Thomson Reuters Corporation (TRI) Earnings Call Transcript & Summary

Good morning, good afternoon, good evening to everywhere you're tuning in around the world for this latest Reuters event supply chain webinar. The topic of today's discussion is flexibility and, more specifically, how can we keep our supply chains moving in a world of unending uncertainty. My name is Nick, and I'll be your host for today's discussion. Without further ado, I'd like to introduce each of the speakers, and then we'll be getting into the discussion today. I'd like to kick off with Ed. Ed, please introduce yourself for the audience.

Thanks, Nick, and thanks, everyone, for joining. I'm Ed Barriball. I'm a partner at McKinsey & Company in Washington, D.C. I am part of our manufacturing supply chain practice and have been leading a lot of McKinsey's research and client service on supply chain resilience since 2018.

Perfect. Thanks for joining us, Ed. And next up, Steven, please introduce yourself.

Hello, and thank you for the invite to be here with this group and glad that you all are able to attend. Steven Judge, I'm the Senior manager of Road Free Procurement here with Newell Brands. I've been here about 10 years. And Newell brands, formerly Rubbermaid, you probably know us as consumer products good, everything that's in your house right now and a long list of stuff. So excited to be here to talk with you all.

Excellent. Next up, Joe, please introduce yourself.

Thanks, Nick, and welcome, everybody. My name is Joe Beacom. I'm the Chief Safety and Operations Officer at Landstar, and I've been here since 1993 and have seen a lot of change and advancement here in the industry. I look forward to talking about that today. A little bit about Landstar. We're a worldwide light asset-based transportation provider, serving a very broad range of customers, using a model that includes our agent family, third-party capacity and our employees. A little bit on the networks. We've got around 1,200 different offices throughout North America where our agents own and operate, about 83,000 third-party capacity providers and over 25,000 customers. In 2020, we did just over $4 billion in revenue, 2 million loads. And the reason we call ourselves asset-light is because we do own and operate around 13,000 trailers. Thanks, Nick.

Perfect. Thanks for joining us, Joe. And last but not least, Ilse, please introduce yourself to the audience.

Hi, everybody. I'm from Google, and I'm the Head of Global Transportation, and I've been there for 10-plus years.

Excellent. Perfect. So as we get into the conversation, if anyone has any questions, feel free to ping them through on the Q&A. And if appropriate, we'll be asking those to the attendees today. To start off with, I'd like to start with Joe. Joe, when it comes to defining flexibility when it comes to your supply chain, how do you guys do that at Landstar?

Well, Nick, for us, I think flexibility is not having to say no very often. Really, that's what we try to do. If you can put yourself in a position to be adaptive, to offer alternatives, whether they're alternatives in equipment type, alternatives in modes, alternatives with time lines or cost -- different cost options, I think that's critical. So you like to try to say yes as much as you can. And for us, having been able to lean back on the size and the scope of our network of agents, our sales folks, our operational people, we've drawn a lot of experience from the past to try to meet some of the challenges of the present and the future we anticipate. And I think also having some financial strength offers some flexibility that maybe you wouldn't otherwise have if we didn't have that. So really, it's about being able to cut across the network and find answers and learn from each other and learn from what we've done in different end markets in the past.

Perfect. So Ilse, just bringing you in here, just based on, I guess, what Joe mentioned. How do you guys at Google build in flexibility to mitigate against disruptions during the transportation planning process?

Yes. I think it's a 2-pronged approach. It's strategic and tactical. I think you have to start by building an organization wrapped around long-term strategic partnerships. And at Google, we have a very small global core base of carrier partners that we use. Part of that is the close collaboration and the joint planning processes that enable us to overcome mitigation in the supply chain. I would say on a tactical basis, from an international airfreight perspective, we block space. And that's been critical and key in the pandemic environment because of the capacity issues that we're seeing internationally as well as over the road in the U.S. But with international airfreight, we block space. We do it based off of historical data as well as forecast data, and that plays into that strategic partnership and that close collaboration and the joint planning process that we do monthly and quarterly. Over the road, we've developed a dedicated fleet program, and we did that a couple of years ago. And the way that operates is it's a 75-25 model. So 75% of it is operating on a dedicated fleet with Landstar, who's our key close partner in the U.S., and then the 25% is based off of their carrier partner base. And so that allows us to flex up and down. That number of flexes, depending on how stable the environment is and what volumes we're looking at. So potentially, a dedicated fleet model could drop down into 60% and then 40%. There's a couple of other key programs, part of global transportation that have helped us to mitigate disruption. And one of them is we developed -- 4 or 5 years ago, we developed a global command center. And that's a follow-the-sun 24/7 operation that their job is to look at incidents and exceptions in the supply chain. And then that information is pumped into our systems in a real-time way. And it allows us to escalate and to make decisions, whether that's alternate routes or whether that's getting another driver out to pick up the freight if there's a mechanical or something like that. And then finally, from a risk management strategy, we have another program, and there's an application that we use as part of that. And it's called Resilience360, which has recently changed their name to Everstream. And they provide us real-time information globally. And that's really helped us to identify hotspots, identify global -- because the policies and restrictions and regulations by country, by region and even within the U.S., by state, really requires us to do different things on a daily basis. And so that information for COVID as well as geopolitical issues that happen, we're able to take action much quicker.

Perfect. Very, very detailed answer there. I appreciate that. I guess, Joe, bringing you into what Ilse mentioned, what's the approach that you guys take at Landstar when it comes to building in flexibility to mitigate against all of these disruptions that we've seen around the world from a supply chain perspective?

