do they expire?).
To manage these elements, logistics
managers must develop strategies relat-
ed to local and domestic sourcing while
weighing the risks and advantages of
global sourcing. This may mean balanc- compete by bidding against each ed with collaborative and cooperative
ing single sourcing rather than multiple other by submitting successively buyer-supplier alliances.
sourcing; or it can also mean choosing lower priced bids during a scheduled “While reverse auctions might be
just-in-time sourcing over a case-by- time period—usually only about an a useful tool for the strategic trans-
case stock procurement strategy. hour, however multiple extensions are portation sourcing process in some
“It’s important to find the right allowed if bidders are still active at the situations, it’s too often used in lieu
mix of price, security and dependency end of the initial time period. of negotiations management tech-
related to the importance and spend- The process is facilitated both by niques,” says Robert Rudzki, a former
ing on a certain good or transportation a number of converging internal and senior vice president and chief pro-
service,” says Anke. “Finding the right external developments and forces, curement officer who is now president
suppliers can then be supported with including widespread ability for buy- of Greybeard Advisors, a leading pro-
approaches like reverse auctioning.” ers and suppliers to economically vider of advisory services for procure-
communicate in real time as well ment transformation.
Tip 2: as the development of user-friendly, According to Rudzki, strategic
Reverse it…maybe Internet-based software systems to sourcing has the capability to make an
In its basic form, a reverse auction is support worldwide reverse auction impact on the four drivers of return on
an online, real-time, dynamic auction events that are either hosted by a third invested capital (ROIC) and cash flow.
between a buying organization and a party or designed to be run by the “Those drivers are revenue, cost, work-
group of pre-qualified suppliers who buying company. ing capital, and capital expenditures,”
compete against each other to win The birth and acceptance of says Rudzki. “When we work on all
the business. reverse auction tools has not been four of those things simultaneously, we
According to analysts at CAPS without controversy, however. For can have a huge impact on the ROIC
Research, a supply chain and procure- some, the reverse process is contradic- of the company. The problem is that
ment advisory firm, these suppliers tory to the long-term benefits associat- most procurement departments are

Ryder.com 19
Best Practices for Seamless Integrated Transportation Management
responsible for a relatively small slice
of the pie.”
His argument is that procurement
should be involved in all areas, includ-
ing revenue activities that can enhance
a supply chain’s responsiveness to
customers, especially in transporta-
tion. “What we’re really talking about
is transforming procurement from a
paper-pushing, back office function to
a strategic value creator,” Rudzki adds.
Tip 3:
Become a “trusted advisor”
For analysts at The Hackett Group,
a strategic supply chain consultancy
based in Chicago, the ultimate mea-
sure of procurement’s performance
is its ability to support the company’s
strategic sourcing and overall business
strategy. They add that procurement
specialists must become trusted advi-
sors to corporate management.
20 Ryder.com
“This will require some procure-
ment organizations to make far more
than incremental improvements,”
says Patrick Connaughton, Hackett’s
senior research director. “As procure-
ment’s operating budget is expected
to grow by just 1.1% this year, it can
afford to fund only a select few of its
highest-priority initiatives.”
According to The Hackett
Group’s “2016 Key Issues Study,”
virtually all companies will be fac-
ing economic headwinds and other
challenges in 2016. Finding new
sources of revenue growth remains
difficult, resulting in pressure to
protect margins through cost con-
trol—especially in transportation.
“This in turn is straining business
services functions’ budgets,” says
Christopher Sawchuk, Hackett’s prin-
cipal and global procurement advisory
practice leader. “Our study found that
enterprise ‘cost takeout’ is the most
prevalent initiative on the business
agenda, but all the priorities identified
can be viewed as defensively-oriented.
To support the enterprise agenda, pro-
curement functions must continue to
increase their own efficiency, upgrade
their talent, become more agile, and
ensure that their strategy is in line
with that of the company as a whole.”
Against this backdrop, the study
findings reveal a change in procure-
ment’s priorities from last year, when
elevating its role to a trusted advisor
was top-ranked. In 2016, reducing
purchase costs placed slightly higher
on the list. Balancing these some-
times conflicting goals will be difficult
this year, add analysts.
Elevating the role of procurement
to that of a “trusted advisor” is not
easy, Sawchuk admits. They note that
attaining this position is dependent on
a new type of talent: one comfortable
with technology, able to speak the lan-
guage of the business, and politically
adept enough to navigate complex
organizations in order to drive change.
“Exceptionally-trusted advisors
are not always the ones bringing
the most innovative or transforma-
tional solutions to the table,” says
Sawchuk. “In fact, when asked to
name the most important charac-
teristic of a trusted advisor, 77%
of respondents chose ‘consistently
delivering on the basics.’”
Tip 4:
Consider big data
When asked to identify the trend with
the greatest potential impact on the way
procurement does it job over the next
decade, the majority of the Hackett
Group study participants chose predic-
tive analytics or forecasting.
Best Practices for Seamless Integrated Transportation Management

