2012 MATC Fall Lecture Series: Tom Clements

Larissa Sazama Author

11/10/2017 Added

11 Plays

Description

2012 MATC Fall Lecture Series

Searchable Transcript

Search:

[00:00:00.786]So, it's my pleasure to welcome
[00:00:01.998]Tom Clements, he's assistant manager of logistics
[00:00:04.081]at Werner Enterprises.
[00:00:05.659]He's gonna be giving a talk on the logistic aspects
[00:00:09.546]of running a very multinational, very large corporation.
[00:00:14.380]We're happy to have him here.
[00:00:16.292]Tom's a graduate of the University of Nebraska at Kearney,
[00:00:20.063]in their computer specialty area.
[00:00:22.677]And Tom, welcome, and we look forward to your talk.
[00:00:25.314]Thank you, Larry.
[00:00:27.491](applause)
[00:00:32.789]It's a great pleasure for me to be here at
[00:00:35.143]the Mid-America Transportation Center
[00:00:37.356]and participate in the Fall Lecture Series.
[00:00:39.859]I wanna thank Larry and all of the other staff
[00:00:42.330]for hosting me and organizing my day today.
[00:00:48.688]My presentation will cover technology
[00:00:51.720]at Werner Enterprises.
[00:00:54.234]For those of you who are unfamiliar, Werner Enterprises
[00:00:56.618]is a large trucking company headquartered
[00:01:00.096]in Omaha, Nebraska.
[00:01:01.926]But we've also got 13 other terminals around the US.
[00:01:06.149]We're a two billion dollar company, as of 2011,
[00:01:09.991]and publicly traded on the NASDAQ Exchange
[00:01:12.704]under the symbol WERN.
[00:01:17.516]To give an idea of our scale, we've got 7,300 trucks
[00:01:21.785]on the road at any given time.
[00:01:25.329]Roughly 9,000 drivers, because some of our drivers
[00:01:28.860]are obviously teams, and so two drivers to a truck.
[00:01:35.113]A roughly three-to-one tractor-trailer ratio,
[00:01:39.174]so that puts us just over 23,000 trailers across the US.
[00:01:45.711]Our trucks operate in the lower 48 states
[00:01:49.044]and to limited amounts in Mexico
[00:01:52.850]and fairly regularly on cross-border Mexican-Canadian loads.
[00:02:00.161]Beyond that, we also have 8,500 alliance carriers.
[00:02:04.834]So we do act as a 3PL and will manage your freight
[00:02:10.001]with other carriers.
[00:02:12.418]It doesn't necessarily mean it's gonna be on a Werner truck.
[00:02:17.598]We're a recognized industry leader,
[00:02:19.793]both in IT as well as in broad-based transportation.
[00:02:24.860]For the last four years, we've won
[00:02:26.660]the Information Week 500, Business Technology Innovators,
[00:02:31.655]as well as the Green Supply Chain Partner
[00:02:34.266]from Inbound Logistics.
[00:02:36.286]Those are two awards that are heavily recognized
[00:02:41.095]for the technology investments that we've made at Werner.
[00:02:45.033]Below, you'll see several awards
[00:02:46.268]that are more business focused
[00:02:48.753]that recognize our service level
[00:02:50.738]and the excellence in operations
[00:02:54.045]that we have at Werner.
[00:03:00.394]This is a general sales slide,
[00:03:03.070]and it's titled The Strength of Werner.
[00:03:07.686]Werner believes that the core of our strength in technology.
[00:03:11.692]The Werner family have invested heavily
[00:03:14.370]in technology for many years.
[00:03:17.615]It's the core to what makes us able to be efficient
[00:03:22.912]and perform at a high level to meet the customer demands.
[00:03:28.577]We've got a global comprehensive portfolio,
[00:03:31.421]as you saw in the previous map.
[00:03:33.012]We do ship to almost every country.
[00:03:36.588]We've got offices in Mexico, Canada,
[00:03:40.161]the US, as well as China.
[00:03:43.076]And our most recently opened office is in Australia.
[00:03:49.277]We love to promote our award-winning customer service.
[00:03:53.433]Werner Enterprises is a brand,
[00:03:57.058]and a lot of that brand is based on customer service
[00:04:01.166]and getting shipments where they need to be
[00:04:04.816]at the time they need to be there.
[00:04:07.349]It's similar to you receiving a FedEx package.
[00:04:09.933]Your perception of FedEx isn't very good
[00:04:12.382]if your shipment isn't there when you want it.
[00:04:15.116]So our award-winning customer service
[00:04:18.309]allows us to maintain the customers that we have
[00:04:23.722]as well as continue to build our network.
[00:04:28.651]We've got a lot of customizable logistics strategies.
[00:04:32.541]We do not necessarily partner with one industry
[00:04:35.827]and become an expert in that field
[00:04:38.591]and how to run the logistics for that industry.
[00:04:42.379]We are heavily connected to retail,
[00:04:45.171]but also are very comfortable with food and beverage,
[00:04:50.370]manufacturing, and other industries as well.
[00:04:55.226]The company overall is consistent,
[00:04:57.096]credible, and conservative.
[00:04:59.198]There's no doubt that we're based in the Midwest.
[00:05:04.410]Our comprehensive solutions, as I spoke earlier,
[00:05:07.504]we do freight management.
[00:05:09.603]And that's where we see a lot of the 3PL
[00:05:12.198]and international moves.
[00:05:15.870]We also do freight movement.
[00:05:17.339]There's no doubt that we own access
[00:05:18.826]and own assets and use those to move freight
[00:05:22.942]across the US, as well as globally.
[00:05:27.338]We do have some trucks on the ground in China,
[00:05:30.706]but that's fairly limited,
[00:05:34.504]more for permit and regulation needs.
[00:05:38.478]Then again, our technological advantages,
[00:05:42.682]we believe our systems are
[00:05:46.111]more advanced than our competitors.
[00:05:50.024]A brief timeline of Werner Enterprises,
[00:05:53.310]and I'd like to highlight the three
[00:05:56.959]that really focus on technology.
[00:05:59.194]In 1992, Werner put GPS units on every truck.
[00:06:04.457]So that's been a long time that we've had
[00:06:07.290]the ability to track trucks and know
[00:06:09.923]where every unit is.
[00:06:12.119]In 1998, we incorporated the electronic driver logs,
[00:06:16.834]which required an electronic onboard recorder,
[00:06:20.104]so at that point, we knew what the driver's doing
[00:06:23.134]within the truck as well as where he is.
[00:06:27.578]In 2008, we've really launched our fuel
[00:06:31.854]miles per gallon initiative,
[00:06:34.173]and I'll share a lot of technology that we're seeing there.
[00:06:38.596]And that continues to be a rapidly developing area
[00:06:42.969]of innovation for Werner.
[00:06:48.654]The four technology areas that I'll cover today
[00:06:51.456]are the equipment and fuel areas;
[00:06:54.946]we'll touch on regulation and how we've used technology
[00:06:58.084]to accommodate and meet the regulations
[00:07:02.346]that our industry faces;
[00:07:05.470]I'll go through several systems that we have;
[00:07:08.922]and then also finish up with business intelligence,
[00:07:12.050]geographical information systems, and our analytics team.
[00:07:19.429]Environmental sustainability is
[00:07:22.536]definitely a focus area for a lot of people.
[00:07:26.833]It's becoming commonplace.
[00:07:30.400]It could be said that the Midwest
[00:07:31.646]is a little bit behind on the recycling efforts and such.
[00:07:34.887]Larger cities are getting there more rapidly.
[00:07:38.527]But even small towns across Nebraska
[00:07:41.413]are really starting to implement recycling programs,
[00:07:45.544]and it's continued to run the space.
[00:07:50.365]That's the same within the business environment.
[00:07:54.151]Although it's a little bit hamstrung in that
[00:07:59.705]there needs to be a desire both to be
[00:08:04.307]environmentally conscious but also profitable.