I think key to that, and I think Ilse hit on that pretty well, is just understanding the customer's business. As she implied that we participate in their supply chain and it's -- and it wouldn't work as well as it works with Google or anybody else if we didn't have a very good understanding of their business and what are their pain points. Who are their vendors? Are we bringing in materials that are for inventory? Are we bringing in materials that are for production? And what does that mean? Because we would make different decisions from a support perspective knowing that information. And that applies across our customer network. Having that access to both a dedicated capacity base with our BCOs or a large carrier network that allows us to flex up and down helps mitigate risk. And as I mentioned in the prior question, just the experience, we do -- we participate in a lot of verticals. And so we have experience. We've partnered with FEMA for a number of years and a lot of the state emergency departments to respond to disasters regardless of what the source. And so that's -- we've got expertise here in the building. We've got expertise across our agent network that responds to that. We're the largest truckload carrier for the Department of Defense, and they have a few no advanced notice readiness exercise every year. So we're constantly understanding how we do it for them. But a lot of that knowledge and expertise, that bleeds across. We don't -- it isn't siloed here and here and here. There's things that you can learn in one instance that you apply in another. And even as recently as last year with the pandemic, we're not a big food hauler. But we hauled a lot of food, a lot of consumer products last year as other things were off. And so you force yourself to pivot and reallocate and reprioritize. And the nimbleness of our model and the expertise across both the agent capacity network and our employee base allows us to do that pretty well. And then just in the backdrop, you try to apply technology to make sure that you're not missing anything, to try to remove some manual processes to improve transparency for all partners. And that seems to work pretty well for us.

Steven, I was wondering, bringing yourself in here, Just I guess to what Joe and Ilse have mentioned, specifically from a Newell Brand's perspective, what adjustments have you guys made in the past year with the unexpected interruptions that we've seen take place?

Yes. And as all transportation in one part or another, I think we expect the unexpected. This one has just been a lot longer than Polar vortexes and some hurricanes we may have experienced in the history, right? So I think we first started going into this and approaching it, it was, okay, we're in a normal sort of drill and let's try to get this worked out. But as it continued on, we really did have to find bigger adjustments long term. Things were going on. So time management is the biggest thing that I can say that we've come out here on Newell Brands, understanding we were spending a lot of time last year scrambling for new lanes, trying to secure the capacity with our partners as lanes were well above forecast for some of our products and then it's way down on others. And so completely adjusting our ways and saying, okay, how are we spending our time? As Joe was mentioning is, how do we get rid of manual processes? What can we start doing? You start using automation, using BOT technology to start doing some track-and-trace that may be wasn't done before, right? And focus our energy and time, since it is limited, on the things that are going to be more impactful. The high-volume lanes, the stuff that's going to be going into our facilities, making sure we have plenty of capacity, that we have multiple providers, which maybe was only handled by one before. And then really the lanes that are moving once, twice, a couple of times is, okay, can we live more on the spot market instead of trying to find a primary care that made a contract rate when it pops up? Won't even hold anyways, right? So we found ourselves doing that a lot is, let's adjust this let's adjust our routing guides and our awarding mentality to be, okay, smaller lanes popping here and there, let's just find some of these new digital brokers or traditional brokers to handle that at spot market rates. And then the lanes that are going to be moving consistently and that are going to be very high servicing, let's start spending more time with groups like Landstar, other groups of the carrier world to say, we need you here. Here's why we need to go do that. So really focusing our effort, time to eliminate the manual parts and then really making sure that when we're doing something, that's going to impact the business in the right way.

Definitely. I was wondering if you can go a little bit on depth on, I guess, the diversification from a risk mitigation perspective.

Yes. So historically, Newell Brands was very -- going to the RFP, it would be 1 primary carrier per lane, and that's how we do with a waterfall backup. And then as it started to fall apart, like a lot of shippers did last year, was saying, okay, we need to take a new strategy to this. So it's really trying to balance out the use of traditional brokers where they come in and they're helpful on the lanes that are onesie-twosies that are going to come out there or lanes that we can be a little bit more flexible on pickups, right, freight live, first lives. And then understanding where is the new -- everyone's using the word digital brokers now and so we started looking into that foray and trying to understand, okay, when is it appropriate just to go to the market as a procurement group, right? How much effort can I really save the company on a lane that's going to move once a year? If I save $50, it's not as impactful as it is if I can build a better servicing carrier for the other lane. So it's when do we go to market, even when the market is not great, they have a world to be here and set up and say, okay, this is now less time of trying to send out e-mails or using a CMS to send out multiple requests for a lane, trying to get that feedback. And then execute where that may take hours. And suddenly, we all know in this world that if you spend hours trying to slow shipment, you may lose your driver, right? There's a lot of drivers that you got to be as quick as possible. The driver has options of who they want to go with. And if I can help them by getting them in and out faster and locking that down, then I think that's made sense. So we've seen a lot of diversification of really playing to the asset strength, the traditional broker strength and the new emerging digital broker strength, bringing them all in, in different -- and the good thing about Newell Brands is we have so many different business units that we can try them all in different locations. It's not a here's a Newell Brand strategy. It's -- here's the strategy for the writing team. Here's the strategy for our home appliance teams and where it makes sense for them. Because each facility is a little different as well. So we've done a lot of changes. We're still tweaking it as it goes on, and we're expecting a potentially scary June and July, right? It's, okay, how is this going to work? How is it changing? How have we adjusted to it? And then hopefully, after that, we get a little bit of reprieve and get to keep adjusting. So as we are talking about flexibility, it's just saying what can we use for this technology and the carrier base. And as Joe and Ilse mentioned, how do we use their strengths to help support us where we really need it?

Excellent. Ed, bringing yourself in from the McKinsey perspective, I guess what adjustments have you seen companies make in the last year? What are some of the best practices that you've seen when it comes to unexpected interruptions?

