On the Record Interview with Ardent Mills

In these short videos, TranzAct's Mike Regan interviews Dave Venberg, the Senior Director of Transportation and Logistics at Ardent Mills, about the steps they took to improve carrier relations. You'll also find the full length interview and transcript of their conversation below. 

The Current Transportation Marketplace

The Transportation Perfect Storm has hit, but Ardent Mills 
has been able to find capacity by strategically aligning
themselves with their carriers as a shipper of choice.

Why Ardent Mills Conducted a Massive Driver Survey

Dave discusses the survey Ardent Mills conducted with the
drivers from their carriers. Hear about the results and what
changes they've made to their supply chain in response.

Sharing Data to Improve Your Customers' Docks

Hear about the strategies Ardent Mills used to improve
conditions for drivers at their customers' docks, not just
the ones they control.

Full Interview

Watch Time: 23 Minutes

Interview Transcript

MIKE REGAN: This is Mike Regan and it's my pleasure to welcome Dave Venberg. He's a Senior Director of Transportation for Ardent Mills and I had the pleasure of meeting Dave at the University of Denver's capstone logistics program and Dave I'd like to welcome you to this edition of On the Record here at TranzAct.

DAVE VENBERG: It's good to be here. Thank you.

MIKE: Dave one of the things that you highlighted in your panel discussion—there's this buzzword that's been going on for the last four, five, or six years—was the topic of the shipper of choice and I think for a lot of shippers, they just paid lip service to it until recently when this whole capacity crunch started to get real serious.  And as we covered at Denver, one of the things that you and the other panelists were talking about is the capacity situation. I was just at the NIT League's annual meeting, and got some data there, and it looks like capacity is going to be extremely tight throughout 2018, probably rolling into 2019. And so this whole thing of shipper of choice, I think, is taking on a whole new meaning for shippers as they see it as a way to basically source capacity. Could you talk about some of the challenges you've had there at Ardent Mills, and we're going to get into some of the specific steps that you've taken, but what are you seeing today? Are you seeing the capacity crunch and issues like that?

DAVE: Yes, I think the market has woken up with quite a surprise here. We've been talking about a driver shortage for several years now. I think the combination of a strong economy, strong retail sector, new laws that have been implemented including the ELD mandate, and the fact that we do have a driver shortage situation, has created a capacity crunch a lot quicker maybe—and a lot more volatile than we had anticipated as a shipper and receiver community. So indeed, we are struggling along with everybody else to find capacity on certain lanes, to make sure that our customers are being served at the same rate of service levels that we've had in the past, but it has been significantly a challenge here through the fourth quarter and now into even January and early February as capacity has continued to be tight for us and for many as you as you know.

MIKE: One of the charts that we're going to be sharing with our audience, and that was shared by the folks from FTR, is the truckstop.com market demand indicator. At the height of the capacity crunch in 2014 the highest it ever got was 27, and what's been really interesting, the last week of December on through January it never went below 40. In an interview we did with Derek Leathers, he said “look folks when you're seeing this at 40 in January, which is one of the weakest months, it ought to really scare the bejeebies out of you in terms of what you're gonna see in March, April, and May”. One of the things Dave we've talked about is being a shipper of choice and this is really what I wanted to focus on because you are in fact one of the few shippers that's actually done this. We say there are four things that you need to really pay attention to: First, how you're utilizing the carrier's equipment. Second, seeing your business through the eyes of the driver. The third thing we like to say is that you have to have great information to understand the choices you can make and then the fourth thing that we encourage people to do is to have an adaptability to be able to change practices and processes in response to what you're learning. And one of the things that really intrigued me when you were at Denver was, maybe you could talk to us, this seeing the business through the eyes of the driver. I had never heard of this before which is why I was so excited to share this with our audience. You actually went through and surveyed the drivers. Could you walk us through exactly what you did there?

DAVE: We started our program around being a shipper of choice three or four years ago actually when we formed Ardent Mills. One of our values is to really have and build trust with our customers, and our vendors. Another one is serving, and so we believe strongly that we're here to serve both of our customer consumers, our communities, our vendors, and obviously our employees. And so coming out of that whole value statement was a transportation strategy and one of the things that we talked about in our transportation strategy is how do we build long-term partners?

