A Catalyst for Supply Chain Profitability

2020 Vision. My Top 10

2020 Vision: 10 for 2020 and Beyond:

Another decade arrives, and brings with it some fun and challenges for the Supply Chain Community:

Number 1: Insurance Rates SkyRocket – You would have had to be under a rock to not have heard the Siren’s call of the trucking insurer’s. Get your house in order AND expect to be presented with increases. The importance of your procedures and policies, as well as your safety scores, is paramount. Insurance companies want to make sure you have Kevlar underwear to avoid a nuclear verdict if something goes sideways.  If you haven’t already reviewed every policy, manual and training document, you may already be too late.  The alternative of facility insurance – which is not really an alternative if you want to be competitive – is the only other avenue for many.

Number 2: ELD’s – if you are operating in the US, this flag has already been waved, and you are across the finish line. Makes sure it’s an ELD, not an ABORD. Make sure your drivers know how to use it and can provide the files ot the roadside officer. And if you are a Canada only operator, the warm-up laps are about to finish - with scheduled requirement dates for June 2021,  consider how you are going to meet the requirement. We are talking about training drivers, dispatchers, safety personnel and even clients on new processes and realities. If you are thinking you can do this at the last minute, well hope you like stress. Consider allowing 3 months for assessment of the various solutions, and 6 months for install, training and development. All of a sudden, June 2021 is just around the corner.   And remember – The Canadian rules for form and manner elements are different than the US rules; likewise for DVIR’s.  Is your device compliant?

Number 3: FMCSA Clearinghouse for Drug & Alcohol Testing: get ready for a cluster. Every single drug and alcohol test is to be recorded in a database. As is the treatment for those who fail a test. All carriers and all drivers are required to register and use the system. I remember being on the ACE Manifest rollout as a trade participant back in 2004. The Website was painfully slow and subject to frequent crashes. When you consider the sheer amount of participants this exercise is going to involve, the likelihood we are in for some fun is significant. Oh, and yeah, all those drivers who hate computers, they have to sign up in a not-overly-user-friendly-interface.  It had me saying a few choice words.

Number 4:  The WSIB Item 1  – having retired their unfunded liability, and subsequently stockpiled a few extra millions by maintaining the premiums at the rates that fixed that underfunding scenario, the WSIB is charging forward with the new rate framework. Moving to different rating structure and determination of premiums.  NEER and its counterparts are gone; replaced by a performance rating system based more on the individual entity's performance than the industry. A significant reshuffling of groups and their participants is about to happen. We should all see significant reductions in premiums (as a result of the end of the catch-up payments mentioned previously), but I suspect that such a radical change will not be without its pain.  As of the middle of this year, there were some pretty basic operational elements that the WSIB had not yet determined, let alone trained their people on. I am predicting a few receding hairlines arising from this transition in the next few years. 

Number 5: The WSIB Item 2 – giving Kudos to where it is due, a tip of the hat for the way they have participated in catching up to those who have played fast and loose with the obligations of operators by adopting the Driver Inc. model of paying under the table.  Keep it up. For those carriers who have adopted this model – hope thoughts of an audit keep you up at night the way your competitive advantage kept those operators doing it by the books up at night wondering how to compete. And if you are an operator who has true Owner Operators – make sure you have the WSIB determination of Owner Operator status in your files.

Number 6: Driver Inc. – all the other government agencies - hopefully, everyone keeps the pressure up on the Feds and the provincial tax agencies to step up and make the players of this game of dirty pool pay for their cheating. The Ontario Trucking Association and The Canadian Trucking Association have kept this in the news feeds – and the pressure needs to continue. Kudos to the OTA, CTA and other industry members not letting this important issue slip off the radar.

Number 7: C-TPAT C-TPAT has rolled out its new minimum requirements for members. As of the time of this writing, they have suspended new applicants pending audits of the existing participant’s compliance with these new criteria.  If you haven’t reviewed these yet, you are significantly behind the ball and may want to consider getting the support of an outside consultant. The IT security requirements alone will bring a material challenge to many small operators. I am predicting quite a few drop-outs before this process is done. As of the date of this writing, CBSA has not released any comparable requirements for PIP participants – but that is just a matter of time.

Number 8: CLC Changes and Bill 86 – Big changes in the Canada Labour Code that affect the supply chain HR file. Kudos for the Canadian Trucking Alliance for stamping at the door of the legislators and pointing out that while some of these changes may be workable for a bank, they are not so for a world that has introduced the final mile as a fast-growing market segment. If you aren’t aware of how these proposed changes affect your scheduling requirements, vacation pay obligations and a range of other issues, just Google Bill C-86 and the CLC to see.  AND ……don’t lose sight of the fact you need to update your hiring packages, offer letters, company policies and a raft of other HR documents accordingly, or run the risk of pain in the arbitrator's paneled room of interrogation.

Number 9: Expect the FMCSA to finally come forward with revisions to the SMS / BASICS scoring system that will allow them to play in prime time again. Make sure you know how to challenge the preventability of a crash using the DataQ. There are now 15 specific types that are defined as non-preventable

Number 10: The FMCSA is also expected to release the latest iteration of the hours of service rules, and many of us have our fingers crossed that the required 30 minute break before 8 hours rule will be impeached and removed from office

That isn’t all the fun for the next few months, but I think it ought to keep a whole bunch of us busy on a whole bunch of fronts.  Hidden under the blanket are other things such as the CBSA single window initiative – bringing many of the import reporting functions for OGD agencies into the E-manifest functionality, I am expecting similar disastrous rollout as the E-manifest itself displayed. CBSA has yet to prove they can effectively rollout systemic changes and train their staff in their functionality at the same time. So get ready if you have OGD reporting requirements on your freight.   

But I said the top 10, so I should really let it go there…..

May you live in interesting times, indeed.

And of course, if you need help or any information with respect to any of these things, give me a call.