I usually have guest speakers from JB Hunt & Lineage Logistics come into class…Great jobs, great companies.
With truck drivers collectively racking up 93 billion highway miles in the U.S. every year, 40% of the trips are made with empty trailers.  40%?!!!!

The market is mostly made up of small trucking companies, with 91% of companies having six trucks or fewer.  91%?!!!

“Convoy”, which ranked No. 11 on CNBC’s 2019 Disruptor 50 list, can consider “tens of thousands of trucks at the same time,” and matches customers the best option, making the process more efficient by ultimately saving time, money and CO2 emissions.“
Do you want to work for a potential disruptor?  Do you want to create your own disruptor?  The SCM field is prime for disruption.  See story way below on Convoy (the Uber for freight)….

I usually have guest speakers in class from Lineage Logistics and JB Hunt to discuss the logistics industry (which is one of the distinct functional areas that you are majoring in). Steve Rosso has moved jobs from JB Hunt to Lineage Logistics (LL).  I have attached his former JB Hunt presentation because JB Hunt still hires from WMU ISM.  A lot of his jobs with LL are in metro Detroit (Novi).  The logistics industry is a $1,000,000,000,000 industry in the U.S. (that’s 12 zeros, $1 trillion). When I say the logistics industry, that includes all dollar signs associated with moving everything around (including people). The 3PL/4PL industry is a component of that and is a $400+ billion industry. Lineage Logistics is an asset based 4th Party Logistics Provider that does around $2 billion a year in revenue. LL is only around .5% of the 3PL/4PL industry, but they are also one of the larger companies in the business. Make sense?  

Note, Lineage Logistics’ core competency is cold storage.  Basically, they store food that requires cold temperatures.  You think that might be a big industry?  Let’s put this into perspective.  90% of everything you eat requires cold storage at some point in the supply chain process.  Of that 90%, LL touches 1/3.  That means LL touches 27% of everything eaten in America.  How do you think business is going as of late?  Through the roof! If LL was a publicly traded company (that means you can buy stock in it), it would be one of the largest industrial real estate holders.  So, you could also make the argument that real estate is a part of its core competency.  

Do you want to work for a potential disruptor?  Do you want to create your own disruptor?  The SCM field is prime for disruption.

The 3PL/4PL industry is filled with thousands of companies (most of which are small mom and pops – think of the local guy with a truck that delivers stuff from Best Buy to your house). However, this is a high growth industry, and price and economies of scale will be the name of the game. That means the mom and pops will go out business because they cannot be price competitive and the larger ones will acquire and merge (they will get bigger). Buy stocks in companies where the industry will grow over time while the amount of competition will decline. The 3PL/4PL industry is just that. Take a look at 3PL/4PL stocks like JB Hunt over a period of time. JBHT (stock ticker symbol) has doubled in the last five years.  Its stock splits often.  Do you understand what that means?  Had I bought 10,000 shares of JBHT stock for $40,000 when I first came to WMU 21 years ago, it would be worth $1.2M today. 

Save the attached presentations if you decide to interview with JB Hunt or LL or with a similar company.

Do not forget our previous discussions on 3PLs versus 4PLs.  LL and JB Hunt are asset based 4PLs (they have actual ISM jobs).  A job at a non asset based 3PL/4PL would be a sales job largely based on making a commission or brokerage fee. 

I think getting an internship at Coyote Logistics (CL) would be an excellent opportunity for ISM students in general.  Just keep in mind that non asset based 3PLs such as CL, CH Robinson, TQL, etc., recruit across all majors, especially general management, general marketing, and sales marketing.  I would prefer that students work for companies that pay a premium for your ISM degree.  However, 3PLs provide services in an industry that you are majoring in, so to that extent it is a great match for you.  Also, some of you have strong sales skills and/or want to develop those skills moving forward in your SCM careers (which makes sense given that you will be interacting with suppliers a lot).  A major trend in SCM is reverse marketing and supply base deproliferation.  That means buying organizations are trying to shift a larger and larger amount of volume to a fewer and fewer number of suppliers (that way they get huge price discounts from economies of scale, make sense? – this is supply base deproliferation – reduce the number of suppliers that you do business with).  Sometimes, you have to go to your current suppliers and convince them to take on more business (that is called reverse marketing).  The goal is to do a lot of outsourcing with a few key strategic suppliers.  For example, in reality, Toyota only has around 12 suppliers.

