Episode 19: The Crossroads of Load Planning & Data: Maximize Efficiency to Minimize Costs

Speaker A: Welcome to Cargo Shorts, brought to you by Old Dominion Freightline. I'm your host, Samantha Jones. Today we're talking about load planning, the hidden hero of successful LTL shipping. We're going to get into what it is, how it affects shippers, and what steps can be taken by all parties involved to turn it into a superpower. We'll get into the role data plays in load planning and what happens when inaccurate data gets into the system. The whole LTL industry has been transitioning to what Old Dominion calls the age of accuracy. We'll look at some practical ways shippers can prepare themselves to take advantage of the benefits this new era is going to bring, as well as some common pitfalls to avoid so you can keep costs low and make sure your deliveries arrive on time. Joining me today to discuss all this is Skip Velardo, vice president of Transportation at Old Dominion Freightline. Skip, thanks for being here today.

Speaker B: Pleasure to be here. Thank you.

Speaker A: Yeah. Would you mind, for anyone who doesn't know you very well yet, uh, could you give us an introduction and tell us a little bit about who you are and your background and what you do now?

Speaker B: Sure. Uh, I've been in the transportation industry for almost 18, 19 years. Actually. I started with another company, uh, and then transitioned to Old Dominion about five years ago. Um, I was a service center manager for a short time, was a regional vice president for almost four years, and then just transitioned to be the vice president, transportation down here at corporate. Um, basically, I'm responsible for Linehaul and everything that has to do with that.

Speaker A: Okay, well, thank you. So I thought to maybe kind of kick things off, you could just give us a general overview of what load planning is, what it's kind of evolved to become over the last few years, and kind of set the stage for us a little bit.

Speaker B: Load planning is, uh, how we, uh, strategically load our freight onto the trailers. Right. So we're talking about the timing of when shipments get picked up to when they delivered, the, uh, schedule they're supposed to hit, uh, on our line haul network. And it's how we kind of maximize our efficiencies. So we're looking at how can we get the most amount of freight on the trailers while keeping it safe and moving, making sure the freight doesn't shift and keeping it safe for our customers, but then also making sure that it gets a destination as quickly as possible. Because we're all competing against each other in terms of LTL carriers. And usually whoever has the fastest service wins. So we try to make sure we Maximize that and put it all together at the same time.

Speaker A: I think you said it was 18 or 19 years that you've been in the industry. So I'd like to kind of know, um, a little bit about how, what does this look like now? Like, how did load planning look when you started and then how far have we come till today?

Speaker B: Load planning? I mean, I was, I, uh, think I, when I got into the industry was more towards the, the old era of hanging manifest trailer doors and using, uh, the saber sorts to figure out where the weight routes went. We had a gentleman here at Old Dominion that for a very long time was on the whiteboard just basically mapping out different segments of each leg of a run or, uh, a schedule. Um, now we're using computers, we're using a little bit of AI that's going to continually evolve. I know it's a huge buzzword right now is AI, is everybody's trying to figure out how to maximize that, to apply to what we do every day. But now we're able to take the technology and quickly identify, you know, those lanes, the tonnages, the shipment counts, uh, every service center, every customer would have, and how we can maximize that across our network. So it's, it's transition to do things a lot faster than what we had done before.

Speaker A: When we think about load planning and, you know, what has the goal always kind of been around? Load planning? Is it, is it, um, are we more focused on accuracy or, you know, perfectly cubing out trailers? Are we more focused on the efficiency of our routes or timing and speed? Like, what are some of these things that kind of come to mind to anchor? Like, the reason that we even should be discussing load planning on a podcast, like, what are some of those important factors?

