In a compromise decision that nobody seems to be happy about, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) announced its revised hours of service rules for commercial truck drivers. In a move that illustrates how little attention the FMCSA wanted from its ruling, the announcement was made just prior to the long Christmas holiday break, when most offices were scheduled to be closed.

It’s difficult to imagine how the FMCSA could have managed to satisfy nobody, but that looks to be exactly what’s happened. The new rule reduces the maximum number of hours a truck driver can work from 82 hours within a seven-day period to 70 hours. By removing 12 hours from the work week, the FMCSA angered many of the shipping organizations, who are complaining that the rules will effectively force more trucks on the road during the busiest hours of the day. On the other hand, the final rule retains the current 11-hour daily driving limit, which has safety groups upset because for them reducing the 11-hour limit down to 10 was a must-have stipulation.

Daphne Izer, co-founder of Parents Against Tired Truckers (P.A.T.T.), doesn’t mince words when expressing her disapproval of the new rules. “I am beyond disappointed that once again industry profits were put before the safety of the motoring public and truck drivers. I don’t know what it is going to take for the government to get real about protecting us on our roads.”

John Cutler, legal counsel for NASSTRAC, an industry association that represents the interests of freight shippers in all modes of transportation, disputes any suggestion that shippers will be seeing any positive gain from the new rules; quite the opposite, he says. “FMCSA’s new rules will adversely impact productivity for trucking companies and their shipper customers for little or no safety benefit,” Cutler says.

Small truckers aren’t happy with the changes, either. “Collectively, the changes in this rule will have a dramatic effect on the lives and livelihoods of small-business truckers. The changes are unnecessary and unwelcome and will result in no significant safety gains,” says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association (OOIDA).

“By forcing through these changes FMCSA has created a situation that will ultimately please no one, with the likely exception of organized labor,” adds Dan England, chairman of the American Trucking Associations (ATA) as well as trucking company C.R. England.

But not even the Teamsters seem to be particularly pleased with the new rules. James P. Hoffa, president of the International Brotherhood of Teamsters, basically had nothing to say about the rule changes, other than to acknowledge their existence. “We are reviewing the new rule, and in the coming weeks we will meet and discuss it with our allies and, if necessary, determine our next course of action.” Not exactly a ringing endorsement from one of the Obama Administration’s most vocal allies.

England sums up the situation thusly: “Both the trucking industry and consumers will suffer the impact of reduced productivity and higher costs,” he claims. “Also, groups that have historically been critical of the current hours of service rules won’t be happy since they will have once again failed to obtain an unjustified reduction in allowable daily driving time. Further, it is entirely possible that these changes may actually increase truck-involved crashes by forcing trucks to have more interaction with passenger vehicles and increasing the risk to all drivers.”

According to the FMCSA, the new rule will require truck drivers to take at least two nights’ rest between the hours of 1:00 a.m. to 5:00 a.m, as part of the 34-hour restart provision. But as Cutler points out, “The effect is that down time due to restarts will increase significantly, and many drivers will start driving on Monday mornings, forcing thousands of trucks onto our roadways in rush hour and dramatically increasing traffic congestion.” Drivers can only use the restart provision once during a seven-day period.

So does anybody have anything good to say about the new rules? “If there is a positive in this rule, it is the lengthy period of time before it becomes effective,” says Bill Graves, president and CEO of the ATA, pointing to the compliance date of July 1, 2013, set by the FMCSA. This 18-month delay, Graves says, will give ATA time to consider legal options. And, by delaying implementation of this rule, the agency is acknowledging there is no safety crisis on our highways.”

And by July 2013, there could very well be a new Administration in the White House, and presumably, new leadership at the FMCSA. And that could very well lead to even more changes in the hours of service rules.

Related Articles:

Retailers: Hours of Service Decision a Mixed Blessing

Hours of Service Debate Goes into Overtime

All companies big and small invest a lot of passion in mastering the arts of material handling and logistics. The way the economy has been, these disciplines offer a wealth of opportunities for cutting waste and slowing or stopping the flow of red ink. But passion can often lead to disagreements about the best approaches.

