Half of my job is focused on building and maintaining our engineering infrastructure – Strategy Management, Business Intelligence, Lean Six Sigma and Operations Research. These are the shared services that we use to improve our strategy and execution through the application of science.
For that reason, it makes me happy to see transportation covered in this month’s math feature column at the American Mathematical Societies website (http://www.ams.org/featurecolumn/archive/trucking.html). The article discusses the famous vehicle routing problem that we are so familiar with in LTL. It’s a glimpse into a bit of the complexity involved in providing exception-free, on-time and fast service at a competitive price.
You may (but probably not!) have noticed that I now refer to transit time concepts as “velocity” instead of “speed”. The reason is to emphasize the purposefulness of our network. Here are the definitions (in case you’re also having a tough time recalling the lectures of your 11th grade physics teacher!):
Speed: The rate of motion.
Velocity: The rate of change of position.
It doesn’t help our customers if we’re moving their freight fast but in the wrong direction.
From the August 11, 1930 issue of the Wall Street Journal:
Post office issues ruling prohibiting parcels marked ‘Eggs’ unless they contain eggs; too many using that mark to assure careful handling of fragile packages.
This reminds me of all of the “do not stack” cones that shippers place on freight in an effort to reduce damage. I suspect that they do very little (if any) good because they are placed on all types of freight – whether stacking is an issue or not.
Also, did people really ship eggs via the postal service? I think that they buried the lead!
This is a very clever post that compares the price of sending a letter through the USPS to the price of buying a kiwi at a grocery store (they’re both about $0.45). From the comments:
I doubt most people have mail that is so urgent it needs to be shipped daily to the door. Instead, if we were required to pay market price for this service we would consider alternatives like picking our mail up once or twice a week from the post office. This would drastically lower costs for the USPS.
There are tons of things to find interesting in this article, but I like it as a clearcut example of a few of the seven forms of waste. In particular, the daily trip that the mailman takes to your mailbox seems like tremendous overproduction/overprocessing. Given the Internet, perhaps the transportation of many of the letters is waste to begin with.
via The Perfect Substitute: Is The Post Office So Bad? Yes, and Try Eating More Kiwi..
If you’d like to see how easy True LTL Pricing is, check out this screencast.
Before moving to Michigan I lived in beautiful Marblehead, MA, but spent over 2 hours every workday commuting to and from Burlington, MA. So, when I saw Jason Kottke link to an article about an academic study that explains one way to improve the flow of traffic in the Boston area, I took notice. In short, the study shows that letting each commuter pursue the route that improves their individual drive time increases the total drive time of all drivers. It also compares and contrasts that finding with research that shows that increasing confusion (as happens when drivers approach roundabouts with little signage) can actually improve traffic safety.
But maybe these two traffic models have more in common than it first seems. Both encourage individuals to drive more slowly so that everyone gets to his destinations faster. Both favor a holistic approach to traffic, one that designs from the perspective of the overall flow rather than that of an individual driver.
While its nice to think that a whole network can be optimized by letting the participants in the network pursue their individual goals, reality is more complicated when the individual incentives don’t match the network objective.
Running a less-than-truckload network presents the same management paradox described in this New Yorker article on federalism. We need to rely on local teams to make local improvements while reserving central control for network improvements.
The tension between state and national interests isn’t new: it dates back to clashes in the early Republic over programs for “internal improvements.” Of course, the federal government is far bigger than it once was, and yet in the past two decades we’ve delegated more authority, not less, to the states. The logic of this was clear: people who are closer to a problem often know better how to deal with it. But matters of a truly interstate nature, like the power grid, can’t be dealt with on a state-by-state basis. And fiscal policy is undermined if the federal government is doing one thing and the states are doing another. It’s a global economy. It would be helpful to have a genuinely national government.
That’s why we unified our operating model, simplified our network, and standardized on Lean Six Sigma for continuous improvement.
Managing this tension is one of the keys to True LTL.
via The fifty states are hurting economic recovery : The New Yorker.
Adrian Gonzelez from ARC Advisory Group posted a thoughtful article on True LTL Pricing, social networking and sustainability.
The most interesting part of my conversation with Sean, however, was his take on the “green” benefits of TrueLTL pricing.
I discussed the efficiency advantages of LTL in When Fuel Rises…, and I’ll continue to post more on this in the future.
via The Green (and Social Media) Side of Con-way’s TrueLTL Pricing
This article on roundabouts contains a smart point about transit time. It’s not only speed (how fast you’re travelling when you’re moving) and circuity (the directness of the route) that matter. Time in motion is also a big driver of total transit time. For example, a truckload carrier may be able to move a shipment 500 miles in 10 hours, but when will they be able to pick up the shipment, and what will they do when the driver runs out of hours? It can be difficult to secure a same-day pickup in many markets, and unless you’re hiring a team or using relays, the load will have to pause along the way due to hours of service regulations from the DOT.
People may see vehicles winding slowly through a roundabout and think the intersection must be 1) adding to congestion and 2) slowing down people’s travel times. But travel speed at any given moment should not be confused with overall travel time. Drivers may breeze through one intersection’s green lights only to sit through a 90-second cycle at the next. What’s more, the “protected turning movements”—i.e., the green arrows—required at many intersections steal time from the larger numbers of people wanting to proceed in every other direction. Roundabouts slow but rarely stop traffic. A noteworthy example here is Golden, Colo., which in 1999 converted a series of four formerly signalized intersections to roundabouts on a wide section of arterial highway that was becoming a major corridor for “big box” retail. While speeds between the intersections fell to an average of 37 mph from 47 mph, the time to travel the entire stretch of road dropped.
True LTL service from Con-way Freight provides same day pickup service, and utilizes our network to keep shipments moving. If you measure the entire lead time for a shipment to get from origin to destination (including the wait time on the pickup), True LTL service is often faster.
via American drivers should learn to love the roundabout. – By Tom Vanderbilt – Slate Magazine.
In a clever post on his blog on NYTimes.com, Paul Krugman describes “ketchup economists” – people that can get fooled by the complacency that efficient market theory can breed.
What this made me think of was an old paper by Larry Summers mocking finance economists as the equivalent of “ketchup economists”, who believe that they’ve demonstrated market efficiency by showing that two-quart bottles of ketchup always sell for twice the price of one-quart bottles.
In the case of housing, buyers do carefully compare prices — with the prices of other houses. That is, they make sure that two-quart bottles of ketchup are the same price as one-quart bottles. As we’ve seen, however, they don’t do a very good job of checking whether the overall level of housing prices makes sense.
This is analogous to a mistake that is commonly made in truckload purchasing. If you’re only comparing prices from truckload carriers to prices from other truckload carriers, the lowest priced truckload carrier will look like a good deal. But, for all of your medium-sized freight that uses less than half of a trailer, you can do better with True LTL Pricing. Your True LTL Price from Con-way Freight will be less than typical truckload pricing because we consolidate freight from many shippers to fill trailers and eliminate out-of-the-way miles.
If you’re sourcing your truckload network or just looking to augment your existing truckload options, email me at devine.sean@con-way.com. Con-way Freight can participate in your truckload bid by providing True LTL Pricing for any lanes in the US. It’s worth it to take a closer look – you’ll save money on many shipments that you’re currently moving with a truckload carrier.