Speaker B: All of that above is everything you just said is, is, is equally important, right? So we want to try to maximize the, the amount of space that's on the trailer to fill the trailer up. Because, um, you know, line hole for anybody's, uh, business is going to be probably the most expensive thing they have, where, you know, that's just traveling tons of miles. Fuel, equipment, everything that goes along with the cost of that. So that's, that's a big part of it. Um, the timing is huge too, because we have to know what time we have to hit certain, uh, meets or legs of a run to know when it has to get to the next phase in terms of mileage and things like that. Um, accuracy from customers is big because we want to make sure that whatever they're telling Us we're picking up is actually true because we're going to be basing that off of tonnages and dimensions of freight and things like that to make sure that we can fill the trailer up. So um, everything you said before was uh, probably all equally important to make sure that we can um, save on costs as the carrier, but then also be able to be more efficient for our customers. So that gives us flexibility to um, improve pricing, get uh, better discounts, build better relationships with our customers because they want to be able to trust us.

Speaker A: So this, I mean I don't want to oversimplify this because right now we're kind of talking about a high level and it sounds like maybe, okay, like it's how we're getting freight on a truck and you're sending it out over the road. But load planning can be incredibly complex and, and it's kind of like playing a game of Tetris if you will. It's kind of what comes to mind to me. What can be some of the things that make it challenging or that are making it more difficult to reach peak efficiency?

Speaker B: Well, to your point, just like Tetris, you're going to have different pieces that have to go and commingle with one another because that's what ltl is, right? And we're not just a truckload carrier. We're not just putting the same like freight on the trailer, right? We're co mingling all kinds of different, uh, commodities. Um, I gave a tour yesterday to our local business, uh, people here and explained to them that, you know, because they asked me what's on the truck and I said you could have diapers, you could have motor oil, you could have, uh, long, you know, skids of, you know, pilings or fencing, anything like that. So um, so that's why when you're, you're, you're co. Mingling all this freight, you have to make sure you know what's going to fit. And that's why getting the, the data from our customers is so important. So that when we're, we're capturing that at time pickup, whether dimensions are put in or EDI or anything that that's put in, we know how much space that should take up on the trailer. And then that when our supervisors and our dock team are loading all that, they can make the best decisions possible. Like Tetris, right. We're trying to, you know, mix and match all kinds of different freight together. So um, so that's, that's why it's so important to get that Information on the front end. Correct.

Speaker A: I mean, I guess it's an opportunity, but also a challenge because I feel like this space is evolving where we, we have been working to digitize more in the LTL industry as a whole. So we have the electronic bills of ladings. We're putting in more information, the, um, kind of dimensions required now for pricing or helping have more data incoming on shipments. Um, I believe it used to be you had to wait as the carrier till the freight was picked up and brought back to the dock to like, see what it looked like and see how it was going to fit. So it was very like manual. You had to have eyes on it, you had to be able to have hands on it to get it loaded in a trailer. It sounds like what you're saying now is if, if we have this information, this data being pumped into us from the shippers before we ever even get that freight back to the dock, we can start to work it into a load plan.

Speaker B: Absolutely. And that's where you're going to gain efficiencies. Because then if we know kind of what that freight's going to look like, and we can build that trailer kind of in, uh, our minds or, you know, on a piece of paper, understand, you know, how it's going to fit together, then we'll be able to, uh, load that trailer faster, get on the road faster, and then meet those points that it's got to hit to get to the destination, depending on how far it's going.

Speaker A: Yeah. So with clean data, if a shipper is able to provide that, um, they should, in theory be seeing faster transit times. Right. Because if, if their shipments can be planned into, you know, the load plan as quickly as possible. Right. Knowing exactly what it is without surprises, then it could potentially be getting worked through the system in a more optimal way.

Speaker B: Yeah. If we cut down delays at the time of pickup to the time it's getting loaded on the outbound trailer to then move on to the next phase in the line haul network. And then, yes, we're going to be able to speed up our transit times and make it more efficient for our customers.

Speaker A: Are there any other, like, aside from. I mean, that was kind of it. That one stuck out to me. Right. The speed of transit. But are there other benefits that shippers actually gain when you guys are able to be more efficient with your load planning?

