Logistics Startup’s Tech Investment Helped Prepare it for COVID-19

ProServ Logistics’ empty offices in Eden Prairie, Minnesota.
Photo courtesy ProServ Logistics

For one logistics company, the need for employees to work from home during the COVID-19 pandemic has been made easier with technology. In fact, ProServ Logistics had a head start, as some of its employees were already working remotely.

“Honestly? We didn’t really intend to be virtual,” says Brian Johnson, founder and CEO of ProServ Logistics, headquartered in Eden Prairie, Minnesota.

“Not all the best people wanted to work in Eden Prairie,” admits David Buhl, co-founder and COO. “They wanted to work but didn’t want to commute.”

“So, I guess we went virtual,” Johnson says with a laugh. “Maybe reluctantly, at first. Before we were comfortable with it. Certainly, before we really knew what it could do for us.”

“And what it can do for our customers,” Buhl adds. 

Virtual Offices

Some of ProServ’s key personnel have been remote from the beginning. One of them was Diane Johnson (no relation to Brian), vice president of operations.

“I just reached a point in my life where I wanted to be closer to my family,” she explains. “I love logistics, supply chain, the constant challenges, helping people, preventing problems. But I can do that from home…or my cabin,” she adds, like a true Minnesotan.

Eric Jex, vice president of operations, climbed every hill his “out of college” career choice presented him with. “But I’d chased that rabbit long enough,” he says. “I just wanted to have more meaningful relationships with family, friends, co-workers and customers.”

Brian Johnson, CEO and Co-Founder, ProServ Logistics, working from home during the COVID-19 crisis.
Photo courtesy ProServ Logistics

Jex, initially the most remote employee, joined ProServ when Brian Johnson and Buhl said he could come aboard without being on site. “The lifestyle I want is miles away from Eden Prairie,” he says. “When they said they were cool with me being remote, it was the easiest – and best – decision I ever made.”

ProServ had an office, where most of their employees showed up daily, intent on serving each customer, and committed to growing their business.

“I like coming into the office,” says Perry Torgerson, manager, business development.  “I’m a people person, and that’s what ‘having a job’ always meant to me. Until this Coronavirus,” he adds. “Now, a lot of offices are just risky.” 

Finding tech solutions

In addition to Johnson and Jex, they added a third remote employee, working from Kalamazoo, Michigan.

“At first, it was easy to communicate the important stuff,” Johnson says.  “We were small, and we didn’t always have a lot that we needed to work together on.” But the business grew, and success presented challenges.

“As a service provider, you need your team to communicate, collaborate, and coordinate,” Johnson says. 

Buhl, whose expertise is technology, looked on the situation as an opportunity. “We’d been looking at what was out there, kicking some tires, so to speak. We knew it was time to upgrade our technology.”

ProServ agreed to be a beta tester for EKA Solutions, which developed a cloud-based Omni-TMS to allow brokers, shippers, and carriers to more easily work together. They went live the first of this year. That gave the company an advantage when the COVID-19 crisis forced the entire office to work remotely.

“And you know how all of our people are able to work remotely this week?” Johnson says.  “Because we’ve been doing it. Working remotely, communicating with each other, helping our customers and carriers use our technology.”

David Buhl, COO and co-founder of ProServ Logistics, working from home during the COVID-19 crisis.
Photo courtesy ProServ Logistics

“EKA is a distributive platform,” Buhl explains. “Its security protocols are second to none, but it allows our people – and trusted partners – single sign-on access, and, it’s role-based.”

“So, was it hard to tell everyone to not come to the office because of the pandemic?” Johnson asks. “Yes, because we’re all used to what we’re all used to.  But, did I worry about our business? Or about taking care of our customers? No, because we’ve got the best people, and the EKA platform does everything we need it to.”

Noting that EKA is regularly adding new features to the platform, Buhl says, “I tell them they need to keep pace with ProServ. Our team is working remotely, but we’re going places.”

Brokers Operate at Peak Performance and Entirely Remotely using EKA Platform

SALT LAKE CITY, March 25, 2020 /PRNewswire/ — EKA Solutions, Inc., provider of a cloud-based integrated freight management ecosystem platform, announced today that many of its customers are successfully operating entirely remotely using its Omni-TMS™ Platform.

This follows EKA’s announcement yesterday of its special Omni-TMS® platform offer to Brokers who wish to operate their business partly or entirely remotely: https://www.prnewswire.com/news-releases/eka-solutions-announces-tms-offer-for-brokers-to-operate-their-business-entirely-remotely-301028725.html?tc=eml_cleartime

“In this uncertain time and though many of our operations are in ‘Shelter in Place’ locations, EKA Omni-TMS™ is a platform that allows us to continue to create and maintain our brokerage, agent, and digital marketplace while keeping our associates connected, even at home and remotely,” said Ryan Farrell, President and CFO for Wilsons Logistics, Inc. “EKA has helped define our digital solutions and allowed us to deploy our network to our customers, drivers, and carriers in the most efficient manner.”