[00:08:08.614]Being a publicly-traded company,
[00:08:10.474]you're really balancing that.
[00:08:14.411]Some of the fuel and efficiency initiatives
[00:08:17.772]are aerodynamic trucks and trailers.
[00:08:21.042]Our drivers, five years ago, had the ability
[00:08:23.782]to pick out what model of truck they liked,
[00:08:27.472]and it didn't matter if it was aerodynamic or not.
[00:08:30.648]It was based on their desires.
[00:08:33.183]We've gone away from that, and you now
[00:08:35.782]get an aerodynamic truck.
[00:08:37.902]None of the big front, flat-faced trucks,
[00:08:40.530]we just can't afford to pay the extra fuel
[00:08:43.720]to run those, and
[00:08:48.467]seen great benefits from standardizing equipment.
[00:08:53.229]I'll speak more about the ArrowShield in a minute,
[00:08:57.535]as well as driver behavior.
[00:09:00.306]Automatic tire inflation systems are another
[00:09:05.963]wonderful technology that we've implemented recently.
[00:09:10.376]And then our paperless log system,
[00:09:13.126]weight reduction strategies,
[00:09:15.003]and recently, Werner took possession
[00:09:18.672]of our first liquid natural gas
[00:09:20.095]and compressed natural gas trucks,
[00:09:23.077]so we officially do have a pilot program
[00:09:27.118]looking at those technologies.
[00:09:30.895]The ArrowShield is the trailer skirting
[00:09:33.881]you see on the trailer in this photo.
[00:09:39.510]The California Air Resources Board
[00:09:41.817]passed new emission standards that heavily
[00:09:44.694]impacted the transportation industry.
[00:09:48.113]And they said if you'd like to operate
[00:09:49.914]in the state of California, we need you
[00:09:52.740]to bump up your fuel efficiency
[00:09:55.678]and do that by implementing technologies
[00:09:58.201]both on the tractor and the trailer.
[00:10:00.755]The largest one and most visible is the trailer skirting.
[00:10:06.015]I'm sure several of you have noticed those
[00:10:08.095]going up and down the interstate.
[00:10:09.990]And Werner started looking into that
[00:10:13.316]and found that there's a lot of different
[00:10:17.748]companies that sell them.
[00:10:20.279]Varied results on the efficiency gains
[00:10:22.899]as well as the maintenance aspect.
[00:10:25.243]They're out in the field,
[00:10:26.076]they're going to get beat up, so to speak,
[00:10:28.748]and we need to have good control over the quality.
[00:10:33.887]So we actually partnered with a plastics manufacturer
[00:10:38.419]and did the aerodynamics testing
[00:10:42.613]to create our own trailer skirts,
[00:10:46.823]and those are now branded as ArrowShields.
[00:10:50.549]They gain four to five percent in your fuel efficiency,
[00:10:56.241]using a trailer skirt versus not.
[00:10:59.060]So it's been a very good, successful project, and
[00:11:05.110]something that's allowed us to continue
[00:11:07.306]to operate in California.
[00:11:08.955]I would say we're at 10% of our fleet
[00:11:13.908]is currently outfitted with trailer skirts.
[00:11:17.310]But that will continue to rise very rapidly
[00:11:20.446]in the near future.
[00:11:23.686]Weight reduction is key.
[00:11:25.885]Every pound of mass that you move down the interstate
[00:11:30.503]is gonna burn energy, and that's fuel,
[00:11:33.587]which turns into dollars.
[00:11:36.579]Shippers want to ship as much weight as they can
[00:11:39.502]on your truck.
[00:11:40.657]And so Werner has very aggressively pursued
[00:11:43.508]weight reduction within our tractors and trailers.
[00:11:46.955]That includes reducing the wheel base length,
[00:11:50.399]single wide based tires,
[00:11:52.468]dead or non-drag rear axles on the tractors,
[00:11:56.161]so on the back of a tractor you've got
[00:11:58.650]normally two axles, both driven by the engine.
[00:12:04.577]But we found that you can really reduce the need
[00:12:08.442]to have both of those drive-capable
[00:12:10.744]and just have one.
[00:12:13.635]Also, reduced fuel tank size.
[00:12:16.767]You look at the size of an eighteen-wheeler,
[00:12:19.956]and there's 350-gallon tanks, massive amounts of fuel,
[00:12:24.513]which, when full, is very heavy.
[00:12:28.975]It's very nice to be able to fill up
[00:12:32.953]and be able to go across the nation
[00:12:35.494]without needing to stop for fuel,
[00:12:37.786]but in reality, drivers do not utilize that capability.
[00:12:41.987]Our drivers live out on the road,
[00:12:44.432]and what we found is truck stops
[00:12:47.600]will give you a free shower if you spend $50.
[00:12:52.329]So a driver will spend $50 on fuel every day
[00:12:56.766]so that at the end of his day,
[00:12:58.067]he stops at the truck stop, puts in $50 worth of fuel,
[00:13:01.570]and goes and takes his shower.
[00:13:03.727]They will never top off their fuel tank,
[00:13:06.120]because that could mean no shower the next day.
[00:13:09.188]So what that translates into is
[00:13:12.760]we're carrying excessive weight on our tractors
[00:13:15.787]that's never going to be fully utilized.
[00:13:18.711]And we can cut that back so that we can
[00:13:20.205]haul more cargo.
[00:13:22.174]Aluminum wheels, both on the tractor and the trailer.
[00:13:26.685]And then aluminum cross-members underneath the trailer.
[00:13:30.674]Right now, a big portion of the trailer
[00:13:32.849]is built with aluminum, but there's a lot of steel
[00:13:36.174]in the underlying structure.
[00:13:41.061]Driver behavior is also key.
[00:13:43.925]I'm sure you know that you can impact
[00:13:45.955]your miles-per-gallon usage based on how you drive.
[00:13:50.353]It's even further multiplied when you're looking
[00:13:52.729]at 7,300 tractors running across the US.
[00:13:56.793]So keys to that are equipment maintenance
[00:14:00.810]and educating the driver to know that
[00:14:04.649]you need to fully inspect your tractor,
[00:14:07.586]fully inspect your trailer, make sure
[00:14:09.897]that everything's operating at the highest level
[00:14:11.877]of efficiency.
[00:14:13.863]Minimizing out of route, we've got
[00:14:15.580]optimization systems built to make sure
[00:14:19.818]that the miles that we're driving
[00:14:22.227]are as highly loaded as possible.
[00:14:24.918]There's no need to burn excess fuel
[00:14:29.315]if we can minimize that.
[00:14:33.209]And then just proper driving habits,
[00:14:35.303]speed control,
[00:14:39.035]acceleration, being mild and not overly aggressive,
[00:14:45.017]progressive shifting, knowing your transmission
[00:14:47.259]and your equipment and when you should optimally shift,
[00:14:52.020]as well as hard brake monitoring.
[00:14:53.994]We've now rolled out a system that allows
[00:14:57.404]an alert to be sent from the truck
[00:15:00.358]back to the dispatcher every time a hard brake is detected.
[00:15:05.845]And so to us, a need for a hard brake
[00:15:10.866]probably means that he was following too closely
[00:15:14.895]or put himself in a situation
[00:15:17.598]that he shouldn't have been in.
[00:15:20.970]And we can catch that and educate
[00:15:23.716]before there's an incident.
[00:15:27.880]The last one is unnecessary truck idling.
[00:15:32.016]If you've ever gone and gotten fuel at a truck stop,
[00:15:35.098]you see a lot of trucks sitting there idle.
[00:15:38.318]Werner's fleet is 100% equipped
[00:15:41.279]with idle-reducing technology.
[00:15:43.621]And you can see in the graph the breakouts
[00:15:45.900]of what technologies we use,
[00:15:48.463]between diesel auxiliary power units,
[00:15:51.677]electric APUs, and Espar heaters.
[00:15:54.705]Espar heaters are the growing technology
[00:15:59.759]that we're really moving to.
[00:16:05.238]Tire strategies are very important at Werner.
