Narrator [00:00:04]:
Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today's critical issues, the challenges, and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.
Scott W. Luton [00:00:32]:
Hey, good morning, good afternoon, good evening wherever you may be. Scott Luton with you here on Supply Chain Now. Welcome to today's show. Now folks, we have a fascinating show teed up here today. We're going to be talking with two supply chain dynamos that have done big, big things, ministry. And one unique element to this conversation we're going to be getting into today with some neat anecdotes will involve their time working for two big iconic rivals, FedEx and UPS. But we're also going to be touched on topics such as the ever evolving world of maritime logistics, the importance of organizational, I'm going to call it nimbleness. I don't know if that's a word.
Scott W. Luton [00:01:10]:
We're going to make some words up here today and bold predictions for 2025 in global supply chain. All that and a whole bunch more. So stay tuned for an informative, enlightening and entertaining conversation. So I want to introduce our guests here today. And folks, if I sound different, it's because I sound different. The weather here in metro Atlanta, one day it's 70, the next day it's 35 and is messing me quite the head cold. But if that's the worst that life throws at us this week, we're okay, right? Doing good. I want to introduce our two guests today.
Scott W. Luton [00:01:44]:
So first up, we have a popular repeat guest that's joined us on a few occasions over the years. So Alan Amling is a TED speaker, a leading authority for helping companies get out of their way to thrive in disruption. Not just survive, thrive. Alan spent about 27 years driving innovation and getting results at UPS. Now he serves as CEO of advisory firm, Thrive and Advance LLC. He also serves on a variety of boards including as advisor for promising innovative startups. He also serves as Assistant Professor of Practice Supply Chain Logistics at the well-renowned University of Tennessee at Knoxville. So be sure also to check out his first book, Organizational Velocity, which was released in 2022.
Scott W. Luton [00:02:31]:
It's gotten a bunch of great reviews. Alan, welcome in. How you doing?
Alan Amling [00:02:35]:
Hello Scott. I'm doing well. It's great to be back.
Scott W. Luton [00:02:40]:
Great to have you back. And we're not in person this time. We're in digital person here today. But we'll do another one of these together. Rubbing elbows and breaking bread in the near future. But today, also joining today is Don Maier, Associate Professor of Practice Supply Chain Logistics, and again the highly rated supply chain department at the University of Tennessee, Knoxville. Now, Don began his logistics career driving trucks on the midnight shift in Chicago with Federal Express. See where we're going with this? He'd go on to serve in a wide variety of leadership roles in logistics, from operations manager to regional transportation manager to a role with a global manufacturer where Don oversaw all North American logistics operations.
Scott W. Luton [00:03:24]:
How about that? Don would later discover his true passion for teaching and helping others succeed, advance and develop. This passion would lead Don into doing all sorts of innovative work in education field, from instructor to professor to dean. But I love this, he still refers himself as an overeducated truck driver, which in my book is a wonderful, wonderful thing. Welcome in, Don. How you doing, Scott?
Don Maier [00:03:47]:
Thanks very much. Good to be here.
Scott W. Luton [00:03:50]:
Wonderful to have you here. You and Alan. So, folks, we got, we got quite the one, two punch here today. But before we get into sharing some anecdotes from their days, UPS and FedEx, which is going to be kind of the, the core of today's discussion, we got a lot to get into. I want to get to know both of these incredible panelists a little bit better. And I want to start with you, Alan. So, you know, we're recording this session in December. It's hard to believe we're about to flip the calendar to 2025, but we've made it through almost all the way through 2024 here.
Scott W. Luton [00:04:19]:
It's been quite the year. But when you look back and you reflect back on your 2024, what is one of your favorite personal or professional moments in the year that was, well.
Alan Amling [00:04:33]:
I would have to say my 30th anniversary year with, with my wife. And we celebrated quite a bit. Went to a number of countries. But the place that really stands out, there's a religious place in, in Cambodia called Angkor Wat. And it was a big effort to get there. It's in central Cambodia. And we specifically wanted to see this sunrise. It was a big dream of my wife's.
Alan Amling [00:05:03]:
And my, my favorite moment was just as the sun was peeking up over anger watt. It was beautiful. But the most beautiful thing was like looking over at my wife, just tears rushing down.
Scott W. Luton [00:05:20]:
Oh, wow.
Alan Amling [00:05:20]:
And it was like, this is it. You can't, you just can't top that. So a lot of great things happened this year. That was number one.
Scott W. Luton [00:05:30]:
Oh, no doubt. What a, what an image you paint. And in those moments when I've had similar moments. You feel so insignificant.
Alan Amling [00:05:39]:
Oh, yeah.
Scott W. Luton [00:05:40]:
Compared to the power of the universe. And I'm a sucker for any sunrise. And gosh, where you were at Angkor Wat in Cambodia. I can only imagine. And then. Congratulations. 30 years.
Alan Amling [00:05:52]:
Yeah.
Scott W. Luton [00:05:52]:
That is quite an achievement. So kudos to you and your spouse, Alan. Okay, Don, that's gonna be tough to top. See competition beat that.
Alan Amling [00:06:03]:
Sorry, don't first, man.
Scott W. Luton [00:06:08]:
That's okay. That's okay. Hey, for when you look back at your year, Don, in 2024, what's one powerful reflection that comes to your mind?
Don Maier [00:06:17]:
Okay, I didn't make it to Cambodia, but I do have Alan beat on one thing. Where my wife and I are going to be celebrating our 34th anniversary next week. So there you go.
Alan Amling [00:06:26]:
Wow, nice.
Scott W. Luton [00:06:26]:
Congratulations.
Don Maier [00:06:27]:
Well, thank you. Thank you.
Scott W. Luton [00:06:29]:
So let me ask, where'd you meet your wife back then?
Don Maier [00:06:34]:
Truth be told, I mean, it's a long story, but I'll try to condense it. We're both from Joliet, Illinois, so outside Chicago. Grew up on the same block, actually, same street, one block away from each other. Our dads also grew up together. Came out of the same neighborhood. She went to the parochial schools. I had to go to public schools. She had no idea who I was, even though my wife used to babysit her.
Don Maier [00:06:52]:
I'm also the youngest of eight kids, so there's like this long line. So one of my sisters babysat my wife. There's my in laws are the godparents to one of my cousins. On and on and on and on. But she never knew who I was. In high school, there was a conversation. My brother and I were sending out after a football game. Then I got to go to the the Catholic high school, all male.
Don Maier [00:07:12]:
She went to the all girl high school. And she comes around the corner. She knew who my brother was. My brother's is a policeman. So just imagine that she stands right there, has this long conversation with my brother, doesn't even look at me saying hello, nothing. She's finishes, walks away. I'm like, man. My brother's like, oh yeah, I got this girl to talk to me.
Don Maier [00:07:32]:
Anyway, we actually didn't really meet until in college. And she walks around the corner from our friend's house and the friend introduces me. I'm like, oh, I know who she is. I just rattled off everything I knew about her. So it kind of freaked her out. So we were friends for about a good year and a half before we started dating. So there you go.
Scott W. Luton [00:07:48]:
Oh, man.
Alan Amling [00:07:50]:
I have to ask you I didn't know that. Joliet, Illinois, when I grew up in Southern Oregon, I was a big Archie comic book fan. And isn't that like, the first, like, Archie restaurant or something like that?
Don Maier [00:08:06]:
I think it was done on the Far east side. Yeah, I think so. Okay, so if you've ever seen the movie, Blues Brothers, the opening scene outside the prison, that Joliet Correctional center was about a mile from my house. The movie, Rudy. So his cousin taught me how to water ski. I actually taught his second cousin in college. His aunt is a Catholic nun who hired my wife for one of her teaching positions. And the steel mill that they worked at was right next to the.
Don Maier [00:08:33]:
To the prison. So there you go.
Scott W. Luton [00:08:36]:
I love it. Keep. Keep throwing it at it. You know, what you described there between your upbringing, the community, of course, your fate, quite frankly, or was led to 34 beautiful years with your wife. I love that. And great cities like Chicago that offer that diverse fabric of experiences and people and stories is what makes these wonderful cities so special. I love spending time in Chicago. So Don, you come on back and we're going to learn a lot more about. Was it. Is it Juliet or Joliet?
