While our So Cal Supply Chain Meetup usually focuses on the ports and drayage carriers, we decided to take it one step further and explore the relationship — and opportunities for improvement – between drayage trucking companies and the warehouses in which they pickup from and/or deliver to. This “port to door,” or “rail to door” part of logistics is a critical component of our supply chain.
See the full video here
My colleague Walker Banks, Chief Operating Office at PortPro, moderated a great discussion in July with industry leaders: Jim Gillis (IMC Logistics); Ian MacMillan (South Coast Air Quality Management District); Daniel Loflin (Prologis) and Stephanie Bewick (NavTrac – Acquired by Loadsmart). The event was held at Braid Theory’s offices, an incubator and accelerator for entrepreneurs serving programs in all areas of the blue economy.
Here’s what they had to say…
Drayage Is A Relationship-Driven Industry Dependent on Drivers
Jim Gillis, President of the Pacific Region for IMC Logistics, talked about the top 3 characteristics that make a warehouse easy or perhaps difficult for carriers to work with.
Jim called for improvements and unity in the way drivers are treated. He said the lack of respect shown to drayage drivers at some warehouses is appalling. In fact, he stopped doing business with a large automotive manufacturer that would not allow drivers to use its restrooms — even after they’d shown up on time for scheduled appointments, and then were forced to wait around for eight hours for a pickup. At IMC facilities drivers are treated with respect – they are offered a cold drink and a place to get out of the heat while they wait for their freight. It seems like a no-brainer, but sadly, some people need reminding that common courtesy goes a long way. Treat drivers with respect, and communicate with them — update them regularly on the status of their loads, and build relationships with them. They’re the ones doing the work in getting our goods from and to where they need to go.
Flexibility is key. According to Jim “when I look at warehouses and they tell me, hey, I'm only going to be open from 6 to 12 and if you're ten minutes late, you lose your appointment time…that's probably not a guy that I really want to do long term business with because there's a lot of factors outside the company's control, whether you have traffic in LA or congestion in the port”.
Finally, technology has made communication with drivers much easier. It also has made drayage operations run far more smoothly. Unfortunately, some warehouses are still operating with pen and paper. Jim wants his drivers to be able to walk into all facilities with a tablet and have electronic bills of lading signed so they can be immediately transmitted. Electronic documents make the entire supply chain more efficient — and contribute to sustainability efforts by doing away with paper.
Technology Rules
Walker Banks said that PortPro helps drayage carriers by giving their drivers an app that allows them to receive electronically signed PODs, and upload their documentation directly into their TMS system. Warehouses should also adopt technology to make their interal processes and communication with vendors more efficient and seamless.
NavTrac’s Stephanie Bewick, Head of Business Development and Customer Success, shared that the company has a QR-code-based driver check-in tool for use at warehouses. Drivers can preload bills of lading, their driver’s licenses and get text messages that they’ve been checked in. There’s also an SMS texting feature for direct communication with drivers. They can load and unload drivers quicker. These safety protocols actually remove the need to have a driver interact with those in the office, cutting down on drivers’ wait times.
Jim stressed that effective communication connecting all parties involved in the delivery of goods is essential — and goes a long way toward building mutually beneficial long-term business relationships. He said, “If I can communicate electronically to a warehouse, I can cut out phone traffic and transmit data so that warehouse knows what's coming, when it’s coming, and I know when it’s received electronically. I think that’s the key to smoothing out the processes and cutting out a lot of the manual back and forth.” That said, IMC’s proprietary TMS and off-the-shelf WMS don’t talk to each other. And that’s not unusual.
For a seamless supply chain, streamlined data tracking a container from the port or rail to the warehouse — and keeping drayage providers and warehouse managers informed — really is key. Proprietary and legacy systems, or Excel-based spreadsheets make it hard to communicate and have full visibility of what’s coming in and out of your warehouse. “A big advantage of PortPro’s technology”, says Walker, “is that it is web-based and offers open APIs that allow for seamless connectivity and communication between a trucking company’s system and warehouse’s system.”
Cut Back the Smog and Emissions
The South Coast Air Quality Management District is on a mission to cut emissions. The district includes Southern California’s Los Angeles, Orange, Riverside, and San Bernardino counties and claims to have the worst smog in the country. According to the agency’s Ian MacMillan, trucks, many of them drayage vehicles serving warehouses and the Ports of LA and Long Beach, are the largest source of emissions. Ian discussed a regulation put in place by the agency (2021) — the Warehouse Indirect Source Rule (ISR) (Also known as Rule 2305) that requires warehouse owners and warehouse operators to take actions to reduce emissions from their operations.
According to Ian, most warehouse owners don't necessarily own a fleet or even directly contract with the fleet. That said, this ruling is not only related to emissions attributed to the warehouse - it also has to do with the trucks that go to and from a facility.
The Warehouse Indirect Source Rule has a menu based points system with a list of actions. Every year, warehouses greater than 100,000 sq ft need to earn a certain number of points. Every action has a certain number of points associated with it and warehouse operators can pick and choose from the menu which actions to complete. An example of an action item on the list is ensuring that a clean truck (ie. zero emissions) can come to your facility and charge their truck.
Ian shared that there's annual compliance of the menu and facilities can pay a mitigation fee. He said “alternatively, facilities can pay a mitigation fee to us. We found that a lot of facilities so far are paying a mitigation fee. It's the easiest thing to do, though not necessarily the cheapest.” He also said that if they are a very busy operation their obligation is higher. So based on the scale of the operation there could be significant costs as a result of this rule. As Ian said, “there's a 3 to 1 benefit of public health. At the end of the day we have to deal with the EPA and meeting air quality standards.”
Prologis’ Dan Loflin said the real estate company is doing its part by installing EV charging infrastructure at its owned facilities and at third-party warehouses and building stand-alone charging hubs. Prologis is also the second-largest owner of rooftop solar in the country.
According to Dan, Prologis is the landlord – they don't operate the warehouses or own the trucks. The infrastructure that they build behind the fence is there for the benefit of the tenant. Ultimately, the tenant controls their operations - who and how they want to charge and Prologis builds the infrastructure to their spec. He also shared that Prologis is building charging hubs that are publicly available.
The bottom line? Addressing the challenges in the Southern California drayage industry requires a multifaceted approach. Effective communication and the adoption of technology are crucial for streamlining operations between drayage carriers and warehouses, which can enhance efficiency and respect for drivers. Additionally, efforts to reduce emissions through regulations and technological advancements are important for long-term sustainability in the industry, yet complex and costly to implement.
Sponsors for this meetup included PortPro, Harbor Trucking Association, Braid Theory, and 4th Sector Innovations.