[00:16:09.391]Within the last few years, our tire costs
[00:16:12.389]have more than doubled.
[00:16:13.867]It's an issue that all of transportation faces.
[00:16:20.229]The price of tires continues to rise.
[00:16:23.947]And so using those efficiently is very key.
[00:16:28.788]As you see in the image to the right,
[00:16:31.981]that's a single wide base tire,
[00:16:33.852]sometimes called super singles.
[00:16:36.933]Wonderful new technology, because rather than
[00:16:40.179]having your two dual tires, you're getting it in one.
[00:16:43.525]That means rather than having four sidewalls,
[00:16:46.386]you get two, which leads to weight reduction,
[00:16:50.800]and there's also a miles per gallon savings.
[00:16:54.809]They just roll smoother.
[00:16:57.670]The downside is you've now got a very wide base
[00:17:02.409]that to use efficiently needs to be kept very flat.
[00:17:06.651]And that is a challenge.
[00:17:09.773]Your tire wear on a super single can often be
[00:17:13.895]much more irregular.
[00:17:16.045]And in the end, that means you can't
[00:17:19.242]wear down your tire as far as you may have
[00:17:21.908]if you were using a dual tire setup.
[00:17:27.201]The set of tires below, you can see within the hub,
[00:17:31.921]there's a little yellow piece and then two tubes
[00:17:34.971]coming out and then back into the wheel.
[00:17:37.197]That's an example of our automated tire inflation system.
[00:17:41.634]Our drivers do a very good job of maintaining
[00:17:44.335]their trucks.
[00:17:46.277]But unfortunately, they hook up to a trailer
[00:17:50.139]knowing that I'm just gonna have this trailer
[00:17:51.809]for one load, and then I'm gonna drop it off somewhere
[00:17:54.254]and it's somebody else's problem.
[00:17:56.179]So I don't necessarily need to go out
[00:17:59.549]and check the tire pressure of the trailer tires.
[00:18:02.619]They look good from a distance, and they'll get me there.
[00:18:06.478]So within our trailers, we have found
[00:18:10.456]automated tire inflation systems
[00:18:12.720]that bleed air off of the air brake system
[00:18:15.019]and inflate the tires as needed
[00:18:17.166]to be a wonderful savings for us.
[00:18:21.214]We're seeing a lot more tire failures on trailers.
[00:18:25.161]And the tires that we have on last significantly longer.
[00:18:34.007]Overall, we've got a ton of initiatives
[00:18:38.305]on our trucks, using various technologies.
[00:18:41.518]This graph just highlights a few,
[00:18:43.791]whether it's what liquids we're putting into the engine,
[00:18:47.508]the gap between the tractor and trailer,
[00:18:50.364]the skirting, tires, down to the mud flaps.
[00:18:54.804]The traditional mud flap was solid rubber,
[00:18:57.949]and we're starting to convert to
[00:18:59.877]what they call a flyswatter mud flap.
[00:19:02.883]If you take your flyswatter, where there's 50% air,
[00:19:05.019]50% plastic, that's exactly what the mud flap looks like.
[00:19:08.929]It will stop any rocks and debris
[00:19:11.329]but lets the air flow by.
[00:19:13.369]And that equates to better miles per gallon.
[00:19:17.988]You can also see on this tractor trailer,
[00:19:21.328]we've got a trailer tail, which is a foldout system
[00:19:27.261]that produces a cone behind the trailer,
[00:19:30.472]and that breaks the wind rap
[00:19:33.740]that creates a vacuum behind the trailer.
[00:19:36.497]And that also gains us four to five percent efficiency
[00:19:39.975]in miles per gallon.
[00:19:45.218]What does that mean?
[00:19:46.881]It means 20 consecutive quarters
[00:19:49.492]of year over year improvements to our miles per gallon,
[00:19:52.350]more than 50 million gallons saved
[00:19:54.742]between 2007 and 2012, and more than 560,000 ton
[00:20:00.326]reduction in our carbon footprint
[00:20:02.245]from the same time period.
[00:20:05.752]Now, in the corporate world, I talked about
[00:20:07.211]that needing to balance out to environmental sustainability
[00:20:11.670]with bottom line profits.
[00:20:17.605]Roughly 7,300 trucks averaging 495 miles a day,
[00:20:24.296]between the first quarter of 2011 and
[00:20:26.437]the second quarter of 2012, we've seen an improvement
[00:20:28.692]from 6.125 miles per gallon to 6.850.
[00:20:33.300]While that doesn't seem ultra-significant,
[00:20:36.642]when diesel was $4.08 per gallon,
[00:20:44.000]and per day we're running 3.6 million miles,
[00:20:50.495]that means per day, we're utilizing
[00:20:52.791]over half a million gallons of diesel.
[00:20:56.214]The difference of 62,000 gallons of diesel
[00:20:58.604]at that price is $255,000.
[00:21:02.357]So all of these fuel efficiency technologies
[00:21:06.182]really do come together to work together
[00:21:09.771]and help us as a corporation, as well as
[00:21:14.196]produce a better environment and have less impact on it.
[00:21:20.132]Within regulation, we have long
[00:21:25.177]been concerned with the hours of service.
[00:21:27.816]And using the electronic onboard recorders.
[00:21:30.977]It's key to adhere to those.
[00:21:33.843]Our drivers are able to drive 11 hours a day.
[00:21:40.390]And we can implement restrictions on that
[00:21:44.806]based on our Qualcomm units.
[00:21:48.343]The FMCSA is definitely pursuing
[00:21:51.353]electronic onboard recorders for all carriers.
[00:21:55.401]And that's an effort that we support.
[00:21:58.838]We do believe that driving within the hours
[00:22:00.736]of service does produce a safer society.
[00:22:08.651]With the current hours of service
[00:22:10.884]regulation changes, we are concerned
[00:22:13.667]with the 34-hour restart, needing to include
[00:22:18.476]two periods of one to five a.m.
[00:22:22.192]That restriction, we believe, would be counterproductive
[00:22:26.220]to safety within the roads.
[00:22:29.669]It's gonna cause a utilization decrease per tractor,
[00:22:35.237]which means more tractors on the road.
[00:22:38.761]It also takes the 34-hour restart
[00:22:41.455]and bumps up the length of time that that could be,
[00:22:44.650]if you don't optimally have two one a.m.
[00:22:47.490]to five a.m. periods, and puts the driver
[00:22:50.910]in the situation that many of them
[00:22:53.340]will come off of their restart at six a.m.
[00:22:58.304]and hit the roads all at the same time,
[00:23:01.106]whereas now you can restart and just,
[00:23:04.172]you're down for 34 hours.
[00:23:06.495]So trucks are on and off the road at any given time.
[00:23:10.774]We feel there will be congestion concerns.
[00:23:14.976]Safety's a huge concern and focus at Werner.
[00:23:20.012]We've got a computer-based training system
[00:23:22.645]that is accessible via the web.
[00:23:26.197]And we've got computers in all of our terminals
[00:23:30.084]and some customer locations, where drivers
[00:23:31.917]can go in and take our safety courses.
[00:23:35.465]That's also available at their home,
[00:23:38.407]if they've got internet access there.
[00:23:41.159]And will be available in our trucks
[00:23:43.851]as we roll out new Qualcomm units.
[00:23:47.261]Safety improvements has been a key.
[00:23:50.717]We've got several safety KPI scorecards
[00:23:53.837]that monitor it heavily, as well as CSA monitors.
[00:23:59.926]And then corporate training safety
[00:24:01.979]is really a focus of everyone.
[00:24:05.815]No matter what your job is at Werner,
[00:24:07.879]it needs to be centered on safety.
[00:24:11.178]And what we've learned corporately
[00:24:13.033]is that it's similar to driving.
[00:24:14.463]It takes a constant focus.
[00:24:16.609]If you're a driver and you get distracted
[00:24:18.580]for just a moment, you're at risk
[00:24:21.543]for something ill happening.