Don Maier [00:09:07]:
Joliet. In fact, there's a law in the city books that if you pronounce the town incorrectly, that they can actually find you. And this goes back to, like, the 1830s or 1840s. No kidding. Seriously?
Scott W. Luton [00:09:18]:
So that you just shared what my version of purgatory is for all the mispronunciations. I do, man. It's going to be a tough spot for me. All right, so, Joliet, I will sear that in my memory. But congratulations to both of y'all on a more serious note, for your incredible marriages and all that that's produced and all the wonderful experiences. So let's talk about this. We've just kind of shared some context from your personal journeys, right.
Scott W. Luton [00:09:46]:
And some really special anniversaries here this year. But I want to switch over to your professional journey, which I was sharing. Just, you know, we'd be here all day if I. If I shared with our audience all the different things you all been involved in over the years. But I do want to add a little bit of context for our audience. So if you would. Let's go back to you, Alan, if you'd share a little bit about your professional journey as well as where you spend most of your time now.
Alan Amling [00:10:11]:
Okay. Yeah. Fantastic. Well, I actually started with UPS when I was in college. I played small college football, and they hired our entire football team to work peak Season. So I worked a remote center washing package cars and loading up the big trucks in Southern Oregon. Who then went to college, had no intention of going into the logistics industry, none at all. And actually worked in the forest products industry after college for four years, went back to grad school.
Alan Amling [00:10:51]:
I was a marketing guy so I wanted to work at, you know, P&G or Nestle and those were the places that I were applying to. But UPS came on campus very first time they came on campus to hire MBAs and I had such a good experience with them that I interviewed with them and ended up taking the job thinking that I was going to be, you know, I'd stay there two or three years because then you become less marketable and then that turned into a 27 year career. It was really fantastic. Love my time. All the rumors about UPS working there, people very hard. They're all true. They're all very true. So when I was eligible for early retirement, I actually planned in advance, started my PhD, finished it in 2019, retired in 2019, joined UT in 2019.
Alan Amling [00:11:51]:
So I've been with UT for five years teaching in the online Masters of Supply Chain program. I teach in some executive MBA on campus and then do some research. We have something called the Advanced Supply Chain Collaborative where we work with companies on the issues that they have really hands on, right now I'm working with three CPG companies and a 3PL on collaborative planning which is a big thing going on right now to become more coordinated, more resilient and more agile really. So that's what I'm doing now. And then I do have this LLC where I'm doing some public speaking and advising supply chain startups and absolutely love it. So it's a great act too.
Scott W. Luton [00:12:43]:
Well, you know Alan, I want to say before I switch over to Don here, your first appearance on Supply Chain Now, which you were still at UPS at that time and I want to say, and I could have my wires mixed, I think you were doing some startup advisory support at that time on behalf of ups if I'm not mistaken. Alan, Is that right?
Alan Amling [00:13:04]:
I was, yeah. I was heading UPS's corporate venture capital fund.
Scott W. Luton [00:13:10]:
That's right.
Alan Amling [00:13:10]:
While I really enjoy this, this time I will tell you that being on the side of venture capital where you have the money is much better than have other side trying to get the money. That's a little more difficult.
Scott W. Luton [00:13:28]:
I get it. But also kidding aside, I loved something you shared pre-show with us. When you have to do anything in this life. Yeah, some of it's okay. A lot of it isn't, but when you can just do what you want by following your passion.
Alan Amling [00:13:43]:
Yeah.
Scott W. Luton [00:13:43]:
No matter what it is, it changes everything. Even your food tastes better, right. When. When that's what you're doing. So Alan, love it. And I appreciate what you're doing and I bet all the companies and startups you're advising appreciates it too. Don, speaking of advisory and mentoring and educating, as I shared when I was introducing you, a light bulb flipped on at a certain point of your career and that's you've been chasing your passion, impacting a lot of lives.
Scott W. Luton [00:14:10]:
If you do the same thing. Share a little bit about your professional journey because it's a fascinating one and where you spend most of your time now.
Don Maier [00:14:18]:
Yeah. So my professional journey, I did not go to school for logistics or transportation or anything like that. I have always been a nut for all things transportation. Even as a small little kid, I actually went to school, you know, political science, pre-law. Cause I wanted to go to law school. Except it's, semester my senior year, I decided, you know what, I'm tired of school. I don't want to go to law school. I'm going to need to go find a job.
Don Maier [00:14:41]:
And you know, who's going to hire someone with a political science degree? So I took a couple of sales jobs and I don't like sales. So which marketing guys and all those folks never really cared for, especially when I was in corporate, which made it even worse. But I was actually also working on my masters at the time, part time. And I read the Tom Peters books like we were talking about beforehand. And he referenced, you know, Federal Express and the Fred Smith journey. And the one thing that really resonated with me was what the culture was like there and that you have to start at the bottom and work your way up. And there was an article I happened to read for one of my master's courses and the two gentlemen in their VP of HR and the executive VP of HR, and they had their name. So I sent them a letter.
Don Maier [00:15:25]:
So this is pre-email days, right?
Scott W. Luton [00:15:27]:
Right.
Don Maier [00:15:28]:
Sent them both a letter saying, hey, or I sent one of them letters saying, hey, great company, how do I get in? And he replied back. And basically it went and went through the interview process in downtown in Chicago. And you know, the gentleman said, you know, if you already had your master's, I can hire you as a manager. But because you don't, you got to start the bottom. I'm like, I'm okay with that. So, yeah, started at the bottom, work at Midnights, throwing the packages, driving the truck back and forth from O'Hare down to the Southwest side, making deliveries as well. Work my way up into management. At that time, when I got into management, someone mentioned that I was like, the second youngest manager FL Express at the time in operations management.
Don Maier [00:16:06]:
Yeah. Yep. I was youngest east of the Mississippi. There was a guy, I think he was in Denver, he beat me by like three months. I'm like, damn, so close.
Scott W. Luton [00:16:14]:
Sounds like a wrestling in. In the world of wrestling, there are different regions from the central Savannah river area world champion to, you know, Western Pennsylvania. That's kind of like how you divided that east of the coast. Youngest operations manager in Federal Express at the time. That's done getting us up. That's. That is something. Early achievers that. You get that from your parents?.
Don Maier [00:16:38]:
Probably. You know, it's just a matter of just put your nose to the grindstone. They're just working hard, and eventually someone's going to take notice. And if you just take your looks.
Scott W. Luton [00:16:46]:
Things will work out from that operations manager up through regional, up through North American leadership roles. Pick back up there.
Don Maier [00:16:56]:
Yeah. So when actually, when I was at FedEx as a manager, one of my drivers actually suggested he goes, hey, did you ever think about becoming a teacher? And I laughed at him. I'm like, there's no way. He goes, yeah, you know what? You really managed us pretty good. Like you did in our department meeting today when I finished my master's. Went back, talked to one of my old professors, like, hey, Bill, how do I get into this? And he told me, first thing, if you want to do it full time, you're going to have to get a PhD. I'm like, I don't want to go back to school.
Scott W. Luton [00:17:22]:
Everything leads back to school, doesn't it, Don?
Don Maier [00:17:25]:
So I actually started teaching part time for the University of St. Francis in Juliet, where I'm an alum and was doing that part time while I still had all my corporate jobs. And I was fortunate that when I got to Montana, we had tuition reimbursement that they would pay for 100%, any degree at any level. So I could have gotten the PhD in best weaving and they would have paid for it. Wow. So I took advantage of that and started my PhD program. I had my corporate job downtown, still teaching part time. I had my wife, one child.
Don Maier [00:17:53]:
The second one was on the way, and I was already teaching. And I remember after the first class, at the end of the semester, I'm like, you know, I really found my passion. I really like this stuff. So at one point, right about 2004, I outsourced my entire group at Monsanto. And it was actually a good thing for us. I know everybody's like, oh my God, you got rid of everybody's job. No, everybody had a job. And I even outsourced my own.