Analysts observe that as procure-

ment’s role matures in transporta-
tion management from transactional
facilitator to trusted business advisor,
proficiency with the next generation
of analytics—Big Data—will be a
key enabler. Big Data may also add
significant value when it comes to
customer analytics, bringing more
agility to model massive volumes of
structured and unstructured data
from multiple sources.
However, Donna Wilcek, vice
president of product marketing for
Coupa, a cloud-based spend manage-
ment software company, notes that
this information overload can be over-
whelming. “Everyone from the CFO
on down the command in the supply
chain should have access to this trans-
parency, so that risk is mitigated and
costs are contained,” she says.
In fact, Coupa’s recent whitepa-
per, “Understanding the Sourcing
Organization Maturity Model,” posits
that “immature” models may not have
much of a process for project planning Tip 5: achieve 95% spend classified with
at all—since sourcing projects are Incorporate TCO 95% accuracy. And the only way to
handled on an ad hoc basis. Meanwhile, companies at the strategic achieve this is to employ technology.
“As sourcing organizations move stage of development are incorporat- “Technology is the underpinning
up the maturity ladder, projects are ing total cost of ownership (TCO) and that supports the process and people
managed centrally but still may not be other key risk factors into the sourcing so that the organization can become
planned upfront,” says Andy Chiang, process in order to effectively evaluate best-in-class,” says Bartolini.
director of product management at their supply base. “Without solid technology, sourcing
Coupa. Further up the ladder, he The best-in-class sourcing organiza- organizations can only hope to reach
adds, transportation sourcing projects tions also have a standard set of key per- the ‘reactive’ stage of development.
are often strategically planned out and formance indicators (KPIs) that include If you’re doing offline sourcing
results are reported to the CEO. things like savings goals and spend under today, then you have to strip out the
“Another aspect of sourcing maturi- management, which are continuously word ‘strategic.’” jj j

ty is the process for executing sourcing
projects and when it’s used,” Chiang
adds. “Often companies in the early
stages of development don’t even have
a standard sourcing process defined.
As companies mature they establish a
standard strategic sourcing process.”
updated and reported and drive action
from both the buyer and the supplier.
According to Andrew Bartolini,
chief research officer of Ardent
Partners, a Boston-based strategic
sourcing consultancy, the goal for
best-in-class organizations is to
Patrick Burnson is executive edi-
tor for Logistics Management and
Supply Chain Management Review
magazines and web sites. You can
reach him directly at pburnson@
peerlessmedia.com.

Ryder.com 21
 S O L U T I O N S H O W C A S E

Best Practices for Seamless Integrated Transportation Management

Effectively addressing the issues of wide-ranging and complex

distribution for companies that operate 24/7 in multiple
locations throughout the U.S. takes a holistic and custom-
made approach. This prioritizes and delivers the simplification
of supply chain processes and operational efficiency in each
one on a constantly improving basis. If managed correctly,
businesses can achieve cost savings at the same time.
LE AN Savings at the granular level help increase margins that are
particularly under pressure in industries like Food & Beverage.
WAR EH OUSE S This report illustrates how leading packaged food retailer
Conagra Brands was able to achieve both greater efficiency

SI M PLI F Y and cost savings by using a combination of supply chain and

dedicated transportation solutions by partnering with Ryder.