[00:24:24.568]Within our corporation, we need to be focused
[00:24:26.953]on safety at all times
[00:24:29.018]because when you remove your focus from safety,
[00:24:31.881]you're letting it go about something else in your mind,
[00:24:36.533]become distracted, and that's not how we
[00:24:39.888]like to operate.
[00:24:43.004]Paperless orientation was a wonderful technology
[00:24:46.272]that we rolled out.
[00:24:47.655]There's a lot of regulation around hiring people.
[00:24:51.515]And paperless has allowed us to go
[00:24:55.484]to online applications for drivers.
[00:24:58.633]When a driver applies, we've got 30 days
[00:25:00.724]where we can do background checks
[00:25:02.382]and check his driving history, but beyond that,
[00:25:06.288]we no longer have his consent to make those checks.
[00:25:11.110]So there are a lot of drivers that will reapply.
[00:25:15.025]Due to our online application system now,
[00:25:17.103]when you reapply, your application is pre-filled
[00:25:21.606]with your previous data, and you can just modify it,
[00:25:24.550]versus having to start over from scratch,
[00:25:28.223]which is the norm in the industry.
[00:25:30.987]During orientation, we do an electronic signature capture.
[00:25:34.774]And so all of your employment forms
[00:25:36.868]that they used to take a half a day
[00:25:39.547]to get filled out and signed are filled out electronically.
[00:25:43.237]You sign once on a credit card-type machine
[00:25:46.448]that you would see at a major retailer,
[00:25:49.734]and then that signature is imaged
[00:25:51.736]onto the documents.
[00:25:53.855]And then the driver does an approval
[00:25:56.800]to have those be legal.
[00:25:59.331]Scott Anderson, a manager at Werner Enterprises,
[00:26:01.548]won the professional of the year award
[00:26:04.253]from the Nebraska Trucking Association in 2011
[00:26:07.473]for that technology.
[00:26:10.387]At the end of the day, that saves half a day
[00:26:12.038]of orientation class for 300, plus or minus, drivers
[00:26:16.120]that we hire every week.
[00:26:20.572]Driver contact is an area that's aggressively changing.
[00:26:23.829]We've got a driver portal that allows drivers
[00:26:26.117]to come in and self-service 24 hours a day,
[00:26:30.049]seven days a week.
[00:26:31.586]Our office hours aren't always conducive
[00:26:34.174]to them asking questions about their paycheck
[00:26:37.037]and other things like that.
[00:26:39.046]And so we want to enable them to do that
[00:26:43.401]on their own time from wherever they're at.
[00:26:47.235]We're also rolling out text messages to drivers.
[00:26:50.784]Down below, you'll see in the images
[00:26:52.222]kind of the timeline of how you used to communicate
[00:26:54.771]with drivers.
[00:26:55.846]It used to be he would stop at a payphone,
[00:26:57.581]call in to the mothership, hey, what am I doing next?
[00:27:00.869]Then we moved onto Qualcomm units.
[00:27:02.435]Now we've got in the truck communication.
[00:27:05.431]But the current scenario is you've got a driver
[00:27:08.504]at a truck stop without a load,
[00:27:10.378]waiting for his next load, and now he has to go out
[00:27:14.070]through the parking lot, get in his truck
[00:27:16.195]every half hour, every 45 minutes,
[00:27:18.108]check, oh, no load yet, go back in and enjoy himself.
[00:27:22.455]Go back out, check the truck again.
[00:27:24.677]So we're rolling out text messaging to drivers
[00:27:27.768]so that we can text to their mobile device.
[00:27:30.548]And based on our system of electronic logs,
[00:27:33.823]we won't be texting them while they're driving
[00:27:36.134]or while they're sleeping.
[00:27:38.230]So it's a wonderful way that we can
[00:27:42.264]adhere to regulation in that area.
[00:27:46.778]This is an example of two of our lightweight
[00:27:49.151]equipment setup trucks.
[00:27:51.768]Most of the time, we can haul 44,000 pounds of cargo, tops.
[00:27:56.775]But using these trucks, we can push 50,000.
[00:27:59.903]So it's an extra 6,000 pounds of cargo
[00:28:03.630]for our customer, which, 6,000's a large percentage
[00:28:07.853]of 44,000, so it at the end of the day
[00:28:11.212]means less shipments.
[00:28:14.952]Our IT staff, we've got two departments,
[00:28:17.817]our AIS group that I'm a part of,
[00:28:20.141]Analysis and Information Systems,
[00:28:22.341]roughly 130 individuals, 115 in Omaha
[00:28:26.008]and roughly 15 in China.
[00:28:29.359]We're responsible for the SMART transportation
[00:28:31.845]management system, which is a web-based app
[00:28:34.270]written on Java with a Cold Fusion front end
[00:28:37.190]and then hosted on an Informix database.
[00:28:40.936]We also control document imaging,
[00:28:43.545]web portals, and internal applications.
[00:28:45.906]Those are written in .Net using C sharp
[00:28:48.477]and based on a SQL server.
[00:28:50.887]Our database administrators, our analytics teams,
[00:28:53.177]the GIS heavily use DB2 as our enterprise data warehouse,
[00:28:59.686]SQL server, and then .Net for programming applications.
[00:29:04.916]Beyond that, we've got help desk, system administrators,
[00:29:07.740]and other analytics teams.
[00:29:12.339]Our management information systems
[00:29:14.792]is the legacy department, so to speak.
[00:29:19.731]Roughly 30 IT staff,
[00:29:22.807]they work on the IBM AS/400,
[00:29:25.445]and that system controls all of our asset functions.
[00:29:29.450]We've invested heavily over the years,
[00:29:31.576]so asset maintenance, asset efficiencies
[00:29:34.739]and optimizations are built into
[00:29:38.189]that system.
[00:29:41.825]AIS uses a SCRUM methodology for Agile software development.
[00:29:47.118]And that's user-driven project requests.
[00:29:51.746]Our users know the business,
[00:29:53.577]and it's our job to enable them
[00:29:55.434]to do it more efficiently and continue to be
[00:29:59.454]on the cutting edge.
[00:30:00.902]Our developers go on sprints of 30-day
[00:30:03.699]development cycles to allow them
[00:30:05.763]to focus on a given issue for 30 days.
[00:30:09.766]And then they just prioritize backlogs,
[00:30:13.231]items beyond that.
[00:30:14.484]So if a new project comes up within the 30 days,
[00:30:17.742]it gets put on the backlog and prioritized,
[00:30:20.432]and the next 30-day cycle, they'll take
[00:30:23.086]what they believe they can bite off of the priority list
[00:30:26.809]and focus on that for 30 days.
[00:30:30.189]What we found with that is that your customer
[00:30:35.167]and business interaction is far increased
[00:30:38.238]over the traditional waterfall development cycle.
[00:30:41.931]The waterfall was more, the business would say,
[00:30:44.807]hey, I want this.
[00:30:46.095]And IT would say, well, I can get that
[00:30:50.052]in six to nine months, and really you did
[00:30:54.281]a little bit of requirements gathering up front,
[00:30:56.699]and when you started actually programming,
[00:31:00.660]you didn't really talk to the business a lot.
[00:31:03.378]Six to nine months later, IT had developed something,
[00:31:06.504]and that something, we found, was usually
[00:31:10.389]something slightly different than what the business wanted.
[00:31:13.635]So breaking it down and having sign-off and approval
[00:31:17.340]every 30 days has brought the business
[00:31:20.038]and IT much closer.
[00:31:24.999]Our infrastructure is very robust in Omaha.
[00:31:29.590]We've got two on-site data centers,
[00:31:31.667]one remote disaster recovery center,
[00:31:35.048]also within Omaha but just on the other side of town.
[00:31:39.508]We've got diesel generators and fuel
[00:31:41.171]to power our entire campus.
