Business Advisory Council - Spring 2014 Meeting

Business Advisory Council Meeting - June 10-11, 2014

Tuesday, June 10, 2014: Industry Technical Workshop & Patterson Lecture

Time

Event

1:30 - 4:30 pm

Industry Technical Workshop - "Autonomous Vehicle Technologies for Passenger and Freight Mobility"

Cocktails & Dinner

Location: Medill McCormick Tribune Center Forum, 1870 Campus Dr

5:00 PM

Reception and Cocktails - Guild Lounge, Scott Hall 601 University Place

6:00 PM

Dinner - Guild Lounge, Scott Hall 601 University Place

Patterson Lecture

Location: Medill McCormick Tribune Center Forum, 1870 Campus Dr

7:30 PM

33rd Annual William A. Patterson Transportation Lecture

Speaker:
Chris Lofgren,
President & CEO,
Schneider National, Inc.

Wednesday, June 11, 2014: BAC Meeting

Location: Norhtwestern University Transportation Center, Chambers Hall, 600 Foster St. - Ruan Conference Center (Lower Level)

Time

Event

7:30 AM

Continental Breakfast

8:00 AM

Call to Order & Opening Comments - BAC Chair Justin Zubrod presiding

8:10 AM

Welcome: Ronald Braeutigam, Associate Provost

View Presentation (PDF)

Notes: Dr. Braeutigam discussed "We Will" - the Campaign for Northwestern and its strategic priorities: Student Experience, Campus and Community, Global Connections, and Discovery and Creativity. He focused on the Student Experience priority area, namely the diversity of NU's imcoming class, global programming and connections, interdisciplinary opportunties such as the Transportation & Logistics minor program, co-curricular opportunities, and a goal to secure funding for undergraduate research opportunities.

8:20 AM

Director’s Report: Hani Mahmassani - followed by discussion

View Presentation (PDF)

Notes:

Director Mahmassani thanked the Council for its continued support, announced the publication of NUTC’s new BAC Directory, and thanked members for their continued and generous financial support of the Center.

The Director highlighted NUTC’s various outreach events and activities, including our Sandhouse Rail Group rail industry group, our Icarus aviation industry group, our forthcoming Freight & Logistics executive class on September 15-17, our outreach to the supply chain industry through NUTC’s participation in the Department of Labor, Leveraging, Integrating, Networking, Coordinating Supplies (LINCS) for Supply Chain Management (SCM) research consortium, where NUTC is providing strategic guidance to a group of community colleges developing supply chain management training programs for entry and middle-level employment.

Director Mahmassani also emphasized the current portfolio of research efforts ongoing or in development at the Center.  Industry engagements with Beoing, BNSF, Coca Cola, Echo Global Logistics, and U.S. Bank are either recently completed, ongoing, or in development.  NUTC has also responded to several calls for proposals since the Fall 2013 BAC meeting.  In collaboration with Boeing NUTC submit a proposal to USDOT’s Commercial Remote Sensing & Spatial Information Technologies Program to leverage remote sensing and emerging digital data sources to support relief and recovery operations in major flooding areas.   NUTC also assisted Professor Kimberly Gray with her National Science Foundation proposal -  Sustainability Research Networks Competition (SRN), 2014 Focus: Urban Sustainability, where NUTC secured letters of support from Centerpoint Properties, DSC, JLL, and UPS.  NUTC was also actively involved in two proposals to the Federal Highway Departments Exploratory Advanced Research program: (1) Virtual Nondestructive Evaluation (NDE) Laboratory for Highway Structures; and (2) Behavioral based (or agent based) National Freight Demand Modeling. 

In conclusion, the Director informed the members that NUTC will undergo a systematic program review during the 2014-2015 academic year.  The Center’s last review was conducted in 1998, even though reviews typically occur every seven to ten years.  Dr. Mahmassani noted that BA C members may be contacted by a review committee comprised of both internal and external reviewers. 

More information on the past year is posted in the presentation and the 2013 annual Progress Report, issued at the Fall 2013 BAC meeting.

