Wednesday, July 14, 2010


Injury prevention starts with leadership, training, communication, risk assessments, and metrics.

While everyone is responsible for their individual safe behavior, the company's leadership team must own, lead, and participate in safety management. It's not enough for leadership to merely support safety; they must exhibit behavior that clearly demonstrates to all associates that safety is critical to the success of the organization.

From the first day of an employee's tenure with a company, training is key to safer warehouse operations. Educate all associates on safety-related practices, requirements, and responsibilities. Once the organization's vision and safety requirements are explained, the groundwork has been laid for continuous training.

After associates receive basic safety training, reinforcing workplace safety behavior is ongoing. Managers should observe, for example, how an employee drives a forklift during the first few days following forklift training, and be prepared to offer immediate and meaningful feedback. Good managers point out the positives of safe behavior, and coach areas that need improvement, often on an ongoing basis.

Create cross-functional, in-house safety teams that meet at least monthly to focus on preventing accidents and injuries by identifying hazards and unsafe conditions in the warehouse, and ensuring proper controls are in place to bring all hazards within acceptable levels of risk. Teams should include warehouse workers, forklift drivers, supervisors, vendors, and customer liaisons.

It is important for employees to be safe, and for employers to create a reasonable workday and safe workplace to facilitate their duties. To avoid unsafe behaviors caused by fatigue, consider implementing ergonomic improvements; rotating job assignments; supplementing shifts with temporary or part-time employees; adding a shift; and providing adequate rest and beverage breaks, especially in hot and humid conditions.

Identify individual job activities, the potential hazards associated with each activity, and their existing controls. Then assign a risk rating to each activity by using a numeric formula that considers the probability of loss, the severity of loss, and the frequency of each activity. The risk rating will determine if additional controls are needed

A group of health and safety professionals should work hand-in-hand with site management to seek out unsafe conditions and hazards, and create action plans to bring risk within acceptable levels before employees are injured or property is damaged.

After an incident, identify immediate and upstream root causes, and implement better controls to prevent a repeat occurrence.

Frequent and consistent communication between all levels of management and associates regarding safety processes, performance, and expectations is critical to building an effective safety culture and successful safety performance.

Create metrics that reflect the presence of safety (leading indicators), not just the absence of safety (trailing indicators). Metrics must also be designed based on their intended audience. For example, metrics for safety managers will need to be very detailed and facilitate analysis of correlations and trends. Metrics for operating managers need to be at a higher level and help identify deficiencies the team can address.

A tip of the hat to Inbound Logistics and thank you!

Tuesday, May 04, 2010

Looking Beyond Rates: Fundamentals of good contract negotiations go far beyond mere pricing

Pure data can provide valuable insight, but it doesn’t tell a complete story.

Hiding behind pure numbers will only create a one-sided, noncompetitive, zero-sum contract winner — and doom the negotiations, to failure.

The recovery is here, and not a moment’s too soon. Shippers and carriers across all transportation modes that have struggled through the Great Recession, suffering billions of dollars in losses and setting back their business by years, are feeling better about the economy and trade environment than at any point in the past two years. Retail sales are surging, and dramatically depleted inventories are being rebuilt.

And, after a rare high-profile public eruption over winter cargo backlogs wrought by capacity constraints resulting from carriers’ survivalist mentality, shippers and carriers appear to have found middle ground in attempting to resolve their differences instead of bickering about them.

It is, indeed, a new world order — or appears to be. But the true test of how both sides react will come in the next several weeks, as shippers and carriers wrap up what could be the most important contract negotiations in years, if not more.

Will carriers be true to their word and end the slash-and-burn rate-cutting wrought by their pursuit for market share? Will shippers become true partners in a market where success and speed to market can be determined by the success of their transportation providers?

Will the empathy and collaboration that both sides have long pursued but seldom achieved finally have staying power, or will both sides retreat into their business-as-usual mentality when the inevitable recovery picks up steam?

It is this last point that should be the start of the healing process, and the starting point in the negotiation process, because in an ever more complex supply chain, a good contract goes far beyond mere price.