[00:31:43.480]I've heard that should we be off the grid,
[00:31:47.921]we would have enough diesel to
[00:31:52.179]power our campus as well as sell electricity
[00:31:55.240]back to our provider for 30 days.
[00:32:00.362]Our infrastructure, we just implemented
[00:32:03.383]some IBM DS8800s for storage and have also
[00:32:08.543]implemented the IBM Metro Global Mirror.
[00:32:11.210]We're the first company in the US to do that,
[00:32:13.775]although IBM does have some partners internationally
[00:32:16.444]that have implemented it.
[00:32:18.358]The metro global mirror's a means of taking
[00:32:20.598]three data centers and having them be redundant.
[00:32:24.138]Two of the data centers being on our headquarters campus,
[00:32:27.319]that's considered the metro link,
[00:32:29.425]and there's redundancy there.
[00:32:31.354]And then the offsite center is the global link,
[00:32:34.373]which has redundancy.
[00:32:36.812]So really a three-way redundancy
[00:32:39.408]between all three data centers.
[00:32:42.912]Trends that our infrastructure guys are seeing,
[00:32:45.284]our Redhat Linux use in continuing to grow.
[00:32:48.916]And then virtualization, we can buy
[00:32:52.043]a wonderful server that is just way too powerful
[00:32:55.938]for any one use, and we're typically running
[00:32:58.729]20 to 60 hosts virtualized per server now.
[00:33:04.090]We have a direct line to China, with our office there.
[00:33:10.181]They've got some internet firewall regulations
[00:33:12.324]and such that it made it more conducive to us
[00:33:16.290]to have a direct line from Omaha to China.
[00:33:19.284]So as someone in our Shanghai office uses our
[00:33:25.596]web-based applications or would even search the web,
[00:33:29.006]their traffic is routed to Omaha
[00:33:31.035]and then out to the web from there.
[00:33:32.754]So that has been
[00:33:36.393]a significant investment for our company.
[00:33:39.307]But in the end it's enabled that office to
[00:33:43.807]operate very smoothly.
[00:33:46.330]We also use AVAYA voice over IP phones
[00:33:49.657]and are starting to get into some
[00:33:51.404]soft-calling functionality where we'll build
[00:33:54.472]the ability to make a phone call into applications
[00:33:58.678]within our company.
[00:34:02.975]Our electronic data interchange group,
[00:34:06.314]we do three million EDI transactions a month.
[00:34:09.735]It's constantly communicating with our customers via EDI.
[00:34:14.301]Currently converting to Sterling International
[00:34:17.041]to help manage those.
[00:34:20.534]And historically, it is very batch process driven.
[00:34:27.338]A customer would say, here are the shipments
[00:34:29.189]I have for tomorrow, import those into your system.
[00:34:33.293]That's kind of a way of the past.
[00:34:35.461]Now it's Java Message Services and Queues
[00:34:40.295]and web services so that as they have a load,
[00:34:43.533]they're sending it to us, and we start the execution
[00:34:46.549]at that time.
[00:34:48.586]One downside is we used to have the ability
[00:34:50.813]to say, they could call and say hey,
[00:34:52.756]I had an error on that load.
[00:34:55.492]Don't worry about it, you can delete it
[00:34:57.003]out of your system.
[00:34:58.593]And we could because it was just in the batch
[00:34:59.782]waiting to be processed.
[00:35:01.306]Now, that load may have already been tendered to a carrier.
[00:35:04.555]It could be too late.
[00:35:07.471]The system's high availability,
[00:35:09.330]the offsite location is running
[00:35:11.659]just as a production instance.
[00:35:13.445]So as the need to balance those transactions occurs,
[00:35:18.154]all three sites are working simultaneously.
[00:35:22.028]We also, we're the first carrier to roll out email EDI.
[00:35:26.090]There're a lot of the small mom and pop carriers
[00:35:28.099]that just don't have a robust EDI system.
[00:35:32.281]And so we could send out a link via email
[00:35:35.815]and allow them to click, go fill out a form on the web,
[00:35:39.596]and that would return an EDI message into our system.
[00:35:44.075]Now, that email can be sent to a smartphone,
[00:35:47.661]and if it's capable with a browser,
[00:35:49.914]they can do that there.
[00:35:51.440]And so it's really extended our EDI.
[00:35:54.665]Event Notification is a key framework
[00:35:58.934]that we've recently released.
[00:36:01.211]A lot of this was focused around the need
[00:36:03.103]for international shipments, to know when things are booked,
[00:36:07.267]when they make the gate at the port, if they're late,
[00:36:11.570]when they sail, how the boat is progressing,
[00:36:18.125]and then different customs clearances.
[00:36:20.285]So we've got a robust event notification system
[00:36:22.860]that on any shipment, there can be various events
[00:36:27.607]that are thrown, and then that can be communicated
[00:36:30.954]directly to the customer automatically.
[00:36:35.400]Our optimizations team within the SMART TMS
[00:36:41.140]is Java backend with a Cold Fusion user interface.
[00:36:46.552]We can perform more than 1,000 mileage calls per second.
[00:36:50.241]Mileage is obviously very important
[00:36:52.409]to any optimization problem that we tackle.
[00:36:55.585]And so the need to be able to calculate miles
[00:36:58.585]very quickly is important.
[00:37:02.753]1,000 mileage calls per second
[00:37:04.779]was very difficult to achieve, but we're there.
[00:37:08.115]And that's wonderful, because now mileage calculations
[00:37:10.447]does not add a significant time to your solve.
[00:37:16.089]Our optimization systems do,
[00:37:18.341]they are based on a production rate structure.
[00:37:21.376]Many optimization systems will actually use
[00:37:23.978]a secondary rate structure that's usually simplified
[00:37:27.726]and may not account for all rates and surcharges.
[00:37:31.153]But ours are built in on the actual rates.
[00:37:36.156]We do account for driver scheduling
[00:37:37.816]with hours of service.
[00:37:39.877]And ultimately, the optimization system
[00:37:43.911]is a modified vehicle routing problem
[00:37:47.143]or VRP, as you may be familiar with.
[00:37:50.472]The solver is a genetic algorithm,
[00:37:53.146]so it's not brute force or common search algorithm.
[00:37:58.922]If I had more time, I'd love to talk to you further
[00:38:01.446]about genetic algorithms.
[00:38:03.285]It's a way to get a very good solution quickly,
[00:38:07.884]although you're not exactly guaranteed
[00:38:10.392]to ever hit the optimal solution.
[00:38:13.247]So if you're looking at the need
[00:38:15.589]for an absolute optimal, that would be a hamstring.
[00:38:20.583]Chipper is our genetic algorithm that runs continuously,
[00:38:24.472]so as loads come into the system,
[00:38:26.379]they're thrown in the pot for optimization.
[00:38:29.095]As a consolidation is realized,
[00:38:33.873]they're pulled out of the pool,
[00:38:35.582]and new orders can come in.
[00:38:37.209]So it's just continually running,
[00:38:38.633]similar to a woodchipper.
[00:38:40.569]If you feed something in, it's gonna feed you
[00:38:42.547]chips of wood out.
[00:38:45.430]Continuous moves solver, again,
[00:38:47.256]trying to minimize the deadhead miles.
[00:38:50.240]And then John Henry's Hammer.
[00:38:53.112]We found that users think that they
[00:38:54.566]can outperform the computer.
[00:38:57.365]And so the screenshot above you see
[00:38:59.595]is John Henry's Hammer.
[00:39:02.108]And that shows the consolidations
[00:39:04.076]that the optimizer has made
[00:39:06.805]and lets the user drag and drop rows
[00:39:08.950]of the different data tables to adjust