Should we automate or do we need to make better use of our existing labor?

If it’s the latter, how far can we push people to be more productive before safety is compromised?

And if we start monitoring and measuring performance, should we celebrate achievement or punish the lack of it?

If it’s the latter, how diplomatic do we need to be with the employee—or his union?

These are all debatable issues, but debates often turn into arguments among managers and supervisors—and even with employees. The recent spate of Republican debates, and even the debates on Capitol Hill about extending tax cuts, offer good examples of how not to behave. And with Cyber-Bullying being the latest hot topic in the mass-media outlets, you would think social media forums would offer more of the same.

But the other day, a loyal reader of this blog, Stafford Sterner, president of SJF Material Handling Inc., invited me to check out an “Open Forum” discussion on “The Art of Disagreement.” It was initiated by Rajesh Setty, whose bio says he’s an entrepreneur, author and speaker based in Silicon Valley. He offers the following seven ways to disagree with someone “gracefully:”

1. Plan to disagree [gracefully] long before the conversation takes place.

2. Mentally clarify the purpose of your disagreement.

3. Clearly show that the focus is on the issue at hand.

4. Get explicit permission to disagree. (which, if I read him right, is a kind of civil preamble before addressing the issue)

5. Ask for alternate options from the other person. (“Ask them about the details of their plan so that they’re forced to think them through,” Setty suggests. “Oftentimes the other person will change his opinion as he realizes the flaws in his proposition.”)

6. Use analogies extensively. (Start with an analogy that will immediately take the other person to a place that’s familiar to him.)

7. Save their face in public but send a clear message in private. (in private, they should know that their thinking was flawed and that they need to work on “getting better.”)

After reading through this list the first time I felt like something was missing. Then it came to me: What if YOU’RE the one whose thinking is flawed? Failure to consider that option is the cause for all of this world’s conflicts. So I had to post a number 8 for Mr. Setty to consider:

Be ready to admit YOU are wrong. Listen carefully to the other person’s point of view and look for points you’ve never considered before. You might have to say, “let me think about that for a day or two,” and then really challenge those points inside your mind. Do some research to hear other viewpoints as well–then come to a conclusion. Then if you determine that you WERE wrong, tell that person. He or she will only respect you more.

And with that little speech as we head into the homestretch to Christmas and New Year’s Day, on behalf of the staff of Material Handling & Logistics, I wish you peaceful, happy holidays, free of all conflict—except that offered up by the NFL.

Last week I blogged about how relieved a lift truck fleet manager was to cut the 15,000 invoices he was paying for maintenance every year down to one a month. He’s using an OEM-supplied wireless fleet and operator management system. Who could argue with those results? Leave it to me to find someone.

His name is Michael Gary, and he’s vice president of Sales & Customer Service at LTM Services, Inc., a fleet cost management consulting firm in the New York City area. Mike read my blog and responded that I was telling only 1/3 of the maintenance story. He maintains that those 15,000 bills that fleet manager received are more of an opportunity than a problem. By examining them more carefully they could help answer vital questions such as:

• Why were the repairs needed?

• What parts were purchased and at what cost?

• How long did each repair take?

• How many of those 15,000 invoices were repeat repairs?

• How many were properly related to abuse by operators or the warehouse environment?

• Was the full spend the right spend?

“A consolidated bill, while simpler and less time consuming, does not allow for the proper oversight and invoicing transparency truly required for comprehensive maintenance review,” he said. “That manager’s company might not be receiving 15,000 invoices a year any longer but they are also not being offered the ability for the true understanding of their fleet costs.”

Feeling a bit defensive, I responded “This was not all about billing. While that company has consolidated its bills, they’re also getting information down to the serial number level on their fleet. This helps them see trends and understand usage.”

I also mentioned that many smaller companies today don’t have as many sets of eyeballs or the time to stay up on wear-and-tear trends, and that technology like this can be a handy tool.

But Mike wasn’t done with me.