COM PLICATED
DISTR I BU TIO N

22 Ryder.com FLEET LEASING & MAINTENANCE | DEDICATED TRANSPORTATION | SUPPLY CHAIN SOLUTIONS
TH E OU TSOU RCI N G DI FFER EN CE
With Ryder, Conagra Brands has achieved:

29% Reduction
in Cost per Case

99%
On-time Delivery

99.6% 350+ dedicated fleet shuttle

runs from plant to a single
Order Fill Rate
distribution center per week

Improved pick productivity from 600

to 1,600 cases per labor hour

80+% of U.S. product displays

built at Ryder-run facilities

Ryder.com 23
Imagine the intricate logistics challenges that Conagra Brands
must face every day. The Fortune 500 company, with annual
net sales of about $8 billion, is one of North America’s leading
packaged food firms. It owns a wide array of brands found in
Imagine the intricate logistics challenges that Conagra Brands
grocery, convenience, mass merchandise, and club stores –
must face every day. The Fortune 500 company, with annual
with many of them being top performers in their categories.
net sales of about $8 billion, is one of North America’s leading
packaged food firms. It owns a wide array of brands found in
Conagra has produced some of America’s favorite brands:
grocery, convenience, mass merchandise, and club stores –
from Marie Callender’s, Healthy Choice, and Hebrew National
with many of them being top performers in their categories.
to Peter Pan, Orville Redenbacher’s, Egg Beaters, PAM,
Chef Boyardee, plus many more. Owning all of these brands
Conagra has produced some of America’s favorite brands:
requires that Conagra regularly keep track of millions of
from Marie Callender’s, Healthy Choice, and Hebrew National
stock keeping units (SKUs). Distributing all these products
to Peter Pan, Orville Redenbacher’s, Egg Beaters, PAM,
means funneling and delivering them in hundreds of different
Chef Boyardee, plus many more. Owning all of these brands
directions on a daily basis to meet the specific requirements
requires that Conagra regularly keep track of millions of
of consumers buying them in thousands of locations
stock keeping units (SKUs). Distributing all these products
throughout the nation.
means funneling and delivering them in hundreds of different
directions on a daily basis to meet the specific requirements
How does Conagra get all of these products where they need
of consumers buying them in thousands of locations
to be when they need to be there for the consumers who
throughout the nation.
depend on them?
How does Conagra get all of these products where they need
“It’s a process,” says Keith Furhman, Conagra’s Senior
to be when they need to be there for the consumers who
Director of Warehouse Operations. Most importantly, it’s
depend on them?
a LEAN process, he notes.
“It’s a process,” says Keith Furhman, Conagra’s Senior
“We move more than 1,000 trucks a day and we’re working
Director of Warehouse Operations. Most importantly, it’s
with many different 3PLs (third party logistics providers).
a LEAN process, he notes.
At one point, we felt it would be more efficient to deal
with as few as possible. It’s a real challenge to work with
“We move more than 1,000 trucks a day and we’re working
multiple providers and we needed to simplify that to
with many different 3PLs (third party logistics providers).
function more efficiently. But we needed to make sure that
At one point, we felt it would be more efficient to deal
whoever we partnered with could bring value to us and be
with as few as possible. It’s a real challenge to work with
a good, collaborative partner. We didn’t want a customer
multiple providers and we needed to simplify that to
relationship; we wanted a partner. And that’s why we chose
function more efficiently. But we needed to make sure that
Ryder,” Fuhrman says. “The goals were to offset the cost of
whoever we partnered with could bring value to us and be
inflation and drive incremental productivity every year.”
a good, collaborative partner. We didn’t want a customer
relationship; we wanted a partner. And that’s why we chose
Ryder,” Fuhrman says. “The goals were to offset the cost of
inflation and drive incremental productivity every year.”