“So, was it hard to tell everyone to not come to the office because of the pandemic? Yes, because we’re all used to what we’re all used to.  But, did I worry about our business?  Or about taking care of our customers? No,” said Brian Johnson, CEO and Co-Founder, Proserv Logistics, “because we’ve got the best people, and the EKA Omni-TMS™ platform does everything we need it to.  And they’re building new features in all the time to help us operate at peak business performance.”

“EKA is a cloud-based distributive platform,” said David Buhl, COO and Co-Founder, ProServ Logistics. “Its security protocols are second to none, but it allows our people – and trusted partners – single sign-on access – and, to operate entirely remotely.”

About EKA

EKA Solutions, Inc., provides a transformational cloud-based SaaS digital freight management, dFEMX®, ecosystem platform to manage all the customer’s freight businesses including freight exchange and third-party services. As part of dFEMX® Offering, EKA provides the Smart, Unified Platform EKA Omni-TMS® for – Virtually – Everyone. EKA Omni-TMS™ is designed to transform the transportation and logistics industry. It empowers small, medium and large size broker, carrier and shipper businesses to operate from quote-to-cash with affordable and best-in-class digital tools, enabling the higher performance demanded in tomorrow’s supply chain. With real-time information, EKA Omni-TMS® enables brokers, carriers and shippers to provide visibility and transparency as they fluidly trade across an expanding and verified network with key, trusted partners. For more information about EKA, visit: https://www.go-eka.com

About Wilson Logistics

Wilsons Logistics, Inc., is a multi-modal transportation and logistics service provider offering multiple capacity solutions through its agent, brokerage, and freight network while operating more than 1,000 company owned trucks.  Wilson Logistics is based in Springfield, MO with terminals and operations in MO, TX, MT, WA, OR, and CA. visit: https://www.wilsonlogistics.com

About ProServ Logistics

ProServ Logistics is a customer-centric non-asset-based 3PL focusing on the North American supply chain.  It provides truckload, less-than-truckload and expedited transportation management services to meet customer’s needs for timeliness, transparency and overall excellence in their supply chain. Based in Eden Prairie, MN, their highly skilled, experienced professionals blend their expertise with superb technology to support their customers’ success. Visit: https://www.proservlogistics.com

For all other inquiries:
Arune Singh
arune@go-eka.com

SOURCE EKA Solutions, Inc.

Related Links

https://www.go-eka.com/

Smart COVID-19 “Business Continuity” Response – Tech Up Not Shut Down!

Today, tomorrow, and for the foreseeable future, millions, perhaps billions, of people are trying to work from home.  Some current adapters have been forced out of their offices by the specter of COVID-19, struggle with time – and family – management, and hope to return to the comfortable routine of office life asap.  But others adjust easily, as if they have been working remotely all along. They’re the ones that Tech Up.

What makes the telling difference?  It is likely too early to draw conclusions.  However, there is one young, growing business that, with a versatile approach, a “whatever it takes for the customer” attitude and a savvy, insightful technology decision, is able to make their “remote opportunity” thrive.    

ProServ Logistics

“Honestly? We didn’t really intend to be virtual,” says Brian Johnson, Founder and CEO of ProServ Logistics.  Headquartered n Eden Prairie, MN, they recently drew positive attention from the local press http://www.startribune.com/long-game-starting-to-pay-off-for-logistics-startup-proserv/565358672/

“We were glad to do what they wanted,” says David Buhl, co-founder and COO, “But not all the best people wanted to work in Eden Prairie.  They wanted to work but didn’t want to commute.”

“So, I guess we went virtual,” laughs Johnson, whose love for life and logistics shows in his upbeat demeanor and continual optimism.  “Maybe reluctantly, at first. Before we were comfortable with it. Certainly, before we really knew what it could do for us.”

“And what it can do for our customers,” Buhl adds.  

Virtually, Everyone?

ProServ is not all virtual, not all remote.  

“I like coming into the office,” says Perry Torgenson, Manager, Business Development.  “I’m a people person, and that’s what ‘having a job’ always meant to me.”

“Until this Coronavirus,” he adds, over the phone.  “Now, a lot of offices are just risky.”  

But, some of their key personnel have been remote from the beginning.  Diane Johnson (no relation to Brian), VP Operations and an industry leader for more than twenty years, was “officed out.”

“I just reached a point in my life where I wanted to be closer to my family,” she explains.  “I love logistics, supply chain, the constant challenges, helping people, preventing problems.  But I can do that from home…or my cabin,” she adds, like a true Minnesotan. “And my commitment to my customers and ProServ?  I’ll reach out to you before you need me, but I’m always available.”

Eric Jex, VP Operations, is an intense, “make things happen” dynamo who climbed every hill his “out of college” career choice presented him with. 

“But I’d chased that rabbit long enough,” he says, smiling to help you understand.  “I just wanted to have more meaningful relationships with family, friends, co-workers and customers.  Brian and I had worked together earlier, and, when I heard what he had started, I was intrigued.”