“If the billing is not being reviewed and assessed for all the detail and transparency, the serial number drill down information will not be accurate,” he responded. “If these fleet owners do their diligence they will find many excellent management firms whose offering is very much along the same cost lines as the forklift OEM systems without the need to add all types of sensors and hardware to their fleets.”

I checked out Mike’s company website, and LTM is described as a firm that uses a “robust proprietary software solution in tandem with intensely seasoned and experienced analysts.” Those are the eyeballs I said that many fleet managers are doing without these days.

After reading this morning’s Wall Street Journal I realized that companies like Mike’s are performing a dual service. Not only are they assembling the pieces of that crazy complicated forklift maintenance puzzle, but they’re employing a mature workforce to do it. A WSJ story titled “Oldest Baby Boomers Face Job Bust” notes that with U.S. unemployment at 8.6% and much higher among people in their teens and 20s, younger members of the labor pool are accusing Boomers of refusing to gracefully exit the workplace. “But their long-held grip is slipping, as employers look past older Americans to younger, cheaper workers.”

I’d like to see those kids sift through 15,000 forklift maintenance invoices and come up with coherent answers to those questions raised above. That’s a job for a detective who has seen his or her fair share of burned-out transmissions and fried batteries.

So whether you use an OEM-supplied fleet management solution, hire a consultant, or employ your own seasoned citizens, be thankful for the many years of on-the-job engineering education that make your uptime possible.

A month ago the headline coming out of the U.S. Postal Service (USPS) news room was bleak: “Postal Service Ends Fiscal Year 2011 with $5.1 Billion Loss.” Profits bled out of many wounds, big and small. The biggest gusher is only increasing as the volume of first class mail diminishes. Total 2011 mail volume declined by 3 billion pieces, or 1.7 percent, from 2010, the USPS announced. Its largest and most profitable product, First-Class Mail, continued its year-over-year decline, from $34.2 billion in 2010 to $32.2 billion in 2011 (5.8 percent).

Priority, Express and Standard Mail provided the only bits of good news. Priority and Express increased 2011 revenue by $530 million (6.3 percent) over 2010. Standard Mail increased by $495 million (2.9 percent) on a volume increase of 2 billion pieces (2.6 percent).

The Postal Service has been tightening a tourniquet to stem the flow of red ink. Business best practices deserve some of the credit. USPS reduced work hours by 34 million despite an increase of 636,500 delivery points. For this accomplishment it credits effective workforce management, efficient use of materials and transportation, and continued advancements in the use of technology. Since 2001, the Postal Service has reduced work hours by 28 percent, while delivering to almost 14 million additional addresses.

But another profit leak the Postal Service is trying to plug is caused by disappearing material handling assets like pallets and containers. Last month we reported that the USPS was embarking on an amnesty program, encouraging the return of those assets within a two-week period. It promised that no questions would be asked.

The Postal Service spent nearly $50 million this past fiscal year to replace equipment that was never returned. Five years ago this magazine reported that by March of any year most of the pallets used during the holiday shipping season have returned to USPS warehouses. It is then that they can assess their needs for the next heavy mailing season. We reported that the Postal Service’s national “comfort level” was around 500,000 to 700,000 pallets. What it actually ended up with that year was around 100,000 pallets, with 60,000 typical on any day. This situation has only gotten worse since then—hence the amnesty strategy. Did it work?

Nobody at the Postal Service seems to have a good answer. I asked Dave Partenheimer, their manager of media relations, for some kind of national number but as of yet the only information he could give me was anecdotal:

• Cresco IA—a pallet recycler reported that she received four USPS plastic pallets and wished to return them;

• Mounds View, MN—a USPS customer called for a pickup of nine USPS plastic pallets;

• New York, NY—a USPS customer called for a pickup of flat tubs;

• Buffalo, NY—a pallet company called to request a pickup of 250 plastic pallets;

• Traverse City, MI—a delivery company requested a pickup of 350 pallets;

• Baltimore, MD—a pallet recycler called to request a pickup of 40 USPS plastic pallets—with a total value of more than $600.

