C.H. Robinson President & CEO Bozeman provides overview of key logistics trends and themes at SMC3 JumpStart 2024

Logistics Management Group News Editor Jeff Berman and Dave Bozeman, President and CEO of Minneapolis-based global logistics services provider and freight forwarder C.H. Robinson spoke about various industry topics in an on-stage interview earlier this this week at the SMC3 JumpStart 2024 conference in Atlanta.

Bozeman discussed his acclimation to C.H. Robinson, coming over from Amazon, where he served as Vice President of Amazon Transportation Services, and leadership roles at Caterpillar Inc., Harley-Davidson, and Ford Motor Company prior to that. Other topics covered in this wide-ranging interview included: the freight econonomy; various initiatives C.H. Robinson has focused on in recent months, and the increasing role of the supply chain, among others. Their conversation follows below.

LM: How would you describe your leadership style? As a follow-up, how have you leveraged your previous positions at Amazon, Caterpillar and Harley-Davidson heading into your current role at C.H. Robinson, as well as your Lean methodologies and engineering backgrounds?

Dave Bozeman: My style is an inquisitive style. It's a problem-solving style, but it's also a listening style [type] of leadership. Being a Lean practitioner and learning that years ago, I found that solving problems and using tools to solve problems really makes for better business outcomes and business decisions.

You talked about my experience. I started my experience at Harley-Davidson Motor Company, which is really where I would have cut my teeth, almost 17 years there in a number of different roles in Harley. But I will tell you one thing that I that I learned a lot from at Harley starting way back is becoming a supervisor. I came in as an entry-level manufacturing engineer, but I wanted to carry a radio, and they said: “You can't carry a radio. You're an engineer.” They said you have your supervisor do that. So, I said I am going to do that. And they nicknamed me “Slash,” short engineer/supervisor. But I spent a lot of time with people. And what that taught me, and by the way, I got beat up a little bit, too, on the floor, because I was a young rookie coming in and doing that, but it taught me that getting close to the work and understanding the people who are doing the work, makes for a better leader and I carry that with me to this day. It's OK to go down to where the work is being done and understand that in order to make better decisions.

Leaving Harley, I then headed to Caterpillar and Caterpillar, as you know, headed up operational, global mining all over the world in places where you can scream and no one will hear you but just driving that allowed me to really get into our Lean excellence. I was responsible for deploying Lean within Caterpillar and responsible for the Caterpillar Production System and quality logistics and really getting that deep kind of understanding of order to cash within caterpillar and driving that. I did spend three-and-a-half years in the in the executive office at CAT, working under CEO Doug Oberhelman and really just driving big decisions and am proud of how that company is operating today. And then after that, a small startup company named Amazon called me. I decided to leave caterpillar and go to Amazon and take on the mission of building out the middle mile transportation business. That included a number of different things, from ground transport to the sort center network.

We scaled that to more than 240 buildings or so in our sort center network and Amazon Air, building that node. We started with just a few planes and when I left it was almost 120, as well as the ground transport at well over 65,000 trailers with some power, in building up Amazon Freight and Amazon Shipping. All of these things in a concentrated period of time really kind of gave me a lot of logistical experience with technology and having all the data scientists to go with that. That put me in a position to build that experience coming into Robinson. And I also was at Ford Motor Company and working with Jim Farley and team over there. That's an inflection point in the electrification of vehicles and being responsible for Mustangs, Broncos, and customer service globally for Ford. All of these experiences have one tie-in: customer experience and customer satisfaction. All of those cultures and all of those companies all tie-in. Coming into a company like Robinson it's the same thing. It's about customer satisfaction. And I think I'm well positioned to do that.

LM: Looking back to last summer, when you got on board at C.H. Robinson, what were sort of some of your earliest observations about the company coming into the role?

