Jarrett Quarterly Industry Update Q1 2020 / Volume 13
Empowering Companies to Make Data-Driven Decisions
LTL, Truckload and Parcel Report
COVID-19 Update: How the Pandemic has Affected the Industry
Recruiting Pipeline: Hiring Great People
NOTE FROM THE PRESIDENT
W
e’re well into 2020, and it's no doubt that this year has brought on some difficult challenges and uncertainty for many people. Like every other business, we have experienced changes and opportunities amid the COVID-19 outbreak. Inside this Q1 Industry Update, you’ll find the most recent transportation news alongside a featured article on the importance of filling your recruiting pipeline with great people. This is not an easy task, but an important one. People drive the success of any business. Investing in people and helping them grow has been essential to Jarrett's “why.” You’ll also find an article on how using a Transportation Management System (TMS) can change the way your business manages transportation, for better, not worse. We’ve kicked off our year with a new internal training series called We Are Jarrett. Our Training team has designed a year-long program to feature each of our departments and other businesses. Monthly, employees are invited to a company-wide training session where they can learn more about that month’s featured department. So far, we have learned from our Training and Safety departments, as well as PackShip USA and Zephyrs Fitness/CrossFit Orrville: two other businesses under the Jarrett brand. These sessions have been great for helping employees learn more about each part of our business and feel more unified as a Jarrett team. We find it’s important to take time to learn about what our teammates do, so we can better serve our clients with a more holistic approach. This quarter, I had an exciting speaking opportunity. In February, I had the honor to be selected as a keynote speaker at the OHuddle Golden Circle Dinner. OHuddle is an organization that brings together community members of Wayne County to make a change in the life of a child. Through their mentorship program, students are supported
Q1 2020 • Volume 13 • Page 1
(Left) Mike Jarrett speaking at the OHuddle Golden Circle Dinner in February (Right) Jarrett Fleet Services' new 24/7 roadside assistance truck
and encouraged by mentors, community programs, organizations, small groups, and businesses to practice their individual strengths and positive attributes. It truly is a great organization. Taking a trip 17 miles over to Jarrett Fleet Services, in Seville, OH, we welcomed our newly styled 24/7 roadside assistance truck. The maintenance vehicle got a fresh look featuring our services and recognizable brand. We were eager to get it out and help others keep their equipment on the road. Back in Orrville, Jarrett was named as the recipient of the Community Impact Award from the Orrville Area Chamber of Commerce! It’s always an honor to be recognized for our Civic Responsibility efforts, a value we hold close to our core. I grow consistently prouder of how Jarrett employees take the initiative to give back to our community. One of our teams here started a Random Acts of Kindness program. As a part of the program, our employees collected supplies for a local addiction recovery and domestic violence shelter. As I said, great people are key to helping your business and community flourish. We’ve adapted quickly to implement business continuity plans due to the changing environment surrounding COVID-19. Our first priority is the health and safety of our employees and our next priority is to continue to deliver exceptional service to our clients. We mobilized 150 employees to "work from home" in a matter of a few days. The process was handled flawlessly and
with no service interruptions to our customers. Our Operations and Information Technology teams did an amazing job in making it happen. Being considered an essential business gives us a great sense of pride in our work and satisfaction knowing that we are doing our part to help in this time of need. Adversity always shows you what you’re made of. Albert Einstein famously said, "Underneath every crisis lies an opportunity." This crisis has given us an opportunity to see people emerge at all levels in our organization to provide leadership and innovation, which we will carry with us long after we've defeated COVID-19. Like many other businesses, we’re preparing to welcome interns for the summer. Although we are delaying the arrival of our interns until mid-June, we are looking forward to working with many talented young individuals who bring innovative ideas and new energy to our Jarrett team. Whether you're welcoming interns for the summer or not, we wish you an excellent Q2 as we all continue to navigate the remaining challenges of COVID-19.
