2. 1
Executive Summary
Schneider National is a Green Bay, Wisconsin-based trucking company whose "pursuit of safety,
excellence, and innovation will not be outdone” (Schneider National, n.d.). Due to Schneider
being a private firm and not publicly traded, much of its information is inherently private;
therefore, the information given within this report will be about the trucking industry as a whole
or by using specific major competitors as a means of “getting a feel” of where Schneider stands.
Companies with whom Schneider competes includes J.B. Hunt Transport Services, Werner
Enterprises, Inc., and Swift Transportation Company. Schneider National has a competitive
advantage because of their reputation in the industry and competitive pricing of services.
3. 2
Organization Background
Schneider National all started when Al Schneider traded in his first car for a truck back
in 1935. Its headquarters are located in Green Bay, Wisconsin where the Schneider family lived
(Schneider National, n.d.). The company started to make moves to become a larger company in
1964 when they merged with Packer City Transport and later overtook Garrison Transport and
Kampo Transit (Schneider National, n.d.). Don Schneider, Al’s oldest son, eventually became
president of the company; only to change hands one more time to current CEO, Christopher
Lofgren. Schneider National hit 1 billion in revenue in 1992 and doubled that less than five years
later; with rapid growth (Schneider National, n.d.). They are one of the largest transporters in the
United States, “hauling 16,275 loads per day, with 11,300 company drivers, 9,600 company
trucks and 31,000 trailers on the road” (Schneider National, n.d.). Schneider Trucking currently
employes 17,450 people throughout their organization. They are a private company whose focus
is on transportation, but does not stop there. They offer a wide range of services that include
“Van Truckload, Dedicated Regional, Bulk, Intermodal, Brokerage, Supply Chain Management,
and Port Logistics services.” Not only a domestic firm, they have 168 facilities worldwide
including Canada, Mexico and China.
4. 3
Company/Industry Profile
Industry and competition:
To understand Schneider, or any company, the industry that Schneider operates within
must first be analyzed, with special consideration of other major players within that industry.
Schneider considers itself to be in the “Truckload, logistics, and intermodal services” industry
(Schneider National, n.d.), often more simply seen as the trucking or long-distance trucking
industry. Schneider’s logistics services can be grouped with trucking, and the intermodal services
involve outsourcing to “the nation’s four major Class I railroads” (Schneider National, n.d.), the
top four in the country being Union Pacific, Burlington Northern and Santa Fe (BNSF), CSX
Transportation, and Norfolk Southern (Wright, 2011). This paper’s focus, therefore, is on
Trucking as the major industry in which Schneider National operates.
Long-distance transportation used to be done almost exclusively by trains over railroad
tracks. Trucking as an industry first started to take off in the United States due to World War I:
the extreme congestion of railroads led to trucking as a necessary alternative (Highway History,
2015). Later, over a few decades of debates and bills, the current US interstate highway system
would eventually be realized, which combined with other trucking technologies would lead to
trucking becoming a major transportation industry (Highway History, 2015). Figure 1 shows the
increasing market share of trucking within the freight transport industry from 1996 to 2005,
calculated as percent of ton-miles transported, at the expense of water and pipeline
transportation. That figure, however, shows tonnage moved globally; focusing on the US alone,
trucking accounts for “nearly 70%” of freight transport (Reports, Trends, & Statistics, n.d.).
Figure 2 shows the enormous growth of the industry between 2009 and 2014, with revenue
increasing from about US$124B to US$180B, or by nearly 50%.
5. 4
Major players in the US Trucking industry, outside of Schneider, include J.B Hunt,
Werner Enterprises, and Swift Transportation. Revenues from these for 2014 were US$3.9B
(Murphy, 2015), US$6.2B (J.B. Hunt, n.d.), US$2.14B (Werner Enterprises, n.d.), and US$4.3B
(Revenue and Financial Reports, n.d.), respectively. The relative market share for each (2.17%,
3.44%, 1.19%, and 2.39% respectively) shows how competitive this market is: four of the largest
trucking companies in the US make up fairly insignificant amounts of the market share. The
numbers are not wholly accurate due to the fact that all four firms operate in at least one
additional country outside of the US (mostly Canada and Mexico, but including others), and so
the revenue figures include revenue that is not included in the 2014 figure of US$180B revenue
earned in the US trucking industry. However, the firms are all US-based and operate mainly in
the US, so the numbers are still an accurate representation of the spread of the trucking industry,
with none of the major players controlling more than a few percent of the market individually.