[00:39:10.909]the sequencing of orders, add an order
[00:39:13.090]to a given consolidation,
[00:39:14.906]and it then in real time tells them
[00:39:17.353]why that couldn't happen or that it really did cost more,
[00:39:22.029]once again proving that systems are very good
[00:39:26.597]and efficient.
[00:39:29.421]Our imaging system is built in-house.
[00:39:32.659]And 11 departments are fully automated on that.
[00:39:37.339]We handle 45,000 new images a day
[00:39:40.783]with over 220 million images in DB2.
[00:39:45.480]Retrieval time of less than a second.
[00:39:50.311]To put that in perspective, that's 4,400
[00:39:52.951]paper filing cabinets' worth of images
[00:39:55.746]that we don't have to store because they're electronic.
[00:39:59.693]We've got a dedicated mobile development team,
[00:40:03.956]so you'll start seeing Werner apps soon,
[00:40:07.906]although they're not out there yet.
[00:40:12.433]Our BI team, which I spoke on earlier,
[00:40:16.120]the trends that they've seen are 10 years ago,
[00:40:20.685]there were a lot of monthly reports.
[00:40:22.674]Five years ago, things were weekly,
[00:40:24.971]and now it's absolutely got to be realtime.
[00:40:30.282]Our GIS team is four developers,
[00:40:33.728]two in the US and two in China.
[00:40:36.268]We use the ESRI software suite,
[00:40:39.276]although we did try Google for a short time period.
[00:40:44.015]Impact the GIS has is we geocode every shipment
[00:40:47.167]record that comes into our database.
[00:40:49.743]We do a lot of customer maps and analysis.
[00:40:52.271]And this map that you see on the screen
[00:40:54.415]is a road closure event.
[00:40:56.975]There's a small yellow segment where a chunk
[00:40:59.740]of interstate had a landslide.
[00:41:02.698]And then using GIS, we can pull every tour
[00:41:06.426]that would be routed through that landslide area
[00:41:08.903]and affected by the detour.
[00:41:13.016]Our IMAP application allows us freight visibility.
[00:41:18.360]We can see current truck locations.
[00:41:22.157]Future truck locations, this is what trucks
[00:41:24.175]will be in southern California.
[00:41:26.338]So even though he's in Cheyenne now,
[00:41:28.867]we now where he's headed.
[00:41:31.156]We've got route visibility, to what route
[00:41:34.645]we've recommended for the driver.
[00:41:37.333]And then within each truck, by clicking on it,
[00:41:39.139]you get a lot of details that will tell us
[00:41:42.564]what are his hours of service left and
[00:41:47.336]where does he live and information like that.
[00:41:50.500]We can also do alerts and actions.
[00:41:53.458]If a truck isn't moving like we think it should,
[00:41:56.950]alert via the map.
[00:41:58.803]Loads that may be delayed or behind schedule,
[00:42:01.817]throw an alert so that we can see what's going on.
[00:42:06.454]After those alerts, we're implementing actions.
[00:42:10.666]Okay, now I'd like to message the driver
[00:42:12.770]through the map so I don't have to go
[00:42:14.689]to another system and do that there.
[00:42:17.605]Start assigning loads to trucks via the map
[00:42:20.613]so it's a much more heads-up display environment.
[00:42:25.416]What's next with our mapping application?
[00:42:27.688]A new user interface and keyboard shortcuts.
[00:42:30.644]We found that our users are heavily connected
[00:42:34.913]to legacy systems where mice are not the standard,
[00:42:39.700]and keyboard shortcuts are key to them
[00:42:42.422]doing their job efficiently.
[00:42:45.094]Allowing a user profile to save search history
[00:42:47.914]and map state, and then embedding training documentation
[00:42:51.785]and videos.
[00:42:54.135]Our analysis team does a wide variety
[00:42:58.395]of supply chain analytics,
[00:43:00.152]onsite customer analysis, rapid response,
[00:43:03.261]such as supply chain emergency,
[00:43:06.675]as well as special events.
[00:43:08.667]There's a lot of seasonal freight
[00:43:10.521]and things that need to be planned out.
[00:43:13.061]Could be a Father's Day promotion
[00:43:14.856]or something like that in the retail environment.
[00:43:18.462]We can route those and design how they should go.
[00:43:21.868]We're always looking for improvement with backhaul,
[00:43:24.578]and then how we utilize drivers,
[00:43:27.124]whether it's trainer teams, slip seats, or pod drivers,
[00:43:29.943]where you've got three trucks and four drivers
[00:43:33.421]so that the truck is always moving
[00:43:34.812]and never without a driver.
[00:43:38.637]The ROI that we've seen on supply chain engineering
[00:43:41.184]is 10 to 30% staffing based on the level of
[00:43:48.575]automation that the customer has by going to a TMS.
[00:43:53.087]Mode optimization three to six percent,
[00:43:55.774]load optimization, creating multi-stop truck loads,
[00:43:59.634]roughly eight to 15% savings,
[00:44:02.660]continuous moves two to five percent
[00:44:04.308]by cutting down on that deadhead,
[00:44:05.893]and then vendor-supplier compliance,
[00:44:09.055]six to 15% savings there.
[00:44:11.548]So the return on investment is definitely there
[00:44:16.044]throughout all the supply chain engineering.
[00:44:20.576]A case study that we did with Anheuser Busch InBev,
[00:44:26.006]we put a new fleet in of 150 trucks
[00:44:28.393]in their second-largest brewery in Columbus, Ohio.
[00:44:31.662]The previous carrier was a bit underperforming,
[00:44:36.330]and we came in and really wanted to outdo the standard.
[00:44:42.958]So we worked closely with equipment manufacturers
[00:44:45.641]to design our lightweight spec trucks
[00:44:48.191]and implemented the delivery of those trucks
[00:44:54.883]and also lightweight trailers so that
[00:44:59.104]in the end, we've got more than a million dollars
[00:45:01.697]saved annually just on that account.
[00:45:04.848]Again, that's shipping more freight
[00:45:06.631]on a lighter truck, which ultimately reduces shipments.
[00:45:11.587]And that concludes my presentation.
[00:45:14.615]If you've got any questions on technology at Werner,
[00:45:17.798]things I've covered or potentially
[00:45:20.039]other questions that you've got,
[00:45:21.933]I'd be glad to field those now.
[00:45:24.948](person talking quietly)
[00:45:32.462]You have three questions online.
[00:45:34.200]First question is from Nick Henry.
[00:45:35.977]Could you please elaborate on Werner's perspective
[00:45:38.442]of CNG freight?
[00:45:40.246]Is it feasible for open road trucking
[00:45:42.281]or just for specialized local freight
[00:45:44.503]due to the shortage of CNG?
[00:45:48.558]Absolutely.
[00:45:49.391]With CNG trucks, there is a lack
[00:45:53.113]of a fuel network nationally right now.
[00:45:56.164]There is a corporation that is dedicated to
[00:46:00.398]putting out 77 fueling locations across the US
[00:46:04.055]over the next year, and that will enable us
[00:46:07.111]to really go nationally with the truck,
[00:46:10.270]although having limited fuel stops,
[00:46:13.164]you're still going to have to be very advanced
[00:46:15.369]in your planning.
[00:46:16.635]I think CNG, within the next three to five years
[00:46:21.078]in the US, will be focused mainly around
[00:46:24.020]a dedicated local fleet scenario,
[00:46:27.963]where you're not just going random places
[00:46:30.257]throughout the US.
[00:46:32.165]But long term, CNG may very well
[00:46:36.696]be so popular that it doesn't matter
[00:46:40.029]where you're headed, fuel will not be an issue.
[00:46:43.633]There are some performance issues with CNG.
[00:46:47.780]They just don't have the torque the diesel has currently.
[00:46:51.359]And so we have to be very cautious
[00:46:53.867]of our pilot trucks and putting them