Bozeman: I think early on coming into the role, I thought that I would come in and see kind of rear-facing technology. And it was everything but that. I was really delighted to see that the company had built some pretty good technology. But I'm more excited over the last several months on where the roadmap is going, really strong technology that we're setting up that is only going to increase customer value. That was good. I saw a culture that wanted to win. Every day, they want to hunt and they want to win. That was pretty good to see that culture. In fact, I did a little challenge. It was focused on a “what's impeding your speed challenge?” This was maybe the third week I was there. And I sent a message to every employee in Robinson, saying “hey, what's impeding you from doing your job faster or better?” I was ready to write out 350 Thank You cards, but I got back roughly 3,400 different ideas from 2,400 employees. That is a lot of thank you cards. I still did write 350. But the point was this: it was a culture that was a speak up culture that wanted to weigh in and had ideas on how to do that. I did also notice, though, that it was a culture in which we could do better when it came to problem solving like every company can. I wanted to up the game when it came to the speed of how we look at it. One, you can't admire problems. Sometimes you have enough data, and you understand what a problem is. You just can't stare at it. You have to move from problem staring to problem solving. And that's something that we've moved to in Robinson, being leaner and being more agile. And I thought we could just do better overall with customers. From the various suites of services that we have, I thought that we showed up sometimes as different companies, and we're one company, one Robinson and so driving this kind of one Robinson flavor is something that I noticed that we jumped on right away, connecting and selling the house, much more integrated for our customers. That will get better wallet share and more profitable growth overall.

LM: So, fast forward now and you’re six-plus months into the job. When you're in meetings with customers, across all of the different verticals that Robinson serves, what are some of the common threads, or themes, that you are hearing from your customer base?

Bozeman: If I had to use one word, it would be flexibility. Customers coming out of the pandemic learned some things. They want to be much more flexible. They want to partner with companies that are flexible in solving their problems, because one thing that's guaranteed in this industry is disruption. And just when you think things are smooth, there's disruption. We see disruption in the Red Sea. You see disruption along the Mexico border. Those things will be solved, and then there will be more disruption. Customers are saying we need to be flexible across different modes, and how do we shift in a more-timely way. The other thing we hear from customers is problem resolution. They say, “Dave, hey, we love Robinson, and we love that you guys are there for us in the good times and the bad times, but solve things for me that I don't even know about.” So, we are encouraging the team to look around corners and be that company that solves issues for customers that they don't even know about, and really drive that. That's what I'm hearing.

LM: When you are working with and talking with your carrier partners, what are some of the things they are telling you, in terms of things they want to work with Robinson on or things that need to be addressed, for example?

Bozeman: The carriers want a better experience, and, I agree with them. Which is what you saw in our news this week about carriers adopting an electronic bill of lading (eBOL). They want automation and they want visibility. I sum all of that up as carriers wanting a better experience. Things are changing with technology and, for carriers, it is changing. Accessorials and where they used to be…if you think of it ten years ago, it was like one accessorial in the LTL industry. Now it's like four out of 10 are being charged. It used to be 3% of our line haul cost and now is 14%. It is really a number of things, but that is how it was at the time. And now with technologies and tools, and visibility, you're just starting to see a number of these things happen. I believe in what's called a boring factory, because boring factories make money and chaotic ones don’t. We have fun in this business, and there's time to do that. But when it comes to processes and business, it's OK to be boring, too, and to just have processes that are clean and are visible, and are a great experience. That's what we do at Robinson.

LM: Speaking of Robinson, earlier this month, it rolled out a Program Management Office (PMO), which will focus on strengthening capabilities needed to further enable the company's strategic priorities and drive significant growth for the company. What drove the need for the rollout in his office and what are the key goals and objectives?

Bozeman: We are super excited about the PMO office coming in and driving a Lean mindset within the company. It's a new Robinson to have a company that's going to be leaner and more efficient. Part of doing that—and I explained this as I was in the company over the first few months—is that you cannot come in and say “we're going to just do Lean and jump in.” That's not the right way to do that. You really have to understand the culture, understand its history, and then walk into it with a language. We're really talking about continuous improvement, that's what this is. And if I went to any company and I said, “Look, we're going to do better when it comes to continuous improvement, and we are going to do better when it comes to making problems more visible. We're going to do better with developing an operating model that allows us to go from being a somewhat output-based company, to an input-based company, and being able to adjust and solve those problems in real-time by being visible.” That's what this PMO office will help us do. It's going to build our operating model. I brought Jim Reutlinger in, and he has a Danaher background and is a better Lean practitioner than I am. It really helps us drive that. What's the outcome for Robinson? Ultimately, you get a company that is in your face every day on what we have to achieve and what we are supposed to achieve. If we're not, that's very visible, and the key, what are we doing about it? What we're doing about it will allow us to solve problems faster, innovate faster, create better customer experience, better investor returns, and more profitable growth. That ultimately is what the PMO will help us do.