W. MICHAEL JARRETT President & CEO
WHAT’S INSIDE 3-4
SUPPLY CHAIN VISIBILITY
5
FUEL UPDATE
6
LESS THAN TRUCKLOAD REPORT
7
TRUCKLOAD REPORT
8
PANDEMIC
9
PARCEL NEWS
10
TRENDING TOPICS
Empowering Companies To Make Data-Driven Decisions
Q1 update of diesel fuel fluctuations and cost per barrel of crude oil
Early March brought multiple general rate increases from LTL carriers
Another busy quarter came to a close as the coronavirus pandemic began to have an impact on North American transportation
How COVID-19 is Disrupting the Industry
Changes made by FedEx and UPS before and during the coronavirus outbreak
The United States made trade deals with China and then Canada and Mexico, while innovation continues in the areas of electric and autonomous vehicles
11-12 THE AMAZON EFFECT
Amazon.com Inc increased the capabilities of its same-day shipping options, while allowing its sellers to utilize FedEx Ground again
13-14 THE JARRETT DIFFERENCE
Recruiting Pipeline: Hiring Great People Q1 2020 • Volume 13 • Page 2
SUPPLY CHAIN VISIBILITY
EMPOWERING COMPANIES TO MAKE DATA-DRIVEN DECISIONS By Mike Jarrett
Q1 2020 • Volume 13 • Page 3
SUPPLY CHAIN VISIBILITY
I
recently purchased an item from Amazon and was amazed at the speed in which it was delivered to my home: Next Day Delivery on a Sunday, at no additional charge. What was this item, you ask, that justified such a quick turnaround? A $10 pair of socks. Amazon has elevated consumer expectations in regards to knowing the status of their purchase at all times and receiving it promptly, without paying extra for the convenience. Alerts are sent when the order has been processed, shipped, and delivered to your door. This transparency in all stages has become the norm for online purchases – even for something as inconsequential as a pair of socks. For consumer goods and industrial manufacturers alike, supply chain speed and visibility are more complex and crucial than ever. The amount of data necessary to plan for production, hire employees, and deliver goods to market on time can be daunting. Handled internally, supply chain management can be an extremely intensive process that pulls the focus away from primary business goals.
INFORMATION IS POWER In order to keep up with consumers’ expectations, companies need to make sure they are getting the best information available. Information in real time empowers companies to make more efficient, cost-saving decisions. Data has the power to enable complete supply chain visibility. A Transportation Management System (TMS),
provides a wealth of useful information to companies. Typically, data is captured from dispatch, warehouse and fulfillment systems, and remote devices that carriers have. It identifies trends, disruptions, or inefficiencies within the supply chain. This provides transparency in realtime and allows companies to make data-driven decisions that optimize short and long-term planning, production, and business strategies. When partnering with a lead logistics provider, a company receives instruction and training, so they understand how to access all the available information on their shipments. Each company is different from the next, so a leading 3PL will enable customizations that streamline and enhance a company’s particular business model. This is not something you can get with a mass-produced, offthe-shelf TMS.
DATA & DECISIONS The data gleaned from this level of visibility provides crucial information on arguably the most important aspect of a company’s business: the bottom line. These systems allow companies to review carrier and service options and choose between the most affordable or the more efficient, premium-cost carrier. Access to supply chain data has enabled companies to be proactive in their logistics planning and decision-making. And just like that $10 pair of socks, it gives them an expectation of excellence and confidence in the level of service they choose.
