Trucking Evolves Into Logistics
COOPERSVILLE — A ponderous roll of magazine stock just off either of the two production machines at Muskegon's Sappi paper mill looks like a white tree trunk and feels just about as solid.
Yet it is perishable, subject to gouges by passing clamp trucks and the other vehicles hurrying about inside the sprawling Muskegon Lake plant.
Accordingly — once the paper runs through the finishing machines, which impose gloss, matte or pebbled surfaces — Sappi wants the product out of the plant and en route to the printing industry or one the company's distribution centers.
An assortment of haulers handles the cargo, but always at the direction of a sort of information symphony conducted by Foreway Management Services LLC,of Coopersville.
Foreway Management — a logistics spin-off that is separate from Foreway Transportation Co., the trucking firm — provides the same third-party logistics services for Sappi's recently acquired mill in Clouquet, Minn., near Duluth.
According to CEO Pam Hassevoort, those services — in the simplest terms — entail arranging outside haulers for Sappi loads, while:
- Scheduling back-hauls for those same trucking firms, or
- Providing Sappi cargo as a back-haul, or
- Mating partial Sappi loads with haulers' other partial loads to provide cost breaks to both clients.
Hassevoort says such arrangements buttress haulers' productivity so that they can charge Sappi the lowest possible rates.
"We know Sappi's problems through long-term acquaintance," said Hassevoort. "And we also know truckers' problems, because our background is trucking." That's Foreway Transportation, which she also serves as CEO.
She stressed that no more than a quarter of Foreway Transportation's fleet hauls for Sappi. "We use 75 percent outside haulers for Sappi's Muskegon plantand 100 percent outside haulers for Cloquet."
She also stressed that the logistics Internet information flow is critical in working with those haulers.
Foreway Management liaison people in the two mills keep headquarters in Coopersville ahead of the mills' production schedules while also tracking and tracing loads already on the road.
Meanwhile, new Foreway Management software meshes with clients' systems, so that production — together with any changes or glitches — is visible in real time to Coopersville 24-7. When a web tear shuts down a Sappi paper machine for a few hours, Foreway Management can quickly make new arrangements for haulers.
In earlier times, news about production halts in most manufacturing operations rarely reached haulers until they arrived at the plant to find no product — a damaging financial event for the transport company. Hassevoort says the communications just weren't there.
It's different today. "The earlier our people can see into the production schedule," Hassevoort said, "the wider the window we have to schedule haulers and to find back-hauls for them as well. We're trying to make everybody happy."
According to Janet Boone, Sappi's regional traffic director in Maine, Foreway Management has saved money for the giant paper-maker.
"Muskegon and Cloquet are very heavy contributors to our distribution centers," Boone said. "And Foreway's service has been very, very good."
Foreway Management, the third-party logistics provider, was founded five years ago thanks to two factors linked to Sappi:
- The evolution of a long-term problem-solving relationship with the Muskegon mill.
- Hassevoort's desire to have more control over some of the maddening variables that plague trucking — and which have caused several thousand haulers to fail in the past decade.
As CEO of a trucking firm, she found the uncontrollability of variables was frustrating. "There was only so much I could do. The rest was really just at the mercy of the market: fuel costs, capacity, regulations and tremendous liability exposure."
Along with that, she said, was the business model's permanent frenzy for return trip loads. When you're making payments on a $125,000 rig, she noted, you want it producing revenue going out and coming back.
She said Sappi looked like a special opportunity because it's such a big manufacturer and has a constant need for over-the-road hauling.
"We started hauling occasionally for Sappi in 1979," she said. "And we were always their safety valve, their back-up.
"When they were in a pinch, they knew that we always could pull a rabbit out of the hat. We were the guys they'd come to when they were in a bind. We did our best to make it look easy to them."
But she said that while being Sappi's safety valve was a good source of revenue, it wasn't sufficiently predictable or constant. Moreover, Sappi was paying Foreway a premium for emergency help.
"They came to us first and said, 'Give us a rate to haul 30 loads a week to our distribution center in Allentown.' And we looked at it and said to ourselves, 'We can do it, but somebody's going to underbid us. So how can we give them what they need?' We know this account so intimately. We know their problems."
She said Foreway pitched Sappi on the Muskegon-Allentown "lane," offering a lower rate predicated on being given back-haul loads — from Sappi's two Maine mills — to printing markets in Chicago and the Midwest.
She said Foreway's approach was that, given zero empty miles, it could sharply cut its charges to the Muskegon mill.
"But freight coming out of Allentown was controlled by someone else," she said. "And they were saying, 'Well, that's not helping my numbers.'" She said that sort of attitude was typical of the way most manufacturers were set up around the country. "There are pockets and budgets and that's what those individuals are held accountable to."
She said it took time, patience and tenacity to convince Allentown that cutting rates for Sappi Muskegon were in Sappi's corporate interest.
After securing the contract, informal liaisons between Sappi mill managers and Foreway Transportation evolved and grew. The mill and the trucking company shared moneysaving ideas until a new discipline evolved that was too complex for either.
That's when Foreway Management came into being. Hassevoort explained that it was an entity that began by living and breathing Sappi.
"The bottom line," explained Sappi's Boone, "is that Foreway Management now takes care of our transportation in two of our four mills.
"Bringing in Foreway reduced the workload for Sappi transportation planners," she said. "That has been a savings. Foreway often has been able to marry up our freight with other customers, benefiting both organizations.
"They provide very good service, and as far as commerce is concerned," she added, "it also reduces the amount of truck traffic on the road."
When Sappi purchased the Cloquet mill 18 months ago, Foreway found Sappi receptive to managing logistics for that operation. And since then, the Coopersville headquarters has brought nine more logistics clients into its operation.
According to Hassevoort, what she's running in Foreway Management is not an ancillary transportation firm but an information flow business.
"Our job is to close communication gaps within our clients' operations and between our clients and their haulers."
She explained that her firm's clients are utterly dependent upon transportation, and truckers are no less dependent on Foreway Management clients.
"Last-minute cancellations are devastating for trucking companies," she said. "We always have to help all of them with a Plan B. We don't want to leave anybody high and dry."