 Jex, initially the most remote employee, went from “intrigued” to “all in” when Brian Johnson and Buhl said he could “come aboard” without being on site. “The lifestyle I want is miles away from Eden Prairie,” he says.  “When they said they were cool with me being remote, it was the easiest – and best – decision I ever made.”

Remoteness Becomes a Strength

ProServ had an office, where most of their employees showed up daily, intent on serving each customer, and committed to growing their business.  But, two of their key personnel – Johnson and Jex – were miles away. Then came Melissa, a customer advocate whose name and talent was well-known.  

“We had identified her as a rising star,” says Jex, who had recruited Melissa earlier in their careers.  “When we had the chance to get her on our team, we wanted to find a way.”

“I live in Kalamazoo,” Melissa says with a laugh.  “When I interviewed, I told them, ‘Give me a chance and I will help you build your business…but I’ve got to do it from Kalamazoo.”  

Then, there were three who were remote; vital team members, core to Pro Serv’s success.  “At first, it was easy to communicate the important stuff,” Johnson says. “We were small, and we didn’t always have a lot that we needed to work together on.”

But, the business grew, and success presented challenges.

“As a service provider, you need your team to communicate, collaborate, and coordinate,” Johnson realized.  

“And technology is my area of expertise,” Buhl states.  “And this looked like an opportunity. We’d been looking at what was out there, kicking some tires, so to speak.  We knew it was time to upgrade our technology.”

“We’d heard about EKA Solutions,” Johnson recalls.  “And had worked with some of their people earlier in our careers.  So, we put them to the test. This is our livelihood; we can’t gamble.”

“We agreed to be a BETA tester,” says Buhl.  “And, first of this year, we went live.”

“And you know how all of our people are able to work remotely this week?” Johnson asks.  “Because we’ve been doing it. Working remotely, communicating with each other, helping our customers and carriers use our technology.”

“EKA is a distributive platform,” Buhl elaborates.  “Its security protocols are second to none, but it allows our people – and trusted partners – single sign-on access – and, it’s role-based.”

“So, was it hard to tell everyone to not come to the office because of the pandemic?”  Johnson asks. “Yes, because we’re all used to what we’re all used to. But, did I worry about our business?  Or about taking care of our customers? No, because we’ve got the best people, and the EKA platform does everything we need it to.  And they’re building new features in all the time.”

“Every two weeks EKA does another release,” Buhl says.  “I tell them they need to keep pace with ProServ. Our team is working remotely, but we’re going places.”

“That we are,” Johnson says with a laugh.  “We may be remote now, but we’re all still in sync!”

It’s Time To Tech Up

The world is changing rapidly – and more so in the last four weeks. While many factors are out of our control, that makes it more imperative to learn from the success of ProServ Logistics who decided to embrace technological progress in business.

They decided to Tech Up.

This is no longer a choice. Companies rigidly holding to the old ways of doing business in an analog mindset aren’t prepared for the myriad of challenges about to arrive in an increasingly digital world.

No one can predict everything that’s coming – but we can say with confidence that refusing to embrace cloud-based technologies and platforms means you won’t be ready for the future. 

Happy Re-Boot!

January 6, 2020 By Jim Best, Chief Growth Officer, EKA Solutions, Inc

Happy Reboot, er, New Years!  

Technology is having an impact on us in ways once unimaginable, changing how we work, play, shop and socialize.  But one of technology’s most effective actions – the reboot – most closely resembles one of our favorite traditions – New Year!   Everything old becomes new again…. (Read More)

No matter how tech-savvy you are – and it could be that the more savvy you are, the more you believe in its value – but, there are times when we all solve a glitch by rebooting.  In fact, I have been in several situations when the only thing I could think to do – it was, indeed, my last and only resort – was to reboot. Thankfully, it works.  

Rebooting is, of course, the techie’s equivalent of an “all-purpose punt”.  Consider these guidelines:

  1. When in doubt, reboot
  2. When all else fails, reboot
  3. When push comes to shove, reboot.

A reboot works because it restores ”everything to its original state”.  It “flushes” the system of ‘…random, unimportant, and/or trivial data bogging down your device”.  There is, of course and fortunately, an important lesson to be learned here.

If you are human (and I will assume you are, as I do not have a “Select the squares which depict cacti” nine-square test available), you can probably relate to the “reboot” analogy.  So often so many of us stumble (okay, let’s say, “blithely traipse”) along the path of our life, thinking we’re pretty much headed in the right direction, believing we’ll get where we hope to arrive, and hoping we’re with the right people to make the journey, well, if not pleasant, at least tolerable.      

And, then, what?   A thunderstorm bursts from the sky, the people we’re with decide they hate us and flee, the path becomes untenable and, worse, uphill – a pack of stray dogs looks hungry and mean, our shoes become untied, a chill wind descends and sleet smites our face.  

What to do?  Re-boot!

And so, I theorize, the popularity of New Year’s.  It is our annual unconditional reboot.  

Fall short of your goals?  

Only partially alcohol-free?

Not quite finish that 5K?

Poor performance review?

GPA less than 4?

Forgot to call home a few (dozen) times?

Speeding ticket?

Slide from paleo-to-keto-to-nacho?