Economic Statistics
There are many factors of the trucking industry (and, as such, Schneider National) in
terms of economic measurements. The major measurements considered are economies of scale,
scope, and density.
Economies of scale are defined as “the cost advantage that arises with increased output”
(Investopedia, n.d.), whether the cost advantages are due to the individual company or the
industry as a whole. A major reason that economies of scale exist are due to fixed costs and their
distribution amongst products or services: as a company produces more, the fixed costs are
spread more thinly amongst the goods, leading to each with a reduced cost. Economies of scale
are thus based off of, in this example, fixed costs and production. Trucking requires an enormous
capital investment of trucks: using publicly-traded competitors as examples, J.B. Hunt has fixed
6. 5
assets for year ended December 31, 2015 of about US$2.7B, with total assets being over
US$3.6B, making fixed assets nearly 75% of total assets (Nasdaq, n.d.); though lower, Swift still
had fixed assets at about 56% of total assets (Nasdaq, n.d.); and Werner had fixed assets at about
71% (Nasdaq, n.d.), showing how much trucking companies keep in fixed assets. However, with
how trucking works, fixed assets must grow roughly similarly to revenue, as more trucks are
needed to make more trips to generate revenue. The exception to this is distribution centers,
which eventually hit a cap of cost/benefit efficiency, after which fixed assets due to distribution
centers would not increase, but revenue generated would. Therefore, economies of scale do exist
somewhat in the trucking industry, but have all very likely been taken advantage of already for
any major players.
Economies of scope are defined as “the average total cost of production [decreasing] as a
result of increasing the number of different goods produced;” (Investopedia, n.d.) whereas
economies of scale reduce costs by producing more of a single product or service, economies of
scope reduce costs by offering more variety of products or services, and allocating fixed costs
amongst those departments. The trucking industry is somewhat simple in terms of what the
service provided is: the company takes your freight and moves it elsewhere for the customer.
Economies of scope here would involve innovating and integrating into new market segments.
Schneider could, for example, rent out its trucks during slow seasons to generate revenue with
existing capital, spreading the fixed costs of the trucks that it already owns to a new branch of
services. Another possibility is to take excess shipping containers that Schneider is left in
possession of and create a division of the company dedicated to either the selling of containers or
the repurposing of containers into housing for sale or rental purposes. So far the only economies
7. 6
of scope that Schneider is really taking advantage of, however, is using logistical knowledge that
its employees have and using that to offer additional logistics services.
Economies of density are defined as “economies wherein unit costs are lower in relation
to population density,” (Meaning of Economies, n.d.) such as electricity being provided to a city
as opposed to a farm miles from the nearest town. Economies of density can certainly exist for
the trucking industry, and distribution centers are strategically positioned accordingly (Schneider
Warehouse Locations, n.d.). Schneider’s map of warehouse locations shows most warehouses
along the coasts of the country, where population is highest and where there can be easy access
to ship freight; only three of the ten warehouses are located outside of the coastal states, two of
which are along Lake Michigan for similar purposes as oceanic coastal locations, with the last
one being in Colorado to service the Midwest region. Economies of density exist for the trucking
industry, and are already being taken advantage of.
Current Industry Issues
There are many potential and realized problems affecting the trucking industry. The
American Transportation Research Institute (ATRI) releases an annual report of the current most
critical issues facing the trucking industry, determined by surveying “major trucking industry
trade press and dissemination through the 50 State Trucking Associations to their respective
memberships” (Critical Issues, 2015), with the specific issues chosen and their respective
designated importance shown in Figure 3. The issues within the ATRI report are very specific,
and this report will instead group some of the ATRI issues and other chosen issues together:
driver (employee) satisfaction, the Going Green movement, and security.
Driver satisfaction itself includes many of the top 10 listed in Figure 3. Hours of service
can influence satisfaction in either direction, be it a driver wanting to be allowed to take more
8. 7
time at home with his or her family, or a driver wishing he or she could work more hours. Driver
shortage could be assumed to be due to driver satisfaction, but research showed that “45 percent
of driver hires are done to replace retirees” (Critical Issues, 2015) and not to replace prior
disgruntled workers, showing that the shortage is due to people wanting to avoid entering the
trucking workforce. Health and wellness would also be a major factor contributing to
satisfaction, as fewer people would want to enter the workforce of stereotyped overweight truck
drivers. These three factors are all fairly intermingled: adjusting hours of service to fit driver
demands and increasing availability of health and wellness amenities at truck stops could bring
in more driver hires to fill the shortage gap; additionally, addressing the driver shortage problem
could give the truck driving community a stronger voice to fight for improved hours and health
and wellness benefits.
