Sales Manager, Richard Kenney, was fortunate to attend the 64th Annual Food Shippers of America Conference in Palm Desert, CA from March 3-5, 2019. There were approximately 1,200 attendees, which took place at the J.W. Marriott Desert Springs Resort and Conference Center. The Conference was so well attended, that the use of additional hotel space was required to handle this year’s exceptional group of transportation and logistics professionals from the food industry.
This year’s conference included, but were not limited to, the following attendees: Nestle, Philadelphia Macaroni Company, PepsiCo, Dawn Foods, Reinhart FoodService, T. Marzetti Company, Griffith Foods, Meijer, Save-A-Lot, Supervalu, and J.M. Smucker Company.
Monday’s Schedule included opening remarks by Archie Manning, who is the father of Cooper, Peyton, and Eli Manning. Peyton and Eli Manning are Super Bowl winning quarterbacks. Archie Manning discussed the importance of leadership and goals for the future. Following the opening was a session on Shipper/Carrier Collaborative Victories and The Art of Keeping an Efficient Flow with Costs in Line.
Transportation was the front and center topic, as the Top 100+ S&P CEO’s discovered that transport costs affected the bottom line in 2018. If business were to proceed as usual, companies could face another 7% increase in costs like the prior year. It was debated that higher costs in 2019 are expected and could be due to higher driver pay (Walmart Fleet offering 89K to start), LTL dimensionalization, higher accessorial charges and low sulphur fuel requirements. Discussion of shipper fines and collaborative ways to reduce them was an important part of this session. Detention and the 2-hour window were also reviewed to see if they could possibly be reduced. It was stated that CEO’s would and should watch this area closely in 2019..
The next session featured Compensation vs. Total Rewards. Record low unemployment is fueling creative solutions in paying drivers and logistics personnel in the Food Shipper Industry. Getting creative with variable pay, incentive based compensation, benefits that include more flextime, PTO and improved training programs, should help manage turnover in 2019. The importance of recruiting programs, including looking at the under 21-year-old potential employee pool in the US, was also discussed. Orientation programs with follow-up, including after the orientation period by spot checking on satisfaction is also a priority in 2019.
Lastly, on Monday, upcoming advancements in trucking equipment and innovation was discussed. The current fuel situation has caused the industry to notice studies focusing on higher MPG goals. Michael Roeth, from NACFE.org, reviewed a recent test on how to run on less in 2019. Equipment matters, maintenance, tire pressure, lubricants and creative driving in wind reportedly helps MPGs. A new test has been scheduled again in the Fall of 2019.
Tuesday’s schedule provided all attendees with the opening of a life lesson from Corporal William Kyle Carpenter, whom is a Medal of Honor recipient and retired US Marine. Corporal Carpenter provided an inspiring look at his action in Afghanistan, which lead to injury, rehabilitation and recovery. He spoke about not forgetting the importance of our country, our freedoms and the gift of life. By overcoming adversity, Corporal Carpenter taught the attendees the personal power that dwells within all of us.
Corporal Carpenter’s discussion was a perfect segway to the next session which featured a discussion about attracting our country’s greatest resource…the men and women veterans and active military members who can work for Food Shippers of America. Special looks at hiring military spouses (18% unemployment rate) and the importance of showing diversity in hiring veterans of all types, was the topic of discussion. Veterans are offered training in trucking, operations, mechanical engineering, and other types of employment.
The next session featured Bob Costello, Sr. VP of ATA, and his annual economic update. Bob expects a good 2019, after a strong 2018 year in the trucking industry. GDP of 2.6% is forecasted, a solid number for 2019. Skill sets in hiring will be very important. Older workers are expected to remain in the work force, as recent retirees view not working as boring. Bob stated that he does not expect a recession until late 2020 or 2021 and it will be mild. In the freight market, Bob expects that a positive 2019 capacity growth will be difficult, with some new carriers starting operations. Pertaining to drivers, history shows turnover rates are high in good times (89% in 2018), with LTL at 11%.
The price of drivers is expected to go up in 2019 due to demand and private fleet actions, shortage (50K shortage 2017 last number on file) and demographic age problem (Congress Drive Safe Act under 21 drivers). The lack of female drivers is a problem and must be addressed, as females are 47% of the overall workforce but only 6% of truck driver workforce in USA. Due to this situation, Bob’s prediction for the future is that in the next recession, although mild, some trucking companies will go out of business due to the recent pay increases. A future driver issue may be minimum driver pay, as studies indicate a $75K salary is needed for equilibrium.
Throughout the 2019 conference, there were plenty of networking opportunities. Each day, there was time included in the agenda to network during the day and later at night. The opening and motivational speakers this year, made the FSA 2019 very memorable. The next FSA conference is the 65th Annual Food Shippers of America Conference at the JW Marriott Grand Lakes in Orlando, FL from February 23-25, 2020.