So the Postal Service’s “Good Cop” approach is over. Time for the “Bad Cop” to go on duty. Will USPS pallet hoarders be visited by SWAT teams any time soon?

“We will launch aggressive efforts to have this property returned to us,” Partenheimer promises. “We’ll announce details soon.”

In the meantime, the Postal Service just announced that its promise to start shutting down mail processing facilities has been postponed until May 15, 2012. Until then it says it will continue all necessary steps to review these facilities and will conduct public input meetings.

It’s hoping that during this closings moratorium Congress will pass postal legislation to help it be profitable again. Postmaster General and CEO Patrick Donahoe says the USPS needs a more flexible business model so it can respond better to a changing marketplace. “To return to profitability we must reduce our annual costs by $20 billion by the end of 2015,” he calculates.

That’s a lot of pallets. Do him a favor—take another look through your logistics operations. I’m sure he’d look favorably on the return of a few thousand more of those “lost” assets. The Post Office you save may be your own.

How long would a coffee filter last in a modern forklift? That’s a question that might occur to you if you looked to your company’s general ledger account to find out how much you’re spending on maintenance. According to Jim Gaskell, director of global Insite products for lift truck provider Crown Equipment, the general ledger account is a dumping ground of data for many companies. Apparently their accounting departments feel there’s not much difference between air filters and coffee filters—so you may see both of them there.

Jim made this observation during a Crown webcast on fleet maintenance last week. It might seem like a ploy to grab the audience’s attention—but it was backed up by his co-presenter on the program, Sean Bennett, director of financial operations for MBM Corp.—a Crown fleet maintenance customer. MBM also happens to be one of the nation’s largest customized foodservice distributors for national restaurant chains. If anyone would know the difference between a coffee filter and an air filter you’d think it would be him.

But even Bennett admitted that eight years ago, looking at his company’s general ledger was not a good way to find out what lift truck maintenance was costing him. And according to Gaskell, that’s not unusual. In fact he’s heard customers complain that they spend more than a million dollars on lift truck maintenance every year. But when Gaskell asks how many lift trucks are in their fleet, he’s often answered with silence. They haven’t a clue. His retort is, “So how do you know a million dollars is a bad number? It might be a good number.”

Bennett could relate to his fellow stumped maintenance managers.

“We knew how much we spent on material handling equipment but when we asked ourselves how many pieces of equipment we had and whether that was a good amount, we didn’t know the answer,” he said.

Bennett worked with Crown to find out, implementing Crown’s InfoLink wireless fleet and operator management system. Today every piece of MBM lift truck equipment is identified at the serial number level, and they know every type, make and model in their 1,000-vehicle fleet.

“We paid 15,000 invoices annually for material handling maintenance before,” Bennett said. “With this system we pay one invoice a month and we have information on each serial number. We know how much we spent by DC, by truck type, make and model, how much on parts and how much on labor. Knowing that has allowed us to extend our fleet’s material handling life cycle by two or three times.”

By upgrading their maintenance operations and getting better equipment utilization, Bennett says his company has reduced its fleet by as much as 22% in some of its facilities, while at others it was more like 8%, translating to about a 10% fleet reduction overall. But equally important, Bennett knows more about his fleet than he did before.

“We went into this wanting to know one or two things about our equipment and once we got into it we realized there were 10 or 15 things we needed to know,” he said. “The idea that we would know how much we spent on parts and labor at the serial number level is something we never thought would be important to us. But now we know how often we use parts, how often a part or a truck fails in our environment and whether or not there’s something we need to do differently within our operation that would change that.”

Today lift truck fleet analysis can give a manager hard and soft costs to better understand return on investment. Soft costs used to be ignored when it came to ROI, according to Bennett.

“But soft costs are real, they’re just hard to measure,” he concluded. “That doesn’t mean they don’t exist.”

Unlike the Mr. Forklift coffee filter.

