06/28/2022 by Christine Morris
How do we get supply chains back on track after years of constant disruption and setbacks? The supply chain backlogs came largely from the shock at the start of the pandemic, but even before then, there have been many supply chain vulnerabilities.
Recently, Congress met to discuss our national and global supply chains, current supply chain issues that we need to focus on now, and how to build supply chain resiliency for the long term. Congress invited individuals and organizations to come to testify, to present their views for inclusion on the topic. U.S. Senator for Delaware, Tom Carper, asked Doug Potvin, Chief Financial Officer (CFO) of Trinity Logistics to testify.
With 16 years of service at Trinity and over 30 years of industry experience, Doug sees first-hand the problems plaguing supply chains. Doug’s testimony gave the Members of this panel valuable insight into the continued problems in supply chains and how members of the Transportation Intermediary Association (TIA), like Trinity Logistics, continue to serve the nation amidst these difficult times.
“ I want to introduce myself as the CFO, Chief Fun Officer at Trinity Logistics because we like to have fun when we’re working hard. Thank you for the opportunity to speak with you today regarding how policymakers and business leaders are addressing the existing backlogs in the supply chain in the short term and building more resilient supply chains in the long term. My name is Doug Potvin. I’m the CFO of Trinity, a third-party logistics company (3PL) headquartered in Seaford. I’m privileged, honored, and humbled here today representing Trinity, our association, Transportation Intermediary Association, and the entire third-party logistics industry that we serve.
We serve as an intermediary in solving the logistical needs of our shipper customers by sourcing capacity from motor carriers and vendor partners. We are proud to report today that this past year we’ve generated over 1 billion dollars in revenue, arranged over half a million shipments, and offered 350 individuals full and part-time jobs. We truly are a proud Delaware company.
From Charles Dickens, the novel, The Tale of Two Cities; It was the best of times, it was the worst of times. Season of light is the season of darkness, a spring of hope is a winter of despair. Over the last two years, the same could be said of the international supply chain and from our perspective, closer to home, the domestic transportation industry.
In March of 2020 as both domestic and international countries shut our businesses including the shutting of the port cities and operations in China and the fact most consumers were at home facing an uncertain future, freight volumes plummeted. Motor carrier capacity increased dramatically due to the steep drop in goods moving and the transportation market saw prices for motor carriers fall. In fact, Trinity Logistics was mentioned on a Facebook post that we were earning an average gross margin of 60 percent, which was simply wrong.
In addition, a small number of motor carriers came to Washington D.C. and demanded rate transparency. Interesting after the businesses, ports, and countries opened up freight volumes began to skyrocket, available motor carrier capacity tightened up, and rates paid to motor carriers increased due to reflecting the change in market conditions. Demand for rate transparency went silent.
The pricing in our industry is driven by market conditions, supply and demand. Large scale, no entity on either side of the equation has enough market share to drive rates. In addition, each shipment has its own variable considerations to take into account including everything from available to capacity in various regional markets, lead time for products, dwell time at shippers and consignees, commodities needing move, and type of equipment needed. All this happens in real-time to ensure goods get to market, keeping our economy moving forward.
Now more than ever, the role of third-party logistics professionals has become more valuable. Companies like Trinity and the other 28,000 licensed property brokers are working overtime to ensure that essential goods continue to be delivered in an efficient manner to meet our customer and consumer needs. Our industry along with motor carriers are the main component as the why during the crisis and disruption, the supply chain bent but never broke.
Trinity Logistics applauds the U.S. Senate and House of Representatives’ Bipartisan passage of the Infrastructure Investment and Job Act, a historic investment into transportation and infrastructure. We’re very pleased to see how quickly the Federal Motor Carrier Safety Administration (FMSCA) established the Safe Driver Apprenticeship Pilot Program. Trinity hopes this three-year pilot program will be successful and made permanent so individuals ages 18 to 20 will explore interstate transport careers. Trinity also believes that as the spending on the Investment Act ramps up in the near future it will provide enough support to the economy to keep the motor carriers employed as we are starting to see freight volumes pull back over the last 30 to 60 days.
Trinity would also like to thank Chairman Carper, John Cornyn, Senator Menendez, and Senator Tim Scott for the support in offering legislation and getting the Senate to act unanimously in passing the Custom Trade Partnership Against Terrorism Act (CTPAT).
Currently, the vaccine mandate for truck drivers coming to the country to deliver freight from Canada and Mexico continues, these professional drivers spend most of their professional time alone in the truck cab, presenting a zero percent risk of spreading Covid-19. This should be lifted immediately to open up capacity and shorten the amount of time it takes to move goods across borders.
Another issue that greatly impacts not only the efficient movement of goods, but highway safety, is the lack of a federal motor carrier safety selection standard. Currently, because of broken safety rating systems from the FMCSA, almost 90 percent of trucking companies are considered unrated. There are no requirements in place before selecting a trucking company, that drastically impacts the overall safety of our nation’s highways. The latest report from the national highway traffic safety administration noted that the number of accidents involving commercial motor vehicles increased 13 percent in 2021. The status quo is not working, and highway safety needs to be improved. Trinity Logistics and our trade association, TIA, fully support legislation to create a motor carrier safety selection and mend the safety rating process.
The U.S. trucking spot market conditions have reflected towards weaker and more normal conditions, though we still will see what the future holds and how that trend continues. Hopefully as a result of this meeting and coordinated actions taken by the United States, our trading partners, manufacturers, supply chain vendors, our nations become resilient when facing similar conditions and uncertainty.”
Trinity Logistics would like to thank Chairman Tom Carper and the TIA for inviting Doug to testify before the Committee. He is a very valuable leader in the industry and Trinity Logistics appreciates all he does for our company, our industry, and our nation.
If you would like to watch the full hearing:
Trinity Logistics has always been a service-oriented company, and this includes community service. Being so heavily involved in our local communities over the years, we decided to streamline our efforts. In 2005, we formed a 501(c)(3) non-profit organization and called it the Trinity Foundation. All community service and charitable giving from Trinity Logistics is funneled through this Foundation.
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