Yes. It's a good question. I think Steven, Ilse and Joe all laid out a lot of what I think are our best practices. So it's exciting to hear what each of them are doing. Yes, a year ago, when we were in the heat of the early waves of the pandemic, I think everyone was talking about the supply chain resilience topic and what we're going to do. I think we're now kind of seeing some companies that are taking it seriously and investing in it, but others, you probably need to move a lot faster. And some of the things that we think folks should be doing is -- Ilse talked a lot about the reactive ability, which is absolutely necessary and amazing to be able to detect things as they're cropping up and be able to react to them and change shipping routes or final [indiscernible], et cetera. We also think there's a lot of possibilities in preparing more and understanding where your vulnerability is set. The recent Suez Canal issue, among many others, you still found a lot of companies that were struggling to quickly understand, "How are we affected by this?" And I think there's a sense that we got through the pandemic and we were able to firefight our way through it and we can get through these things through firefighting. And as the world is becoming more complicated, as a lot of the assumptions that we've built, our trading networks on change, right, relationships change, weather patterns change, et cetera, these things are going to keep on happening. And investing now and not just being able to react to understand when something's happening, but also saying, "Okay, how do we tie our data systems together, so when something does happen, we don't have to scramble around, make a bunch of phone call and figure things out. We can actually just get the information on? Where do we make certain things? How do they get to us? Who are critical suppliers?" We still think there's a lot to be gained in investing in the capability to do that more quickly. And if you look at some of the things written right now about Toyota, for instance, some semiconductor shortage going on, they have been, based on what you see in the press, less effective than some of the other automakers because after 2011 and the tsunami in Japan a decade ago, they actually invested in the lot of the ability to get ahead of some of these issues and now they're less affected by things that are happening today. So I think everything that my fellow panelists have mentioned are great things to do. We think, generally, that folks should be investing more in this and getting away from the mindset that you can firefight our way to these issues when they come up.

Perfect. I guess, Ilse, just bringing you in here, obviously, we -- usually, in normal times, we expect peak season to be towards the end of the year. We seem to be in kind of a super peak given the crazy consumer demands that we're seeing. What's the, I guess, the approach that Google takes to secure, I guess, reliable capacity in these unprecedented times of peak -- continuing peak periods?

Yes. So it's kind of, from our perspective, it's -- we don't have a lot of seasonality ourselves. However, we are growing at a very rapid pace. So our -- internally, our scale is always up and to the right. And so we have to join with our carrier partners to look at peak capacity issues versus our volume issues, which are always going up. So internally, we have kind of a flat forecast. We know what we're going to do every quarter. I think as we get closer to peak, we do a more granular data analysis associated with what do we expect to happen. What I see peak happening and when I look at peak, I look at peak globally. Peak looks like, over time, is extending. So for the past 3 years, it's always extending a little bit like another month after Chinese New Year or something like that. And so I feel like we're experiencing peak for 2 quarters instead of 1 quarter. So we're planning further down the line for a blocking space. It's the same process where we do an analysis for the dedicated fleet and determine our over-the-road requirements for peak and lock those in. We have contractual relationships to lock in drivers for a longer period of time than we would normally. So that's typically what we do. We extend our capacity agreements over time for peak.

Excellent. Perfect. Joe, bringing yourself in here, what's, I guess, the Landstar approach to peak season? Obviously, we expected certain things pre-COVID on the way things work from a supply chain capacity perspective. Given all these disruptions, as Ilse mentioned, seems to be peak is extending, what's the Landstar perspective on this?

Well, I would agree with Ilse. I would say everybody is trying to get ahead of peak. So it gets a little bit earlier all the time, right? And with the change in buying habits and consumer strength, I think that's added to that to where I think you're -- that's leading in part to some of the capacity tightness that we see currently and that we've been seeing throughout the first quarter, quite frankly. Securing capacity for us, it's being able to have quality and volume of opportunity for the capacity providers in the network and then to effectively be able to put that information in their hands as soon as we get it. So to try to stay ahead of -- stay ahead of the curve and allow people to plan their routes, plan their businesses accordingly. Brand recognition for us is absolutely critical. And it's a function of kind of how we treat the capacity providers that are in our network and what they think of us, because the -- while our capacity base has grown, our exclusive BCO count has grown by around 2,000 trucks or 20% over the last 4 years. Our active carrier count has grown over 50% in the last 4 years. And I think that's a function of, not only the quality of business that we're able to put out there for them to consume, but also the way our agent family engages with customers to really understand the business. Because when you get opportunities and you can properly explain them and then you can throw on some technology that tries to put business with people that have handled it before, they've handled it successfully, or they've told you. Because we track a lot of preferences and historical data as well, they've told you what they want to do, they told you what they're good at, I think that helps try to get ahead of it and mitigate the risk of coming up short when there's something that you anticipate or don't anticipate on the horizon.

Perfect. Ed, I was wondering if we could just bring you back here of something you said earlier around data. I guess, delving deeper into that, how can we, I guess, use data to get ahead of these capacity challenges that we've been mentioning?

Yes. We actually think there's a really big opportunity now, and this one have been -- is true 2 or 3 years ago. But we're at sort of a unique spot where I think there's enough data out there in the ecosystem and the processing power to use it, where you can build a relatively good perspective on 3 things. One is, who is actually in your supply chain, not just your immediate suppliers, but folks at Tier 2, Tier 3, Tier 4. A relatively good perspective on what the demand trends are for you and your competitors in terms of what you're going to be trying to bring to market. And a relatively good perspective on when you look at your own supply chain, what other markets are there? So if you have a -- for instance, to go back to the semiconductor example and you're an automaker, they're supplying you, but you're probably a small customer, consumer electronics is a lot more. If you put those 3 data sets together, you can actually start to build some really interesting models about given demand in your industry and other industries, where could there be [ plug ] points in your supply chain. And we think that this is actually something that companies can do. It's feasible. It's not going to be overly expensive. It's not going to be a big science project. And you can actually start to get ahead of and understand where some of these capacity constraints are going to be, either caused by your own industry or caused by other industries for suppliers that serve you in another industry. So that is where we think the next horizon. Really. And the folks who really get ahead of this issue are going to have a competitive advantage because they're going to be able to much better predict where the capacity constraints are going to be in their supply chain, and they're going to be able to get ahead of it compared to others.