If you’re a regular reader of our blogs you’ve already seen how lift trucks were used to move hippos and pandas. These stories might have had one of two effects on you: either your heart was warmed by how carefully these creatures were handled or your heart was aflame with concern that these animals could have been harmed during these tricky moves.

If you’re among the former crowd, we’re glad to have given you a smile. If you were among those with heartburn over the hippo handling, hear this: it was done by trained professionals.

I must admit I was in that latter crowd. I know how important it is that lift truck operators get site-specific and job-specific training for the material handling tasks they perform. So I wondered, who on earth has a job title like hippo handler and how do you get trained to be one?

I contacted my connections at Toyota, the lift truck supplier to the Philadelphia Zoo, and they got me an answer that’s a good refresher for any operation that uses lift trucks.

First, let’s address the loads in question: tons of moving muscle that you never want to spook. Believe it or not, these hippos were trained for this move too. The Philadelphia Zoo keepers trained them to enter the crate and to remain calm while the crate’s door was closed. The crate offers another good example of the material handling art. It was designed specifically for large mammals such as hippos—large enough for the animal to fit comfortably but snug enough to keep it from shifting side to side. This design ensured that the animals didn’t injure themselves or make the move more difficult than it had to be.

Now, about the lift truck operator. The Philadelphia Zoo has a trained operator on staff whose job is to know how to pick up a crated animal and move it onto a trailer for transfer to a new exhibit space. They also know how to offload the crate and stage it for the animal’s exit.

So, yes, this zoo employs trained, licensed lift truck operators with very specialized skills. It also employs an experienced animal mover who consults on such moves. AND it employs Scott Hughes, who is a lift truck operator trainer. Scott not only teaches, but he occasionally transports animals himself.

So there’s a little back-story on the moving adventures of Cindy & Unna and Sweetie & Sunshine. And for those hotshots out there thinking “What’s the big deal, I could have done that”—a message from legal: “Don’t try this at home.”

“At the end of the day, we produce a PC just like someone else produces one of their products.”

A few years ago, if a sales guy representing a big name in personal computers would have said such a thing in public he would’ve been fired. But Dell’s v.p. of sales, Bill Popp, said this to me last week and he did it while sitting next to Dell’s executive director of manufacturing services, Mike Morrison. Mike not only didn’t get upset, he agreed with Bill.

“We’re moving Dell from an IT hardware-focused company to one that focuses on solutions addressing business problems like the profitability of certain products to certain customers around the world,” he said.

I guess Mike’s title should have been the tipoff: Manufacturing “Services.” If the 1967 movie “The Graduate” were to be remade today, that one-word piece of career advice Dustin Hoffman got—plastics—would have to be changed to “Services.” Not that manufacturing is a dead career prospect, but helping manufacturers be more certain in this age of uncertainty seems to be where it’s at.

And that’s why I was talking to Bill and Mike. Their company just introduced “Dell Product & Profit Analytics,” or DPPA for short. They say DPPA will help manufacturing companies predict the impact market conditions could have on their products. It does so by linking details on material, manufacturing and selling costs from across a manufacturer’s supply chain.

So maybe it’s not just “Services” that’s the new “Plastics,” it’s “Logistics Services?”

“With all the issues we had worldwide with natural disasters, logistics has become a major strength and we’re bringing tools out to help companies become more profitable, control costs and go to market more efficiently,” Popp said.

Dell is using corporate America’s aversion to uncertainty to its advantage. Even in its press release about DPPA it describes this service as a way to “creates powerful ‘what-if’ simulations in a safe, sandbox environment. … The ability to quantify forward-looking scenarios allows decision-makers to take smart action and decide what to stop, what to change and what to grow.”

Dell isn’t entering this new phase in its business model alone. It partnered with pVelocity, makers of cost analysis software. In fact another guy in the room, Kang Lu, pVelocity’s chief technology officer, told me that not only is the nature of manufacturing changing, but so is supply chain logistics.

Manufacturers have always focused on how to make widgets faster with reduced inventory, he said. The big challenge now is understanding which products they should make, in what mix, and how to target that mix to the right customers at the appropriate price points. That requires looking at supply chain cost and efficiency factors and marrying them with the sales and distribution characteristics of the organization.