[00:46:55.973]in places that aren't real hilly,
[00:46:58.390]because a full load on a hill will overbear the engine.
[00:47:05.512]Second question from Nick,
[00:47:07.060]what steps will the individual have to take
[00:47:08.950]to be able to work at a location in China?
[00:47:11.892]Supply chain management or analyst,
[00:47:14.468]or what office is their position?
[00:47:17.584]In China, our office is in Shanghai,
[00:47:20.817]and it was opened up as a business office.
[00:47:24.079]And then we put some IT resources there.
[00:47:28.380]Again, as I said, 15 individuals roughly.
[00:47:32.810]So you would start by getting in contact with myself,
[00:47:37.500]and I will put you in contact with the appropriate people
[00:47:40.894]to get hired on there.
[00:47:43.169]We've had employees here that have
[00:47:45.712]had interest in visiting there
[00:47:47.739]and doing short term stints over there,
[00:47:51.713]up to a year.
[00:47:52.936]We've also had employees planning
[00:47:55.235]to make the transition from the US to China
[00:47:58.102]or vice versa.
[00:48:01.503]Question from the University of Iowa,
[00:48:04.712]for route optimization, how does it account
[00:48:06.941]for travel time variability such as traffic conditions?
[00:48:11.664]Currently, we are not hooked up
[00:48:13.535]to any live traffic feeds for our optimizer.
[00:48:18.204]We do have some historical data
[00:48:20.792]that backs that up, and that does a good overall job.
[00:48:28.422]Unfortunately, that's really as good as you can get
[00:48:31.415]with optimization because you're planning the future.
[00:48:34.936]With an execution model, we can say, okay,
[00:48:38.148]where are you at as a driver?
[00:48:39.936]What does traffic look like ahead of you?
[00:48:41.960]And start to accommodate.
[00:48:43.775]But in the optimization system,
[00:48:45.578]you're always planning out a load
[00:48:47.930]that is yet to start.
[00:48:49.907]And so you don't know exactly what the traffic will be
[00:48:54.800]six, eight hours, maybe tomorrow.
[00:48:58.342]And so you've just gotta go on kind of
[00:49:00.167]a historical average that, hey,
[00:49:02.346]if I'm gonna cut through the middle of Chicago,
[00:49:03.958]that's bad, it's gonna be busy.
[00:49:08.203]So that's the traffic that it utilizes.
[00:49:12.925]One last question online
[00:49:14.013]and then I'll give to the group here.
[00:49:17.112]Werner generates a tremendous flow
[00:49:19.019]of data that might be useful
[00:49:20.363]for public sector freight planning.
[00:49:22.705]Can the data be supplied for federal highways,
[00:49:25.230]state public transport fields?
[00:49:27.803]Are there ways you might just collaborate and cost share?
[00:49:31.504]It's from John Fullway.
[00:49:35.275]We have a lot of data,
[00:49:37.633]and certainly with 7,300 trucks,
[00:49:42.193]anybody looking to do a study on the efficiency
[00:49:46.270]within transportation, that is a gold mine.
[00:49:50.758]Werner also considers it a bit of a competitive
[00:49:54.372]advantage, and so we do not publish any data
[00:49:59.514]that's out there for everyone to utilize.
[00:50:02.541]We have in some limited capacities
[00:50:05.985]partnered with a specific research entity
[00:50:10.074]to tackle a specific project
[00:50:13.917]and enable them to have access to our data.
[00:50:18.400]But as far as open book policy,
[00:50:23.373]that's not gonna happen.
[00:50:26.012]If you've got desires or need for data,
[00:50:29.725]we could certainly talk, but it's an uphill battle.
[00:50:37.907]What is your progress for
[00:50:40.760]pursuing the priority software on...
[00:50:44.375]For what software?
[00:50:45.867]Radio frequency identification.
[00:50:49.748]RFID.
[00:50:53.298]Our RFID progress has been slow.
[00:50:59.867]We've got some shippers that using it very consistently.
[00:51:03.083]We have a yard management system that uses RFID
[00:51:08.159]to put an active tag on each trailer
[00:51:11.161]when it comes into a yard so that the shag truck
[00:51:14.662]that pulls the trailer from the yard
[00:51:17.201]to the dock door knows exactly where that trailer's parked.
[00:51:21.173]And so we're utilizing RFID for that system,
[00:51:25.696]but beyond that, it's very limited.
[00:51:28.940]Will we get to the point where there's RFID scanners
[00:51:31.341]on the truck or throughout the trailer?
[00:51:36.330]Likely, but I'd say not in the next five years.
[00:51:39.500]That's probably 10 years out before RFID
[00:51:43.448]is fully incorporated.
[00:51:50.674](man talking quietly)
[00:51:59.977]I am having a terrible time hearing up here.
[00:52:08.241]So the question is more related to
[00:52:11.209]online shopping,
[00:52:13.009]people can get two-day shipping.
[00:52:15.307]What has that done for the shopping industry?
[00:52:20.360]Wonderful question, and it's a stress.
[00:52:25.797]You can go on Amazon today, and if you're
[00:52:28.833]an Amazon Prime customer, you get free two-day shipping.
[00:52:32.236]And you can order up until three p.m.
[00:52:34.863]and still get it two days later.
[00:52:37.661]Amazon has optimized their supply chain.
[00:52:41.654]They know that this warehouse is gonna deliver
[00:52:45.461]to this UPS facility,
[00:52:49.081]and they know how many miles that is.
[00:52:51.504]We do carry freight for customers
[00:52:55.262]that are similar to Amazon.
[00:52:57.290]And we have very time-sensitive time windows
[00:53:03.937]to pick ups that freight and deliver it.
[00:53:06.884]We've got a 15-minute appointment
[00:53:08.404]that we must meet on the pickup site,
[00:53:10.203]as well as 15 minutes on the delivery,
[00:53:13.494]and we must average no less than 50 miles an hour
[00:53:18.869]during transit.
[00:53:20.108]So that has put us in the position
[00:53:22.589]where we need to get a truck to the pickup
[00:53:26.632]that's full of fuel and a driver full of hours
[00:53:29.349]to make the transit, because there's no margin of error
[00:53:32.380]in between.
[00:53:34.059]They know that the shipment has to be
[00:53:37.184]to the UPS facility at five p.m.
[00:53:40.644]And so we need 45 minutes of transit
[00:53:43.494]and then time to pick it within their warehouse.
[00:53:45.875]And that back-dates to you being able to order
[00:53:47.862]it up until three p.m.
[00:53:49.370]So you as a customer who has demanded
[00:53:52.845]great access to any goods bought over the internet
[00:53:58.768]has certainly forced the supply chain
[00:54:00.769]to be very realtime.
[00:54:06.021]I have a couple questions.
[00:54:07.530]One is purely interest.
[00:54:09.419]What portion of your two billion do you spend
[00:54:11.794]on insurance for your tractor trailers drivers?
[00:54:15.766]And the second question is you've made some changes
[00:54:19.059]to the trailer for aerodynamics.
[00:54:21.978]I know there's small groups out there
[00:54:24.521]in the industry that are pushing
[00:54:27.151]for side underride guard protection for trailers.
[00:54:31.921]What has your company done to look into that?
[00:54:35.211]And working with trailer manufacturers,
[00:54:37.147]is that something you think is not really relevant
[00:54:41.269]into the number of side underride crashes
[00:54:43.724]that may be experienced?
[00:54:47.626]I'll address the second question first.
[00:54:50.143]We do work very closely with equipment manufacturers
[00:54:53.131]for both tractors and trailers.
[00:54:55.619]And along with that is the safety aspect.
[00:55:01.926]The side impact on a trailer,
[00:55:04.698]I think we're gonna see that come through,
[00:55:07.431]although unfortunately, adding that equipment