Don Maier [00:18:19]:
It was at a point where, you know, I stayed with the company, but I took a different role on the manufacturing side. But it helped me a lot when I started teaching. And it just so happened to St. Francis had a full time position opening up at the same time I was defending my dissertation and, you know, going teaching full time was going to be my long term position career. And it just so happened that you got that gift. Looking at you, it's like, what do you do? Right. Campus is two miles from home rather than driving 45 minutes to work every day. It's hard to beat, right? So I made that transition to academia full time in 2004 and was at St. Francis, made tenure. I was there for about a good five, well, actually more than that, about seven, eight years. My wife was also Joy. We were like, hey, we got to get out of the city, we got to escape, right? It's a city of prisons. Got to escape. So I took the position all the way out in Maine, on the east coast at Maine Maritime. So I got to learn the maritime side of the business. So I was moving containers all over the world, but didn't understand the ship operations.
Don Maier [00:19:20]:
But I was also teaching international logistics there. Moved my way up into as a dean at Maine Maritime, had the logistics program. Both undergraduate graduate, took the dean's position at California Maritime where I had the marine transportation and the logistics program. So my students would eventually become captains of the ships.
Scott W. Luton [00:19:41]:
That's fascinating.
Don Maier [00:19:42]:
Yep. Did that for a number of years. And then I decided, you know what, all of our family is east of the Mississippi. And my wife and I, like, why are we in California this time? For us just to head closer to family. And it was just good time that everybody knows about Tennessee's program. I've always known about it for years. So it was a good opportunity for us, you know, so we get the little bit of the cooler weather without having to, you know, shovel out three feet of snow. I'm okay with this.
Alan Amling [00:20:08]:
You know. You know, Scott, people like Don are rare, right. There's not a lot of people that have the combination of the academic and the practitioner, right. And especially I know from experience, you gotta be a little nutty in the head to go back to school, you know, Mid career, because it's. It's quite a sacrifice. But UT seems to attract those people. We have a lot of, you know, former practitioners.
Alan Amling [00:20:42]:
You know, I'm thinking of like, Darrell Edwards, used to be the SVP and Chief Operating Officer of La-Z-Boy also has a doctorate, found his way to. To Tennessee. You know, a lot of people from industry, Mary Long, who I know, you know, you know, Domino's and CPG experience, Mike Burnett from P. And the. The list goes on. And when I was looking at different schools, it was like, Don, when you were saying about, you know, no, I'm not going to teach, because when you were in industry, people said, well, if you can't do, teach.
Don Maier [00:21:24]:
Yeah, those who can do. Those who can't teach. And that. I had somebody say that to me once after I just started teaching, and this was at, right before a Blackhawks game with a bunch of friends. And the guy that said that, I'm like, are you kidding me? Anyway, just absolutely drove me nuts.
Scott W. Luton [00:21:38]:
Yeah.
Alan Amling [00:21:39]:
But on the other side, I talked to a lot of different universities, and you would think, oh, of course they're going to embrace practitioner experience. And so they have the same kind of, you know, bias on the other side of, oh, well, if you're a practitioner, you're not using the scientific method. You're not being serious. So UT is kind of bringing in the best of both worlds. But the truth is, neither side is correct in their kind of gross simplification.
Don Maier [00:22:13]:
We have a great mix in terms of both the tenure track, the hardcore researchers, and those like Alan just said, like, both of us were practitioners, right. So we could bring all of that knowledge into the classroom, and we see that, you know, and again, as a dean, I got to see all of my faculties, course evaluations, and those that had that practitioner experience, their evals were a lot higher. And the comments from the students were much more enriching because they're like, these were great stories. I learned more from that than any textbook.
Alan Amling [00:22:39]:
Yeah.
Scott W. Luton [00:22:40]:
Yeah, I love it. And a couple other things to point out. I think that as y'all both described your entry into global supply chain, it really illustrates, and there's a lot more schools now because they've really proliferated, which is a great thing. But we still need folks from all walks of life, all programs, all sectors. You know, one of my favorite stories to talk about is meeting a supply chain practitioner that. That majored in Renaissance Arts or something like that. He was an artist and found his way in the supply chain doing big things. We need folks from all walks of life.
Scott W. Luton [00:23:16]:
And I love that about Charles background. The other thing, captains you mentioned captains, Don. So many folks have no idea what captains go through and kind of that lay the land. I don't know, find a new better analogy. But you know what I'm saying, it is fascinating what they do and so important to how global supply chain works. And for that matter just the river system here in the US So many folks don't talk about that until the Mississippi goes, goes dry and then folks talk a little bit about it. Anyway, fascinating stuff. Let's do this.
Scott W. Luton [00:23:49]:
We got so much to get to, folks. This podcast idea really was created when I saw a social post that Alan had shared where it was him, I think it was him and Don at an event somewhere, right. And one of what Alan was communicating was he was really celebrating how former fierce competitors can still come together, oftentimes come together to do big things in the industry. And I love how we see that play out not only in that message, Alan, with you and Don, but we see so many other companies coming together that, you know, compete fiercely during the day, but they come together and support humanitarian missions or whatever, innovation in industry, you name it. So our audience, I know, because we got the smartest audience in all the world, knows that the long time fierce competition between UPS and FedEx, right? The game has evolved as of course everyone expects it to, but still, I can only imagine if Dallas thought they had a long running TV show. We should focus on a Dallas type premise but focus on the world of UPS and FedEx. Man, we could retire to the beach. So I want to explore that a little bit here today, give our audience a glimpse into some of the supply chain story behind the scenes.
Scott W. Luton [00:25:06]:
So Alan, you have been nominated. You're going to be our Otis Nixon here today when we share some of these anecdotes. What comes to mind when you think about the competition between UPS and FedEx and especially what you saw in your roles?
Alan Amling [00:25:19]:
Oh yeah, I'll tell you what, it was fierce, no doubt. And you know, one of the things I mentioned in that, in that post, that in my household you couldn't use the F word, right? The F word was not to be uttered in our house. The other thing is, and I actually love doing this, every once in a while I would have a vendor send me a package via FedEx. They would get that package back in the next day or two in a brown box from ups unopened.
Don Maier [00:25:57]:
You're sad.
Alan Amling [00:25:58]:
And it was like, come on, what are you doing right and people just, you know, they just didn't think. And that caused some interesting responses. But yeah, it was, it was pretty fierce.
Scott W. Luton [00:26:15]:
I'm gonna switch over to Don here in just a second. But you were talking about no one could use the F word. Years ago, I had the great pleasure of going into Coca-Cola headquarters and we did an in person event right in my first startup. And it was just an incredible opportunity. You know, the Coca-Cola vice president for operational excellence spoke during a certain portion. It was just, it was awesome. Great experience. But to do that, the security there gave us our ground rules.
Scott W. Luton [00:26:41]:
And one of those ground rules, Alan and Don, they weren't messing around. No competitor products get past the front gate, basically. At first I thought they were kind of like tongue in cheek. Yeah, yeah. Oh, no. I saw them clearly communicate it and I wasn't gonna, I wasn't gonna try it, but such is life. Don, what comes to your mind when you think about what you saw between the competition between UPS and FedEx?
Don Maier [00:27:06]:
So just for everybody's, you know, sick, acknowledge, take note that I have my purple on and Alan has his orange on. So see, he's actually converted over to the FedEx side now. See?
Scott W. Luton [00:27:17]:
Oh, how about that?
Don Maier [00:27:18]:
I just happen to see that. I'm like, oh, I got you now, buddy. Alan is absolutely correct. There. There is that fierce competition. But I know that over the years it was good fierce competition. Being in operations, I was on the road a lot more. And you know, even with my drivers and the drivers that I would remember when I would do checkrides.
Don Maier [00:27:37]:
So that's one of the big differences just in terms of how we operate. We do the same business, but we also operate very differently. So me as a manager, I would do my checkrides on my drivers, where at UPS they would have an industrial engineer do it with those drivers. But I remember watching how the camaraderie, still a competition, but the camaraderie would go between the FedEx drivers and the UPS drivers. Very similar. Like, like Alan and I are right now a lot of great deal of respect. And if they needed help from somebody, those guys would be there to help pitch in and help them out right away. Yet at the same time, they also knew that they were competitors.