We had come from a position of going out every year with our piece, especially on the dry van, and bidding out lanes and what we were discovering is, that although we had turnover maybe twenty to thirty percent of our lanes, the other 70 to 80 percent of our lanes never changed. It was it was a lot of work to go through these RFPs and manage them and get the feedback and so we decided to stop doing that. Instead what we did is we met with our key strategic carriers and we talked to them about the importance of being a partner and what does that really mean and what we suggested is rather than bidding on lanes you don't like, just tell us that those lanes aren't good ones and tell us which lanes work in your network and then we'll make sure that we can match that. Because at the end of the day, it's about efficiency and it's about ensuring that everybody has the right assets, right lanes, and the combinations of back hauls etc. to make them efficient.

And we were really interested in that, not just the per mile rate if you will. So we work hard with our carriers on that and what was interesting is we had this notion of the shipper of choice—and I haven't talked about it in the industry for a long time—but what was interesting is that the shippers weren't really doing anything about it. But when we sat down with our carriers we said “What does shipper of choice mean to you?” what they told us was, it was about equipment utilization, it was about taking care of the driver, it was about making sure that your trucks can get in and out quickly. It was simple things like do you have access to a restroom? Do you have access to a pop machine or water or whatever for the driver so they can be refreshed? And what's your parking lot look like and is there places to park their trailers etc.? And also in some cases, being able to do a drop trailer program.

So we took those inputs and we started on a process of being a shipper of choice and there were a couple things that we did. One is we decided that we would leverage the National Driver Appreciation Week that happens every year. And so we make a big deal every, I think every September is when it comes around, where we will actually have a day at every single one of our facilities where we will barbecue or we'll hand out food. We'll appreciate our drivers, and those are all types of drivers—those are our inbound wheat drivers, our outbound feed drivers or flour drivers or dry van drivers and we just say a word of thanks for the work that they do. And we also give them usually some kind of memento, whether it's a hat or whether it's a flashlight or something to just again solidify the importance of the drivers in our supply chain.

The other thing that we've done with our plant employees and our plants is talk about the drivers as an extension of Ardent Mill's brand. The drivers are the ones that see our customers every day when they when they show up at the customer to offload our product and the customer then sees those drivers through the lens of Ardent Mills--this is an Ardent Mills product coming in--and so therefore we want to make sure that those drivers represent us well. And the way you do that is by representing yourselves to those drivers and that driver community carefully and well and that you treat them as an extension of your employees really and you treat them with respect and with honor. And so that was a process that we put in place to help our people understand the importance of drivers and the importance that they play in our supply chain.

Continuing to build on this, we reflected on how we've been hearing from the leadership of these carriers, but what really haven't done is really heard the drivers. And so last year we surveyed 800 of our drivers. Now these are not Ardent Mills drivers, these are drivers that work for third-party companies obviously. We don't have any drivers or any footmen or any tractors, but we call them our drivers because that's the intent that they really represent our brand.

MIKE: And I just want to clarify one thing if I could interrupt for just a moment--these are the drivers with your carriers.  

DAVE: Correct.

MIKE: These are not, so I want to make sure because sometimes I was describing this to a gentleman after our conference and he came back and he said to me well Mike if I had a dedicated fleet I could do the same thing. And I said no no no, he actually went out and talked to the drivers from these carriers.

DAVE: Right, so we engaged with the carriers and their leadership team and we said we'd like to do a quick little survey. We want to ask about seven different questions to your driver base--your carrier driver base--and are you okay with that? So they accommodated that as part of our partnership and learning and so we went out we surveyed and we got their response. We surveyed about 800 some drivers, we got pretty good response rate, I would say about 80%. We asked drivers simple things like: Do you feel like you are treated well at our facility? Do you have adequate space to turn your trucks around and park and get in? Do you feel like our documentation is accurate and timely? Do you feel like our parking lot and our lighting is satisfactory for your needs? Do you have access to a restroom and a lunchroom, if you will, if needed? And so we got the results back from the survey this year, then we've taken that input and we're trying to, where it makes sense, implement some of the suggestions and recommendations from our drivers. And we believe that we'll do the survey probably not every year but every other year to watch the trend in terms of the reaction is from our drivers.

MIKE: Ok, so I just want to make sure then--you surveyed about 800 drivers.

DAVE: That is correct.

