Logistics Productivity Drivers Emphasized by Schneider

The 20th annual William A. Patterson Lecture was delivered on April 25, 2001 by Don Schneider, President of Schneider National, Inc., to a large crowd in the Coon Forum. After reviewing the recent history of the US logistics productivity in relation to total economic output, Schneider drove to his point: American standards of living depend significantly on the efficiency of the material supply chain, and that efficiency can improve in specific ways:

  • Product supply chain management: Deregulation of transportation has permitted close relationships between manufacturers, carriers and merchants that enable continuing reductions of inventories and logistics costs -- by creatively working together.

  • Mode optimization: Use of rail intermodal service must continue to increase. Rail is the low cost mode in lanes that are dense and long enough to offset route and terminal costs. Recent rail mergers have held back progress because of poor service, but elimination of interchanges by combining railroads should make on-time performance an attractive possibility.

  • Equipment Capacity: Operation of larger, longer, heavier vehicles with more axles will reduce highway damage and will actually improve overall system safety compared with alternatives that include a larger number of smaller trucks.

  •  Technology: Cost reductions will be achieved through remote visibility of inventories and transportation equipment flows using low level satellites and better cellular systems. Network operations data can be subjected to optimization modeling techniques that will support further system improvements.

  • Cross-border movements: The Mexican border is a productivity challenge compared to Canada. As international trade growth continues, the complexity of multiple countries, ports and modes will require more technology. Separation of the information flow and the financial flow from the physical movements of goods is necessary to expedite the latter and minimize delays of valuable equipment, personnel and inventories.

For Schneider National, each of these steps depends upon attracting and retaining quality of personnel, the top priority of the company and its president. Combining the right personnel, equipment and systems, Schneider believes that the logistics industry can manage new dimensions of complexity and will continue to improve supply chain efficiency.