So Dell seems to have read the writing on wall street and diversified into the world of logistics service providers. Sounds like a smart move, considering that most of the major third-party logistics providers did pretty well last year. In Dell’s vision of success, though, it’s more than just about identifying costs, it’s breaking them down and analyzing where costs become problems. Many times it’s in transportation.

The Dell guys told me about one customer that sourced a liquid product both from Europe and from North America. Even factoring in freight they couldn’t figure out why the North-American-sourced product was more profitable than the European one. But by breaking down the costs further they found they were actually shipping diluted product in from Europe, not the concentrated form—which would have taken up less volume and therefore been less costly to ship. A little thing like that changes the profitability of a product significantly.

Forget “The Graduate.” Dell’s new business model reminds me more of an old Sherlock Holmes movie—but without the dead bodies.

One of the most popular blogs ever posted to this site featured the story of two hippopotamuses being moved from one end of the Philadelphia Zoo to another. But as well received as that story was, we knew you wanted more. As impressive as the hippo story was, it was basically self-contained.

As the follow-up to that first in our occasional series of “Extreme Logistics” adventures, this time out we’ve got international intrigue aplenty, as the story begins in Chengdu, China, home of Tian Tian (aka Sweetie) and Yang Guang (aka Sunshine), two giant pandas, and ends in Edinburgh, Scotland. We’ve got material handling (the video in fact begins aboard a lift truck), we’ve got packaging (customized containers for the pandas), we’ve got transportation both domestic (full-length trucks and express delivery vehicles) and international (the flight of the FedEx Panda Express). And we’ve got a spell-binding plotline, as the first video below ends on a note of intrigue.

Best of all [SPOILER ALERT], we’ve got a heart-warming happy ending courtesy of the second video. Enjoy.

Just when the daily business stats start pointing to a boom in the making, someone grabs hold of that boom and lowers it on you. Here’s a headline that appeared in the business section of my local paper this morning:

“U.S. productivity rose less than first estimated”

Even we at MH&L have been reporting a lot of positive economic numbers from various sources lately. But apparently the Labor Department was too generous in its last report. The measure of employee output per hour rose only at a 2.3% annual rate during that period, not the 3.1% it reported previously.

“Companies may find it harder to maintain earnings growth with productivity cooling relative to the recovery, when employment fell faster than output,” the report stated.

If these productivity numbers get you down, the Material Handling Industry is always there to lift you up—ergonomically, of course. Last week I traded e-mails with Tom Kozenski, VP of Product Marketing at RedPrairie, the warehouse management system (WMS) providers. I was doing some research for a story on automation. We discussed system integration and the new role a WMS played in today’s businesses.

First of all, we should really call a WMS by the role it has grown into: as a supply chain execution system. As such, today’s SCE products help to “productize” integration between two technologies. Kozenski says the component-based design of today’s solutions allow for an “iterative communication” between a WMS and material handling equipment.

The term “iterative” has also been applied to system design in general. That’s where the designer goes back and forth between the different steps until a satisfactory design is produced. It also fits into the “Services Oriented Architecture” material handling system vendors are offering. Where warehousing and distribution are concerned, SOA separates functions into distinct units, or modules, which users can access over a network and combine them as needed in their operations.

What does this have to do with productivity?

“Automation provides an opportunity to minimize the labor impact on operational costs, as well as optimize overall facility throughput,” he told me. “If anything, the current use of automation has been enhanced over the past few years because of that more intimate system integration that’s going on. The communication between a WMS and material handling equipment is highly configurable and offers real-time connectivity. The use of automation supports the idea of what some economists call the “workerless recovery,” where companies are starting to grow again and increase capacities, but doing so without a reciprocal hiring of warehouse labor.”

So if you’ve been struggling to squeeze more productivity out of your workers—or even to hire the talent you need to maintain productivity, the material handling industry is working to make a good case that the overall ROI of an automation project looks a lot better today than what employee turnover is costing you.