"Information in real time empowers companies to make more efficient, cost-saving decisions. Data has the power to enable complete supply chain visibility." Q1 2020 • Volume 13 • Page 4
FUEL UPDATE
GASOLINE & DIESEL FUEL U P DAT E
AVERAGE DIESEL FUEL PRICES AS OF MARCH 31, 2020: •
U.S. National: $2.586
•
East Coast: $2.671
•
New England: $2.793
•
Central Atlantic: $2.866
•
Lower Atlantic: $2.514
•
Midwest: $2.432
•
Gulf Coast: $2.363
•
Rocky Mountain: $2.592
•
West Coast: $3.126
•
California: $3.395
WHAT WE PAY FOR A GALLON
Q1 2020 • Volume 13 • Page 5
COST PER BARREL As of March 31st, U.S. crude oil futures were down 67% on the year. The cost per barrel was $20.09, the lowest level it has been at since February of 2002. (WSJ) According to IHS Markit, the current rates of supply and demand mean inventories will increase by 1.8 billion barrels over the first two quarters of 2020. This is compared to the estimated 1.6 billion barrels of storage capacity left worldwide, meaning the world is running out of storage for oil. Oil producers would be forced to cut output, because by June there will no longer be any place to put it. (Financial Post)
ON-HIGHWAY DIESEL FUEL PRICES
LESS THAN TRUCKLOAD REPORT
Q
LESS THAN TRUCKLOAD FREIGHT
1 2020 started off fairly ordinary. By the beginning of March, many national less-than-truckload (LTL) carriers had announced general rate increases with averages ranging from 3.9% to 5.9%. The ordinary start to the year took a drastic turn as the coronavirus pandemic began to take hold throughout North America. At the time of publishing, national LTL carriers have little to no restrictions in their ability to operate within the US and across the northern and southern borders. Carriers continue to work diligently to ensure that both the shipper and consignee on all shipments are operational to ensure the free flow of freight through their networks.
General Rate Increases • March 2 - YRC Worldwide: average of 4.9% increase • March 2 - Old Dominion Freight Line: average of 4.9% increase • March 2 - UPS Freight: average of 5.4% increase • March 2 - Estes Express Lines: average of 3.9% increase • March 4 - FedEx Freight: average of 5.9% increase
Other News • Fourth quarter revenue was down
6% annually at XPO Logistics (XPO). However, full-year 2019 revenue was up 3.7% and organic growth rose 9.3%. (Logistics Management) • LTL carrier Beaver Express Services (Beaver), located in Oklahoma, ceased operations on March 26th. Beaver was a regional delivery agent servicing Texas, Oklahoma, and Kansas as a partner to multiple large LTL carriers. The President of Beaver stated that the coronavirus outbreak, soaring insurance costs, and oil prices plunging was the “perfect storm” that forced the company to close down. (Freight Waves) • The liquidation plan of New England Motor Freight Inc. (NEMF) was approved by a bankruptcy judge in January, almost one full year after NEMF applied for Chapter 11 bankruptcy protection. (Wall Street Journal (WSJ)) • While the 2019 revenue at Old Dominion Freight Line Inc. (ODFL) of $4.11 billion was the highest ever in ODFL’s history, fourth quarter net income declined 9.7%. (Winston Salem Journal) • At the end of 2019, XPO had stated it was looking at possible acquisitions. However, by early January, those plans had changed. “On January 15, 2020, XPO Logistics, Inc. announced that its board of directors had authorized a review of strategic alternatives, including the possible sale or spin-off of one
or more of XPO’s business units,” the company said in the 8-K statement. However, in March, XPO shifted strategies again, saying, “In light of current market conditions, XPO has terminated the strategic review process (exploring a possible sale of one or more business units).” (Logistics Management) • XPO announced the appointment of a new CFO, shortly after announcing its strategy to explore options at a potential sale of one or more of its business units. (WSJ) • Central Freight executed an agreement to acquire most of Volunteer Express, Inc.’s business. Effective April 5th, Volunteer Express’ customers will join the Central Freight Lines family. The goal of the acquisition is to strengthen its internal process and expand its footprint. (PR Newswire) • YRC Worldwide (YRC) CEO, Darren Hawkins, said he believes closings in the truckload sector will add more demand on the LTL side of business. Hawkins said, “The year 2019 probably ended with close to 800 closings in the truckload industry; that lessens capacity.” (Logistics Management)
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TRUCKLOAD REPORT
TRUCKLOAD FREIGHT
A
nother busy quarter came to a close as the coronavirus pandemic began to have an impact on North American transportation.