It would be great work experience and would help you also get your foot in the door for another internship or even a fulltime job at OEMS such as GM and John Deere if you got some work experience at a 3PL or 4PL (all work experience is good work experience).  Again, a 4PL is a company that can do all logistics for a company and a 3PL can actually only perform some logistics. For example, if you can only handle warehousing, but cannot handle inbound and outbound, then you are a 3PL (a truck driver with a trailer is a 3PL, but he/she is an asset based 3PL if they own the truck and trailer).  3PLS are evolving into 4PLs, which means if a company goes to them, then they (the 4PL) can perform all logistics services for a customer (i.e., inbound, outbound, warehousing, etc. – one stop shopping for all things related to movement of goods).  Coyote Logistics has actually evolved into a non asset based “4PL” because they can do everything logistics related for customers.  However, because they are non asset based, they do not own anything themselves.  They just outsource everything to 3PLS and manage the process for their customers.  Why would their customers not do this themselves?  Because CL can do it better, faster, and cheaper and these customers can then focus on their core business (which usually has nothing to do with logistics).  Finally, JB Hunt would be considered an asset based 4PL because they can perform all logistics services for companies such as Whirlpool, but JB Hunt actually owns the stuff it takes to move things around.  For example, JB Hunt has trucks, trailers, drivers, containers, railway capacity, distribution hubs, etc.  However, JB charges a premium for customized services and is not as price competitive as non asset based 4PLs.  Whirlpool is very OK with that since JB Hunt offers exceptional quality service and JB Hunt still does it better, faster, and cheaper than Whirlpool.  I hope this helps and makes sense. 

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https://www.cnbc.com/2019/11/13/convoy-gets-400-million-from-al-gore-and-other-investors.html

Convoy gets $400 million from Al Gore and other investorsTrucking startup Convoy, which was co-founded by former Amazon exec Dan Lewis and uses a mobile app to match truck drivers with shippers, raised $400 billion in a venture capital funding round co …www.cnbc.com

Convoy, trucking start-up founded by former Amazon execs, gets $400 million from investors including Al Gore

• Seattle-based startup Convoy uses a digital platform to match trucking companies with shippers.
• Run by a former Amazon executive, Dan Lewis, the trucking start-up raised $400 million in a funding round co-led by Generation Investment Management, Al Gore’s sustainable investing firm.
• Convoy has now raised a total of $668 million, with a valuation of $2.7 billion, and has existing investments from Jeff Bezos and Bill Gates.

Convoy, a Seattle-based trucking logistics start-up, has raised $400 million in a venture round co-led by Generation Investment Management, Al Gore’s sustainable investment management firm.

Described by some as the “Uber of trucking,” Convoy uses a digital platform to match trucking companies, truck drivers and shippers. Founded in 2015 by former Amazon executives Dan Lewis and Grant Goodale, Convoy aims to aid the fragmented trucking market by connecting small trucking businesses with shippers using a mobile app. With truck drivers collectively racking up 93 billion highway miles in the U.S. every year, 40% of the trips are made with empty trailers.

Convoy has now raised a total of $668 million and the new deal was completed at a reported valuation of $2.7 billion, almost triple its former valuation of $1 billion reported at the time of its last fundraising in 2018.