Told your sister to mind her own business?

Pretended you didn’t see your neighbor?

Bought the cheap dogfood for Sir Bowzer?

Used data-roaming a few times too often?

A few credits short of your Master’s degree?

Lied about your weekend?  

Told your spouse you didn’t see the dirty dishes?

It’s okay – it was a helluva tough year.   Cut yourself sone damn slack!  

Just reboot.  Everyone is doing it.  

The only real question is, “Why do we wait a whole year before each sanctioned reboot?”


Transflo and EKA Solutions, Inc., Announce Strategic Collaboration

SOURCE EKA Solutions, Inc. Read more Here

SALT LAKE CITY, Nov. 5, 2019 /PRNewswire/ — EKA Solutions, Inc., provider of cloud-based freight integration ecosystem platform solutions announced today that it has executed a strategic collaboration agreement with Transflo® to jointly deliver innovative offerings to small and medium size brokers, shippers and carriers to help them thrive in the new supply chain world.

EKA provides a transformational digital freight integration ecosystem platform to manage all the customer’s freight businesses. EKA serves as the system of record across multiple applications and seamlessly ties into other freight solutions (TMS, driver apps, etc.). A single digital end-to-end hub delivers a seamlessly unified, consistent, efficient and effective experience across all freight management systems for customer’s entire business with trusted entities.

“The transportation industry is experiencing significant change, and most of it comes from software and technology,” stated Frank Adelman, President and CEO of Transflo®. “We’re excited to work closely with the experienced and talented supply chain leadership team at EKA Solutions, Inc., to meet the industry’s current and emerging needs. Creating a strategic relationship with a state-of-the-art end-end cloud-based logistics software solution provider like EKA will help accelerate the delivery of transformative solutions to small and medium size brokers, shippers and carriers.”

“EKA is enthusiastic and privileged to work with Transflo®, a leader in delivering real-time communications to thousands of fleets, brokers, and commercial vehicle drivers. The collaboration between TransFlo and EKA will be an important demonstration of how a cloud-based mobile extensibility solutions leader and a transformational end-to-end software solutions provider can strategically collaborate to create strategic operational leverage for brokers, carriers and shippers,” said JJ Singh, founder, investor & CEO of EKA Solutions, Inc.

About Transflo

Transflo® by Pegasus TransTech is a leading mobile, telematics, and business process automation provider to the transportation industry in the United States and Canada. Through its digital platform, the company delivers real-time communications to thousands of fleets, brokers, and commercial vehicle drivers. The company’s mobile and cloud-based technologies digitize over 500 million shipping documents each year, representing more than $84 billion in freight bills. Organizations throughout the Transflo client and partner network use the solution suite to increase efficiency, improve cash flow, and reduce costs. Headquartered in Tampa, Florida, USA, Transflo is setting the pace of innovation in transportation software. For more information, visit www.transflo.com.

About EKA

EKA Solutions, Inc., provides the Smart, Unified Platform EKA Omni- TMS® for – Virtually – Everyone. EKA Omni-TMS ® is the cloud-based SaaS freight Eco-System designed to transform the transportation and logistics industry. It empowers small, medium and large size broker, carrier and shipper businesses to operate from quote-to-cash with affordable and best-in-class digital tools, enabling the higher performance demanded in tomorrow’s supply chain. With real-time information, EKA Omni-TMS® enables brokers, carriers and shippers to provide visibility and transparency as they fluidly trade across an expanding and verified network with key, trusted partners. For more information about EKA, visit:  https://www.go-eka.com

For More Information:
Arune Singh
arune@go-eka.com 

Volvo Chief: Technology Driving an Industry in Transition

October 30, 2019 • by Deborah Lockridge

Read more Here


Martin Lundstedt, president and CEO of the Volvo Group, speaks to HDMA members at NACV. Photo by Deborah Lockridge

Electrification, autonomous trucks, and connectivity are transforming the trucking industry. said Martin Lundstedt, President and CEO of the Volvo Group. He explored these topics addressing a crowd of trucking industry suppliers at the Heavy Duty Manufacturers Association’s lunch briefing during the North American Commercial Vehicle Show in Atlanta Oct. 29.

With 8 billion people projected to be living in an increasingly digital world by 2030, he said, “With that population that means that transportation needs will continue to grow and increase, both goods and people – but it needs to be considerably more sustainable,” in order to leave the world in good shape for future generations.

  • Vehicles are only used about 25 percent of the time over their life cycle, sitting idle and unproductive the rest of the time
  • Only about 40-50% of available load capacity is actually used, meaning more of a vehicle’s length is theoretically available for cargo
  • 5-10% of total fuel consumed is used to move goods
  • Roads reach their peak throughput only 5% of the time, and even then, it is only 10% covered with vehicles
  • Nearly 7% of all U.S. accidents involve a large truck – and about 12% of fatal crashes.

“In Volvo, what we are going for is safety, that should continue to be the main priority,” he said – but at the same time, obviously new technologies offer great potential for more efficiency and productivity.