Speaker B: Well, yeah, we'll be able to gain more capacity. So if a customer has more freight and they want us to want to use us more often, you know, we'll Be able to put more freight on our trucks and you know, uh, let them have the benefit of our capacity. Uh, we'll be able to protect the freight better because then we'll be able to fill the trucks up and be able to let or not have freight, you know, shift as much while it's, you know, bouncing down the street on a trailer. Because that's what it's always going to do. Right. We have to try to maximize that, make sure it doesn't move as much as possible, you know, that when it gets to pricing, you know, we might be able to uh, look at, you know, if we're, if we're maximizing our efficiency to our customer, then when we're looking at ors and discounts and things like that on a customer specific pricing, uh, we might be able to get better pricing at that point too.

Speaker A: Yeah, I feel like that's something that um, maybe not all shippers understand quite entirely.

Speaker B: Absolutely. And that's why the data and the communication from our customers to our, you know, day to day operations and service centers is key. Because we have to know what we're going to get every single day, how it's going to fit into the trailers and then that's only going to help us help them. Right. That's kind of a corny way to say, but uh, that's, you know, that's the truth of it because it's going to factor ah, in all that cost that we're talking about.

Speaker A: What would that look like for a shipper to be able to give you guys, um, as much information with as much time as possible? Is it electronic bill ladings that do that? Is it just calling in your pickup as accurate as possible? Like what, what does it look like?

Speaker B: Both. I mean, if a customer has the capability, uh, to give us an electronic bill lading and we can, you know, integr, uh, in our network and we can pick all that stuff up without having a conversation, that'd uh, be great. But if it's still a conversation or a phone call then, or an email either, um, all we just need is the accurate information. You know, pieces, weight, dimensions and being able to factor that in on how much that's going to take up on our trailers.

Speaker A: Okay. Outside of maybe the full automation or of, of an AI agent or some tool like that, um, have we at least seen progress in how a computer can kind of analyze the data that is available or make suggestions or at least improve or streamline the process, um, from what it used to look like or, and how like is that constantly developing or are we, where are we kind of at with that?

Speaker B: I think it's constantly developing, but it's just a matter of what data you're trying to take out of the program that you're using, uh, if your program is able to adapt and insert the information that it's giving from the AI. Um, you know, we have small tools that, you know, we use, I'm sure other carriers using on some data, uh, for that or whatever. But, um, uh, again, it's still, still evolving. I think there's still a lot of advancement, um, that can happen. Um, I'm excited for that. I'm eager to see what that's going to look like. It'd be nice to have, uh, more readily, uh, available data at our fingertips, you know, where you could just simply ask a question on whatever you're trying to ask and get that data quickly. Um, kind of like a chat GBT or anything like that right now, but

Speaker A: chat again, ltl freight. That's what we need.

Speaker B: That'd be awesome. Right? That'd be awesome.

Speaker A: I know, but, but you have to, you, I always think like, I think it was 2022 when ChatGPT fully launched. Um, and so some of us are still like adjusting to using it and getting accustomed. But it's, that's going on its fourth year. And so I think we have to realize like, hey, AI's been around, machine learning's been around for a while. It just, it takes time to really figure out how it fits in a business environment and start dialing that in.

Speaker B: And to, to, to that point, like I said, it's just a matter of what you put into it and what you're trying to, you know, extrapolate out of that and how you can apply it to your business. Right. And to your point, machine learning has been around for a long time. It's just a matter of how do you get that data out and then apply it to what you're using it for.

Speaker A: Yeah. And that goes back to such a, like, common thread across our industry right now where for the most part I believe that most shippers, most brokers, most carriers, any providers in the space they were, they're trying to figure out how do we start getting our data in an accessible place that's readable by these tools because they feel like that's how are we capturing it and then storing it to be used, um, or make it available. So that's something we're all grappling with across our businesses.

Speaker B: Yeah. And that's where when it comes to a cost, you know, that's where we're trying to figure out how can we save on cost to still be as efficient for our customers. Right. And that's, that's one thing that we're all trying to do, I'm sure on some level.