Don Maier [00:28:12]:
So when the, you know, the labor would have their strife or contract negotiations would be up at ups, they were very hard on us because we would get a significant amount of that volume. And it's like, holy cow, right? So Alan's right. UPS had that reputation that you're going to work Hard, but they knew that. And if you're getting a job there, you know that walking in the door, right? So it's easy for us that it's like, hey, if you don't want to be, you know, in the union, or if you want to be in the union, just go look at the back door of the UPS truck, especially now at Christmas. If that's the kind of lifestyle you want, then by all means, then consider joining the union. Otherwise, you could be like us. We'll treat our employees a little bit better and nicer, and you actually get to wear, you know, two different colors rather than just brown and look like a tree.
Scott W. Luton [00:29:01]:
There's so many elements to what y'all just. Just have shared in your first two anecdotes. And of course, going to Don's point, man, the age of the workforce, it has been fascinating to see continued organization and some of the great wins. And I think some of the biggest wins are right around the corner. Perhaps. Alan, when you hear Don talk about workforce culture, one of my favorite parts, he talked about how the drivers, it's like a brother and sisterhood. And I've seen that play out in my career. And the drivers talk about folks that get not nearly enough recognition.
Scott W. Luton [00:29:34]:
They are, in so many different ways, the heroes of what keeps keeps us all moving. But, Alan, what else comes to your mind?
Alan Amling [00:29:39]:
That is the truth. The drivers of the franchise for both companies, they are v face to the customer. So when. When UPS hired me out of Indiana, they hired me into corporate marketing. And in typical fashion at that time, they started me in industrial engineering in Louisville. So that's where I started. And I, you know, I worked in the hub, worked with drivers, and I didn't understand why they did that at the time. But over the course of my career, all of that really paid dividends. But when I was ready to go to corporate, these two VPs came down and said, alan, here's what we want you to do.
Alan Amling [00:30:23]:
We want you to come up into corporate marketing. You're going to be the FedEx analyst. And we're out of dinner. And I'm looking at them. I'm going, okay. Is that all? And they kind of snickered at each other. And I said, that doesn't sound very challenging. And they just howled at me.
Alan Amling [00:30:45]:
They said, oh, come to Atlanta. I think you'll find out that it is. And it certainly was. And as much as I poked on and all of that, I have great respect for FedEx. I think both companies made each other better. They had a Philosophy under Fred Smith that I just love people, service, profit. It was a great culture. And at ups, it was, you know, similar at that time, things that were passed down from our founder.
Alan Amling [00:31:21]:
And we would read this policies, and we would read these policies, like before every single meeting and talk about how they matter to us. And the culture was really strong. And really, in both companies, you know, you started at the bottom, like Don was saying. And one of the things that kind of makes me cringe a little bit, it's not the same anymore at any other company. And some of that change had to happen. But, you know, you're seeing it where the jobs are becoming more transient, and it's a job, not a career.
Don Maier [00:32:00]:
Yeah. And again, being a driver, being a manager in ops, it's a hard job, right. I hated the holidays. So since last Friday, which was one of our busiest times on the afternoon shift until just after the first of year, it's miserable, right. And then you're having to deal with weather. Now, I know you guys down in Atlanta, y'all don't get cold.
Don Maier [00:32:18]:
You don't have to worry about things getting chilly. But imagine telling your drivers in Chicago, hey, it's so cold, like minus 32 with the windshield. Leave your trucks running, huh? Chicago, not necessarily a good idea. But Alan is right that the culture really has a lot to do with it. And I know UPS would be the same way. You know, Alan talked about Fred Smith and the psp, the people, service, profit. Even to this day, I can rattle off exactly what that was all about. I still remember my employee number.
Don Maier [00:32:46]:
And everybody knew that your employee number meant your seniority. So when you start and you meet someone at a new station, like, hey, my name is Don. And you're like, yeah, mine's got great. Hey, Scott, what's your employee number? Because now we're trying to figure out where you sit in the whole pecking order, right. Or because Fred Smith was a pilot during the Vietnam War, a Navy pilot. The uniforms that we first had when we first started this Federal Express, some of the drivers actually had epaulettes, Right. And they would change colors based on their seniority, and we would get our Bravo Zulu pins.
Don Maier [00:33:18]:
So Bravo Zulu means job well done. So there are two naval center for flags that those are pins that we put on our badges and everything else. And that was all over. You know, that's something that you do that you can give someone a busy for doing something good. And we can give it to, you know, companies or to a customer as well. So that was a big deal, right. So there's a lot that we, I think we're going to be missing in terms of that type of a corporate culture where you get to know people that you work with.
Don Maier [00:33:46]:
I mean, yeah, we're here online and you know, Alan and I have talked a number of times in person and virtually fortunately, but there's still something that the camaraderie and the relationship that you can develop with someone face to face, I think we're starting to lose that and I think that's going to impact how we operate going forward in years to come.
Scott W. Luton [00:34:04]:
Yeah, I'm with you. And it's really a double edged sword, right? Because if you look at ever since the pandemic and which gave rise went well past a tipping point, we've had remote communication platforms for decades, right. But of course the pandemic took that to a whole new groundbreaking level. And on one hand you got the convenience factor, which is important, right. But kind of to your point, Don, and similar maybe to some extent what you're sharing, Alan, it changes the game of rapport building. It changes that camaraderie factor.
Scott W. Luton [00:34:41]:
It really, I found just my personal experience, tough to have the same genuine, earnest conversations. That really builds bonds. You know, we're limited to the remote thing. So it's really, it's a tough equation to balance. Alan, your final word here.
Alan Amling [00:34:58]:
Yeah. So there's absolute benefits to the flexibility and it's something that, you know, when I was at ups, I actually fought very, very hard for. You know, we wanted to attract more women into the, the workforce, but we weren't giving them the flexibility that, that they needed and especially early in their career, which was a big mistake.
Scott W. Luton [00:35:26]:
Right.
Alan Amling [00:35:26]:
But made no mistake, you're paying a tax for it. You know, because I would always tell people the secret sauce at UPS is you'd have these people that have known each other for years, if not decades. I mean, when I was, when I was there, we would have a Founder's Day and at the corporate office you had to have at least 30 years of service to be recognized in person because there were too many people. When you would switch positions or switch divisions, chances are you knew people in different divisions and there was this trust that was already there that you didn't need to build up and, and so decisions could be made more quickly because you didn't have to go through all of the gyrations of okay, I'm going to give you a little bit, I'm going to give you a little bit more until I trust you Because I know you, I trust you. I'm just going to make it happen. That's something that, you know, as Don was alluding to, is messing.
Don Maier [00:36:27]:
Alan brings up a great point. It's building trust, right. It's. We can work for the same company and we can exchange emails and be on team meetings as much as we want. You put us in a room or something really big comes up, I have to reestablish all of that new trust, right. Well, when we're face to face, I can develop that a lot quicker and it's easier to help move those decisions along a little bit faster.
Scott W. Luton [00:36:50]:
And whether we're talking inner organization, like both of you are the trust factor, or of course, out across our ecosystems, I think we all learned for the perhaps a million time the immense value of trust here in the last few years. I'll tell you, I wish we had a couple more hours, Alan and Don, because I know we're, we're not even scratching the surface. We're. We're not even doing that. We've got a lot more to get to. And I want to shift over to talking maritime for a second. So Don, you co hosted part of it, but I can piece together it seems like an extraordinary panel session at the Fall Forum, which I think is an ongoing event that y'all hold at the Global Supply Chain Institute there at UT now, it seemed to feature quite a panel of maritime experts. Can you shed any light on that and maybe share a key takeaway or two?
Don Maier [00:37:39]:
Yeah. So it really was a great panel and I think we were fortunate to have the members that we did agreed to come join us, right. We're also fortunate. One of our alums, Jim Newsome, used to be the CEO of the South Carolina Port Authority. So with Jim's connections and his involvement just in the whole maritime industry was very, was very helpful for us, you know, so we had Stuart Sandlin from HAPIG Lloyd, we had Mike Simonas from Louis Dreyfus, we had Griff Lynch from the Georgia Port Authority, and we had Daniel Maffei. He's a chairman, current chairman of the Federal Maritime Commission. So to get all of those folks all in one panel at the same time, face to face, great accomplishment.
