It “links farmers to almost any market in the world,” envisions a “global food economy where every crop will grow where it grows best” and where agricultural efficiency can make “food more affordable to feed a hungry world”. If you watch “The NewsHour With Jim Lehrer” on PBS or read The Economist, you probably know that I'm talking about ADM. Its ads carry slogans like “The Nature of What's to Come” and “Supermarket to the World.”
What you may not know is that ADM has developed the largest agricultural transportation system in the world. The intermodal fleet has 2,300 tractor-trailers, 2,180 barges, 17,000 rail cars, and 85 towboats. And that's just the private portion. In total, ADM shipments occupy 5-million trucks, 500,000 railcars, and 12,000 barges each year.
I'd like to focus on the private fleet — ADM Trucking, Inc., a full-service operation that primarily hauls ADM bulk value-added products like sweeteners, vegetable oils, flours and fuel alcohol. Bill Patterson, president of ADM Trucking, says: “We operate as a profit center and generate revenue through competitively established freight rates and account for 100% of the cost to operate.”
ADM Trucking, which handles about 50% of the company's total volume of finished products, works hard to earn its keep. Patterson's staff is responsible for securing rate and service quotes from other carriers and contracting the remaining volumes out. “This part of the operation is key to maintaining competitive rates,” says Patterson. “ADM Trucking must have rates that are competitive with the competing carriers or the freight gets contracted out.”
Since it is forced to operate under competitive freight rates, the truck group must keep a close watch on costs. “There are no budgets at ADM,” he says. “A tremendous amount of cost detail is provided for every part of the operation. These are tracked against costs from previous years, [allowing] us to see the adjustments we must make due to constant changes in traffic lanes related to gains or losses in sales.”
ADM Trucking believes it must be better than the other carriers delivering ADM products — and not just in terms of rates. “We really stress service with drivers, mechanics, wash bay personnel and dispatchers,” says Patterson. “When an ADM truck pulls into a customer with ADM written all over the equipment and on the driver's uniform, ADM and ADM Trucking are synonymous in the eyes of the customer.”
New employees go through a week of orientation and training that covers OSHA regs, defensive driving, DOT compliance, food safety, product handling and company policies. The payoff: driver turnover is less than 20% a year, which “equates to efficiencies in lower cost and consistently higher service levels,” Patterson says.
Safety at ADM is the probably the most important element of the company's success, Patterson points out. ADM Trucking uses computers and electronic logs on 100% of its road tractors. “Every dollar we invest in this technology pays back significant safety dividends.”
But there's more. “Long-term results have also produced cost savings and improved customer service. With the few accidents we've had, data from the onboard recorders has defended us well, avoiding potentially high court settlements. When the accuracy and timeliness of drivers' HOS improved, the quality of dispatches also improved, resulting in fewer service failures.”
All in all, the ADM Trucking group is fulfilling its role in helping ADM be “the nature of what's to come” by getting product to market safety, efficiently and profitably.
Gary Petty is President and CEO of NPTC. His column appears monthly in FLEET OWNER.