Definitely. I guess from a Newell Brand's perspective, Steven, what's the approach that you guys take when it comes to, I guess, what Ed mentioned or just the use of data to, I guess, forecast some of these changes on the horizon?

Yes. Data is an interesting thing. We all have a lot of it, and then we all have to see how much we trust it, right? And so thankfully, we spend a lot of time here as, a team, trying -- even before COVID, trying to clean data, understand it, because it has so many potentials. And as I said, it's saturated the market, right? So really thankfully gotten through that. We have a great database now as Newell's been really focusing and prioritizing that. What we've been doing is trying to connect it to more of the market indices that a lot of us maybe look at, go from out there, you can see capacity indexes, what's going on that they'll forecast it. What we do is try to tie those trends to our own and say, "Okay, if you look historically, the ups and the downs, here's what going." Here's how Newell was that, right? Because obviously, maybe we had contract rates. We weren't as affected, or maybe we were. And then we can actually start building out -- we have a great team of data scientists that we've now been bringing into the transportation group, that before, that's all they did was data. But now focused on transportation, they can start building connections and using real-time information and saying, "Okay, based off these flow in indices and forecast, here's how we correlate to them. Here's what we can expect going forward, right?" And this helps us not only budgeting, but then we can go out and present to our sales team, the other team that's making decisions, supply planning, demand planning, and say, "Here's what you can expect going forward based off of multiple indices. And here's how we think it's going to affect us," right? And I think that makes another level stronger for Newell to say, like, here's what the industry is expecting. And here's how we normally do during those times. So we've been using a lot of our power to be able to do that and make those connections and show that off and going into media and talking with groups that are not directly transportation, but they have a huge impact on us, right, to ensure that someone's sales group is going out and trying to land a giant deal right on June 30 and say we have a new 100 trucks that we're going to need on 1 day. I can sort of -- look, no, it's not a great idea, right? There's going to be some difficulty that's going to come up with it and giving them information beforehand. And then making sure -- the other part is you're continuing on. It's one thing to use to forecast and then track to see how you're doing, right? Have the lines and say, okay, here's getting more and more refined as we go along. So we've been really excited to use our data that's pretty well vetted, comparing it to indices data. And then actually, one of the untapped resources that I don't think gets enough credit out there, it's actually carrier data, right? I really enjoy going out to our carriers and saying, especially with our LTL groups and the truckload. They have so much technology now, they know where trucks are moving. They know how long is it taking them to get unloaded, loaded at customers. The LTL guys, they have better pictures of my freight than I do, right, because they're scanning it and weighing it. Ask for that data. We've been doing that with our partners and saying, tell us what you see, what's going on. Help us drive the insights based off what you've seen. And we've had some great luck with some of our truckload guys that we can go back and say, here's your average wait time at each facility. It's under your detention time limit, but we're still seeing longer times. Here's what's going on. Here's how your customers are performing, right? So then we can go out and actually start to push back our sales team like, hey, this customer -- this particular customer is driving out, holding carriers for too long. We're starting to see that come back in rates or capacity, right, in both instances coming through that suddenly when that name comes up with that customer, truck driver's going to pass on it. And it's -- we will never know why unless we ask that question. So I think really utilizing other people's data and bringing it in to compare to yours is a crucial thing that a lot of suppliers should be doing and looking at. And on the carrier side, send it over. Make sure it's clean to understand it. Make a point to action with it. And I think you can drive some really good conversations. We've gotten really lucky here to be able to focus on facilities that may have not been performing well enough or having conversations with customers that we never had before of, "Hey, this is how you're looking." good or bad. "Let's sit down and get this better." So it's really helped us understand the future and the forecast and when to expect pain and when do we expect some things to get better.

Definitely, super interesting to kind of hear some tangible benefits of tracking this stuff. I guess, bringing Ed back, obviously, some folks on this call potentially and afterwards, are not as far advanced as maybe some of the folks here when it comes to the use of data. I guess what advice would you give people that are maybe at the start of their data journey when it comes to this?

Yes, it's a great question. It's sort of an obvious point, I think the first thing is to figure out what problem you're trying to solve with it. I think, yes, not necessarily like we want to get X percent more profitable. But what are the questions that we have that we're trying to answer? I think sometimes you start these projects and it becomes just let's go mash all those data together and see what comes out of it. Let's actually figure out what the business' relevant questions are we're trying to answer. And I think to Steven's point, having a broad perspective of where you might pull that data from. I think what we are finding is that Tier 1, Tier 2 suppliers are actually quite happy to share data on things like delivery days, production schedules, et cetera, a lot of times, more so than a company might think. Now if you get into thinking about costs, other customers, that sort of stuff, you will get a bit more sensitive. But if you want to say, "Look, we want to collaborate and make sure that we're making life easier for you and also better understand for ourselves, what to expect," I think you might find more receptiveness to sharing data with some of your important kind of supplier partners as well. And I think the other thing that we would think about right now is there is, especially in the supply chain resilience space, there are so many different databases and tools that have popped up, which is great. There's a ton of innovation in the space right now. The challenge is, especially for large organizations is each business unit, or each teams within business units are priming and testing different tools. If you don't kind of know when to sort of stop that and say, here is how we're going to do this in more of a corporate-wide way, you can end up with a lot of amazing data that's very hard to enter. And so I think if you start to go on this journey of getting better visibility, better transparency, building more resilience, using data to enable that, you should experiment, you should innovate, you should try out different data providers and different partners that are out there. But at some point, make sure that you're thinking about, okay, when are we going to say at a business unit or a corporate level? Here's where we're going to say. Here's how we're thinking about this. Here's the data provider who we're going to use, here's how we're going to integrate those data. So you don't end up a year from now with 20 different tools and 20 different business units and not a great way to go and start to integrate that information.