Why? Because to be successful in this new economy, empathy and collaboration need to ride on the same vessel toward the mutual destination of profitability. Collaborating creates value, and executive empathy makes money for both.

To a certain degree, almost everything in business has become data-driven. It’s common practice today that if you can’t measure it, it doesn’t impact the bottom line. Pure data can provide valuable insight, but it doesn’t tell a complete story. The news is filled with businesses that have used numbers — real or manufactured — to justify prices and volumes that are no longer with us.

From my perspective, I’ve noticed some cracks in this data-driven, numbers-only foundation on which our industry used to build and expand profits. Carriers, importers, exporters and freight intermediaries no longer can base their relationships solely on slot commitments, no-roll clauses, general rate increases, “no show fees” and local charges. Vested collaboration, empathy for both partners’ profitability and efficiency is tantamount to long-term success.

We are moving into the “conceptual age” of business, where the right price is not necessarily the lowest price. It’s no longer enough to be a great numbers person. We now expect more of our leaders, and empathy and collaboration are among those qualities.

Understanding the feelings of others is good behavior, but empathy particularly pays off when organizations — that is, the executives who represent companies — understand what their customers and partners are feeling during the decision-making process.

How does empathy and collaboration impact the success of organizations during negotiations? The strongest point to be made is that both qualities involve focusing less on purely statistical internal issues, and more on a collective way to gain mutual benefit. The opposite of collaborative behavior is internally competitive, command-and-control behavior. This is a form of corporate self-absorption that remains from the Enron days of blind selfishness.

It is easy to hide behind pure numbers and cold-hard metrics, but hiding now will only create a one-sided, noncompetitive, zero-sum contract winner — and doom the negotiations to failure in 2010.

Too often, business leaders focus their attention on rate structures during carrier-contract negotiations while ignoring other important facets of a business relationship. Failure to address the entire scope of the relationship can cause a business to fall short when trying to meet certain goals. Empathy and collaboration will bring to light these more subtle issues that should be addressed to create mutual profits. The following are numerous strategies your business should employ to achieve success in contract negotiations for this year and beyond.

1. Pickup Performance.
How can your delivery be on time if your pickup isn’t? Late pickups cost you more money, sometimes at overtime rates. Before agreeing to a contract, you should know your partner’s on-time pickup percentage and how the carrier calculates that measurement on a customer-specific basis. On-time delivery statistics are calculated in a similar way and should be readily available on customer reports — by customer and/or terminal.

2. Invoicing Accuracy.
This important metric is often overlooked but can be the key to saving a company time and money. Companies that invest in an imaging system allowing them to use information directly from a customer’s bill of lading can ensure accuracy while improving invoicing efficiency. If this isn’t one of the measurements you expect to receive from your carrier, it should be.

3. Claims Structure and Response Time.
Getting a shipment to its destination on time doesn’t matter much if it doesn't get there in one piece. How quickly are claims settled? What is the percentage of claims-free service? What is the claims ratio of the terminal that will serve your customers? Partners should make these performance statistics available for individual customers and terminals.

4. Interactive Web Presence.
Examining your partner’s Web site can help you determine the availability of customer service when you need it. Is the Web site interactive in a number of ways to provide the information you need? The site should allow you to enter pickup requests and download imaged documents and customized reports. It also should offer a variety of track-and-trace capabilities, rate quotes, transit times, and terminal information.

5. Solid Communication and Open Dialogue.
Determining how much customers are involved in their partner’s decision-making process indicates the level of interest a company has in delivering quality service. Initiating a good communications program and creating collaboration with customers is essential. The open dialogue will reveal positive and negative qualities of each organization.

6. Responsiveness.
You should be able to talk with experts in each of your partner’s departments when you need them. Is the line of communication open and results-oriented? Maintaining a strong communication link goes hand-in-hand with developing a strong, effective partnership.

7. Customer Service.
A quick and readily available information resource is invaluable to you and your customers. This resource should provide an answer to any question you or your customers might have about transporting or tracing your shipments. The debate can rage about whether the customer service presence should be “in the market” and the costs associated with same, or if a centralized approach is more consistent, and less costly. The mutual goal, however, must be that the core of a long-term, mutually beneficial partnership is excellent customer service.

