Landstar Supply Chain Solutions
Southfield, Michigan USA Site Visit
October 2, 2012
By
Richard Armstrong

Attendees:
Scott Taylor, President
Greg Humes, Chief Operating Officer
Jim Applegate, Vice President, Core Business Solutions
Patrick O’Malley, Vice President and Chief Marketing Officer
Scott Grady, Senior Vice President, Corporate Sales
Ty Clark, Vice President, Supply Chain Solutions Design
Katie MacDonald, Director, Enterprise Solutions
Mike Mozzola, Director, Program Management

Landstar has expanded its supply chain and transportation management abilities significantly over the last two years. Two heavily used separate services have evolved. They are designed to serve large and mid-market companies.

Landstar Total Logistics Solutions (LTLS) is a fixed tariff model utilizing the Oracle Transportation Management system (OTM). The tariff model operates with an extensive rate library which allows customers predictability for budgeting and forwarding. A large group of approved carriers with rates on file ensures capacity. OTM allows for real-time mode selection (less-than-truckload, truckload and intermodal), shipment consolidation and other features.

Step 1. Order Entry – Shipments are uploaded as an order entry manifest to LTLS by shippers using the web portal, HTML or electronic data interchange. The order entry manifest is a spreadsheet with 34 separate information fields per shipment.

Table 1.  Order Entry Variables

Step 2. Optimization – Shipments are optimized to minimize miles run, improve trailer capacity utilization and decrease costs. Principal restraints are delivery schedules and commodity limitations such as hazmat and refrigeration. After the pool of shipments (3,000 a day) is optimized, loads are offered to and accepted by carriers.

Step 3. Transportation Execution – Shipments are tendered at origin to carriers. They are tracked and monitored enroute. Adjustments and exceptions are flagged and handled if they arise. Deliveries are made and recorded. Landstar agents are heavily involved in this step, since they “own” the customer accounts.

Step 4. Financial Settlement – Landstar bills the customer with a single summary manifest which splits out linehaul, fuel surcharge and any accessorial charges on an individual shipment basis.

Step 5. Reporting – OTM has an extensive reporting capability. Key performance indicators can be used to design reports best suited to meet the strategic objectives of individual accounts. The degree of visibility involved allows for ongoing process improvements by the joint cooperation of agents, the Landstar operations center, customers and truckers.

Original solutions and many continuous improvements are handled with the Solutions Design Group, a group of six experienced employees working with agents. Landstar has agents who are very active in using LTLS for their customers.

Table 2. OTM Main Menu

Within OTM, order release and shipment status are tracked by color codes. In general screens are easy to view and follow.

Capacity Plus

Landstar’s mid-market and expedited shipment solution is Capacity Plus (www.landstarcapacityplus.com (LCP)).

LCP has eight subroutines. After logging in, the first tab is Shipment Tracking. Filter’s for shipment tracking are status, mode, account, etc. Real-time status reports quickly alert the user about pickups, carrier assignments, enroute status and deliveries.

In Shipment Tendering the Carrier Bid & Award Process is managed.

Search allows for current and past shipment activity updates, variables include premium code, mode, account, in-transit, call-in by dates, shipment number, consignee and others.

The tab New Shipment allows for easy entry. Basic shipment details and special instructions are entered and confirmed.

Projects and Definitions is used for special program auctions including spot buys. Most of the activity under this tab currently involves OEM (original equipment manufacturer) automation shipments. Special dashboards and reporting flow to the user.

Eighty LCP employees operating 24/7 handle 1,800 to 2,000 shipments daily. More than 30 agents are heavily involved in LCP use. Several of them operate the software for their own capacity improvement activities.

The Landstar Network

Landstar has over 1,000 agents and 1,350 employees. Five hundred and four agents exceeded $1 million in revenue in 2011. The largest agent in 2011 had nearly $100 million in gross revenue and over 50 employees.

Eight national account salespeople (Core Business) are assigned by region and work with agents in major account development. They do strategic planning, target marketing and sales for large accounts.

As a result, most new business is an expansion from existing customers. Only about 5% of Landstar’s new business is from RFP (request for proposal) processes.

Landstar’s expansion into systems transportation management is part of its program to give its agents the latest competitive tools. It has also expanded into international transportation and warehousing. The changes make Landstar a solid supply chain management professional.