Excellent. That's very helpful. Ilse, bringing new here, just to kind of Ed's point on resilience in the supply chain, I guess, given the global nature of Google supply chain, how do you, I guess, use data to get ahead of challenges that you see around the world?

Yes. I really echo a lot of what Steve said about combining the industry indices with -- I look -- what -- the focus area that I look for is looking at that industry data and the carrier data that they're providing and benchmarking at a high level, not at the customer level, but kind of the trends that they see in the industry, in their region. But what I look for is the trending of data and whether it's trending up or trending down and looking at the reasons behind that data. In general, I think that what it looks like to me for 2021 and 2022 is we're not out of the woods in terms of capacity constraints. So some of the tools and activities, initiatives that we've been focusing on will continue to be relevant, not kind of a one-off situation where we have to use these tools consistently over time. It's almost like the new normal. Some of the things that we've done, especially in the U.S. with the trailer capacity constraints that we've experienced, we've built a reusable model where -- and we've used, actually, the expeditors living model team to build this robust model that we can reuse over and over again. And we need to do it on a monthly basis to determine whether or not we have the right capacity and the right equipment based off of the volumes and where they're going in a lane by lane basis. In the international freight, we have a dynamic lane analysis that we run on a weekly basis and roll that up to a monthly basis so that we can see trends that are occurring in particular lanes. There's extreme capacity constraints in certain lanes, and China inbound to the U.S. And then we also have a facility in Amsterdam. So we do a lot of volume between Amsterdam and Atlanta. So we're always doing an analysis and reviewing that data on a weekly basis. There's a couple of other supply chain tools that we're developing as well to enable us to determine based off of our on-hand inventory, plus inbound in-transit receipts, what modes are necessary. And I think that given the constraints that we're seeing globally, you need to be able to determine what that mode should be and whether or not you can drive it down. I mean, we all know that ocean transit has almost doubled into -- specifically into the U.S. And so it's really a conversation about what's the probability of getting there on time and what mode do I need to make and how long can I take based off the on-hand inventory. So those are some of the things that we're looking at.

Excellent. I think that's a lot of tangible practical ideas that a lot of folks could potentially implement in their supply chains. I guess, Joe, bringing yourself in here, what's the Landstar, I guess, perspective on data and the use of data to get ahead of some of these capacity challenges?

I touched on a little bit of it earlier, Nick, it's just -- we've got just a tremendous amount of data, both historical and preference-related data or predictive-related data on where our providers in our network want to go. We've got a reasonable good assessment of where our demand is coming from. So that we've got, and we use that pretty well, and we've been putting that information into the hands of our constituents, into the cabin trucks for over a decade, and it's proven to be very effective. One of the -- couple of things that we do look at though and -- more broadly, and just listening to others in the transportation world, is the idea that this capacity tightness is going to linger for quite a bit longer, right? I think we've got 2 fundamental issues on the capacity side from a building of trucks, getting Class 8 trucks that are being ordered is pretty significant, very high, but the number of trucks actually being produced is barely at a replacement level. And then the ability to find drivers to seek those trucks and to make them productive, I think it's going to continue to challenge us well into the back half of the year, if not into 2022. And so we look at that and we understand that. We factor that in to some of our supply-related information, but we also take the opportunity to survey some of our -- the carrier base that supports our business as well. And we did that throughout the pandemic to understand kind of where they were. Were they in a position where they were going to be shrinking? So would our overall truck base, in that perspective, be shrinking? Or were they going to hold tight? Were they sitting on the sidelines due to the pandemic? Or do they see themselves coming back even stronger? To try to get a sense of a carrier that was 20 trucks before and now they're 3, they still show up as a carrier in your network, but the capacity that's at your fingertips is no longer there. And so we did that surveying a couple of different times, got pretty reasonable responses to allow us to try to understand kind of how -- what's the real impact to us because what impacts us impacts our response to our customers who are throwing us bids or opportunities. And so I just think -- and that was a manual way to accumulate some data, but really was more of a sense of what's the sentiment and what is the true impact to the small carriers who really make up the majority of carrier capacity in the country? And it was interesting to see there's a lot of optimism there, but I think you're still seeing today a lot of capacity on the sidelines because people are just now getting comfortable overcoming COVID. Or if you're an employee driver, there are some that are saying that people are still sitting on the sidelines, waiting for either wages to go up or some of these extended unemployment benefits to subside before they'll reenter the market. And I think all those things affect the supply and demand equation that we're all trying to put our heads together around and figure out. So we think we do a pretty reasonable job of trying to stay on top of some of that stuff.

Perfect. I guess, coming on to the next point. Obviously, we've mentioned a lot here that the struggles that we've seen, I guess, to fulfill some of these crazy orders over the last year. Bringing in Ed, I guess, something that's come up a lot has been this debate of buffer stocks versus just-in-time inventory. I was wondering what's your perspective on that debate?