8:50 AM

BAC Governance / Committees Overview:   Bret Johnson

Bret Johnson outlined several BAC committees that have been established to gain ideas, suggestions and guidance from BAC members.  These committees include: 

  • BAC Membership
    • This committee has been consistently active in recent years, and continues to identify new members for the BAC. 
  • 60th Anniversary Committee
    • This committee was established after the Fall 2013 BAC meeting to begin planning for a NUTC 60th Anniversary Celebration event on November 13-14, 2014.  Paul Schneider has provided leadership for this BAC committee.  Justin Zubrod is working in conjunction with NUTC to gain insight from a group of BAC members to assist with the development of a day long transportation symposium.  Jean Regan and Jim Rankin are leading a committee to organize a dinner gala on the evening of November 13.  This committee will
  • R&D Committee
    • The R&D committee will focus on working with NUTC to establish collaborative research initiatives, including assistance with identifying mechanisms to fund these initiatives. 
  • Meeting Planning Committee
    • The Meeting Planning committee will recommend meeting topics to NUTC and the BAC Chairperson and potentially help identify moderators and speakers for these sessions. 
  • Executive Education Committee
    • NUTC works closely with BAC Chair, Justin Zubrod, on the development and presentation of our annual Freight & Logistics course.  This committee will help develop one or two additional executive education offerings for the Center over the next year and beyond.
  • Patterson Lecture Committee
    • This committee will work with the NUTC Director and recommend candidates for the Patterson lecture.  

If there is an interest to participate in any of these committees, members should contact Associate Director Bret Johnson. 

9:00 AM

BAC Membership: New Member Introductions

Justin Zubrod introduced new BAC members attending a meeting for the first time: 

  • Robert Knight, Chief Financial Union Pacific; and
  • Rob Maidman, Senior Product Manager, U.S. Bank.

9:10 AM

Shale Oil – Long Term Economic Impacts and Opportunities

Panel Moderator: Farrukh Bezar

Overview:

In the last couple of years, few issues have been as topical as shale oil, whether you are talking about rail, truck, pipeline; whether its frac sand or crude by rail, it impacts shippers, carriers, investors, regulators and a variety of logistics providers.

The shale oil panel was formed to better understand the forecasts for production, and therefore the investment and business decisions being made to support the opportunity.  Furthermore, our goal was to gain and share perspectives from a group of stakeholders that could provide the group with better insight into this dynamic industry. 

Notes:

Patrick Moynihan is director of marketing for crude oil and refinery products at BNSF Railway.  Pat shared the importance of crude-by-rail for the BNSF.  He highlighted the compelling growth in U.S. unconventional oil production.  For example, production has increased more than 250% over the last three years and is exceeding 1,000,000 barrels per day in the Williston Basin.  Today, BNSF serves more than 30 crude-by-rail loading facilities across the United States, with plans to reach more than 50 destination facilities for unloading crude by the end of 2014.  Pat stressed that the opportunity is about more than frac sand and crude oil but supporting infrastructure as well, which includes cement, drilling pads as well as pipe.  Finally, BNSF’s record capital plan of $5B in 2014 ensures continued investment to enable expansion related to this business.

Louis Fenyvesi is the Director of Markets and Supply for TransCanada.  TransCanada’s liquid pipeline portfolio includes investments across the United States and Canada, and includes such development projects as Energy East and Keystone.  They have committed over $20B CDA in seven capital projects that are expected to go-live between 2015 and 2018.  Louis’ view on oil sands production growth was consistent with Pat’s perspective – it will continue to grow.  Furthermore, Louis reinforced the fact that the most significant opportunities in Canada are in Western Canada, in the province of Alberta.

Stefan Loeb is the Senior Vice President of Marketing and Strategic Development for Watco Companies.  Stefan was able to complement the other participants, offering a terminal investment perspective.  Watco maintains investments in short line railroads, mechanical shops, terminals as well as warehouses.  Stefan shared case studies in three broad areas: origin point terminals in the Bakken and Permian sand basins, Gulf Coast end point terminal in Green Ports Industrial Parks and their joint venture with Greenbrier Companies that combines 37 mechanical shops.  He indicated that they look across the entire supply chain and see significant opportunity.  Their keys to success include asset diversification – using non-traditional rail assets like ports and shops, feedback and reinforcement that they receive from customers as well as partners, their ability to leverage the strategic location of their key assets, and their overall flexibility.