• Restocking grocery shelves following panic-buying in mid-March kept spot volumes high, but volumes fell across almost all segments by the end of March. Expect freight volumes to be down year-over-year, especially throughout the pandemic crisis as many “non-essential” businesses are closed. Expect flatbed truckload volumes to be down at least through April. • Cost may also be lower, especially as fuel prices have plummeted. By the end of the first quarter, March 30th, crude oil closed at $20.09 per barrel, the lowest closing price since early 2002. The average diesel cost in the United States was the lowest it has been since August 2017. These factors will play a role in truckload costs, especially in the beginning of the second quarter. • According to JOC.com “Digital bro-
Q1 2020 • Volume 13 • Page 7
kers are navigating a topsy-turvy freight market, which makes it very difficult to anticipate how much it will cost to purchase a truck in two or three weeks.” Everything can change quickly, depending on many factors, including the coronavirus pandemic. Rates may spike in coronavirus “high-risk” areas. However, contract rates could very well be down year-over-year in 2020 contracts.
Closures • Fleetwood Transportation Services Inc., a flatbed trucking company located in Texas, shut down on New Year’s Eve, putting almost 240 drivers out of work. (The Lufkin Daily News) • Rodgers Trucking, a company with around 130 drivers, announced it was winding down operations and would close its doors by April 30th, after 48 years of operating in California. (Supply & Demand Chain Executive)
Other News • Celadon Group, the now-bankrupt truckload carrier, sold its final remaining operating trucking company, North
Carolina-based Taylor Express, to White Willow Holding. White Willow Holding is backed by investment firm Luminus Management, located in New York. (Transport Topics) • Werner Trucking, located in Omaha, Nebraska, announced it will be using an electric truck for a year. The truck will run on a dedicated route in the Los Angeles, California area. (Lincoln Journal Star) • CRST International (CRST), headquartered in Iowa, purchased NAL Group, which owns North American Logistics and Install LLC. The purchase made CRST the eighth-largest truckload carrier in the United States, according to SJ Consulting Group. (JOC) • Trucking company Shippers Transport Express, located in Los Angeles, laid off 145 unionized drivers. The company made pickup and deliveries to and from ports, and was forced to lay off workers as coronavirus drove down import volumes. (Los Angeles Times)
PANDEMIC! T
PANDEMIC
How COVID-19 is Disrupting the Industry
he COVID-19 (coronavirus) pandemic has altered life around the globe. Many cities and states throughout the United States, and cities and provinces throughout Canada, have announced stay-home orders. Here are some examples of how the coronavirus is disrupting the industry: • By March 11th, the World Health Organization had classified the novel coronavirus as a pandemic. (WHO) • Ceva Logistics declared force majeure. The company’s announcement reads, “This means that it is temporarily relieved of its normal contractual obligations where these are rendered impossible or impracticable, due to the coronavirus epidemic and its effects….(This) applies to all CEVA services, including (but not limited to) its Air Freight, Ocean Freight, Ground Freight, Rail, Customs brokerage, and Contract Logistics services.” (SupplyChainDive) • Several OEM companies are using several of their facilities to create health supplies such as face shields, ventilators, respirators, and other critical supplies. Toyota Motor North America Inc. said it will use several of its North American facilities to fabricate face shields. The company is working with medical device companies to speed up the manufacturing of ventilators, respirators, and other vital devices
for hospitals. Ford Motor Co., General Motors and Tesla were given the “go ahead” to produce ventilators. (WSJ & TechCrunch) • FedEx Corp. (FedEx) launched an operation in March to help the United States government transport COVID-19 test specimens from testing centers across the country. (DC Velocity) • India locked down the country, including many factories and “non-essential” businesses for a 21 day period starting March 24th. (WSJ) • The United States and Canada agreed to close their border for travel starting March 20th, while still keeping it open for trade. Shortly afterwards, the United States and Mexico agreed to limit most travel other than trade and workers. (WSJ) • 3M Co. (3M) is sourcing materials for its protective face masks from regional suppliers instead of relying on receiving the materials from far off locations. 3M has increased testing and production of single-use N95 respirator masks and other more robust respiratory protective gear. (Reuters) • Companies have had to adapt to this pandemic in many different areas in order to keep up with demand and avoid shortages as much as possible. Grocers like Kroger Co. started cap-