Yes. I think there's -- either are great depending on the situation. I think the challenge that we see is a lot of companies out there still have blanket policies on inventory stocks by certain types of categories of goods or however they happen to structure it. And there is less nuance about the end-use and the impact that could have in a disruption. There's a chemicals client that we are working with that -- they're very small percentage of by volume of a certain input. And just because of the way that inventory policies were set up in the system, they held the same kind of days of stock of that particular input as inputs required much larger share of the volume of the end product in terms of input. And the impact of that was that, in a very small square footage, you could have a large buffer stock if this really critical and hard to get input. But instead, you had, basically, a small shelf space. And when they start experiencing supply chain strain due to the start of the pandemic a year ago, you quickly ran out of this critical input and then you're really stuck. And so for them, having something more nuanced to say, look, the cost of carrying 30 days of this versus 2 days is very low. The return on resilience is very high. And therefore, we need to have a bit more of a nuanced perspective rather than blanket policy, all of this type of commodity we hold 2 days. This we might hold 30 days. This we might hold 2. I think that, that, at a macro level, every company should be going through and saying, how nuanced are our stock policy is really today? And where is that benefit between kind of the working capital and cash benefits we get from maintaining more of a just-in-time policy versus where do we really -- a little bit of extra working capital investment is worth it, and the holding cost, the inventory is worth it. They have some buffer when things happen to be able to adjust and react to what we need to do. So the biggest thought that I'd have on that is we typically see that there just isn't enough nuance in stock levels, and that leads to unnecessary disruptions for companies.

Definitely. It's very much, I guess, a complex equation for supply chain executives to work through in balancing all the different metrics that they have. Moving on to the next point. Bringing in, Steven, and you mentioned this earlier around, I guess, how you work with the sales team, for example, they have a big deal, end of June, how many trucks do they need? I was wondering if you can speak to, I guess, the importance of communication internally with, I guess, nonsupply chain stakeholders.

Yes. Yes. We've seen a dramatic increase in that to really be proactive and make sure that people who may not be living in the transportation world day-to-day, were only reading headlines, that they're well informed, right, enough that they can speak about it. I don't like to hear about transportation when we have like board meetings and stuff like that, but they need to know these things, right, and ensure that they can separate what is happening in the industry and what's happening in the Newell and separate those 2 ideas because sometimes they're related, sometimes it won't be effective. So really, this year, we've been sending out newsletters. For example, monthly newsletters are saying here's the state of the state, sending it up to executive teams, customer service and the sales group, so they can be like, when you're hearing stuff from -- back from the customers or from our suppliers, the answer is, yes, this is happening. You shouldn't be shocked to saying that customers are having trouble to pick up our freight when they're paying for it because that's going on. These are the areas that are most effective. Our executive team needs to look at this. I'm part of the procurement organization, where sometimes the thought is the economies of scale, that's a normal thought process. But in transportation, sometimes more is just more. And it's not always a good thing, right? And trying to purchase more doesn't always lead to lower prices or easier things. So making sure that the understanding of what's going on and the impact of it. And the hard part is finding a way to tie what you're reading and what's in the headlines because more than likely they will read that, tying it back to -- in our particular case, Newell, but to your own industry and saying, here's how this is affecting us or how it's not. Here's how we're going to combat it, right? It's one thing to say, here's what's happening, I'm out, right? But you have to really say, okay, this is how we're going to go around. This is how we're going to work with our groups, our partners to make sure that we know this and go out there. So we've seen just giant increases at both, like I said, monthly newsletters we're e-mailing out. We actually have been starting to use share points to do real-time updates of embargoes, just so our business units operating understand quickly of, Oh, okay, Ohio snowed in, right? This is what's closed here. Here's what's not closed. Let's make adjustments on the fly and worked out. It's really communicating with everyone, all the way to the bottom of the supply chain of the planers, people who are loading the trucks. They understand what's happening to the very, very top because who knows what questions are going to be asked at the bigger means to understand the impact? So it's been communicating all the time and making sure that in our position, we can know everything that's happening on to that group.

Excellent. Thanks for that, Steven. Ed, I was just wondering, bring yourself in. How do you -- have you seen, I guess, the elevated sense of importance of supply chain within organizations, I guess, to Steven's points?

Yes. It's a -- yes, and there's all sorts of jokes about how a supply chain, it's something that -- that was never thought that would kind of lived in the lower levels of the organization, whatever. And now it's suddenly the hottest job out there and the hottest topic out there, and there's some truth to that. But we actually started really tackling this issue back in 2016, 2017, 2018 around supply chain disruption, supply chain resilience, because it just felt like a lot of the assumptions that folks have built their global supply chains on weren't really true anymore. Trade relationships, certain trends that were assumed to be kind inexorable were actually not happening and that was really the pain in the disruption. So this has certainly become an issue, I think, everyone realizes they need to worry about. I think the challenge is that we have built supply chain and procurement and logistics organizations primarily to optimize around cost is number one. And a lot of folks don't really, I think, understand how to make the trade-off between cost and resilience still. And where does that sit? And how do I actually quantify that? I've heard from multiple CFOs over the past few months that, I was told that we need to throw all this money at supply chain logistics during COVID and then nothing bad happened. So I don't understand, do we actually -- was it worth it or not? And so I think this is a moment of elevated importance and it's a moment of yes, CEOs and COOs and others realize they need to dig in. But I think that the lost opportunity out of this would be to say, well, it seems like if we throw enough money, things are fine. I think there's some real practices in terms of changing your workforces, kind of understanding of what you're expecting, putting in place metrics that actually measure resiliency. And putting those alongside cost and growth. It's amazing to me how many companies still don't really understand what degree of transparency they have into their supply chain logistics providers. I think if you walk into a lot of -- you go down to the transportation planner, he probably does, but -- or she probably does. But if you go into a more senior person, say, what ports are you most relying on or what mode of transporting are you most relying on? I don't think a lot of times senior folks know that. And so getting kind of that level of what are we measuring? How -- what transparency do we really have in our supply chain? And starting to really have the conversations with your staff about, okay, like here's our cost performance, here's our revenue performance, here's our resilience performance. And what skills and capabilities do you really need to be able to start managing to the resilience metrics as well as the cost and the growth metrics that they probably always hold you accountable to. So it is a moment of elevated importance. I think right now, there's a lot of folks trying a lot of different things. I think it'll be a missed opportunity if we don't come out of this a year or 2 later and a lot of companies trying to really think about, okay, we now have quantified resilience metrics alongside our cost number growth and it works.