Speaker A: Well, I was wondering if maybe you had any uh, specific examples. Maybe we probably shouldn't put any names out there, but can you think of any examples, uh, throughout your career collaboration with shippers where you really got to see the importance of load planning and how that collaboration with those shippers is able to improve the operations for both, you know, Old Dominion and the shipper.

Speaker B: Yeah, well, and as far as load planning, it helped us down the road. But one example that I have is uh, this customer, uh, shipped very high end computer printers, copiers, uh, and things like that. And they were not really packaging the freight well enough. And they kept complaining to us that we were getting damages and um, you know, why, why was it happening and things like that. So we were able to go and look at the freight, you know, kind of examine what the, the packaging looked like and give them suggestions and they actually took it, which was great because then that helped us reduce their, their claims on their end in terms of how we were uh, either putting the freight on the trailers, but then that helped our load planning because now with better packaging we can load better freight into the trailers, use our tools with our deck bars and stoneage and everything that we have to protect the freight. And then we saw a dramatic reduce, uh, reduce in claims. So um, very small example. Uh, not every customer I understand is either apt to or willing to take our suggestions because usually it might mean um, a little bit more expensive packaging on their end. Um, but we were able to show the benefit of why that's going to help them and why that was going to be able to reduce their claims and help us, you know, speed up our efficiency as well. So um, it worked out well and they're still a customer today and uh, they love using us. So um, again, small example but uh, it was, it was key to helping our load planning and helping them out as well with their claims.

Speaker A: I think packaging um, is probably such a big part of the conversation too. For load planning. Um, we, we had a good conversation, um, I had a good conversation recently with someone from your company around like how important dimensions are and packaging and like knowing the actual data around each specific shipment. We didn't even really talk about load planning. So turns out it's like it affects A lot more, you know, than just your pricing or just your damages. Um, it really extends to your efficiencies as a carrier as well.

Speaker B: Yeah, yeah. Well like I said, that's if we get good information, good packaging, good freight from our customers, then we're able to maximize that efficiency to help them out down the road. Right. And I know not everybody understands that, uh, but when we're able to identify that cost and explain to them why it's going to benefit them and that can benefit us, uh, then that's where it helps both of us out and then we can really strengthen that relationship with the customer.

Speaker A: Could you talk me through like as far as load planning goes and you mentioned u oversea line haul, what does that look like? We have trucks, you know, the trucks that they see picking up, what happens when that freight leaves their dock, that'll

Speaker B: go back to their service center from wherever they are. Um, and then will we have our outbound team that will basically take the freight that we picked up throughout the day and then loaded on the outbound trailers. Right. Um, so that's where they're going to take the load. Planning and figuring out the Tetris game of how that freight's going to fit together to maximize the use of the trailer. Um, and then from that point then we have certain cut times and schedules that my team, that the line haul team is responsible for to make sure that it gets out at a certain time and gets to the next destination at times. So depending on how far it's going to, you know, let's say something's picked up in North Carolina going to California, that might hit three or four different service centers, but we might have four or five other uh, meets as we call it in between. Right. That's how our network is set up. Kind of like a hub and spoke model. So it'll go to the next location. If it has to be transferred, it would. If not, it could stay on the trailer and then we'll keep moving it along. So, um, you know, it might get picked up in North Carolina, but to get it to, you know, California is going to take ah, a lot of effort to uh, and a lot of planning to make sure that it gets hits to those three or four day transit times that we want to try to make sure that we're promising the customer. So a lot of moving parts with it.

Speaker A: So when we talk about load planning for a lot of these shipments, we're not just talking about like one time that it has to be planned to load into a trailer Right. Because some of these might have to be moved from a trailer to another trailer. Or is there, is there a plan put in place immediately too, just to know, like, do we have available room to add to this trailer at the next stop for stuff that's going on? Like, it's, it, it extends beyond the initial loading at origin when we're talking about planning?

Speaker B: Yep, absolutely. And, um, that's why now, you know, using some of the tools we have, it's much more efficient to use a computer program to give us that information on how those legs look or how that tonnage looks, because that's what we're using right before, where it was literally somebody riding on a whiteboard. It's this many miles to the next break, and then you have to go, you know, do the calculation and then through meat points and things like that. So the computer program has allowed us to speed that up. But yeah, there's, there's so many different points between, you know, destination and origin or origin and destination that, uh, we have to be mindful of and that we're planning around.