Don Maier [00:38:18]:
Right? You know, when Jim and I were first talking about doing this, and it's like, okay, well who are we going to bring in? And we had, you know, this long list, and it's like, well, let's pull out our dream team and see how well it goes. And we didn't have to make Any substitutions? That was like, perfect. Seriously, it's like, holy. I believe. Yeah, yeah. You know, and it's also fortunate that all four of them know each other, so the interaction was much better. Obviously before Scott, when you asked about key takeaways, one of which that came out, two actually, is one in regards to, you know, climate change, right.
Don Maier [00:38:50]:
Everybody wants to really focus on being more sustainable. And I know a lot of companies having to monitor and watch and rate how much emissions that they have. So they're going to the ship carriers and saying, hey, great, I want to make sure that my container gets on board a vessel that uses a alternative fuel or a more sustainable type fuel. Ship companies are like, sure, we could provide that. In fact, I just placed a $40 billion order for 20 new ships and I'm going to have this different type of an engine on board so I can run LNG or ethanol or biomethane, whatever the case would be. Hydrogen is also coming out. Awesome. But that's a very significant investment.
Don Maier [00:39:31]:
So then all of a sudden the companies will say, okay, well how much are you willing to now pay for having your container place on that specific ship? Well, I'm okay to pay a little bit more. Okay. But then when things start to deviate and change now, how much more? No, I'm not willing to pay for. For any more. But wait a minute, you want me to change and have this significant increase in my investment.
Scott W. Luton [00:39:55]:
Right.
Don Maier [00:39:55]:
Yet I can't get any return on that investment. That's a big challenge. So, you know, companies will say that they want to be green, but I don't think right now that any of them are at the point where they're ready to come to the table to say, here's what I'm willing to pay to be green. By the way, the ship companies are actually being regulated and forced to become more green. So the IMO has changed International Maritime Organization, the rules and regulations that they have to be much more fuel efficient and reduce their emissions, which means they have to change, you know, the type of fuel that they burn in the vessels. Okay. But at some point I have to pass those costs on because that investment is significant.
Scott W. Luton [00:40:33]:
Right.
Don Maier [00:40:33]:
And the. If the companies want to be green, you got a pony up to the table, but they don't want to do that. So we all say a good game, but yet it's going to be a very different to see how things will play out. The second big takeaway, and I'm sure we're all having to deal with this, is where we will be dealing with this in a matter in about a month and a half is automation, especially at the ports, right. All of us know that American ports, we are not very productive in comparison to our global competitors. And a lot of which has to do with automation and they're not allowed right now in most of our ports. I believe there's like one port, maybe two, that has a significant amount of automation in the United States and yet the technology is developed here, but yet we don't use it here.
Don Maier [00:41:17]:
We develop it and sell the technology to somewhere else for another country to use. That's the part that really gets aggravating even in terms of predictions. You know, we're at the end of the 20 of 24. Everybody is looking at predictions.
Scott W. Luton [00:41:28]:
Can I keep that cat in the bag with when it comes to predictions? Sure, because I'm going to get your and Alan's predictions for 2025. Bold, 100% guaranteed predictions for 2025. But just those two things you shared, you know, especially that ladder piece, that automation, you know, that's playing out right now as we record this in the Canada post strike. Just one of the many divides, of course you're kind of implying as the deal comes up between ALI and the usmx, I think that comes up in mid January. Automation's perhaps the biggest ticking point. Compensation, of course, but automation. And to your last point and Alan, let me get you to comment on this. You know, I think a lot of folks out there, a lot of Americans and even a lot of supply chain professionals may be surprised at the current level of automation across our ports.
Scott W. Luton [00:42:22]:
You know, Georgia, the Port Charleston, the ports down there in Savannah and that area, incredible. I've toured them y'all prior to them too. Incredible. But being able to compete on the world stage, when you go to other ports around the world and see the differences in automation, it is, is mind boggling and it's something we got to figure out as an industry because y'all probably have the same conversations. I have had lunch with a couple chief supply chain officers not too long ago and they both Automation is going to. It's going to be a killer. It's going to be a killer. How much longer do we got to keep kicking a can down the road? So Alan, there's some big topics that Don brought up from that panel.
Scott W. Luton [00:43:00]:
I wish I had been there. I'm having a little bit of FOMO right now. But Alan, your comment on all things maritime, something Don mentioned or something you might be tracking.
Alan Amling [00:43:09]:
Let me talk about the technology for just A little bit. Because that is an issue that has come up, you know, not just in maritime, but across the supply chain. The big thing is, oh, jobs, jobs. Well, my reply to that is labor. Labor. We don't have enough of it. So there is one argument about, okay, well, you're not going to need as many people. But the fact is the number of people that we have is low and it's not going to get any better.
Don Maier [00:43:47]:
Right.
Alan Amling [00:43:48]:
Just look at the facts. Look at birth rates, not just in the US but around the world. The only way you're going to solve the labor issue is through, you know, smart immigration reform and technology. That's it. I mean, it's just the facts. People can, you know, fight against that, but it's, it's kind of like, you know, Don mentioned, people don't want to pay for green. The companies don't want to make the investment. And I see that all over where you interview some, a group of people and you say, would you rather buy something if it was, you know, greener? And so however you define that, they said, oh, yes.
Alan Amling [00:44:37]:
Would you be willing to pay more for it? No.
Scott W. Luton [00:44:40]:
Oh, no.
Alan Amling [00:44:41]:
Would you. You promote Buy American? Yes, I do. Would you be willing to pay more for it? No, I wouldn't, right.
Scott W. Luton [00:44:51]:
But you know, Alan, I have seen and I don't have it right in front of me, but by and large, I agree with you. But we start, and are starting to see a little bit of movement in and consumers be willing to pay a little bit more. The latest study I saw that where they saw the most movement is if it was, if it was 10% more. Now, to your point, it wasn't like it wasn't a big majority of folks and, you know, price still dominates the equation, right. For all consumers. And we're all three consumers here too. But to your point, Alan and Don, a great keynote, may have been a preacher.
Scott W. Luton [00:45:29]:
I've been determined. I heard this happen. Anyway, he's like, if you ever want to know what's important to you, look at your calendar and look at your checkbook. And to that latter point, the point you both are making, until we're willing as consumers and as shippers and as retailers, as an industry are willing to put our money where our desire is and pay for change, it's going to be tougher and tougher to make it happen, right?
Alan Amling [00:45:53]:
That's absolutely right. Because if you look at trends around ex shoring, you know, reshoring, nearshoring, when you move from, you know, supply chains, being globally optimized most of the moves we make, whether it's to near shore or, or maybe moving from China to Southeast Asia, it's. It's going to end up costing you more, right. And there's a balance that I always talk to companies about that you definitely want to be resilient, but you also don't want to go out of business the old fashioned way, which is not being competitive from a price standpoint.
Scott W. Luton [00:46:38]:
All right, so Don, you get the last word on maritime sustainability, workforce automation, all those topics we just talked about. Before I switch over to what I'm gonna call organizational nimbleness. Your last word there, Don.
Don Maier [00:46:53]:
Okay, so in regards to the whole automation thing, I do think we're gonna see it probably a little bit more allowed in the contract of this next ILA agreement in a couple of weeks or six weeks. But it's gonna come at a cost to the shipping companies and that cost is gonna have to be passed down then to the shippers. So plan on. You want a prediction. Plan on at least a 25 to 30% increase in container rates coming into the U.S. wow.
Scott W. Luton [00:47:18]:
Okay.
Don Maier [00:47:19]:
It's going to be a cost. And that cost, I mean, just a labor cost, by the way. So when Alan talked about, you know, loss of jobs, maybe it may occur, but even when the container was invented here in the United States, when the container came into the ports more often, basically the shipping companies had to pay the unions. They weren't working, but they still got paid. So imagine that, right? And that's what's going to happen. There's that, you know, longevity, cost.