Lundstedt said the new technologies transforming the transportation system are electrification, autonomous technologies, and connectivity.

“They are interesting, but they must be put in context,” he said. “How do we get out the benefits?”

As a project that covers all three technologies, he highlighted Vera, an electric, connected and autonomous tractor, designed for repetitive assignments in logistics centers, factories and ports, Vera doesn’t even have a cab for a driver. Vera now is being used in its first real-world job – providing autonomous transport between a logistics center and the port terminal in Volvo’s hometown of Gothenburg, Sweden.

Moving to e-mobility, Lundstedt pointed to the Volvo Lights project (Volvo Low Impact Green Heavy Transport Solutions) where it’s conducting real-world tests of battery electric Volvo VNRs at the southern California ports, working with California’s South Coast Air Quality Management District and over a dozen industry partners. Volvo has said it plans to have the EVNRs available for sale by the end of 2020.

Also under the Volvo Group, Mack offers the LR electric for waste/refuse applications.

Autonomous trucks, he said, have a great deal of potential in areas such as safety, energy efficiency, and productivity, and predicted they “will come quickly into our business.” There are many applications the Volvo Group is involved with where autonomous trucks make sense, such as port drayage, mines, and cross dock operations. “This is an area where we are putting a lot of effort.”

Volvo recently announced it is establishing a new business division that will focus the company’s engineering, design and financial efforts to accelerate the development, commercialization and sales of self-driving vehicles. And earlier this year, Volvo Group announced a partnership with Nnvidia to develop advanced AI platform for autonomous trucks.

The third area where there is huge potential, he said, is “growing digitization.”

Today there are 1 million connected Volvo group vehicles. “We are collecting enormous amounts of data. The capability of collection, analysis and action have improved tremendously.”

This connectivity is enabling new levels of customer service and uptime, he said, allowing for more informed and specific advice.

Lundstedt emphasized that a large proportion of its investment in developing new technologies focuses on what he called “well-known technology,” such as powertrains, aerodynamics, and safety systems.

“Yes, we are investing heavily in new technologies, but equality heavily into what was call well known; there’s a lot that can be done in those areas as well.”


EKA Solutions Launches Transformational Next-Gen Enterprise Broker TMS Solution

SALT LAKE CITY, Oct. 29, 2019 /PRNewswire/ — EKA Solutions, Inc., provider of a cloud-based freight integration ecosystem platform, announced today that it has launched its Enterprise Broker Omni-TMS® solution. This transformational new software solution completes the EKA suite of Broker TMS offerings – Core, Professional and Enterprise – to help broker customers of any size digitize their business and thrive in the new supply chain world.

EKA provides a transformational digital freight integration ecosystem platform to manage all the customer’s freight businesses. EKA serves as the system of record across multiple applications and seamlessly ties into other freight solutions (TMS, driver apps, etc.). A single digital end-to-end hub delivers a seamlessly unified, consistent, efficient and effective experience across all freight management systems for customer’s entire business with trusted entities.

“The end-to-end cloud-based Enterprise Broker TMS software solution is focused on large customers to transform their logistics and private marketplace business for rapid growth,” said JJ Singh, Founder, Investor and CEO of EKA Solutions, Inc. “With increased pressure to provide superior customer service and the shipper’s need for freight visibility, EKA’s innovative software tools enable large broker customers to make better decisions and faster, at affordable cost and with increased flexibility to manage all their freight businesses including 4PL”.

“EKA created the next-gen Enterprise Broker TMS solution to enable customers to create strategic operational leverage in the new freight economy,” said Mark Walker, Investor, President and Chief Digital Officer for EKA Solutions, Inc. “It’s exciting to see customers agreeing with us by signing-up to run their logistics business on the EKA Enterprise Broker Omni-TMS® platform”.

About EKA

EKA Solutions, Inc., provides the Smart, Unified Platform EKA Omni- TMS® for – Virtually – Everyone. EKA Omni-TMS ® is the cloud-based SaaS freight Eco-System designed to transform the transportation and logistics industry. It empowers small, medium and large size broker, carrier and shipper businesses to operate from quote-to-cash with affordable and best-in-class digital tools, enabling the higher performance demanded in tomorrow’s supply chain. With real-time information, EKA Omni-TMS® enables brokers, carriers and shippers to provide visibility and transparency as they fluidly trade across an expanding and verified network with key, trusted partners. For more information about EKA, visit:  https://www.go-eka.com

Contact:
Arune Singh
arune@go-eka.com

SOURCE EKA Solutions, Inc.

Related Links

https://www.go-eka.com


The Speed of Technology Just Jumped into Hyperspace

Truck Tech • October 23, 2019 • by Jack Roberts

Read more Here

Image by Stain_Marylight from Pixabay 

A few short years ago, I used to give a presentation on the wave of disruptive technology that was just beginning to stir up the trucking industry. My Big Finish slide was a shot of the then-new-and-mind-blowing Amazon delivery drone– to make the point that while many fleets were struggling to find drivers, tech companies like Amazon were testing flying robots to see if they could one day deliver packages.