8. Empathy and Proactive Account Management.
A partner should know when and why a service failure occurred. If it delivers its shipments on time 98 percent of the time, your partner should be able to elaborate and explain what went wrong with the other 2 percent. Organizations should follow up on every service failure, not only to find out what went wrong, but also to initiate corrective action plans to ensure the same problem does not happen again. Taking this stance will make the company a better partner, and, in turn, provide you with better performance. Ask your supply chain organizations how they analyze service defects.

9. Continuous Improvement Mentality and Training.
The kind of training available to your partner’s employees, how often they are trained and the degree to which they are trained should be part of any organization’s strategy in providing superior service to its customers. Asking questions about the training process will give you an indication of the company’s emphasis on quality performance. Does the carrier have an operations training program in place that emphasizes freight handling? Are its drivers trained? Does the carrier offer hazardous materials training to its employees? What about general safety training measures? In addition to these training processes, an organization should have accountability procedures in place at each facility to help reduce costs and waste.

10. Multiyear contracts.

More industries are moving toward multiyear contracts, just as the major third-party logistics providers have over the years via “open book” forecasting, budgeting and costing. A multiyear deal will create an even playing field for each organization to drive out costs (through continuous improvement plans), and increase mutual, long-term profitability. Week-to-week capacity, no rolling, peak-season surcharges, local charges, no-show or dead freight charges become archaic terms of the past, and these tired phrases will become non-issues when looking at the long-term picture of growth, efficiency and profitability.

11. Vested collaboration.
Does your partner organization promote an open, sharing environment or is it merely a transactional workplace? How much does it share with customers via popular social networks such as Twitter and Facebook, or through business-focused networks such as LinkedIn? Creating an atmosphere that has an “open-source” mentality will allow for new ideas to be shared freely and will present an attractive corporate culture to experience. Vested collaboration creates empathy, empathy ensures mutual understanding, and mutual understanding will generate a collective beneficial result.

If you take the time to think critically about these often-ignored aspects of the collaboration process, your company will be equipped with the knowledge and trust it needs to achieve the best possible results far into the future. Consistency, preparation, collaboration and common sense should be your guiding principles when negotiating with your partners.

Successful partner organizations that build mutual empathy and vested collaboration need to establish a committed leadership structure — creating insight, foresight and trust, not just oversight of the annual negotiations. By consistently collaborating on budgets, forecasts and modeling scenarios, with all of the above points taken into consideration, your organization will enjoy long-term fiscal success by being prepared for the best of situations, and to forestall the worst. Empathy will create a collaborative atmosphere during the negotiation phase and will chart a course for a lasting, mutually beneficial business platform into the future.

Michael Stolarczyk is president of Kontane Logistics in Charleston, S.C., and has held various supply chain management roles with Exel and A.P. Moller-Maersk. He can be contacted at

You can follow him on twitter at

Wednesday, March 24, 2010

Register for the EyeForTransport's 3pl Summit in Atlanta - Save a 100 bucks!

I just registered for the 8th Annual 3pl summit in Atlanta, from June 21st to June 23rd. If you use the code "MIKES100" you can get an additional $100 off your registration fee. I hope to see you there in June! It is my goal to start talking about locative logistics with many of the participants. Additionally, let's create some platforms for future collaboration with Kontane Logistics.

Registration Link: 8th Annual 3pl Summit

Monday, March 08, 2010


Carolina-Based Third Party Logistics Leader to Perform
Sub-Assembly and Sequencing Services for Freightliner Manufacturing Facilities

STATESVILLE, N.C.—March 1, 2010— Kontane Logistics, an industry leader in Third Party Logistics with offices in North and South Carolina, has signed a multi-year contract to perform wheel and tire assemblies for Daimler Trucks North America’s Freightliner Group, the largest heavy-duty truck manufacturer in North America and a leading manufacturer of medium-duty and specialized commercial vehicles. The Kontane facility in Statesville, NC, will support Freightliner locations in Cleveland and Mt. Holly, NC, and Gaffney, SC. Activities included in the contract subsist of the mounting, balancing, and sequencing of over 200,000 tires per year for Freightliner models such as the Argosy, Columbia, and Cascadia class trucks, as well as Freightliner-made school buses and recreational vehicles.