ping household staples and sanitization products (such as toilet paper and hand sanitizer) in order to combat the demand from stockpiling shoppers. Gojo Industries, the producers of Purell hand sanitizer, added shifts to increase production. Consumers can expect to see possible shortages of items that originate in virus-stricken areas. (WSJ) • The Federal Motor Carrier Safety Administration (FMCSA) announced a nationwide exemption on the hours of service on March 13th, after President Trump declared a state of national emergency over the pandemic. FMCSA Acting Administrator Jim Mullen said the move “will help America’s commercial drivers get these critical goods to impacted areas faster and more efficiently. (WSJ) • The United States granted tariff exemptions for dozens of medical items imported from China, such as protective gowns, exam gloves, patient bags, surgical drapes, medical waste disposal bags, etc. (WSJ) • Trucking shipments to grocery and discount stores are rising, but other businesses are closed, meaning rigs are sometimes left empty on return trips. Drivers are facing problems as well, including closed roadside eateries and a general lack of hand wipes and sanitizer. (WSJ)
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PARCEL NEWS
PARCEL NEWS A
s the first quarter of 2020 wrapped up, the coronavirus pandemic began to have a significant impact on the parcel segment. FedEx Corp. (FedEx) suspended its money-back guarantee for all FedEx Express, FedEx Ground, FedEx Freight, and FedEx Office services worldwide in March, effective until further notice. The United Parcel Service Inc. (UPS) announced on March 20th that it was adding peak surcharges for packages originating from coronavirus epicenters. • Both FedEx and UPS added $24 fees on packages weighing over 50 pounds, down from the previous level of 70 pounds. Experts believe this could end up costing millions of dollars for some shippers, who may now need to look at breaking up orders into separate shipments in order to avoid the fee. Package carriers continue to try to keep up with the higher handling costs of ever-increasing e-commerce volumes, and these new fees seem to show a willingness to adapt their pricing to keep up with the changes in shipping patterns. (WSJ) • Amazon.com Inc. is allowing its third-party merchants to use FedEx Ground to ship Amazon Prime orders again. Amazon said it was lifting the previous ban after FedEx Ground and Home services began to consistently meet its delivery requirements. (WSJ) • FedEx warned customers about a digital scam where customers would receive text messages claiming to be FedEx and asking the customer to click a link in order to set up “delivery preferences”. (CNN) • UPS expanded its UPS Flight Forward drone delivery program in February. The service was expanded to the University of California San Diego Health system in partnership with Matternet. (Healthcare Packaging)
Q1 2020 • Volume 13 • Page 9
• Revenue from shipping and packages at the United States Postal Service (USPS) rose 2.3% in its fiscal first quarter 2020 (October-December 2019), even as USPS handled 84 million less packages than the same period the year before. (Post and Parcel) • In February, FedEx and its pilots union reached an agreement that allows crew members to opt out of flying into China, during the height of the coronavirus outbreak in that country. (Commercial Appeal) • Bear Down Logistics, a parcel delivery company from Illinois, announced it was laying off over 280 workers as it looks to close facilities in Ohio, Virginia, Minnesota, Illinois, and Michigan in April after losing its contract with Amazon. (The Washington Post) • FedEx announced it was withdrawing its earning guidance and reducing its delivery capacity, with the coronavirus pandemic disrupting the supply chain industry across the globe. This marks the first time in its 50-year history that FedEx has withdrawn its earnings guidance. (WSJ) • As the coronavirus pandemic spread, both UPS and FedEx chose to drop the normal signature rules for package deliveries in order to protect both customers and workers. “For parcels that require one, UPS drivers leave sticky notes before retiring to a safe distance. The customer signs the form, which the UPS employee then picks up after the client has left", a spokesman for the courier said. (Bloomberg) • UPS plans to test its autonomous electric vehicle trailers at its London technology depot later in 2020. The company plans to switch to autonomous testing in the second half of the year. (Smart Transport)
THETRENDING AMAZON EFFECT TOPICS
TRENDING TOP ICS
W
hile the coronavirus pandemic dominated the end of the first quarter, it was a busy quarter nonetheless beforehand. Companies like Hyundai Motor Co. Ltd. (Hyundai) and Waymo continued to innovate in the area of electric and autonomous vehicles. The United States and China agreed to the first phase of a trade deal, while the United States, Canada, and Mexico approved the new trade deal between the three nations. Across the Atlantic Ocean, the United Kingdom split from the European Union.