Well, it looks like that one day is here.

A slew of news stories over the past few weeks have made it clear that drones are getting very close to operational deployment in introductory areas. UPS and FedEx have been particularly aggressive in getting their respective drone programs up to speed – which makes sense. They are the two companies that would benefit immediately from drone deliveries.

And while we haven’t heard much from Amazon lately on the drone front, ZF is working on a delivery system of its own, and a company called Alphabet’s Wing claims to have beat everyone else to the punch, launching the first commercial drone delivery service in the U.S. on Oct. 19th.

In the short term, these developments aren’t going to change much for most of us. In fact, I’d guess most of us are still several years away from seeing our first drone delivery in person.

As crazy as flying robots dropping packages off on your doorstep sounds, the real take-away here is much more profound: The fact that we’ve gone from delivery drones being a far-fetched concept used in presentations about technology five or six years ago to reality is a stark confirmation that change is coming with stunning swiftness. And the only thing you can do in the face of these technological onslaught is to accept it and make it work for you.

Related: A Complete Tech Transformation for Trucking

Even more important than that, I think, is the reality that the pace of change has accelerated far beyond what most of us think of as normal. I’m often asked when I think autonomous trucks will become a common sight. And people are shocked when I tell them it could happen in as soon as five years – with 10 years being a more reasonable assumption. Most people I know who cover this industry tend to say 25 to 50 years – if it ever happens at all.

But my personal conviction is that the rate of technological advancement has accelerated to such a point that the trucking industry – perhaps society as a whole – may be significantly transformed in ways we are only just beginning to envision in as little as a decade. And I’m hardly alone in making that assumption. The stark reality now is that things are happening fast. And they’re getting faster at an exponential rate every 12 to 18 months.

Maybe you find this to be depressing. We are, after all, quickly moving into areas with many unknowns. Just this morning, Google announced that its engineers have unlocked the secrets to quantum computing. Moreover, Google believes these unfathomably fast and powerful supercomputers could be in common usage in as little as five years. And that means that the already-frenetic fast pace of disruption and change we’re dealing with will basically jump into hyperspace.

So, on the one hand, I’m feeling pretty good about my five-to-ten-year prediction for autonomous trucks. But, on the other hand, some experts are saying that quantum computers could pose the single greatest existential threat to mankind in history – worse than nuclear weapons, even. And that is, you know, kind of a buzz kill.

But one thing is for certain – we’re not going to put the technological toothpaste back into the proverbial tube any time soon. A whole new world is coming at us fast. And opting out of it is simply not going to be an option

Intermodal freight continues shift to East Coast, benefiting trucking

John Paul Hampstead, Associate Editor  

Read more Here

(Photo: Norfolk Southern)

Container volume growth on the East Coast of North America continues to outpace growth on the West Coast, despite longer ocean transit times and higher prices from Asia. 

But the eastern railroads are not necessarily the beneficiaries here. CSX (NASDAQ: CSX) has cut many intermodal lanes, reducing intermodal volumes by 8% year-to-date, which followed a similar drop the prior year – the largest drop of any Class 1 railroad. Norfolk Southern (NYSE: NSC), on the other hand, moves the most intermodal freight as a percentage of total carloadings (55%), but has struggled to deliver operating ratio improvements as average intermodal rates fell from $1.78/mile to $1.47/mile this year (INTRM.USA). 

First, price action in the spot markets for 40-foot containers from Asia to North America has responded to volume growth on the East Coast. Over the course of September, rates to West Coast ports (FBXD.CNAW) fell while they were flat or up to the East Coast ports (FBXD.CNAE), widening the ‘Panama spread’ (FBXD.PANA), or the difference between the rates.

(Chart: FreightWaves SONAR)

A widening Panama spread has the effect of making West Coast ports relatively more attractive. U.S. Customs imported shipments to Savannah (CSTM.SAV) are at one of the highest levels they’ve been at in two years, while the same data for Los Angeles (CSTM.LAX) was higher for most of that period than it is today.

(Chart: FreightWaves SONAR)

But the railroads that have pursued intermodal the most aggressively have underperformed against their main competitors, especially in the case of the eastern rails, CSX and Norfolk Southern. After CSX chief executive officer Hunter Harrison’s death in December 2017, Jim Foote took over, and described in earnings calls how the railroad’s intermodal network was almost a separate franchise that had been left nearly untouched by Harrison’s reorganization of the rest of CSX’s operations.

Foote removed about 7% of CSX’s intermodal volumes as he ‘rationalized’ the network to focus on high-density lanes where he saw an opportunity to improve service and yield by reducing the number of touches involved in CSX’s handling of the freight. The railroad was able to gets its operating ratio (OR), or the percentage of revenue consumed by operating expenses, down to 57.4% in the second quarter of 2019.

Norfolk Southern, on the other hand, is more committed to its intermodal business. NSC’s intermodal volumes are down only 2.4% year-to-date, compared to CSX’s 8%, the smallest drop of any U.S. railroad. But weak trucking spot prices (DATVF.VNU), down 16.4% year-to-date, have pulled intermodal rates down with them. Norfolk Southern was one of the last railroads to embrace the cost-cutting and efficiency initiatives of precision scheduled railroading (PSR), but so far has not seen the dramatic early-stage benefits that typically come with it.