Definitely. Joe, bringing yourself in, I was wondering if you can, I guess, talk to the importance of, I guess, value-based relationships and collaboration rather than just merely transactional relationships in the supply chain industry in order to I guess, minimize some of the ongoing disruptions that we're seeing.

Sure, sure. Well, I think collaboration is key, right? The ongoing understanding of what the needs of our customers directly impacts the ability for us to keep them satisfied. And if we don't know what they are, we don't know in priority order what those are, I think that's an opportunity for failure. I think we have to understand the impact. If we don't meet certain expectations. What is the impact to that? If we -- in every load that's a little bit late isn't equal, right? We have to understand that. Some of our customers provide us great information, weeks in advance on production schedules or shipping schedules. Others provide us requests for trucks tomorrow, this afternoon at 4:00, and some do both. And that's okay. I mean, we accept that. That's the business we're in. But I think it's the collaboration that really allows us to understand what's the impact to the customer if we aren't prepared, right? And I think you want to take a lot of surprises out of the supply chain. You want to take a lot of surprises out of execution. Otherwise, you end up with a disappointed customer or a disappointed capacity provider that you want to rely on going forward. So to us, collaboration really mitigates the risk of losing one or the other. And as just a player in that supply chain, I think you have to, as I said earlier at the outset, you don't want to say no. But I think at the same time, you have to know your limitations. You have to listen and be willing to collaborate. You got to be a team player. You got to know when to speak up or offer direction or take direction. And I think all those things come out of a sustained relationship and a collaboration with a customer who looks at the big picture and understands our pain points as well. Where are we going to struggle? Or why do we need that information when we need that information? In order to deliver the service expectation that somebody wants. Things take time. And I think with time and with foresight and understanding, a lot of otherwise big obstacles can be made smaller obstacles.

Definitely. Ilse, bringing yourself in, I guess, what's your perspective on collaboration, and I guess, value-based relationships as you navigate all of these challenges that we've been seeing?

Yes. I think for me, cultivating a trust in the relationship that leads to a productive partnership. So trust is key. One of the things over time that I found is a key to success in a partnership is the cultural fit. Are the 2 companies aligned with the same objectives and agenda? And that transparency in the collaboration and in the relationship and being able to openly discuss back and forth, Landstar is a great example of a really strong partnership where our teams are collaborating on a daily basis. So they have sync up calls in the morning. They have sync up calls in the afternoon. And we have monthly executive management. I feel like we are very integrated into the Landstar model from a corporate level, when we talk about EDI development, and from an agent level. So it really spans the entire process at Landstar. I would say that, again, it's the foundational stuff. We have a performance-based relationship. And when we develop our own initiatives and our own objectives for the year, there are initiatives that are, for example, that Landstar participates in as well. So we're always driving and focused on the performance and then focused on the relationship and just understanding the challenges on a daily and monthly and quarterly basis. So I think we're tightly coupled.

Excellent. And before we wrap up today, I'd like just quickly, Steven, if you could answer, I guess, the lessons that you've learned over the last year. And I guess, how is that going to help you as you kind of predict the struggles, potentially, you're going to see from a capacity perspective over May, June, July?

Yes. Really, I've been probably talking about this a lot. I think it's the communication, right? And it's great to sit on a panel of people that are from different areas, and that really tells you that it's important to have that. And really, we've seen an increase in communications. I think it's important to know, that as we look at that, not every relationship needs to be a partnership, right? That it's okay to have to ask people and bring those in where it's necessary, and that will be needed. And then really use that time of the ones who are true partners. And I think we found out, maybe during this time, we thought someone was a partner and they maybe not, right? So it's really making sure that we keep an eye on that and have those communications on all sides. It's been exciting sort of to do that and spending a lot more time in meetings and reviewing with carriers, with suppliers, with sales teams. I've been on more calls this year with those groups outside of my own than I ever have. And it's been really nice to see that. It gets -- helps build a little bit more of the culture getting it together. Also, what's -- the more that you put out there, I find that you get more -- get back, right? If you're starting to provide more to your sales team, to your carriers, you'll get more information back, right? They're going to return it, right? Whether you asked for it or not, they'll be like, hey, I now know who this person is. Maybe they would like to know this, have that communication, build that out there, get into side chats when you have Teams meetings or Zoom calls where people send you notes on the side. I think building those relationships outside of your own world is crucial. And we've all been forced to do that with what's been going on. And we should keep it up. We really should find ways to communicate. It's a lot of work, a lot of effort. Heck, these meetings are a lot of time to get ready for it and sit through it and listen to it. But even if you just get a couple of minutes' worth of insights that can help you out, I think that's totally worth everything. We've been actually even reaching out to other people that are in our industry of just other shippers and asking, how are they using their TMS, how are they using their carriers and try to bring that information in. And it's sort of exciting to see that it's not us living in our own world of how do I solve this issue for renewals. I have to figure this out. It's okay, who could help me figure this out? What can we do? Whether internal, external, you have all these different great knowledge base. And heck, we're really good at communicating that, right? Look at us, we're all in different locations going around. This should be easier for us to do this to send e-mails, to get on a quick call, smile and wave and talk about what's going on. So that's the one thing I look forward to is in doing this is having more often meetings, getting through this and communicating to help find issues instead of us sitting down with our heads down at a desk trying to plow through something that maybe could be solved by someone else very quickly. So that's the biggest thing that I think we're going to look forward to.