[00:55:10.821]is counterproductive to the weight reduction
[00:55:12.728]we'd like to see.
[00:55:14.241]So is it something that we need to progress through
[00:55:19.623]as a society?
[00:55:21.444]Most likely.
[00:55:22.297]There's definitely safety concerns around that.
[00:55:26.001]But we really need to study it thoroughly
[00:55:28.991]and make sure that the cost-benefit is there.
[00:55:34.271]So as a company, we don't have a stance
[00:55:38.418]that is set yet.
[00:55:42.417]But you certainly saw several slides
[00:55:44.502]focused on weight reduction, and
[00:55:47.605]I think the government would probably
[00:55:51.206]need to spearhead any regulation
[00:55:54.739]to have that be widely adopted.
[00:56:00.607]The first question, can you repeat that?
[00:56:03.835]Well, you have some many drivers,
[00:56:06.584]so many drivers' trailers on the roads,
[00:56:09.304]I'm just curious on how you manage insurance costs,
[00:56:12.340]cause those are skyrocketing.
[00:56:13.864]Absolutely.
[00:56:14.914]Insurance costs are very significant.
[00:56:19.353]Werner is self-insured.
[00:56:21.225]So we do carry a small insurance policy
[00:56:24.707]that over 10 million dollars per incident
[00:56:27.888]would kick in and an insurance company would pay that.
[00:56:32.021]Prior to that, Werner handles 100%
[00:56:36.629]of the cost of that insurance.
[00:56:38.834]So our insurance cost is directly related
[00:56:41.554]to our safety.
[00:56:42.985]And I can tell you safety and risk
[00:56:47.325]is probably 10 cents a mile type of cost
[00:56:52.424]within the industry.
[00:56:53.816]So it's certainly a cost that we need to maintain,
[00:57:01.415]and that goes down to the corporate focus of safety
[00:57:05.054]at all times.
[00:57:08.690]I've got another question
[00:57:09.608]from the online audience.
[00:57:10.886]Mike Hanlin asks how is Werner handling
[00:57:13.915]the driver shortage within the industry?
[00:57:16.862]Absolutely.
[00:57:18.236]Driver shortage is very significant.
[00:57:21.748]We estimate that every driver we hire
[00:57:25.341]costs us in the neighborhood of $3,000,
[00:57:28.670]with marketing and facilities
[00:57:30.851]and the staff that it takes to do the hiring process.
[00:57:35.130]As you can see, we hire 300 drivers a week.
[00:57:38.943]There's a shortage of drivers.
[00:57:43.987]Part of that is based on industry availability.
[00:57:49.863]We compete for a lot of construction workers.
[00:57:52.777]And so when construction is a little bit lower,
[00:57:55.399]we have a little bit better demand for drivers.
[00:58:01.066]It's gonna be an issue, and especially with CSA,
[00:58:05.041]now every driver has a safety score
[00:58:07.880]that is attached to them.
[00:58:10.012]And so there is a very real chance
[00:58:12.252]that we're gonna see drivers leaving the market
[00:58:14.111]due to a history of unsafe driving.
[00:58:18.263]That will only increase the need for drivers.
[00:58:24.733]We do a lot of work to promote driver satisfaction.
[00:58:31.088]Once we hire somebody on,
[00:58:33.409]that's great, and we need to keep them comfortable.
[00:58:36.446]Our optimization system, we believe,
[00:58:39.835]allow them to run more miles than at
[00:58:44.371]a competitor carrier.
[00:58:46.177]And ultimately, more miles means more money
[00:58:48.924]on their paycheck.
[00:58:50.142]They are paid by the mile.
[00:58:55.121]Another question from
[00:58:56.388]the University of Iowa seminar.
[00:58:58.656]The genetic algorithm used in the optimization,
[00:59:01.801]why use it and is there any behavioral factors
[00:59:04.540]considered in building it?
[00:59:07.638]The genetic algorithm is just a wonderful
[00:59:13.601]thing to see.
[00:59:14.755]Solving any transportation problem brute force
[00:59:18.268]can take a long time.
[00:59:20.585]There's just so many constraints
[00:59:23.303]and things that need to be considered.
[00:59:26.757]The genetic algorithm,
[00:59:28.754]we have programmed to be very similar
[00:59:32.802]to a chromosome where you've got
[00:59:35.001]different yes, no flags that all tie together
[00:59:38.662]to become the definition of a solution.
[00:59:42.175]We populate that optimizer with
[00:59:44.467]between 100 and 200 randomly occurring solutions
[00:59:50.877]when we start.
[00:59:52.053]And then it takes and evaluates each
[00:59:55.995]of the solutions, takes the top percentage
[01:00:01.265]of those solutions, and then starts mixing
[01:00:05.274]and meeting those two solutions together.
[01:00:07.940]And that creates your next generation.
[01:00:11.728]The wonderful thing is, as you do that,
[01:00:15.244]it very quickly learns what is good
[01:00:18.841]and what evaluates to be a hindrance.
[01:00:21.960]And so it can learn extremely quickly.
[01:00:25.506]We found that our staff, when they went
[01:00:29.511]to optimize something, they'd love
[01:00:31.351]to have it in five minutes.
[01:00:32.975]And beyond 15 minutes is a tough pill to swallow.
[01:00:37.789]So the true advantage is in getting
[01:00:40.453]a very, very good solution quickly.
[01:00:44.612]And we can do that far faster using the genetic algorithm
[01:00:48.347]than any brute force search.
[01:00:53.455]One more question
[01:00:54.411]from the University of Iowa.
[01:00:55.423]How does Werner Enterprises interact
[01:00:57.539]with the rail industry?
[01:00:59.125]Specifically, are you capable of ensuring
[01:01:01.041]logistics data for time of shipments?
[01:01:04.671]Absolutely.
[01:01:06.058]We do have an air modal division at Werner
[01:01:08.907]that is fully focused on shipping things via the rail.
[01:01:13.746]Ultimately, a rail shipment does need a truck
[01:01:17.659]most of the time to do a final mile delivery.
[01:01:20.821]So we've partnered with several different railroads
[01:01:23.412]nationwide to facilitate that.
[01:01:27.271]The data sharing that we do is via EDI.
[01:01:32.069]When we book a load for a customer onto the rail,
[01:01:36.688]we communicate that via EDI.
[01:01:38.798]And then they give us updates
[01:01:40.473]on how that transit's going and when it's finally
[01:01:44.162]hit the rail yard of the destination.
[01:01:47.567]So it's a
[01:01:51.048]close relationship, but not much different
[01:01:53.798]than it is from the trucking carrier to the customer.
[01:01:57.142]We're just the customer at that point.
[01:01:59.569]Then our systems expose that data
[01:02:01.880]to the ultimate customer, that manages the freight.
[01:02:06.097]So they've got visibility,
[01:02:07.658]whether it's on the truck, trail, boat,
[01:02:09.954]doesn't matter within our system.
[01:02:12.341]They can see where it's at, and that's what they need.
[01:02:17.836]All right, well we've reached our time.
[01:02:20.409](woman talking quietly)
[01:02:23.668]Tom, thank you very much for your talk.
[01:02:25.304]I think you can tell from the questions
[01:02:26.637]we had a lot of interest.
[01:02:28.132]For those out there, Tom has his contact information
[01:02:31.144]on the slide, so you can contact him there.
[01:02:33.739]And to the folks in Lincoln,
[01:02:35.092]you'll be around for lunch.
[01:02:36.849]Absolutely.
[01:02:37.682]If you have any other questions, you can ask him.
[01:02:38.766]Tom, thank you very much.
[01:02:39.996]Yeah.
[01:02:40.829](applause)

The screen size you are trying to search captions on is too small!

You can always jump over to MediaHub and check it out there.

Tags:
ntc
matc
nebraska transportation center
mid-america transportation center

Comments

0 Comments

2012 MATC Fall Lecture Series: Tom Clements

Description

Searchable Transcript

Comments icon comment

Related Channels

Comments