10:00 AM

Break

10:30 AM

Adoption and Perceived Risks of Web-based Software for Transportation Management

Panel Moderator: Bret Johnson

  • Chris Pickett, Chief Strategy Officer, Coyote Logistics
  • Steve Hunt, CPP CISSP, Hunt Business Intelligence
  • Shawn Clark, President, Clark Consulting Group, LLC 

Notes:
Cloud computing is a term used to refer to a model of network computing where a program or application runs on a connected server or servers rather than on a local computing device such as a PC, tablet or smartphone. In the last year, there have been numerous examples of massive information technology and data breaches that have severely impacted the business operations of many companies. With this in mind, is the adoption of cloud-based software services more of a benefit or risk in the current information technology security environment?

In the context of describing Coyote Logistics’ widespread deployment of cloud-based software services and development of mobile computing application, Chris Pickett stated that transportation and logistics companies run the risk of losing a competitive edge against their peers without the adoption of cloud services. Steve Hunt, a security analyst and consultant with over 25 years-experience in the information technology industry, stated that “is not a question of whether to use the Cloud, rather how to use it safely.” Hunt went on to say that he could easily make a case the adoption of cloud-based software services, where computer servers are operated by third parties in military-like secure facilities, is more secure than hosting information on a company’s own computer network. Shawn Clark, who helped develop and deploy fraud detection systems in the airline industry, recommended developing a data-driven culture and building appropriate technology teams to continuously monitor for data thefts.

In sum, the panel agreed the benefits of moving to cloud computing applications, where appropriate business cases exist to do so, generally outweigh the risks of doing nothing.

11:15 AM

Financing Growth in Transportation

Panel Moderator: Justin Zubrod

View Presentation (PDF)

  • Rob Hart, Vice President and Managing Director, Fifth Third Bank
  • Adam Inselbuch, Managing Partner, South Street Ventures
  • Michael Weiss, Greenbriar Equity Group

Notes:

This panel focused on the issues and challenges that need to be addressed in obtaining capital for growth as the North American freight sector emerges from a period of traffic loss, slack demand, depressed earnings, and even bankruptcy for some.  After a period of limited confidence, carriers are now looking at a return to growth – and the need to obtain capital to fund additional equipment, to improve their networks, to build scale and scope and to enhance their competitive position through acquisitions and divestitures. 

The panelists, Rob Hart, Adam Inselbuch, and Michael Weiss - representing operators, private equity and banking, highlighted the relative merits of debt versus equity in obtaining capital and the need to demonstrate not only strength, but differentiation in attracting new investment to fuel that growth. All agreed that to sources of capital, not all borrowers are equal – attractiveness differs by mode and segment. In addition, they highlighted the return of debt to the markets – after years of limited or inaccessible lending, debt and the tolerance for debt on the balance sheet are now more acceptable. All panelists were bullish on the availability of capital – perhaps too much money chasing too few opportunities.

12:15 PM

NUTC 60th Anniversary: Discussion of 60th Symposium and Dinner Gala

Notes:
Paul Schneider reported to the BAC that NUTC will hold a 60th Anniversary Celebration on November 13 & 14, alumni, faculty, student, BAC members, and other distinguished guests.  In addition to the Long-Term Excellence Fund announced by Director Mahmassani at the Fall 2013 meeting, Schneider also encouraged the BAC members to make a 60th Anniversary gift to the Center, in addition to their standard annual gift. 

Jean Regan announced that the Dinner Gala will be held on the evening of November 13 at the Evanston Womens Club, noting the elegant ballroom on the second floor and equally resplendent reception area on the main floor.

12:25 PM

Introduction of Transportation Students

12:30 PM

Buffet Luncheon with Transportation Students