Excellent. I guess, as we wrap up today and it comes towards the end of today's webinar, I'd like to go around all of the panelists today and just ask them, given the context of today's conversation, what excites you about the future of logistics and supply chain? So maybe starting off with Ed.

It's -- I think it is a really exciting time. I think, but obviously, the field has rarely had so much visibility in the popular minds as well as kind of the CEO's minds. So it's a real opportunity. I think that supply chain logistics has been one of those areas that has been hyped for a long time. It's kind of so ripe for digital, so ripe for AI. The buzz was almost -- and I think the hype has long outlived, kind of the reality of it. But it does feel like this is a moment in time where the willingness to invest is there, the senior attentions' there, the investor attention is there. There's a lot of venture money flowing into topics like supply chain resilience right now. So it feels like this is a time that there really could be a step change in terms of company's capabilities. So I think it's really, really exciting from a data perspective, from the collaboration perspective, as Steven has just lined out. As just a lot of folks are trying a lot of new things. So I think it's a very exciting time. I think the risk of this time is that attention drifts elsewhere or priorities drift elsewhere or folks decided we've gotten through this well enough, and that's -- so all is well. So I'm hopeful that folks will continue to push on the topic and continue to say like this is really a moment in time for this particular field and let's take advantage of it.

Excellent. Ilse, same question to you. I guess, given the context of today's conversation, what excites you about the future of logistics and supply chain?

Yes. I don't -- I think that there'll be consistent disruptions globally. I don't see that going away. I actually think some of the Asian geopolitical issues that are going on are going to increase over time. And so the space of risk management and resiliency of the supply chain are critical. And I think it's really an exciting field that we started heavily investing. The 301 tariff was a wake-up call for us, where we started to really gather our resources and define a strategy around risk management and resilience. And I think it's a really exciting field, and there's a lot of new applications in artificial intelligence and all of that, that's going to come into play. And I think it's a super exciting area that's going to continue to grow. And from an industry perspective and from -- just from a Google perspective, we're definitely going to be growing in that and expanding in that space. So that's where I think it's pretty exciting.

Excellent. And Steven, same question to you. Given context of today's conversation, what excites you about the future of logistics and supply chain?

Hopefully, I've expressed my interest in all the collaboration, communications well enough as we go throughout here. Ed took a lot of that. But I think that's good. And really, with the increased -- I think it's right, we have a spotlight on us now, right? In supply chain where maybe, potentially, we didn't before. Hey, we'll just get things done, don't worry about us. Well, we're here now. People are listening, let's take advantage of this and make sure we don't go backwards. And when we do go through this, as it was mentioned, like other things will pop up. But really, what's exciting that I'm seeing now is that it looks like, I know from our chains, maybe we're pulling in more people that wouldn't have been in supply chain before, right? I mentioned having data scientists that, potentially, who may not have invested in us as company, right? And now they've been saying, okay, well, data is important. We know data is important. Well, how's our data doing? The answer maybe is, we don't know how our data's doing, right? That we're bringing in people that are not transportation experts, that are not supply chain people and making them that, right? They want to be here. They want to learn things. We can learn from them as they go through data, today's data, right, help us clean it, help us build correlation, help us make connections. I'll teach you transportation, I'll teach you how to do LTL rating, right? But, really, come in here, help us think outside of what's out this, of what we've been doing of looking at the routing guides, how do we automate things that have not been before using all this technology. I think that's been super exciting to see. I've seen growth in our own supply chain of just people coming from all sorts of background before as I went and studied in logistics and here I am ready to execute it. No, I have a completely different background. I'm ready to bring in my touch to help this out and really move forward a team and think in new ways that maybe we haven't, right, as a group and really working together. So increased collaboration. It's always nice to get an injection of young talent to come into the industry as a whole to help rethink some of the stuff that maybe we were doing. So I'm looking forward to -- hopefully, as that grows and there's more headlines, and hopefully, things are better, right, that the light that we're seeing at the end of this tunnel is not another train that's about to come at us, but we'll see as we continue along and keep working through this.

Excellent -- and then last but not least, same question to you, Joe, what excites you about the future of logistics and supply chain?

Well, I think just to be in an industry that has gotten the attention that it's deserved for a very long time, more recently has gotten, and sometimes you get attention and sometimes it's good, sometimes it's not so good. I think that there's been a lot of focus on the supply chain, a lot of focus on motor carrier operations. It's touching to see, on social media, when you have communities giving out free lunches to truck drivers at truck stops, I think it's gotten very base. And I think people have maybe a greater appreciation for supply chain than they did in the past. And I echo a lot of what Ed and Ilse and Steven have already said about a lot of those things. I just -- the collaboration that exists today, this panel is but one example. You just like to believe that this continues and that there is more of a collaborative effort and we don't go back into, historically, going back, you find relationships between shippers and carriers or brokers that it was a little more adversarial. "I win if you lose" type thing. I just am excited to see us not go back in that direction. I don't think that really benefits anybody long-term and everybody on this call has talked about long-term and strategic. I think the collaborative relationship and the information sharing and common goal setting, I think that's where this industry goes. And if you can't get excited about that, there's something wrong.

Excellent. That's a great way to end. Really enjoyed today's discussion. As I said, we've got a number of these coming up over the coming months. So hopefully, we'll get you along for another one of these real soon. Other than that, thanks a lot to the panelists today. And everyone, stay safe and have a lovely rest of the day.

Thank you.

Thanks, everybody.

Thank you.

Thank you, everyone.