24 Ryder.com
In 2002, Chicago-based Conagra began its partnership with
Ryder, giving the company management of some of its
warehouse processes. Conagra expanded the partnership in
2016 awarding Ryder the management of all of its warehouse
In 2002, Chicago-based Conagra began its partnership with
operations for the distribution of its dry products (those
Ryder, giving the company management of some of its
not refrigerated or frozen) via Conagra’s centers located in
warehouse processes. Conagra expanded the partnership in
Frankfort, Indiana; Fort Worth, Texas; Knoxville, Tennessee;
2016 awarding Ryder the management of all of its warehouse
Milton, Pennsylvania; Jacksonville, Florida; Modesto,
operations for the distribution of its dry products (those
California; and Ontario, California. Ryder also provides a
not refrigerated or frozen) via Conagra’s centers located in
dedicated transportation fleet of five trucks and 10 drivers
Frankfort, Indiana; Fort Worth, Texas; Knoxville, Tennessee;
to move products on a 24/7 basis from its plant to its
Milton, Pennsylvania; Jacksonville, Florida; Modesto,
distribution center in Pennsylvania. The trucks complete an
California; and Ontario, California. Ryder also provides a
average of more than 350 local runs a week.
dedicated transportation fleet of five trucks and 10 drivers
to move products on a 24/7 basis from its plant to its
To exceed Conagra’s goals of creating an efficient warehouse
distribution center in Pennsylvania. The trucks complete an
operation with cost savings built into the process, Ryder
average of more than 350 local runs a week.
provides Conagra with a customized supply chain solution
that includes implementing LEAN to create a culture of
To exceed Conagra’s goals of creating an efficient warehouse
continuous improvement, engaging and empowering the
operation with cost savings built into the process, Ryder
workforce, and ensuring a more effective distribution and
provides Conagra with a customized supply chain solution
operations process.
that includes implementing LEAN to create a culture of
continuous improvement, engaging and empowering the
The LEAN philosophy of leadership, teamwork, and
workforce, and ensuring a more effective distribution and
problem-solving that Ryder implements is based on Ryder’s
operations process.
values, principles, and management processes that result
in continuous improvement throughout a customer’s
The LEAN philosophy of leadership, teamwork, and
organization by focusing on the needs of the customer’s
problem-solving that Ryder implements is based on Ryder’s
customer, empowering employees, and optimizing existing
values, principles, and management processes that result
activities in the business. LEAN practices improve safety,
in continuous improvement throughout a customer’s
quality, and productivity, while cutting costs and
organization by focusing on the needs of the customer’s
eliminating waste.
customer, empowering employees, and optimizing existing
activities in the business. LEAN practices improve safety,
LEAN’s main focal point is the Managing for Daily
quality, and productivity, while cutting costs and
Improvement (MDI) board. It’s where the team lead
eliminating waste.
and supervisors meet to review results, issues, and
countermeasures that ensure customer demands are met.
LEAN’s main focal point is the Managing for Daily
Improvement (MDI) board. It’s where the team lead
For Conagra, implementing a LEAN culture means Ryder
and supervisors meet to review results, issues, and
continually engineers processes in which nearly 500 staff
countermeasures that ensure customer demands are met.
flow products through a supply chain that is custom-created
to work at top levels of efficiency. Each step is constantly
For Conagra, implementing a LEAN culture means Ryder
re-evaluated to address any loss of time or inefficiency.
continually engineers processes in which nearly 500 staff
flow products through a supply chain that is custom-created
to work at top levels of efficiency. Each step is constantly
re-evaluated to address any loss of time or inefficiency.