LM: And prior to that, back in September, Robinson opened up an inland port in Laredo, Texas. The timing for that seems pretty good, given the increased attention and onus on nearshoring. How are things going with the inland port and what were the key drivers for it?

Bozeman: We are really proud of that and proud of what the team is doing there. I just came back from Mexico last week. We've been in that part of the country with Laredo for almost 30 years, almost three decades down. This is about scaling. And it's about building out and getting more capacity and more solutions for customers. We already manage one in 10 shipments coming from Mexico into the U.S. on heavy scale. This particular facility, it just enhances the footprint that we already have in the Laredo area. It gives us more than 1.5 million square-feet of processing space, but we also have the experts down there that that will allow and can solve customers’ problems when it comes to border disruption. And there is border disruption right no. The facility has 154, dock doors, and they're taking on 700 trucks. It's just scale and allows things to flow better. And, again, it's really the team. Like I always say that our technology—and I think we've learned this in the industry—there's just no silver bullet in just technology. This is a combination of people and technology, and it is the same thing in Laredo. This is about our people using our facilities and our processes as a force multiplier, helping customers solve problems when it comes to border disruption. And that team has done a nice job. With the auto strikes that just happened, this team knew, from the 2019 strike, what would happen when that strike was over. They knew what would pull up and so coming off of the auto strike now we have relationships with kind of the top auto parts distributors, as well as some of the OEMs. This team was ready to help customers move freight from Mexico into the U.S. because of that experience they had and the disruptions at the border, having the expertise to get around. And I think that's what customers appreciate about Robinson.

LM: Let's shift gears over to the freight economy. There's a whole host of things that factor in and influence how people buy goods or don't buy goods and perhaps are spending more on experiences. How do you view the current state of the freight economy early into the new year?

Bozeman: I think everyone's happy to 2023 is over, but we're still in the state of the economy that we're in. And I would say that the current freight economy is still tight. It's still a tough market. We've said that we don't see earlier than the back half of 2024 for that to really start to “pivot.” It depends on what type of recovery that we're having. I can tell you that there's a couple of things that are a little bit different in this cycle. There's higher capacity that's still in the market. You would think that's late in the cycle, as well as kind of the heavy amount of cargo carrying capacity that's still in that in the marketplace, in terms of volumes. It can't just be off of carrier capacity. It also has to be volumes. Both of these two things have to kind of change the dynamic for you to really start seeing this happen. I do think that we will see that. I think customers are a bit tight. [Inventory] destocking has occurred in the retail space. But there's still some wholesalers up chain that are a bit overweighted, but customers themselves are looking at this and just being a bit cautious around how they ordered. It used to be they would put in maybe larger orders and now I think they're putting in maybe smaller orders to be burned off. and using a little tighter inventory kind of chain that they have right now. I think when this turns that the buying behavior and order behavior will shift back to the kind of similar patterns, but you have different verticals. The automotive sector is always just in time. I don't think that changes. Some of the other verticals, I think, won't get into the bigger just-in-case environment that you saw in the pandemic, but I think the ordering cycles will change. It's going to take time, and it's going to take some key elements in this industry and in this market to really kind of change this.

LM: How do you view the increasing profile of the supply chain, especially after going through the pandemic and everything that brought?

Bozeman: I feel that freight and supply chains really are the economy if you think about it. In driving the world economy and where it is, the supply chain is absolutely critical. This just became enlightened over the pandemic. But it was always an industry kind of led from the shadows. And you think about it, whether you're in Europe, or Asia or here in the U.S., one small anecdote of the economy is how many trucks are on the road. And if you want to see an indicator, you see how many goods are being moved from point A to point B, or in between. The supply chain is critical. The thing that is going to be different, though, is if it will be the supply chain of 10 years ago, or is it the supply chain of tomorrow? I tend to say it's the supply chain of tomorrow because of technology. And I tell my team you can't solve tomorrow's problems with yesterday's tools. None of us can be afraid of large language models and generative AI and using that in a smart way. It only enhances the supply chain. None of us can be afraid of electronic bills of lading in LTL. That's the start. It needs to continue. This is just the norm and I would say companies like Amazon and others have fundamentally changed the expectations of customers today. If you went to buy something, and you looked at it said it would arrive in 14 days, that probably won’t work but you may have made that purchase years ago. Fundamentally, a supply chain has to shift with that, and with the technology and with the visibility with the tools to make things more efficient. That's what we want. We want to be on the forefront of that and that's where I think supply chain is going overall.