MIKE: And if you were to the top three or four concerns that the drivers had, did you kind of score what would be at the top of their concerns list?

DAVE: Yes, we actually did a couple ways. We scored overall concerns on those topics, we also scored it by plant, so that we could look at the best facility and the worst facility on a score and try to learn then from those facilities that had very good scores, from our drivers or I should say our carrier’s drivers, and understand what they're doing differently so that we could adapt those best practices to other locations.

And as you know, we have 42 some locations so we have a pretty good data set across that and so that then turns into our work effort. There were some surprising things. We realized that some facilities did not have adequate restrooms to serve the drivers and so we need to invest in that so that they have a good, safe, adequate restroom and break room that they can that they can use when they're on our facility. We also learned that some of the facilities didn't have good parking lots and had a lot of potholes and that creates damage and equipment and so how do we how do we make sure that we're taking care of our parking lots accordingly.

MIKE: So I'm just kind of curious, did you get any positive feedback post survey from drivers who noticed that they had been listened to?

DAVE: We haven't gone out and resurveyed but we have heard comments about, first of all, very interesting that you guys actually spent the time to do a survey. Thank you for hearing us and we're excited to hear drivers’ feedback, as we do these initiatives, that they've been listened to. Because that's the most important thing. If you do a survey but then do nothing, it doesn't help or it actually makes things worse.

So we're committed to implementing the things that we've talked about and we're committed to taking care of drivers. But yes, we have heard from drivers that they really appreciate Ardent Mills and the effort we're doing around the driver appreciation day, around listening, around just in treating them with respect. And we believe that's making a difference and we have also tried to track the data to capacity availability and whether carriers, whether we have a better opportunity to make sure that those drivers are choosing to come back to us, and we are hearing that; that drivers do want to come back to Ardent Mills and pick up loads and they feel like they're treated well, so we want to continue that momentum. We are certainly not there, it's certainly a process. It's certainly continuous improvements, but we feel like the effort we put in three years ago, two years ago, last year, and this year, actually has helped us in this capacity crunch. We feel like we're pretty fortunate that we haven't had the same issues as a lot of our competitors or others around capacity and we've been able to manage it and try to maintain our service levels at the same service levels even in this capacity crunch.

MIKE: So you just mentioned that you've been able to get capacity and perhaps use it as a competitive differentiator in the marketplace. Is this something that's got the full support of your C-Level team within Ardent Mills?

DAVE: Absolutely and what's amazing is that we are hearing very low complaints from our customers, but our service levels are on time through the last fourth quarter and January. Our C-Suite, as they go out and talk to customers, they are actually sharing some stories that we're doing with transportation and we've been able to network and connect with our with our partners, our customers, and talk to them about transportation initiatives and what we're doing and where we're headed.

And really this is a foundation, I mean this is basic table stakes that we're doing--it's nothing unique or different--but we are doing it, which allows us then to do things like move forward with track and trace, move forward with real-time visibility, move forward with vendor managed inventory and other initiatives that we believe will take the cost out of the supply chain, drive efficiencies, and as I've always said it's a three-legged stool. You have to have the carrier, you have to have your shipper, and you have to have your receiver to the customer involved to really make this work. And so we're working hard with some of our key customers to really help them also be a receiver of choice: reduce detention, reduce wait time, and we have had some good success when we bring the data forward and show them the data. Clearly they're interested in in making sure that they do their part as well. We're one company but we're I think we're making a difference in the industry.

MIKE: As we head towards the homestretch here Dave, what really intrigued me when we were talking out in Denver, when I talk to people about seeing business through the eyes of the driver I have a lot of people that say “Well I can control what's happening here at my docks but at the receivers docks, what do you want me to do?” And maybe two questions really--first how do you go about sharing this information, and second, the response from these your customers, as you tell them about their facilities, their docks, can you walk me through what that's been like?

DAVE: I think historically the way that we've approached--we being the industry--that is through things like detention charges and other things to try to recoup or try to change behaviors. And we found out that that doesn't work very well. Most of our people that we deal with are in procurement obviously and so they don't oversee the plant operations and they don't oversee receiving or shipping. So the first thing is to just sit down with procurement and talk to them about some of the data and some the facts. We have a great TMS solution that it provides a lot of information about how we call the customer behaviors. And so what we do is we work through our data set and we don't try to tackle all of them. We tackle the 20% that create the 80% percent of the noise. And so then what we do is we set up a discussion with our sales team and procurement. We sit down and we talk about the importance of what's going on the transportation industry, how tight it is.