“While the recent network changeover occurred without major incident, we are nonetheless puzzled by the seeming divergence in how the margin improvement story is unfolding at NSC versus prior PSR iterations (including what we have seen so far from UNP),” wrote Credit Suisse equities analyst Allison Landry in a July note on Norfolk Southern. “Typically, the step-function change in the OR occurs swiftly and in the magnitude of several hundred basis points of improvement within the first 12-18 months of implementation.”

Norfolk Southern’s large intermodal business, generally understood to be lower-margin than other commodity types, may be part of the problem. The other issue is that many railroad analysts think that intermodal is less competitive on the East Coast, that it doesn’t make as much economic sense to shippers, because average lengths of haul are shorter. If a shipper is moving freight from Los Angeles to Chicago, a distance of 2,000 miles, the shipper can save far more money by using intermodal instead of truck that it can on a lane like Savannah to Chicago, which is only about 970 miles. 

Shippers who choose intermodal over truck are normally trading service for price, but for some customers, the trade-off is only worth it on long-haul lanes that produce bigger cost savings. The chart below shows relative year-to-date growth in long-haul trucking tender volumes for Savannah, Los Angeles, Elizabeth, New Jersey, and Houston.

(Chart: FreightWaves SONAR)

Savannah’s long-haul trucking volumes have grown the fastest by far, nearly twice as fast as those of Los Angeles. 

Part of the railroads’ struggle with intermodal this year – across the Class 1s, intermodal volumes are down 4.1% year-to-date – is caused by relatively soft freight demand and relatively loose trucking capacity. The rails have taken advantage of thinner volumes to reduce dwell times and run their trains faster, but those service metrics could deteriorate if volumes came back in a big way, for example if a resolution to trade disputes came earlier than expected, and re-accelerating economic growth sparked a surge in consumption.

In that scenario, railroad terminals could become snarled, trains might be delayed, and healthy margins might prove to be elusive as time-sensitive shippers prefer to pay premium prices to trucking carriers instead of the rails. 

“Rails remain hotly debated,” observed Deutsche Bank equities analyst Amit Mehrotra in an October 3 investor note. “Investor bias is positive, but the magnitude of the volume decline is concerning, and as a result, third quarter results will be critical to the near/midterm outlook for Rail shares. In this sense, near-term conviction is significantly shaken, but long-term thesis still holds.”

Efficiency differences between port operators, the environmental regulation of drayage providers in Southern California, persistent labor disputes, and competitive container rates are all driving intermodal volumes to the East Coast. At present, it appears that CSX is largely uninterested in capturing that freight, Norfolk Southern may have more of it than it actually wants – NSC guided for flat intermodal volume growth for the full year – and that trucking carriers could stand to benefit the most.


Why Trucking Companies Need to Plan Now for a Cyber Attack

October 6, 2019 • by Deborah Lockridge 

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Harold Sumerford, CEO of J&M Tank Lines, talks about his fleet’s experience with a cyber attack.Photo by Deborah Lockridge

When Harold Sumerford’s phone rang at 2:30 a.m. on April 2, he knew the news couldn’t be good. But he figured it was probably the safety department – not the CFO telling him the company’s entire computer system was down from a ransomware attack.

The CEO of J&M Tank Lines, Sumerford shared the headaches and lessons learned from that experience as part of a panel discussion on cybersecurity on Oct. 6 during the American Trucking Associations’ Management Conference and Exhibition in San Diego.

Although the company was able to get the email and phone systems back up in a few hours, it took four days to get functional again. Although they had backups, he said, in layman’s terms, the computer system “could see the data but didn’t know what it meant.” It was a painstaking process to go through all the lines of code and make it interpretable by the computer system. And during those four days, they weren’t able to bill any customers or enter anything into the system. Drivers got their paychecks only because J&M simply paid them the exact same amount they received the previous week.J&M was just one example of a rapidly growing problem with cybersecurity in the trucking industry. Transportation and logistics companies are now among the top-targeted industries by computer hackers, according to the panel. In fact, a recent article on ZDNet reported that “hackers are deploying previously unknown tools in a cyberattack campaign targeting shipping and transport organizations with custom trojan malware.”

Sharon Reynolds, chief information security officer, Omnitracs, said normally she would put up a montage of recent cyber security headines – but there have been so many lately, you might as well just put "your company name here."
 - Photo by Deborah Lockridge
Photo by Deborah Lockridge

Trucking’s Cybersecurity Vulnerabilities

Sharon Reynolds, chief information security officer for Omnitracs, explained that the “attack surface” vulnerable to hackers in the trucking industry is ever-expanding and includes:

  • CAN bus exploits on vehicles
  • Connectivity via satellite, wireless, cellular and Bluetooth
  • Internet-facing networks and platforms

Trucks, laptops, mobile phones, etc., connect to web services. Then there are web-based platforms we use such as GoToMeeting or SalesForce that are also points of connection. “So when you talk about the attack surface, think about the whole ecosystem,” she said. “These are all points of ingress and egress.”