Each month, Conagra and Ryder review the centers’
productivity and financial metrics, and together decide where
the opportunities for improvement are and how best to make
them, says Amro Elsabbagh, Group Director of CPG for Ryder.
“LEAN is now part of our best practice,” Fuhrman says.
“It perfectly aligns with our priorities of service excellence,
cost control, and people continuity. Every year we meet
our goals.”
LEAN supports Conagra’s service excellence goal, which
is currently 99 percent, by helping the company get
customers what they ordered, on time, and in the
condition they need it across multiple locations.
LEAN also allows Conagra to control costs.
“It’s hard to make margin, and supply chain costs can eat up
that margin. Productivity and the cost of materials are part
of that,” Fuhrman says. “The improvement in those areas
with LEAN helps us offset the cost of inflation and reduce our
overall operating expenses. For years, our cost per case has
been going down every year.”
“You want to be in business with
a company that will look out for
your best interest – to look after
your business as if it were theirs.
And not be a customer. Build
a relationship with that partner,
like we did with Ryder.”
– Keith Furhman,
Conagra’s Senior Director of Warehouse Operations
Conagra’s goal of people continuity is also met with Ryder
and LEAN, he adds.
“There isn’t a constant parade of new people. People are
learning and getting promoted – they are developing their
talent. One of the great things about LEAN is that, if there’s
a problem, it’s a learning opportunity, and it isn’t repeated,”
Fuhrman says. “Our employee attrition rate is very
low, especially in important key positions that are
customer-facing.”
Conagra has become a more reliable shipper with Ryder,
he adds, and this has made a real difference with carriers.
“We always get comments about how good we are for
delivery on the dry side of the business,” Fuhrman says.
“This makes it much easier to collaborate with truckers who
know we won’t burn up their time waiting. They can depend
on the loads being ready for them and we can depend on
their willingness to get those loads where they need to be.”
Ryder.com 25
Perhaps best of all, Conagra and Ryder are true collaborators,
Fuhrman adds: Conagra has recognized Ryder within its
network with its “Best of the Best” award, and Conagra
facilities have the highest safety rating in the Ryder network.
“We challenge each other to get better and better results;
we go down the path together. Because we keep careful track
of the metrics and understand each step in our process, we
know any loss that is happening and how we can prevent it
in the future,” Fuhrman says.
Furhman also is a member of the Ryder Food & Beverage
Customer Advisory Board, which brings together an exclusive
group of thought leaders from a cross section of the sector to
consider and address the future needs of the industry.
In the near future, Fuhrman would like to roll out LEAN to
all of Conagra’s distribution sites, and advises companies
considering outsourcing aspects of their supply chain
to carefully consider the character of any 3PL they
are interviewing.
“Of course you will do the risk and reward exercise,” he
says. “But trust is the big issue. You want to be in business
with a company that will look out for your best interest – to
look after your business as if it were theirs. And don’t be a
customer. Build a relationship with that partner, like we did
with Ryder.”

About Conagra Brands

Conagra Brands, Inc. (NYSE: CAG), headquartered in Chicago,
is one of North America’s leading branded food companies.
Guided by an entrepreneurial spirit, Conagra Brands combines
a rich heritage of making great food with a sharpened focus on
innovation. The Company’s portfolio is evolving to satisfy people’s
changing food preferences. Conagra’s iconic brands, such as
Marie Callender’s®, Reddi-wip®, Healthy Choice®, Slim Jim® and
Orville Redenbacher’s®, as well as emerging brands, including
Alexia®, Blake’s® and Frontera®, offer choices for every occasion.
With an ongoing commitment to corporate citizenship, Conagra
Brands has been named to the Dow Jones Sustainability™ North
America Index for six consecutive years. For more information,
visit conagrabrands.com.

About Ryder System, Inc.

Ryder is a FORTUNE 500® commercial fleet management,
dedicated transportation, and supply chain solutions company.
Ryder’s stock (NYSE:R) is a component of the Dow Jones
Transportation Average and the Standard & Poor’s 500 Index.
Ryder has been named among FORTUNE’s World’s Most
Admired Companies, and has been recognized for its industry-
leading practices in third-party logistics, environmentally-
friendly fleet and supply chain solutions, and world-class safety
and security programs. The Company is a proud member of the
American Red Cross Disaster Responder Program, supporting
national and local disaster preparedness and response efforts.
For more information, visit ryder.com, and follow us on our
Online Newsroom and social media pages: Facebook, LinkedIn,
Twitter, Instagram, and YouTube.

26 Ryder.com ryder.com | Ryder and the Ryder logo are registered trademarks of Ryder System, Inc.
© 2017 Ryder System, Inc. Ever better is a trademark of Ryder System, Inc. | PT145642 051217