Scott W. Luton [00:47:45]:
All right, so I hate to leave that topic, all those topics, really. But I want to get to this next one because, Alan, you were sharing some intriguing perspective on social. And folks, if you can't, if you haven't figured it out, y'all gotta follow Alan and Don for that matter, on social, right. One of these posts I saw, you were talking about a Comdex panel that you had hosted back, way back in 2001, which is only 23 years ago, but probably to all of us, it feels like it's about 100 years ago, right. You were pointing out how Netflix was able to defy the non believers and evolve into the dynamo that it is today. The dynamo where we all just saw a much different Mike Tyson take on a Jake Paul, who, who would have figured he would be atop the heavyweight rankings? Anyway, you were offering three key points of advice, Alan, in a, in a nutshell, I know it deserves a fuller conversation, but can you recap those three things here today, that was back, you.
Alan Amling [00:48:41]:
Know, 2001, the Internet was. Was still young and ups. We thought it might be a big deal. So I had Reed Hastings, one of the CEO and co founder of Netflix, on my panel. And at that time, the bandwidth wasn't there to do streaming. So they were actually. Their big innovation was they honed in. The people hated paying late fees.
Alan Amling [00:49:09]:
And so for those in the audience that can remember, VHS tapes used to pay late fees. You'd rent them for, you know, three days, and if you didn't get it back, you got a late fee.
Scott W. Luton [00:49:21]:
If you weren't conned and rewinded, you get a fee for not rewinding those VHS tapes back in the day, too.
Alan Amling [00:49:30]:
Yeah. Oh, gosh, we live in a great world now. What I was talking about, you know, at that time, you know, Blockbuster, you know, was absolutely huge. And what happened was that Netflix was very nimble. They had a great strategy that was focused on a problem, an issue that a lot of people had, but they were nimble, whereas Blockbuster. And it's the curse of success, make no mistake, Blockbuster had some really smart people. They, and they brought in some top executives from Walmart and 7-Eleven along the way that were, you know, extremely smart and very successful in their own right.
Alan Amling [00:50:18]:
But they looked at Blockbuster and looked at what was making them the profit now. And so how do I maximize current profit as opposed to looking at what's happening in the exterior environment? How is technology changing? How are consumer preferences changing? That's really what Netflix honed in on. And I don't know if you recall, but when they made the switch to streaming, it was not received well. There was a lot of backlash. Their stock took a big hit. But, you know, since then it's been Katie bar the doors. And so the three, you know, key lessons that, that I talked about was, yes, you have to have a strategy, and you want to have a strategy that fulfills your why. And your why is, you know, what is the problem? What is the purpose of your organization? And how are you making lives better? And they did that.
Alan Amling [00:51:24]:
But you also have to be prepared to pivot as you learn what couldn't be known when you made your strategy. And that's where a lot of people, a lot of companies lose ground. And I would say that UPS and FedEx have actually lost ground there because you have the curse of profit. You had the curse of having to meet those quarterly demands of investors, and it becomes really, really hard. Which brings me to my third lesson is you have to have courage when you know what the right thing is to do, when you're listening to your customers, when you're looking at what's happening in the external environment, it's never a straight line. It is never a straight line. And in those dips is when you really have to have courage. And you can see there are companies that have done that really well and companies that struggle.
Alan Amling [00:52:29]:
But what I always talk about is, no matter where you are as a company, if you're still breathing, there's still a chance.
Scott W. Luton [00:52:37]:
Yeah.
Alan Amling [00:52:37]:
And you could always turn yourself around.
Scott W. Luton [00:52:39]:
I love that, Alan. I love those three points. I might not capture it as eloquently as you shared it. And, Don, I'm gonna get you a comment here. But, you know, fulfilling that, why with that strategy that you've established, of course, pivoting, which I know that word has taken on a whole new meaning here in recent years. But then that courage you talk. Talk about, because I think, you know, undoubtedly we've got some entrepreneurs or anyone fighting adversity out there across industry right now. And, you know, it's easy to have good days, right? But, man, those tough days that try your soul, you try your teams, try your organization, where you're questioning, hey, what am I doing? Those are the days.
Scott W. Luton [00:53:19]:
You got to reach down deep, Alan, and lean on that courage. And lean on that why, for that matter, to power through. Don, I bet this resonates with you. I bet. Comment on those three key points of advice we just got from Alan.
Don Maier [00:53:35]:
Alan is 100% correct. Is that, you know, when things get tough, you really gotta stay focused on really what it is that you're trying to achieve, you know, and that's where, you know, having that solid organizational culture and that foundation helps, because it makes it a lot easier that everybody already has that buying. They already know what we're supposed to do. And, you know, like Alan said, it's never a straight line. We could think that, hey, this is going to be some great technology using FedEx as the example it had. I forgot what the name of the product was, because it was before I started. It was like Zappos or something like that. And it was nothing.
Don Maier [00:54:09]:
Yeah. Zapmail. Thank you. It was nothing more than a really big fax machine. Okay, well, who would have expected at that time? Well, seriously. And they got caught. That Xerox and everybody else sort of create a fax machine that was small enough that people could actually have in their homes and was inexpensive enough that companies would put in their office. So they didn't need to use the Zap mail anymore.
Don Maier [00:54:29]:
Fast forward. And now you all of a sudden have emails. So an email or a PDF document that's now signed is going to hurt the revenue of FedEx and UPS, because we don't have to have our documents overnighted to have it signed by somebody for a closing or some other type of illegal issue, right. That's already being done. And then you have all of this other technology, right. So on the one hand you have Amazon wanting to make sure that they get that last mile delivery for all the consumers.
Don Maier [00:54:57]:
Makes a lot of sense. Sure. It's a loss of revenue for both FedEx and UPS.
Scott W. Luton [00:55:02]:
Yeah.
Don Maier [00:55:02]:
And I could be very wrong with this, but from my perspective, if I'm one of those two companies, I'm like, you know what, Amazon, you can have all of that high volume, low margin deliveries to the consumer. Let me focus on the business side of it because that's really the bread and butter. That's really what FedEx was all about. And I know UPS was pretty much the same way. And then all of a sudden it's just tried to deviate and pivot all of these different directions and I think they got caught and now they're trying to reposition themselves back in a more strategic direction. And I think we're going to see more of that and not just with FedEx and UPS, but a lot of companies overall.
Scott W. Luton [00:55:38]:
And going back to the next Zapmail, if I heard you right, or the next Netflix or the next, you name it, is right around the corner and be able to find those practical operational innovations even if it's not permanent, right. A lot of competitive advantages and devices that deliver that or vehicles that deliver that. A lot of them are temporary, right. You know, using that downtime, using that challenging time to find that next million dollar, or in this case in some of these companies, billion dollar idea it is. So I mean that's like the, that's core to, I think being an entrepreneur and a true innovator, right.
Scott W. Luton [00:56:20]:
In industry. And when I say I don't know about y'all, but I think innovate, the word can have the wrong connotation for a lot of folks out there. You know, it's not gathering around a whiteboard and, you know, talking about ideas and ideating, man, it's putting it into action and experimenting and a lot of times it don't work. That's the nature of experimentation. But those that do typically come out ahead. Amazon, of course, that you mentioned, Don's one of them Okay, I want to get into this last segment, Alan and Don, where we're going to reflect and project and I can't wait. See, Don's chomping at a bit and I bet Alan is too. Don's already given us a prediction, but I'm going to go back so well one more time.
Scott W. Luton [00:56:57]:
But before we look ahead, we can learn so much by looking even in recent history, right? And so 2024 has delivered all sorts of eureka moments, good and bad and all points in between for supply chain and many, many other areas and aspects of global business. So I want to ask you, Alan, one of your biggest takeaways from global supply chain in the year that was.