Environmentalism has become the new vogue for the current populace. In 2013,
professional truck drivers exceeded 275 billion miles driven (Professional Truck Drivers, n.d.),
with the average miles per gallon for class 8 trailer trucks being between 4 and 7.5 (Ward, 2014).
New advances have some top-of-the-line trucks running at up to 10.7 miles per gallon (Peterbilt
Media, 2014), but that is still far from the norm. Even taking the upper end of the average, that
would be nearly 37 billion gallons of fuel consumed, which equals between 720 and 820 billion
pounds of CO2 emissions based on estimated emission rates (U.S. Energy Information, 2015)
which, based on 2013 CO2 emission amounts (Koch, 2015), is roughly 6% of total US CO2
emissions. 6% may seem paltry overall, but having that much of the greenhouse gas due to one
industry is enormous, and comes with big consequences from environmentalists; however, this
also means it has great potential for improvement. Though recent studies have begun to show
that electric vehicles may be worse for the environment than gasoline or diesel vehicles (Russell,
9. 8
2015), there is still much potential for improvement within the industry by putting research
toward greener ventures, even for Schneider which has been attempting to be environmentally
friendly since at least the 1970s (Schneider National, n.d.).
The last major issue addressed is security. Internal security brings back the ATRI top issues of
CSA and driver retention, both driver-oriented issues, whereas external security mostly exists
with IT security threats. CSA (compliance, safety, and accountability) would be important for
internal security for several reasons: drivers complying with current security measures can
reduce security risks, and drivers being held accountable for their mistakes will help keep them
complying. Increased driver retention rates reduce security risks due to there being a lower
chance of a long-term employees deviating from regulations, whereas newer employees may not
feel like there is as much to lose. For external security, IT is where to focus: viruses, worms,
trojans, and DOS/DDOS attacks to disrupt computer systems; illegal spyware by competition to
try and steal company secrets; and possible risks of social engineering to obtain confidential
employee information. While the internal security threats are, obviously, focused on the drivers
and other employees, the external IT security threats come from competitors, criminal attackers,
or possibly even hacktivists; certain measures must be taken to work against both internal and
external risks, such as defense-in-depth planning, authentication processes, and separation of
duties.
10. 9
Critiques and Recommendations
To expand upon the above mentioned issues the American Trucking Association (ATA)
released its annual driver shortage report for 2015. The findings of the ATA show the trucking
industry is currently experiencing a driver shortage of nearly 48,000 drivers, and the projections
show the shortage reaching 175,000 for the year of 2024 (Costello & Suarez, 2015). Figure 4
shows the driver shortage projections. According to a Huffington Post article, the trucking
industry is seen as the “backbone of American commerce” (Ferro, 2015), and accounts for nearly
70 percent of all freight tonnage moved throughout the country annually (Reports, Trends, &
Statistics, n.d.). With 70 percent of all tonnage moved throughout the country dependent on
truck drivers, these projected numbers create cause for worry in the trucking industry.
Additionally, the harsh regulations placed on drivers, companies, and the truck themselves add
an additional challenge for companies like Schneider National. For example, one new Federal
Department of Transportation regulations places strict rules on the hours of operation a driver
carry freight must follow. The regulations limits the driver to a maximum drive time of eleven
hours, and this is only after the driver has had 10 consecutive hours off duty (Summary of Hours
of Service Regulations, 2014).
Now taking the driver shortage, regulations and the previously mentioned issues into
consideration, the trucking industry faces a difficult road ahead. This leads one to question how
to improve a company’s brand and create a sustainable business strategy? Understanding the
issues faced by the trucking industry as a whole will shed light on the steps Schneider National
has taken to improve its company and why they continue to work towards a sustainable green
business strategy.
11. 10
Schneider National has taken the initiative to differentiate itself and create a sustainable
advantage by holding itself higher than some industry standards. For different aspects of
trucking, Schneider National has made a conscious effort to invest in greener
strategies/technologies since the late 1970s. A few specific examples of Schneider’s efforts can
be found in Figure 5 and include being the first major truckload carrier to specify company
trucks with no-idle heaters (A Shared Commitment to Going Green, 2016). In addition,
Schneider offered its drivers “incentives to cut idling and save fuel with proper shifting” (Patton,
2010). Also, in 2010 Schneider National updated “covers for tractor drive wheels to reduce
turbulence”, and according to the TruckingInfo article, this modified technology will “save 1.8
million gallons of fuel a year” (Patton, 2010). Along with Schneider’s greener choices, the
company also is seen as the industry leader with its use of Electronic Data Interchange (EDI).