But rather than just stopping the conversation there, we say now let's talk about what we can do to minimize this. How we can make sure that we have great service level and how do we go about making sure that we have the capacity to serve you, the customer. So rather than bring in the hammer we bring kind of a carrot, if you will, to the party and we talk about that. We show them the data and we say “now what could happen if we were able to make these changes at your plants”. And then all of a sudden the procurement people are listening because they're interested in reducing their costs of goods obviously. And so then they engage the plant managers, they understand that and show them the data and then pretty quickly the plant managers get engaged. And we've seen customers that used to have terrible wait times--two to three, four hours on their bulk trucks--waiting to unload actually reduce that significantly--you know whether it's 20% or 40% on wait times--just because we brought the data, not in a way to say we're going to charge you for that wait time, but rather “how do we work together so that we don't have to charge you for that wait time over time? How do we work together to understand that and prioritize and plan it.”

And then of course it requires data, it requires time, it doesn't happen overnight, but we feel like we've got momentum now in a lot of spots because we've been working on this for three years. And it does take time, it's not something that you can just sit down one time, but you constantly got to bring them the data every quarter, every six months, and when you have a win with a customer you celebrate that; you say "well look at what we've done here together and can we continue that momentum". And they open up and so it's really becoming a key solution set for Ardent Mills to be able to use transportation and logistics along with everything else that we bring around safety, around our products, around the performance of our products, but now also this whole concept of how do we reduce costs together, or minimize cost increases together through transportation initiatives.

MIKE: So one of the things that really resonates is, I interface and interact with a lot of C-Level executives and when I talk about using transportation, using logistics, to basically beat your competitors, they're asking “Well, how and what does that look like”. And this is really kind of a tangible example of how Ardent Mills has used the transportation function as a competitive differentiator. Well one question that I have for you: let's say you still have that customer out there that basically says “You know Dave, thanks for this wonderful information” and does absolutely nothing. Walk me through, is there some kind of remedial course or something that you can do to help these unenlightened folks be more enlightened?

DAVE: Well I don't know if it's so much about enlightened or unenlightened, I think it's about priorities and what priorities they choose to choose to focus on. And so it is about consistency of the message, it is about the desire to win together, not for them to win or us to win or carriers to win, it's about “how do we widen that pie and all share in that pie?” So that's our approach and, you keep providing the data, keep having the discussion, but I do realize that there are some who want to partner and build trust, and there's others that want to be transactional and that's okay. There is nothing wrong with being transactional--they're important customers and if they want to be transactional then what we're going to do is continue to price in or talk about the cost of the behavior of not moving forward with this. And so we'll build that into pricing. We'll build that into the discussion and we'll tell them that this is what it's costing you because you don't want to change and that's okay and we're okay with it.

But what happens is when they do want to change, then we take that back. So if they do say, you know what, we believe that there is some value here and we'd like to share it in, we're willing to reduce our rates accordingly because they're driving efficiencies. And I think that's one thing for both shippers and receivers in this new world of data and big data and everything else--the decisions you make will impact your cost. And so if you want to be a receiver that penalizes people for being one minute late or don’t have flexibility on drop trailer programs, or do any of that stuff, eventually the data will be captured and carriers will make choices about whether they choose to serve you or at what level they choose to serve you or at what price they choose to serve you versus somebody else that might have more flexibility in working with their carriers.

And so with the data that we haven't had historically and transportation knowledge that we now have with ELDs and everything else, it's really receiver and shipper beware. Because your behaviors will impact your ability to actually have on-time deliveries and a high level of service as well as the cost you paid for that transportation effort.

MIKE: You know Dave, and that maybe that’s a great way of bringing it to a rap here, one of the things we've been saying is behaviors make a difference and in this kind of environment, it's not just what you pay for a truck it's your ability to get the truck. There are some other things that we'll be covering in the future here with our audience, but this has been a great leaping off point. I wanted to thank you for sharing this with us and we'll keep on truckin’ in 2018.

DAVE: Thank you and I appreciate the opportunity to share what we're doing here at Ardent Mills.