Alan Amling [00:57:21]:
2024, when I look back on it, I think this rise of the retailer logistic has been this continued rise that really happened, you know, started during the pandemic and has, you know, just grown. UPS and FedEx are no longer the big dogs, right? Amazon has been the leader now for a couple years. This year we saw Walmart drastically expand their last mile capabilities. And you have some startups that are stitching together regionals and others to create new competitors in the last mile space. And it's one of the things that I reflect on because when I was in corporate strategy at UPS, with all due respect, FedEx never kept me up at night. And the reason they didn't is because I knew FedEx invested a dollar in logistics, they had to make a dollar in logistics. That's not true for Amazon, that's not true for Walmart, it's not true for these other folks and it completely changes the game. And it makes it really hard, as Don was saying, to go after these B2C packages.
Alan Amling [00:58:46]:
And so you had this movement at both UPS and FedEx where they said, okay, I think Carol Tony said we're going to be better, not bigger. And Both UPS and FedEx just said, okay. I think FedEx early on said, okay, Amazon, no, we're going to go to more B2B. But the challenge is, the nature of this business is that you've got high fixed cost facilities that volume has to run through or your costs go up for all packages. And I think, you know, I know in UPS's case that certainly happened because I think you, you heard in their last earnings release they talked about taking on new two new significant new retail customers. Well, you know who they are, Shein and Temu, which is like, if you're talking about high volume, low profit packages, those are it. And then, and then they took the postal contract from FedEx for the first time since I can remember. I mean, we bid on it every year and never did because, you know, obviously UPS needed the volume and so.
Alan Amling [01:00:07]:
And both are going after small businesses. But it's a real challenge out there because now that coal oligopoly, which I wasn't able to say when I was at ups, but it was an oligopoly, everyone knows it, but that's no longer right and it's a real competitive arena out there. And I think you're going to see these retailer logisticians continuing to take a bigger piece of the pie.
Scott W. Luton [01:00:42]:
Alan, as you shared all those different factors that I find fascinating as well. The Rubik, the image of a Rubik's Cube came to my mind and I'm not sure how many dots are on each side of the cube, but let's say there was 12, right. Even as recently as 10 years ago. Now, based on all those factors and how the equation is changing, might as well be a million dots on each face of the Rubik's Cube because equation definitely has changed in so many different ways. Don, shifting gears. Alan, that's quite a takeaway from 2024. His observation there, that continued rise of the retail logisticians, amongst other observations.
Scott W. Luton [01:01:23]:
What's one of your biggest takeaways from global supply chain 2024?
Don Maier [01:01:27]:
Well, I think it's a much growing idea that companies, the retail logisticians, they're really going to have to pay a lot more attention to geopolitical affairs and issues that are occurring globally, right. Who would have ever thought November of last year that the Houthis, you know, a couple of attacks were like, oh, that's going to be a short term thing, really. We're still dealing with it. There was a couple of attacks just this past weekend, right. On US flagged vessels. Okay. That's still a big deal.
Don Maier [01:01:54]:
So I think all of those geopolitical issues, the maritime choke points, are going to become a much greater threat that most folks don't realize yet, right. Especially down in the South China Sea as one example. They're going to be challenging and people are not ready for what to expect because they think, well, I have a container on that ship, so therefore I want my container. Well, you're one of 18,000 TEUs on board that vessel. A ship is not going to revert or divert its ship just for one container or for any one ship, regardless of the size. And that includes the Walmart's and the Costco's, right.
Don Maier [01:02:28]:
Although they would like to have that kind of power and authority. You know, they have some. But they can't just divert the ship just because. And we saw that even during COVID when some of the, you know, like Costco was, or even Amazon chartered their own vessels. Okay, it may have worked then and they got out of that business because it was not a long term solution. I think we're at the point now where companies are going to have to start thinking this might become our new world or the new reality that we may have to be operating in, whether or not we like it. What are we going to do? Yeah, And I think that becomes a much greater challenge,
Scott W. Luton [01:02:58]:
Tthinking even further ahead and of course, playing with a whole bunch more scenarios as we look at the various ways that geopolitical or many other challenges can play out. And it's fascinating to me how everything is so connected. It takes me back to that Forrest Gump opening and the closing with the feather, right. Or the butterfly effect, if some folks want to call it. Everything is connected to some degree. It's really fascinating. Okay, so, Alan and Don, I got a couple final questions.
Scott W. Luton [01:03:31]:
My toughest one is one more bold prediction that you'd each share with us, what to expect in 2025. And Alan, since Don's already kind of gotten a head start on you, I'm going to start with you first, Alan. So what, what are you predicting?
Alan Amling [01:03:47]:
In a nutshell, I think we're going to see a new globalization of supply chain. And it gets back to Don's comments about the geopolitical situation, which I think most supply chain leaders are underrepresenting the risk there. I was in the South China Sea six weeks ago with Chinese vessels shining lights into our ship's cabin because the president of Taiwan had made a comment about China can't speak for them. And so they decided to run some exercises in the South China Sea. I was in Vietnam recently, and because I'm a supply chain geek, you know, I'm asking everyone questions about, okay, so what's the relationship with China? What's, you know, if there was a new Cold War, this was, you know, maybe after some drinks, after I got to know them a little bit, not just random person, right? They would all say this the same thing, that we are so economically tied to China that of course, if there was a new Cold War, we would side with them. And it's something that I've been talking to companies about for quite a while that think, okay, I've moved my final assembly to Vietnam or to Cambodia or Malaysia, and they think, okay, I'm more resilient. I'm protected against this geopolitical threat. No, you're not.
Alan Amling [01:05:27]:
You're not at all. 80% of the materials that go into final assembly in Vietnam come from China. And so I think right now there's, there's going to be a realization in 2025 that we're not going to be able to unwind the global supply chain and it's going to have to take a new shape. And it is. There are certain industries where it may make sense to reshore and I think we're going to, you know, begin to see that. And that has all sorts of ramifications for labor and do we have the right skills in the US since we outsource most of those manufacturing skills many years ago. All of this I call a new globalization is that supply chain managers are going to come to, you know, we're not pulling out of China completely, we're not reshoring completely, we're not near shoring completely. We're going to be very strategic about how we plan our global supply chains to mix that combination of we want to be resilient, but we also want to be cost competitive.
Alan Amling [01:06:48]:
And I am going to bring up the T word. If these tariffs, if the actuality matches the rhetoric, which I think there's probably going to be somewhere in the middle, but we are going to see tariffs. That's going to change the equation too, because it's not just about, you know, pure economics because that, because now the government is putting their thumbs on the scales of commerce and that changes the equation as well. So all of those things are going to need to be taken into consideration. It's never been more important for companies to be doing the scenario analysis, war gaming, things like that, because you don't want to wait until the situation occurs to start thinking about your options. You need to have your options on the table and know which lever to pull based on what. What happens, because you're just not going to be able to predict it.
Don Maier [01:07:55]:
At the same time, though, remember that when we make those changes that we can say, hey, we're not going to source from China anymore, we're going to source from this other country. Okay, but you have legal agreements already in place with that other country, with China, and how long is it going to take for you to get a new agreement set up with this new country? And by that time things are going to change. So there's this reverberating effect that people say, well, we're just going to go find it, find a new Vendor. Sure you can find it, maybe. But how long is it going to take for you to get onboarded for.
Scott W. Luton [01:08:23]:
Anyone that has had to go find new suppliers for even easy parts? You'll know what Don and Alan are kind of talking about there, because it is a lot more challenging. It's a lot easier said than done. We've all been there and done it. I know I have. Okay. Before I get to Don's final prediction, Alan and Don, this might be overly simplistic, but I think it's accurate. And I'm going to leave the policy baking and certainly the economic stuff because I wasn't good with that in college and it hasn't gotten any better. But I believe in what we're facing as a world.
Scott W. Luton [01:09:02]:
When I think of the USMCA and I think of what President Elect Trump has been talking about, specifically when it comes to tariffs, I really think that Canada and the US And Mexico is such a unique part of the world, right. And we got to really lean into that in that game of checkers, right. I'm not trying to be simplistic, but I'm using that as a comparison because a lot of what you are talking to Alan, in terms of the bigger picture and the much bigger threats, risks, geopolitical and many, otherwise, that game of strategy let all three countries win that game of checkers with what they need from their economies and governments, what have you, that can be figured out, and then use that as one of many other pieces of leverage as we lean into what's coming around the corner, which is much more complex with a lot more bigger existential dynamics involved. So we'll see. I'm very optimistic, but we also have to be very realistic. So, Alan, good stuff there, Don.