TECHNOLOGICAL ADVANCES • Hyundai is partnering with Uber Technologies Inc. (Uber) to develop electric air taxis, in the hopes of having commercialization of urban air mobility service in place by 2028. (Reuters) • The United States Department of Transportation announced proposed guidelines named “AV 4.0” for standards for autonomous vehicles. Transportation Secretary Elaine Chao said, AV 4.0 was a joint effort between her department and the White House, which unifies autonomous vehicle work across 38 federal departments. “The goals are simple, clear, and consistent: improve safety, security, and quality of life for all Americans,” Chao said. (AP News) • Waymo announced it was starting to map and would eventually begin testing its autonomous long-haul trucks in
Texas and parts of New Mexico. (Tech Crunch)
TRADE NEGOTIATIONS • The United States and China signed the first phase of a trade deal in January. The eight-part agreement calls for increased sales of U.S. goods and services to China along with reduced U.S. tariffs on $120 billion in Chinese goods. As part of the deal, China pledged to purchase an additional $200 billion in goods and services over the next two years, while the United States agreed to forgo other planned tariffs. (WSJ) • President Trump signed legislation that implements the U.S.-Mexico-Canada Agreement (USMCA) in late January. (WSJ) • The Canadian Parliament ratified the USMCA in March. Canada was the last of the three nations to formally adopt the agreement. (Reuters)
TRUCKING • In early January, a federal judge in California granted a temporary restraining order blocking state law AB5, that forces companies to classify certain contract workers as employees, from applying to trucking companies. Later in the month, a California court ruled that the law didn’t apply to trucking companies, and a judge then extended the temporary restraining order. (WSJ & Trucking Info)
ACQUISITIONS • Trucking company Mark-It Express Logistics, located in Illinois, acquired Spirit Trucking Company based in Chicago. (Trucking Info) • Costco Wholesale Corp. acquired logistics company Innovel Solutions for $1 billion in March. (WSJ)
OTHER NEWS • In January, the Panama Canal cut its daily slot reservations from 32 to 27 due to droughts. It also started imposing a freshwater charge on ships in February, with the charge being set at $10,000 for any ship over 125 feet long, as well as a variable surcharge based on the water levels of the Gatun Lake at time of transit. The freshwater charge will be imposed year-round. (Reuters) • The “Brexit” withdrawal agreement was approved by Parliament, and the United Kingdom left the European Union at the end of January. (WSJ) • Protestors of the construction of a natural-gas pipeline in British Columbia, blockaded the Canadian National Railway Co.’s railways, slowed down traffic, and shut down Canadian National’s eastern network. After the blockades ended in early March, the railway had around 8,000 railcars loaded with freight that were parked just waiting to transport the freight.
Q1 2020 • Volume 13 • Page 10
THE AMAZON EFFECT
TH E
amazon
EF F EC T Q1 2020 • Volume 13 • Page 11
THE AMAZON EFFECT
A
mazon.com Inc (Amazon) started off 2020 by allowing sellers to use FedEx Ground again, while also expanding same-day delivery services in a few different cities across the United States. Walmart Inc. (Walmart) and Target Corp. (Target) saw rising sales over the holiday months. By the end of the quarter, Amazon and other retailers began to make changes as it deals with the effects of the coronavirus pandemic.