In February, Kontane Logistics, in collaboration with Daimler Trucks North America and Freightliner, took over operations at the existing Alcoa Subassembly Logistics (ASL) plant in Salisbury, NC. Prior to the take-over, ASL was in the midst of a company-wide consolidation and potential relocation to Ohio. As a result of Kontane’s ability to meet the Freightliner service level requirements, the company will be able to ensure a smooth transition, retain long-term business in NC, and maintain employment for existing staff of ASL. Full sub-assembly and sequencing production is scheduled to begin in April 2010.

“The opportunity for Kontane Logistics to create a long-term, vested partnership with Daimler and Freightliner will poise our organizations for growth and profitability in this evolving economy,” said Michael J. Stolarczyk, President of Kontane Logistics. Ed Byrd, CEO and owner of Kontane, Inc. and NC resident, went on to say, "Kontane continues to make local investments in response to a resurgent commercial vehicle market. Our investment in Iredell County will maintain opportunities for the local community, such as sales to state and local vendors as well as an expansion of the state and local tax base. We are thrilled to have the opportunity to keep this vibrant operation in North Carolina.”

The new facility will add to Kontane's presence in the Carolinas, where the company has locations in the cities of Hickory, Troutman, and Statesville, NC, along with a large distribution center and Foreign Trade Zone in Charleston, SC.

Kontane Logistics
Kontane Logistics was established in 1995 as a separate operating division of Kontane Inc., the southeast’s premier packaging design and builder based in Hickory, NC. The Logistics division was originally formed as a dedicated third party logistics provider involved with packaging and exporting to several countries around the globe. Since 1997, Kontane Logistics has expanded to include warehousing and distribution, cross-docking, freight consolidation, import material receipt, line sequencing, parts distribution, development of logistics information systems, sub-assembly, and foreign trade zones services. Kontane Logistics currently has four locations in throughout NC and in Charleston, S.C. For more information, visit or call 843-352-0011.

Friday, February 26, 2010

Containership Company Launches in April

A startup container shipping line based out of Norway said Friday it will launch a direct service from the Chinese port of Taicang to Southern California in April.

The service will be operated with five vessels, ranging in size from 2,600 TEUs to 2,900 TEUs, said Franck Kayser, chief operating office of the new line, The Containership Company. Transit time will be 16 days from Taicang to Southern California.

Kayser said in an interview with American Shipper that the idea to base the service out of Taicang was to reduce costs for shippers in China’s Jiangsu province. Taicang sits on the Yangtze River about 30 miles upriver from Shanghai. Kayser said calling directly at Taicang would reduce $150 to $200 in trucking costs shippers generally have to pay to move containers to Shanghai.

“It’s the first direct service from Taicang, so it gives us first mover’s advantage,” he said.

To emphasize the potential uniqueness of the service, American Shipper affiliate ComPair Data has no listing for Taicang for any direct services to North America. However, Taicang is a growing port with more than 1 million TEUs of volume and a diverse base of shippers, including BP, DuPont, Unilever and Nike.

Reports of the emergence of The Containership Company surfaced in 2009 amidst the worst crisis in the history of container shipping. The idea for the company was reportedly born out of the idea of taking chartered tonnage at attractive rates in a depressed market, then passing the savings on to shippers.

Kayser said the five vessels for the service have been chartered for three to four years.

“Of course, when you take them on a longer-term basis, you pay a little bit over the market rate, but we have got a reasonable rate,” he said.

Kayser said it has yet to be decided whether the service will call in Los Angeles or Long Beach, and that the line is in negotiations on where to call. He also said The Containership Company will launch a service between China and northern Europe at some point in 2010.

The company is backed by a group of 30 investors, none of which own a “significant part,” Kayser said. The company will be based in Norway, with startup capital of $25 million.

Note: This is a great opportunity...good luck to Captain Franck and the whole Containership team! God speed!