Scott W. Luton [01:10:04]:
That's going to be tough. So I know you've already given us one prediction about containers coming in and some of that pricing. Any other predictions come to mind for 2025?
Don Maier [01:10:14]:
Well, I don't want to, you know, go off of Alan's coattails because typically UPS follows FedEx's lead and innovation and strategy.
Scott W. Luton [01:10:21]:
I knew that was coming, Don.
Don Maier [01:10:23]:
I had to. I had to, you know, but. But he is right. It's going to be a very evolving thing. So you mentioned before about the usmca. What most people don't realize is the negotiations for the decision to say whether or not each of those three countries are going to stay in has to be made by July of 2025. Because even though the agreement is in place until 2031, it will take six years for countries to reevaluate their systems or get it all set up for when 2031 happens. So countries have to decide by July.
Don Maier [01:10:55]:
Hey, are we going to say in this or not? And I tell my students this all the time. Business and politics don't mix well together. And we're really starting to see that play out now using the T-word, right. Everybody's just kind of waiting to see what's going to happen with that. And I think that is going to be a significant caveat or a significant variable in the next calculus in terms of what my operation is going to be. No one can make a change now because as soon as they do, it could change, you know, tomorrow or within a few weeks, right.
Don Maier [01:11:26]:
It is a little concerning worldwide that we have folks being put into office that are more friends than being more professionally oriented or trained to do that kind of a job. It is what it is, right. But again, is it rhetoric or is it true words? Is it really going to be the actions that we're going to look at moving forward for next year? You know, I'll go back to the automation and technology that's going to have to be the driving force. And I think more companies are going to start looking towards that because if they do start doing some of the tabletop exercise like Alan pointed out to, they should be doing this. And COVID really definitely pointed that out. And now even though that's beyond us, we should have learned from that to keep going forward, right.
Don Maier [01:12:06]:
Anyway, so using those examples now to say we should be doing something different, why? What's going to happen if we get hit with a 25% or a 50% tariff from Canada or Mexico, what's that going to do to our, to our company? Well, if that happens and we begin to see that one of the issues is going to be, well, then maybe we need to start finding more vendors locally or start producer. If I'm going to do that, what's the impact? Well, my costs are going to go up because I need to hire more people. Do we have the people? Are they trained? What am I going to do that? Well, if I can't find the people and I still need to operate my next option, I had to have technology. So let's start embracing some of that and preparing for that rather than not being prepared and then say, oh, my God, now what do we do? Rewind the clock and you know, the whole globalization, we created that, right? We created the situation that we had with China, you know, 20 years ago or more. We were advocating for Companies to go over to China to help spread the word of democracy.
Scott W. Luton [01:13:03]:
Sure.
Don Maier [01:13:04]:
And for us, really what it was is so that we can get lower cost goods.
Scott W. Luton [01:13:07]:
Right.
Don Maier [01:13:09]:
Great. And the U.S. consumer, we like that, we want that. It's just so happens that a lot of the stuff that we buy comes from China. Okay, well now we're in the position where like, wait a minute, we don't have any control now. They.
Scott W. Luton [01:13:20]:
That was good then.
Don Maier [01:13:21]:
Yeah, that was good then. And now what? So, yeah, I think at some point, you know, Scott, we just got to think about what are we going to do to advance, take that next step. You mentioned the word before about innovating. Now is the time that American companies just start to innovate, to think what are we going to do to re energize our company so we could be the innovators.
Scott W. Luton [01:13:42]:
Yes. And there's so many, when it comes to technology, where you started your response, so many different ways that we can pull those levers and bring them in and with powerful, powerful outcomes and use cases and making it easier on our team so they can lean into uncovering other ideas that can, that can add to the competitive advantage and where the organization's going. So many, so many moving parts. But I'll say this final word for ask both of you how folks can connect with you. I hope that our greatest challenges lie within the craft of supply chain management or even the economics of supply chain management rather than geopolitical conflict and violence. And I hope that cooler heads can prevail. I mean, starting just with Ukraine or Russia, let's find a peace deal there rather than things spilling over into other parts of the world, which I'm telling you, going back to Alan, I bet that was a scary situation to be on a, on a boat and have one of the world's largest militaries, you know, looking to intimidate for what's. Because of what's going on in the news, we got to hopefully find a lot more peace in 2025.
Scott W. Luton [01:14:47]:
Okay, so Alan and Don, this has been a fascinating conversation, just like I knew it would be. Alan, how can folks track you down all the different things you're up to? What's the easiest way for folks to reach out and compare notes and talk shop with you?
Alan Amling [01:15:02]:
The very best way to connect with me is via LinkedIn. So connect with me on LinkedIn. If you want to find out more about me, I've got a website, allenley.com but probably the best way is LinkedIn and look into the supply chain forums that you mentioned we have two a year at ut. They're absolutely fantastic. They really are top notch speakers and it's really a nice intimate affair. So that's another way. Don and I are always there.
Scott W. Luton [01:15:37]:
All right. I want to be there for the next supply chain Dream team. Okay, Alan and Don, can I count on you all for that? Folks, you ought to reach out, connect with him as he suggested on LinkedIn. Also see what they're doing up at UT. Take advantage of those events. As Alan mentioned, one of the pieces of advice he shared here today on those toughest of days, I heard it was a, it was a team member from MySpace on a really tough day as that platform crashed, it came up with the idea of LinkedIn. I don't know if that's true. I doubt it is, but it serves as a great analogy.
Scott W. Luton [01:16:06]:
On the toughest of days, some of the grace of things can be born. Don Maier, how can folks track you down and learn and learn more about what some of the things you're up to?
Don Maier [01:16:15]:
Very similar to Alan. The easiest way is through LinkedIn but I'm under Donald Maier, so I only try to use Don because I don't like use my full name unless I have to write it out. So yeah, definitely LinkedIn would be the easiest and then the second best would be email. So dmaier1@utk.edu because I'm always online or checking my emails all the time, so those be the two quickest ways.
Scott W. Luton [01:16:38]:
Great conversation. They really enjoyed it. We'll have to have y'all back again soon. Maybe we do a live session with an ask me anything. I bet y'all too have not seen a question yet you wouldn't like to answer. But I want to want to thank both of our guests here today for spending a lot of time with us. Alan Amling, CEO of the advisory firm, Thrive and Advance LLC, author of Organizational Velocity. Check that out.
Scott W. Luton [01:16:58]:
Wherever you get your books from. Here's a couple more comments, what I hear. And the Assistant Professor of Practice Supply Chain Logistics at the University of Tennessee Knoxville. All that and more. Alan, thanks so much for being here.
Alan Amling [01:17:10]:
You bet. Thank you.
Scott W. Luton [01:17:12]:
And Don Maier, Associate Professor of Practice Supply Chain Logistics, also at the supply chain department at the University of Tennessee Knoxville. And as he put it, Don, an over educated truck driver, which again, I think that's a beautiful thing. We need a lot more over educated truck drivers to figure things out. But Don, thanks for being here today.
Don Maier [01:17:33]:
Thank you very much. And Alan, thanks for putting this together. Greatly appreciate it, gentlemen.
Alan Amling [01:17:37]:
Thanks for being on.
Scott W. Luton [01:17:38]:
Completely agree. But folks, hopefully you've enjoyed this conversation as much as I have. Tons of insights looking back in the rearview mirror, looking ahead of what's on the horizon around the corner. Tons of actual insights. So the challenge is this. You've got homework. Whether you're a student at UT or not, you've got homework here. Take one thing that Don and Alan shared here today and go share it with the team.
Scott W. Luton [01:18:03]:
Put it into practice, right? It's all about deeds, not words. That's how we're going to change this industry together. So with all that said, on behalf of the whole team here at Supply Chain Now, Scott Luton, challenge you. Do good. Give forward. Be the change that's needed. And we'll see you next time right back here at Supply Chain Now. Thanks, everybody.
Narrator [01:18:22]:
Thanks for being a part of our Supply Chain Now community. Check out all of our programming at supplychainnow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and Follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.