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LQ’S EXECUTIVE INTERVIEW SERIES: DEFINING LEADERSHIP IN LOGISTICS AND TRANSPORTATION IN NORTH AMERICA

Most of the companies participating in LQ’s Executive Interview Series have been identified by Richard Armstrong, Chairman, Armstrong & Associates, as the Top North American 3PLs. From Miami to Toronto, these executives and their companies are changing the landscape of logistics and transportation in North America. All of the questions for these interviews have been prepared by a panel from LQ’s Board to ensure the framework for these interviews has been developed from a practitioner’s perspective. We think you’ll enjoy the insights these executives share in their responses to these questions. As a resource for 37,000 logisticians, academics and executives in other disciplines in the United States and Canada, LQ’s Board helps to ensure LQ offers ideas for leadership in logistics, supply chain management and transportation, and provides a unique bridge between business, academia and practitioners

Executive Interview Series:

LQ: What are the biggest challenges to cross border logistics activity? (John Langley, Georgia Institute of Technology)

Jeff Moore: The biggest challenge today is a strong Canadian dollar. We are seeing fewer southbound shipments going to the U.S. and more freight inbound from the U.S. into Canada. This has created a very big capacity crunch in the last three months. We are servicing our customers at the same level, but at a much reduced margin and in some cases at a loss. There is a lot of pressure on us to increase our rates to customers because of high service demands and diminished transportation capacity. On some lanes we’re seeing our cost increase by 10 to 20 percent. Recently we have had to pass on surcharges — what we call capacity surcharges — to help cover this capacity problem. I recently read an article about the exodus of manufacturing from Ontario due to the strong dollar that stated there has been a 19 percent decrease in manufacturing in Canada over the last 12 months. Goods that were made in Canada a year ago are now being made in Asia and the U.S. Today Canadians are buying more in the U.S. and our exports from Canada to the U.S. are down. This has created an imbalance of equipment in a very short timeframe. Combine this issue with increased border regulation and driver shortages and we are living the perfect storm! This, right now, is the number one challenge.

LQ: In what ways has your firm changed its business development efforts when approaching potential clients? How has the value proposition changed in recent years? (David Closs, Michigan State University)

Jeff Moore: We have changed our business development efforts by focusing on those companies who need to make a change. Over the last 12 months all of our new clients began talking with us because their existing provider wasn’t meeting their requirements and not delivering on their promise. It wasn’t a case of them only wanting to reduce cost. We want customers whom we can help to grow and who appreciate our value proposition. Our value proposition has not changed in recent years. We have focused on our core competencies, our corporate culture, our cutting edge technology and recruiting the best people in the business.

LQ: What are the steps you have taken to ensure your company has been diligent in understanding a client’s business? (Russ Doak, Kodak)

Jeff Moore: It’s essential we have a comprehensive understanding of customer’s business before we provide a quote. When we are conducting our due diligence with a customer, we insist they visit our facility in order to afford them an opportunity to understand how we manage our business first-hand — it also gives us an opportunity to talk about their business requirements in an uninterrupted environment. This is an important step that also allows us to see if our companies have a cultural fit. If our cultures don’t match, we’re not going to be good partners. We have several customers that have been with us for 22 years, and many that have come on board in the last 15 years. These business relationships evidence the value and importance of having an excellent cultural fit. We recently won a large piece of business with Xerox. I’ll never forget the comment that was made by one of their key people after their first visit to our facility in Oakville. He said “We really feel that culturally we are well aligned.” I knew at that very moment that this was a great starting point to build a lasting relationship.

LQ: How have your customers increased their demands regarding security and sustainability? (David Closs)

Jeff Moore: I would like to focus on the later half of this question, since I recently attended a conference that featured Dr. Ron Dembo, founder and CEO of a Toronto-based company called Zerofoot print, a not for- profit organization that helps corporations and organizations to reduce their environmental footprint. I spoke with him about our company’s impact on the environment from a carbon footprint point of view and I left this meeting knowing that our firm could be the leader in our industry in Canada from an environmental and sustainability viewpoint. As of November 29th our company is carbon neutral; we have a zero environmental footprint. We’ve teamed up with many companies to get there; Zerofoot print and Bullfrog Power are some of the companies. Some of the steps we’ve taken include running our entire facility on low-impact hydroelectric and wind power. We also realized were throwing away 20,000 plastic water bottles annually, so we installed a filtration system to replace bottled water. We just bought our first hybrid car — and have hired a dedicated resource to manage the whole green initiative for our company: Susan Moore, who is a chemical engineer, is now our Director of Sustainability. Susan’s responsibilities under the new Lakeside “Vision Green” initiative will be to consult with our customer and supplier partners to assist them in reducing their carbon footprint. Just recently we were named a Smartway partner by the Environmental Protection Agency (EPA).