Sometimes the point of vulnerability isn’t technology-based at all, but human-based. Moderator Ken Craig, vice president of special projects for McLeod Software, later shared with HDT a story of a “white-hat” test probing a company’s defenses where the “hacker,” unable to find a weakness via computer, called the company’s main phone line and went down the company directory until he found someone whose outgoing voice mail said they were on vacation for the next two weeks – then mimicked that employee’s voice to call the company’s IT help desk, saying she was having trouble logging in remotely, and got the access information needed.

“A high number of people do not survive these attacks financially,” Sumerford said. “This has to be a strategic priority.”

6 Things to do to Protect Your Company from Hackers

The panel offered a number of strategies to help prevent cyberattacks and mitigate their consequences:

1. Conduct an assessment.

Joseph Saunders, CEO of RunSafe Security, said there are many assessments available that you can use as a framework to evaluate the vulnerabilities in your organization. Generally, he said, there are about 100 questions to ask yourself. You can do it internally or hire an outside party to help (but don’t pay more than $15,000, he said.) It’s a good idea to do a new assessment once a year.

2. Conduct a penetration test

In a penetration test, an outside party, a “white hat hacker,” tests and probes your systems looking for vulnerabilities. Don’t tell your team you’re doing it, or they will become more vigilant and skew the results. This is a separate assessment from the self-assessment, and the results may be similar, or the white hat may find something that you did not uncover previously. Like the assessment, don’t just do it once. Repeat every year or two.As an example of a penetration test, Reynolds cited the Cyber Truck Challenge held in Detroit annually. “We bring our equpment, and college students and professional white-hat hackers hack our devices in an NDA (non-disclosure agreement) environment, and we get that feedback and can go back and say you to developers, you missed this.”

Joseph Saunders, CEO, RunSafe Security, talks about how to prioritize cyber security weaknesses at your company.
 - Photo by Deborah Lockridge

Joseph Saunders, CEO, RunSafe Security, talks about how to prioritize cyber security weaknesses at your company. Photo by Deborah Lockridge

3. Prioritize the risks

You can apply a simple risk management framework, Saunders said. On one axis, plot the weaknesses you uncover based on the likelihood of an attack. On the other axis, plot them based on the significance of their impact. The items in the upper-right-hand quadrant that are both most likely and can do the most damage are the ones you want to address first.

“You only have a finite number of resources you can throw at this,” Reynolds added. “So identify the most critical things — but have your containment and mitigation plan in place for those critical systems.”

4. Apply software patches

Saunders compared software patches to washing your hands – it’s something that can prevent viruses, but only if you do it consistently. Yes, it’s a pain, but make it a regular part of operations and maintenance. Talk to your suppliers – they’re regularly coming up with fixes for weaknesses they find in their offerings, and you need to come up with operations that install them consistently.

5. Consider insurance

One of the things J&M Tank Lines did after its attack was purchase a cyber insurance plan. “Cyber insurance is becoming really critical,” said Omnitracs’ Reynolds. “Like any other business risk we insure for, it’s important to view it as a business risk.” However, companies will generally require you to put a robust cyber security program in place as part of the deal. “You have to have good cyber hygiene or they won’t pay.” Sumerford said J&M just renewed its insurance; “We have a pretty in-depth cyber security plan of action.” Which leads us to…

6. Create an incident response plan

Don’t wait until you get that phone call at 2:30 a.m. to figure out what you’re going to do if and when your company is the victim of a cyber-attack, Saunders said. “Knowing what to do when you get that phone call in the middle of the night is key.” Questions to ask yourself include:

  • Who is in charge?
  • Who gets notified?
  • Who is the response team?
  • Who is your forensics team? The panel emphasized that it’s important to build the relationship with that forensics company before you have the attack. It’s not exactly a good time to be trying to set up a purchase order with your computers down. Set up a retainer arrangement, Reynolds suggested. “This way, you can call and say, ‘It’s happened, boots on the ground.’”
  • Who is your FBI or DHS contact? Again, the time to meet your FBI or Department of Homeland Security contact is not when you’re in the middle of a cyber attack situation. “You don’t want to cold-call the FBI,” Craig said.
  • Will you pay the ransom?

Long-term solutions

Saunders said while these are good things to do in the short term, in the long term, the industry needs to find better ways to “disrupt hacker economics.”

“Often times if they can find a vulnerability in one place, they’re going to do it again and again,” he said. In fact, automated exploits are used in nearly 70 percent of cyber-attacks. “This is an underground business as sophisticated as the ones you operate. The idea is to disrupt hacker economics.”

The military has learned this lesson with drones. “If you think about a fleet of drones… each one is functionally identical, they have the same software, so if there’s a vulnerability on one, it exists in all. The military figured out if you could make it functionally identical but logically unique, so each one is different from an attacker’s perspective, then they have to spend a lot of time to work on each drone. This disrupts the hacker economy.”