While in some cases the use of EDI is seen as an older technology, Schneider National employs
this technology to handle the nearly 3,000 invoices and over one million transactions per month
(About Us: Online Tools, 2015). The use of an EDI can account for greater speed in business
cycles, improved accuracy, and cost saving compared to traditional paper methods (Benefits of
EDI, 2015).
The following section of this report will offer recommendations to improve Schneider
National business strategy. Previously mentioned, Schneider National can implement customer
surveys in order to review feedback in the attempt to see which aspects appeal to customers and
where Schneider National should continue their efforts. This allows Schneider National to invest
in the strategies its customers find most beneficial. To continue looking for ways to improve
efficiency, Schneider National could implement a grading strategy for its customers. This system
could be similar to the example used by John Deere to rate their suppliers, and provided by the
12. 11
Complex Parts case. The use of a grading system for customers could be used as a weighted
scale to decide how Schneider National could improve their more valuable customers’
experiences. Another option for a customer rating/grading system would be a web based
application similar to Uber. Like the Uber platform, both a driver and customer have the ability
to rate the service. Schneider National could allow its customers to rate the quality of the
shipment such as damaged goods, on-time delivery, and allow drivers to rate the convenience of
delivery. This would show the top drivers and best customers in order to improve the
customer/driver experience. A continuation of the web base application grading system
Schneider National could chose to employ a web tracking application. While the software and
technology for a tracking application is nothing new, Schneider National could provide real time
tracking of trucks for its customers without the use of a dispatch. The system would include
mobile notifications which will enhance the delivery window time for both customers and
drivers. Also, considering Schneider National is the trucking industry leader a Wal-Mart
negotiation approach could also be favorable to the company. A key concern of this negotiation
style with Schneider National’s customers is upholding the brand image. Schneider is seen as a
company leader among industry standards, corporate social responsibly, and the treatment of
their employees no negotiation is worth tarnishing its reputation over.
References
13. 12
A Shared Commitment to Going Green. (2016, February). Retrieved April 2,2016 from
Schneider National: https://www.schneider.com/www1/groups/webassets/@marketing-
public/documents/webcontent/sustainability-pdf.pdf
Benefits of EDI. (2015). Retrieved April 2, 2016, from EDI Basics:
http://www.edibasics.com/benefits-of-edi/
Costello, B., & Suarez, R. (2015). Truck Driver Shortage Analysis 2015. Retrieved April
2, 2016 from American Trucking Associations:
http://www.trucking.org/ATA%20Docs/News%20and%20Information/Reports%20Trend
s%20and%20Statistics/10%206%2015%20ATAs%20Driver%20Shortage%20Report%2
02015.pdf
Critical Issues in the Trucking Industry. (2015, October). Retrieved March 31, 2016, from
http://atri-online.org/wp-content/uploads/2015/10/ATRI-2015-Top-Industry-Issues-
FINAL-10-2015.pdf
Ferro, S. (2015, November 15). The Trucking Industry Is Struggling, But Maybe Not For Long.
Retrieved from Huffpost Business: http://www.huffingtonpost.com/entry/american-truck-
driver-shortage_us_56390434e4b00a4d2e0c1fd8
Highway History. (2015, November 18). Retrieved March 30, 2016, from
http://www.fhwa.dot.gov/interstate/freight.cfm
Investopedia - Educating the world about finance. (n.d.). Retrieved March 30, 2016, from
http://www.investopedia.com/
J.B. Hunt Transport Services, Inc. Reports Revenues, Net Earnings and Earnings Per Share for
Both the Fourth Quarter and Year Ended December 31, 2014. (2015, January 22).
Retrieved March 30, 2016, from
14. 13
http://www.businesswire.com/news/home/20150122005091/en/J.B.-Hunt-Transport-
Services-Reports-Revenues-Net
Koch, W. (2015, April 21). This Chart Shows How U.S. Carbon Emissions Are Rising-Again.
