Inside-Out Logistics

Shifting Strategies

Legend has it that a reporter once asked Willie Sutton, the famous and prolific bank robber, why he robbed so many banks. Reportedly Willie answered: “Because that’s where the money is.”

Willie claimed he never said it, that the reporter “apparently felt a need to fill out his copy.” Still the phrase informed Sutton’s Law, which advises medical students to look for the most obvious diagnosis.

And with that, there’s a curious phenomenon happening right now in freight logistics. As Transport Topics recently reported:

“As the coronavirus pandemic took hold, it disrupted freight demand in many segments of the economy, forcing some carriers to furlough drivers while others were quick to hire those furloughed drivers as a way to swiftly onboard experienced commercial vehicle operators.”

Though this moving around of supply and demand⏤in this case, of carriers themselves⏤didn’t begin with the coronavirus, the current situation is a powerful demonstration of the way our industry compensates. It’s a Sutton’s Law of finding the most obvious and available solution for completing movements of freight.

Furloughed is not fired. Companies often realign, shrink, and grow employment lanes to answer the realities that are, literally, on the ground. Furloughed is, then, shelving employment, waiting and hoping for a return and a growth in demand. The carrier, then, has a choice. Wait or move on to another opportunity.

Naturally, drivers are concerned about safety, and retention often hinges on security precautions: creating an environment at loading and off-loading that’s as contactless as possible, with the paperwork prepared or gone paperless, allowing them to stay in their cabs throughout.

These provides a view to the strengths and drawbacks of fleet operations. In our third-party logistics world, we have two elements we believe are strengths and preparation for enduring this time of economic uncertainty.

First: the owner-operators we contract with are their own employers. They have the benefit of bidding or not bidding on any particular movement of freight, and whether they determine the situation is safe, and the distance they’ll travel, and how long they’ll be away from home.

Second: the majority⏤90%⏤of NATCO’s work is with repeat customers. These are established relationships, and our business model has everybody involved seeing the benefits of working together.

As the economy continues to make dips and peaks, some expected and some unpredicted, we continue to adjust to the chaos.