The 2012 Surface Transportation Summit held in Toronto last week attracted over 200 shippers, carriers and industry vendors. The speakers and panelists discussed a wide ranging array of topics but one of the recurring themes was the need for shipper-carrier collaboration.

The Great Recession placed tremendous downward pressure on freight costs and freight rates. The industry is still in a recovery mode. Carlos Gomes, the Senior Economist from Scotiabank, the leadoff speaker at the Summit, expressed the view that the economies of North America will be in a period of slow growth for some time to come.

On the other hand, Maximizing Profitability and Reducing Freight Costs remain the two top priorities for shippers in the 2012 Transportation Buying Trends Survey, as presented at the Summit by Lou Smyrlis, Editorial Director of the Business Information Group. The carrier executives who spoke talked about the need for freight rates to increase to maintain the viability of their businesses. How do you reconcile these two disparate positions?

A number of shippers and carriers talked about the importance of communication and collaboration. This collaboration is taking several forms.

Brian Springer, the VP of Transportation of Loblaw Companies discussed the value of providing a company’s core carriers with freight forecasts. His company provides 6 month, 6 week and 24 hour forecasts of load expectations, thereby allowing his core carriers to better meet the Loblaw capacity requirements. This approach is particularly important since a number of carriers talked about the requirement to control investments in capital, specifically tractors and trailers, until there is a quicker pace of economic improvement.

Jim McKay, Director of Transportation at Wal-Mart Canada outlined their “WPP” or Wal-Mart Freight Program. Essentially what Wal-Mart is doing is allowing its vendors to use Wal-Mart’s carrier network to move their inbound freight. In other words, their vendors are supplying Wal-Mart’s carriers with backhaul freight from the store location areas. Wal-Mart matches each vendor with a particular store location. It then leverages its carrier network as a resource. The advantage to shippers is that Wal-Mart takes responsibility for delivery compliance and lets its vendors focus on their core competence, manufacturing rather than transporting products.

Mark Gallant, Director of Transportation at Home Depot of Canada outlined the major transformation his company went through. His company shifted 95% of their freight from LTL store deliveries to truckload shipments. Working with his carrier partners, Home Depot was able to take significant costs out of their system. When asked, Mark indicated that he was able to retain most of his carrier base.

Jack Ampuja, President and CEO of Supply Chain Optimizers, leads a company that specializes in packaging optimization. His company has done work for many of the leading shippers in North America. Jack provided one example of how his team was able to identify an opportunity to improve the packaging of a client’s freight and take forty percent out of their freight spend. Since the cost of freight is essentially the cost of the space occupied on a trailer or container, improving freight density can lead to significant cost savings. This is certainly an underdeveloped area where shippers and carriers, working together, can identify ways to improve cube utilization through improvements in packaging and loading.

The carriers who participated in the shipper-carrier panel expressed a similar view on collaboration. They are clearly tired of the wave of poorly designed freight RFPs that contain incorrect information. They very much appreciate shippers who treat them as business partners and who share information in an open and trusting manner.

From my own experience as a carrier executive for many years, a good trucking company can see many areas of inefficiency in shipper operations, where improvements can lead to cost savings. These can include such simple things as having the paperwork and freight ready on time, calling the carrier in advance of pick-up to advise of changes in the number of pallets tendered and providing carriers with appointment times, so as to reduce or eliminate waiting time or trailer detention.

Mark Seymour, President and CEO of Kriska Transport posed this question at the Summit. “Do you want a carrier or a partner”? In these challenging times, when high equipment and fuel costs and rising driver wages are driving up freight rates, shippers should engage their carriers in meaningful discussions and look for opportunities to share information on Best Practices and cost efficiencies. This is the time for true shipper-carrier collaboration.

During my 30 years in the transportation business, I have had the privilege of leading some great organizations. Like everyone else, I have had my share of successes and disappointments. During this period I have also had the opportunity to work with and study a variety of CEOs. From experience and observation, I have identified a number of characteristics for those CEOs I would deem as top performers. Here is my list.