Top Amazon News • Amazon filed a trademark for “Amazon Pharmacy” in Canada, the United Kingdom, and Australia. Amazon is already able to sell prescription drugs in the United States. (CNBC) • Amazon’s Flex drivers, independently contracted drivers who Amazon outsources some package deliveries to, have begun using bots to “cheat” the system in order to better their chances at gaining more delivery shifts, which are referred to as “blocks”. One driver said, “We all have to fight for a meal and literally have to manually tap several times per second, nonstop, until we see a block.” (CNBC) • Amazon has built small warehouses near multiple cities in order to cut back on delivery times in those areas. In March, Amazon announced it was updating its same-day delivery program for the cities of Dallas, Orlando, Philadelphia, and Phoenix. Amazon will guarantee that packages will arrive by several set times daily. (Reuters) • Amazon is allowing its third-party merchants to use FedEx Ground to ship Amazon Prime orders again. Amazon said it was lifting the previous ban after FedEx and Home services began to consistently meet its delivery requirements. (WSJ)
• Amazon is making some of the cashierless software it uses to run its “Go” stores available through an organization named Dent. Amazon is trying to interest Walmart and Target into buying the technology it uses in its cashier-less stores. (WSJ) • Amazon announced it was planning to hire an additional 100,000 employees in the United States due to the coronavirus. Amazon also said it would be raising pay by $2 an hour through April. (WSJ) • Amazon purchased the Lord & Taylor building in midtown Manhattan for $1.15 billion. The 11 story building will serve as Amazon’s New York City headquarters, which will house several thousand employees over the next few years. (New York Post) • Amazon suspended almost 4,000 selling accounts in the United States for violating its fair pricing policies. These accounts were price gouging products in high demand during the coronavirus pandemic, such as protective masks and hand sanitizer (one even selling a two-pack of Purell hand sanitizer for $50). (Bloomberg & WSJ) • In mid-March, Amazon announced it was prioritizing shipments of medical supplies, household staples, and other high-demand products in order to keep up with demand due to the coronavirus pandemic. Independent sellers on Amazon will not be able to ship products other than those high-demand products to Amazon warehouses until April 5th. (WSJ)
Keeping up with Amazon • Consumers continue to utilize e-commerce over department stores, as J.C. Penney Co., Kohl’s Corp., and L Brands Inc. all reported lower sales during the holiday months of Novem-
ber and December. Walmart and Target reported rising sales as they have invested in online ordering and in-store pickup services for their customers. (WSJ) • Alibaba, the online retailer headquartered in China, undercut Amazon’s sellers’ fees in order to encourage more vendors in Europe to sign up with Amazon competitor’s AliExpress program. (Reuters) • A survey by Wunderman Thompson found that nearly 20% of e-commerce executives plan to increase investments in Amazon-like fulfillment over the next decade. (Sourcing Journal) • Walmart combined its United States online and in-store product buying teams. The company is looking to reduce conflict between the two units, while also increasing profits for its $50 billion e-commerce side of the business. Walmart had already combined the online and in-store supply chains and finance teams in 2019. Suppliers will no longer need to pitch both separate buying teams, and the teams will no longer need to worry about pricing differences, as they will be working together on pricing moving forward. (WSJ) • Walmart is considering testing a membership program named Walmart+. This Walmart+ program would be a rebrand of the existing Delivery Unlimited service, which allows customers to get unlimited, same-day delivery of groceries for only $98 a year. Walmart is considering releasing the Walmart+ program with features that could include allowing customers to use text messages to place orders. (Recode) • Skipcart, a final-mile provider, stopped delivering groceries for Walmart, after stating that the business was unprofitable. (The Loadstar)
Q1 2020 • Volume 13 • Page 12
THE JARRETT DIFFERENCE
Re c r ui t ing Pip eline:
HIRING GREAT PEOPLE
B
usiness is full of risks. There can be financial risk, reputation risk, and security risk. But another one of those risks is bringing on new employees. So, how do you know you’re hiring great people? There are different ways to define and judge whether a person will bring greatness to an organization. Most companies have a set of core values. Looking for these values in a candidate can be an important indicator that they will be a great fit for your organization. Defining greatness can be based on many things, such as core values, but at the center of it all, is integrity.