Speaker A: Which is, you know, also another reason why the more shippers can give in their data, the better. Because, you guys, when that gets to that origin facility, if you didn't have something, you're missing dimensions, you're missing information. Like you, you have to do it. You guys have to find that manually, enter that information in. Because it's not just one pickup that was affected. It would continue to have negative downstream effects throughout your network. That's not done at the beginning.

Speaker B: Exactly. And that could also add mileage, that could add time. Because if we don't get good information from the customer where we think we might be able to make a direct load or, you know, reduce some distance and we can't, then it has to go to the next break for them to be able to break it and then to be able to load it onto the next trailer that they would move it onto. Um, you know, that's where it might, you know, slow down some of the transit times a little bit. So if we get that good information on the front end, we're able to really understand what that freight's going to do from the time we pick it up at the time we deliver in our network.

Speaker A: Well, I hope that was helpful. If anybody has kind of. Sometimes I think it's good to stretch and think about the entire environment of the services that we're relying on and that we're, we're our businesses are counting on to move our product. Um, and Just good to consider and think about how we can be good partners. Right. And collaborate.

Speaker B: You know, that's what specifically here at od, that's what our biggest thing is. We want to have that relationship with our customers. We want to be able to make sure they understand that they're trusting us. Uh, that's why we think we are one of the best out there is because we know that when the freight gets in our trucks, that freight will not get damaged and we'll get it to destination on time. Um, but there's so many things in coordination that go on with that so that if we get that good information customer on the front end, like I said before, it's going to help them out tremendously with their pricing, with their claims, any hidden costs that might come associated with it. Um, and that's why it's beneficial for us to have that relationship with the customers that we can talk to them about the benefits or the pitfalls that might happen if we don't get that good information or if we don't hold up our end of the bargain if we're not hitting certain schedules or not, um, protecting the freight as well.

Speaker A: Do you have any kind of parting words of wisdom or advice that you would give to a shipper who maybe is listening to this? And is there anything else I should do? Is there something I should be asking to make sure I am collaborating or I'm being a strong partner?

Speaker B: Uh, to your point before, I would highly encourage every shipper to get to a service center, whether it's their local or a larger break, as we call it. Um, because like you said, that's eye opening because some people don't understand the coordination that goes into that and how we move freight through the network. Uh, so that'd be huge. Um, obviously having a great relationship with your sales rep. I know that's what we stress to our sales reps all the time, is just trying to make sure you, you understand what the customer's needs are, you get to know them personally, you know, all that type of things. Uh, so that you know, when these things come up, you can have honest conversations with them. Um, there's inevitably, we're all human, you know, we're not perfect by any means. So there's inevitably going to be a mistake from time to time. And if you can explain the why and how you're going to be able to fix it on the front end, that'll help. Um, so that relationship is huge. So, um, those two things, great relationships with your reps and your your local teams and then visit some service centers. That'll be huge to see how that all kind of comes together and how that coordination gets their freight to the destination not damaged in time.

Speaker A: Awesome. Well, thank you so much for taking some time to have this conversation today, Skip. I enjoyed it. I learned some new things and got a refresher on some things I hadn't had to think about in a while. So I hope it was, uh, helpful and insightful for others who are listening in as well. Thanks for the time.

Speaker B: No problem. Thank you for having me.

Speaker A: Absolutely, absolutely. And thank you guys for listening. If you want to learn more about the best practices and the mistakes to avoid for LTL Freight packaging, be sure to visit odfl.com odoutlook if you enjoyed this episode, be sure to check out our full Cargo Shorts podcast series. You can find us on Spotify, Apple podcasts, Amazon Music, SoundCloud, and YouTube Music. You can also leave us a comment on Spotify. Please rate and review, share with your colleagues, or drop us an email@marketingdfl.com thanks for listening.