1. Passion for the Business

Top CEO’s have a passion for the business. They are fully engaged in the operation and actively seek to improve their companies on an ongoing basis.

2. Become personally engaged with the company’s top clients

The best CEOs get out from behind their desks to meet their clients and form strong bonds with them. They take a keen interest in their clients’ businesses. They also seek to establish a personal rapport with their clients that extends beyond the office. One of the best examples of staying close to a client’s business was demonstrated to me by a trucking company CEO who, several times a year, would take a tractor-trailer on the road to pick up and deliver loads for the company’s key customers so he would have an insight into the freight and its specific loading and unloading requirements.

3. Become personally engaged with the firm’s employees

Years ago I had a (CEO) boss who ran a large multi-division transportation organization with operations across Canada. As he visited his divisions across the country, he would first meet privately with the GM in each division and go through the names of all of the people he would meet that day. As he walked the dock, he would address each employee by their first name and engage them in conversation. He would take a sincere interest in the employees, their work and their lives. This had a huge impact. Top CEOs form close working relationships with many of their employees. Through communication and trust, they build loyal, productive work forces.

4. They understand all elements of the business

No one is an expert in all facets of the trucking business. Some people start their careers as sales people while others enter the industry as truck drivers. Over time, they learn those aspects of the business that are not their core competence. Some trucking companies with good employee development programs route their employees through a multi-disciplinary training program to expose their resources, particularly their upwardly mobile resources, through the various key areas of the business. Other CEOs, who do not have this opportunity, immerse themselves in all facets of the business so they can operate their companies from a position of strength.

5. They know their numbers

Good CEOs know all elements of their financial statements. They know and challenge every number that is not consistent with budget, normal readings or last year’s numbers. They know what to look for, where to get it and they do. They then set in motion action plans to keep their businesses on track.

6. They know when to say “NO”

The word “NO” is one of the most powerful words in the English language. Great CEOs know when it is time to say, “this is not good enough”, “it is not acceptable and we need to do better”. This was one of the great attributes of Steve Jobs of Apple. After key members of his staff would present new products for him to review and approve, he would then push them back. He would request changes that would invariably elevate Apple’s products to Best in Class. Good trucking company CEOs follow the same principle. They don’t accept customer complaints or sub-standard service. They demand that their management teams find solutions that significantly enhance the value of their customers’ experiences.

7. They “keep their cool” and project a confident, mature image

The CEO is the most watched and visible symbol of a company. His or her behavior is carefully scrutinized by employees and customers. The trucking business is very competitive and challenging. Dealing with driver turnover, rate cuts and equipment shortages takes its toll. It is easy to “let your hair down” and throw a temper tantrum or use inappropriate language. These acts can undermine the confidence of employees and customers and hurt a CEO’s credibility. Maintaining a calm composure inspires confidence and stability.

8. They are good communicators

Great CEOs listen to what employees and customers say without interruption and without signaling disapproval or contempt. They analyze what is being said and respond, whether orally or in writing, in a thoughtful and respectful manner. By their communication they instill openness and trust. This allows problems to surface rather than festering and being hidden from view.

9. They hire good people

Nobody has expert knowledge of all aspects of transportation. Good leaders hire and train quality people, often employees who are as good or better or smarter than themselves. They are not afraid to hire great people, specifically people with ideas that are different from their own. They support and nurture their leadership team so it can take the company on new and productive paths.

10. They listen, analyze, decide and follow through

Great CEOs synthesize the inputs they receive from customers and/or their leadership team. They carefully evaluate the viable scenarios, test them out and then decide. They are confident in themselves that they can make good decisions and act on these decisions in a timely manner. They don’t procrastinate or make a decision and then unmake it a few days later when they receive some new inputs.

Top CEOs can lead their organizations to extraordinary levels by virtue of their skill sets. The list of attributes itemized above is not exhaustive. There are many others that could be added to the list. Finding leaders with these attributes will position your trucking company for greatness.