Defining Greatness Integrity is a great indicator of how a candidate will operate within your company. Mike Jarrett, President and CEO of Jarrett, notes other traits that complement integrity. “I am a big fan of Warren Buffett. I’ve always adhered to what he looks at when hiring people,” says Jarrett. “In one of his quotes he talks about integrity, he says, ‘Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don't have the first, the other two
Q1 2020 • Volume 13 • Page 13
will kill you.’” Essentially, intelligence and energy mean nothing, or can even be dangerous to a company, if the person doesn’t also embody integrity. Great hires aren’t all the same. Each person brings greatness in a different way. Rob Churgovich, Director of Human Resources, talks about people who are wired differently, when put together, make up a great team. “If we were only hiring people with the same perspective as us, we might be able to talk to each other easier, but having different perspectives really makes us better,” Rob said. “If we’re all from the same mind, we’re going to find out the hard way, from our customers, if something wasn’t a good idea.” At Jarrett, we emphasize the Four Pillars of Health - an idea that comes from the military. We have different initiatives and employee resources to encourage balance in each area of health, but the strength of each pillar is considered while a candidate is in the recruiting pipeline too. The military is certainly looking for well-rounded people who can handle different situations why wouldn’t an employer want the same thing?
spiritual, physical, emotional, and social health. Spiritual health has nothing to do with religion, but with purpose. It’s about figuring out what guides a person and the foundation of their moral compass. Physical health can be nutrition or physical movement, but it doesn’t mean you have to run triathlons. It means you do healthy things; it can be as simple as walking your dog. Emotional health is about stress. How does someone deal with stress? The ability to keep emotional health balanced is telling of a person’s ability to face adversity. Lastly, social health is about who someone surrounds themselves with. Healthy relationships with co-workers, friends, family, etc., bring essential fulfillment to one’s life. The key is to balance the four pillars because balance means a person can fully maximize their talents.
Finding Greatness
Great hires may be easy to spot once they are integrated into the company, but they’re not always easy to find. Certain questions can help reveal who a person truly is. A good place to start is asking the person to describe themselves with specific characteristics. How a person describes themselves can be key to getting a peek into The Four Pillars of Health are made up of what they value. However, this question
THE JARRETT DIFFERENCE
Essentially, intelligence and energy mean "Essentially, nothing, or can evenintelligence be dangerous to a company, if themean personnothing, doesn’t also and energy embody integrity. or can even be dangerous
to a company, if the person doesn’t also embody "
integrity.
doesn’t totally zero in on who a person really is. After all, it is an interview, so candidates are motivated to paint the best picture of themselves. “I’ve never had anyone in hundreds of interviews say they are a bad person,” Jarrett says. “The first part of the question is easy. Now the second part of the question is where it gets a little difficult.”
of a great company culture. This is why it's not as important to hire people based on their experience, education level, or industry knowledge, but on their foundational skills. People who embody a company’s core values will uphold them through their everyday work. “With culture, you’re either giving or you're taking,” Churgovich says. “If someone isn’t coming here with the core values, they aren’t giving to the culture, but The second part of the question being taking from it.” this: why? Someone can claim that they’re hard-working, but their answer to why they Having people that realize they are a part are hard-working shows which life experi- of something bigger than themselves ences have molded them, beyond the traits impacts the culture in unimaginable and that they were born with. It’s a different way excellent ways. to ask questions and turn the interview into a conversation. In most cases, it gets the It doesn’t stop with internal culture, though. person to open up. Customers reap the benefits of great people, too. Jessica Crawford, Recruiting Specialist at Jarrett, says she sees this Spreading Greatness throughout the interview process all the So, why spend so much time searching way until hired candidates are in front of for great people? The simple answer is clients. “When we interview candidates, we because it pays off in the end. Compro- look for people who really want to help peomise otherwise affects a company’s bot- ple at their core,” Crawford says. “You hear tom line. Great people are the foundation it when walking through the JLS Routing
Center, you hear people on the phone and they genuinely want to make the situation better, fix a problem, provide the best customer experience, or put a smile on someone’s face that day.” Customers will see a company's culture through their interactions with the employees at that company. Not only if they are getting the job done for them, but if they sound fulfilled and happy while doing it. Keeping culture consistent is difficult: “The further away I get from our potential hires, it’s really hard to stay close to what’s going on,” Jarrett says. “So, that's why it's so important that you establish this process where the vision of the CEO permeates throughout the organization.” Great people, who train and hire more great people, who eventually train and hire the next round of great people, create a magnificent snowball effect. Now, like the sturdy base of a snowman, the company has a strong foundation to build on.
Q1 2020 • Volume 13 • Page 14
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