Amazon founder and CEO Jeff Bezos and Microsoft founder Bill Gates are among existing investors in Convoy, which made the 2019 CNBC Disruptor 50 list.Dan Lewis, co-founder and CEO of trucking logistics start-up Convoy and a former Amazon executive, speaking at the CNBC Technology Executive Council summit it New York City on Oct. 29, 2019.
“When it’s that fragmented it’s hard to make everything work efficiently,” Lewis, Convoy’s CEO, told CNBC’s Squawk Box on Wednesday in an interview after the fundraising was announced. “What Convoy does is we take all those jobs, put them in our platform … and we find the ideal matches, significantly reducing empty miles and reducing waste in the system so that everyone can benefit.” The trucking businessis a large market worth hundreds of billions of dollars. However, the market is mostly made up of small trucking companies, with 91% of companies having six trucks or fewer. Convoy uses data-driven software to match big customers, like GE and Home Depot, with small truck companies. Shipping companies can use the app to post a job, find a match and track the shipment. Convoy, which ranked No. 11 on CNBC’s 2019 Disruptor 50 list, can consider “tens of thousands of trucks at the same time,” and matches customers the best option, making the process more efficient by ultimately saving time, money and CO2 emissions.“ Higher productivity is the key to higher earnings,” Lewis said. According to the former Amazon executive, truck drivers cover 45% less empty miles when using programs like Convoy’s Automated Reloads, which provides drivers with two or three jobs at once instead of just one, optimizing pick up and drop off locations to increase productivity. As competing companies enter this fleet management industry, like Uber Freight, Fleetio and Keep Trucking, Lewis sees an opportunity for consolidation and an increase in efficiency. “As we get more and more jobs under our platform, more and more trucks, it gets significantly more efficient,” Lewis said. “So I actually think there’s an opportunity for consolidation in the market through gains in efficiency, and several players to be successful over time.” As autonomous vehicles enter the picture, productivity and safety could increase further, he said.“ The biggest challenge today is that truck drivers are limited to 11 hours per day with government regulations,” Lewis told CNBC. Self-driving vehicles would increase the amount of hours they can drive, allowing them to be more productive. However, Lewis added it will be a long time before drivers won’t be necessary. Drivers may be needed in order to navigate complicated driving situations that self-driving vehicles would be unable to handle.“ That’s a very, very long ways off,” Lewis said. “I don’t think truck drivers can be out of trucks for a very long time.”

The recent funding had additional participation from Baillie Gifford, Fidelity Management and Research Co.

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These asset based 3PLs/4PLs (JB Hunt & Lineage Logistics) are hiring like crazy, even during covid. 

For example, here is a Novi, MI based company (LL) that has hundreds of jobs:
Responsibilities of the “Project Manager” (Sime – sounds like a job that pays a premium for ISM degrees and skill sets): • Independently manage projects through all phases • Work with business process owners to identify and scope areas of opportunity • Support other project managers • Scope, manage, and implement projects to meet business needs • Work collaboratively with all levels including executives, managers, front line, technical experts, and IT

Required Qualifications of the Project Manager: • Bachelor’s degree in an analytical field or equivalent business experience • Project management experience as part of corporate PMO, consulting, or other related field • 5+ years’ work experience in Project Management, preferably in manufacturing or logistics field • Excellent communication and leadership skills • Familiarity with basic statistics and other analytical tools • Proficiency with Microsoft Office software, including advanced Excel and data modeling skills

Preferred Qualifications of the Project Manager: • MBA or other advanced degree • Certified in Lean and/or Six Sigma and/or PMP • Experience with Customer RFP’s and implementing dedicated customer solutions • Previous experience in greenfield or expansion new construction implementations

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Many of you would be a contender for this job (upon graduation).  I would target jobs that say:  MBA preferred, and convince them that I am qualified (and many of you will be, $$$$$).  Would you be qualified for the above job today?  How about upon graduation?  I think the answer might depend on the amount and type of work experience that you have.  

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Remember, JB Hunt and Lineage Logistics are asset-based 3PLs/4PLs.  They actually do SCM/ISM stuff and pay a premium for these skill sets.  They are not going to hire you for a middle-man/broker/sales role. Do you want to work for a potential disruptor?  Do you want to create your own disruptor?  The SCM field is prime for disruption.

Personally, I think some of the best ISM jobs out there are with companies you likely have never heard of.  
Have you ever heard of Lineage Logistics before this email?  Note, 27% chance they touched the food before you ate it today.

JB Hunt:

Lineage Logistics:

Thank you.  Sime

Dr. Sime (Sheema) Curkovic, Ph.D., Professor, Operations/Supply Chain
Western Michigan University, Haworth College of Business

E-Mail: sime.curkovic@wmich.edu