Retrieved March 31, 2016, from
http://news.nationalgeographic.com/energy/2015/04/150421-US-carbon-emissions-rise/
Meaning of Economies of Density. (n.d.). Retrieved March 31, 2016, from
http://www.encyclo.co.uk/meaning-of-Economies%20of%20Density
Murphy, A. (2015, October 28). America's Largest Private Companies. Retrieved March 30,
2016, from http://www.forbes.com/companies/schneider-national/
NASDAQ's Homepage for Retail Investors. (n.d.). Retrieved March 31, 2016, from
http://www.nasdaq.com/
Patton, O. B. (2010, November). Going Green: For Schneider National, Fuel Efficiency's Old
Hat. Retrieved April 2, 2016, from Truckinginfo:
http://www.truckinginfo.com/article/story/2010/11/going-green-for-schneider-national-
fuel-efficiencys-old-hat.aspx
Professional Truck Drivers and the Trucking Industry. (n.d.). Retrieved March 31, 2016, from
http://www.trucking.org/ata docs/what we do/image and outreach programs/misc
documents/pro Truck Drivers_final.pdf
Reports, Trends & Statistics. (n.d.). Retrieved March 30, 2016, from
http://www.trucking.org/News_and_Information_Reports.aspx
Revenue and Financial Reports for Swift Transportation Company. (n.d.). Retrieved March 30,
2016, from http://www.hoovers.com/company-information/cs/revenue-
financial.Swift_Transportation_Company.f7e456d7f891d7b4.html
15. 14
Russell, J. (2015, June 23). New study: Electric cars may be worse for the environment than gas-
powered. Retrieved March 31, 2016, from http://www.washingtonexaminer.com/new-
study-electric-cars-may-be-worse-for-the-environment-than-gas-powered/article/2566847
Schneider National. (n.d.). Retrieved March 30, 2016, from http://schneider.com/
Schneider Warehouse Locations. (n.d.). Retrieved March 31, 2016, from
https://schneiderjobs.com/warehouse-careers/locations
Summary of Hours of Service Regulations. (2014, December 18). Retrieved April 2,2016, from
Federal Motor Carrier Safety Administration:
https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regulations
U.S. Energy Information Administration - EIA - Independent Statistics and Analysis. (2015).
Retrieved March 31, 2016, from http://www.eia.gov/tools/faqs/faq.cfm?id=307
Ward, Jacob. (2014) Vehicle Technologies Market Report. Oak Ridge National Laboratory,
2015. Web. 31 Mar. 2016.
Wright, R. (2011, August 22). The biggest North American railroads - FT.com. Retrieved March
30, 2016, from http://www.ft.com/intl/cms/s/0/ba1227d4-ccd8-11e0-88fe-
00144feabdc0.html#axzz44Rqq6NKx
Werner Enterprises income-statement 2015. (n.d.). Retrieved March 30, 2016, from
http://amigobulls.com/stocks/WERN/income-statement/annual
16. 15
Appendices
Figure 1
U.S. Domestic Freight Market Share
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/special_reports_and_issue_bri
efs/special_report/2007_07_27/html/figure_03.html
SOURCE: U.S. Department of Transportation, Research and Innovative Technology
Administration, Bureau of Transportation Statistics, Transborder Freight Data, as of March 2007.
See box at the end of this report for details.
Figure 2
19. 18
Notes
http://atri-online.org/wp-content/uploads/2015/10/ATRI-2015-Top-Industry-Issues-FINAL-10-
2015.pdf
Option 2: Logistics Company Profile
Schneider National: largest privately-owned trucking company in the US; has been committing
to a sustainability strategy since “before it was en vogue to be green;” actively improving how
they can be environmentally friendly; it provides freight for over ⅔ of the currently-listed
Fortune 500 companies
Paper Format:
● Cover Page
● Executive Summary: Provide a one-page executive summary of the report.
● Organization (or product) Background (1-page)
● Supply Chain or Profile or Plan (4-6 pages)
● Critique and Recommendations (3-5 pages)
● References (APA or MLA format, see http://writingcenter.gmu.edu/writing-
resources/wc-quick-guides)
For option 1, you need a minimum of 3 sources outside the company itself, for option 2,
you need a minimum of 10 sources beyond the company’s material/website) and for
options 3 and 4, you need a minimum of 5 sources)
● Appendices (figures, tables, diagrams etc). Be sure to refer to these in your paper.
Organization Background (1 page)
● Corporate Location, CEO, number of employees, web site.
○ Green Bay, Wisconsin, US; Christopher Lofgren; 17,450; schneider.com
○ Probably only a paragraph or so
● Brief history of the company, is the company public or private, what are the
primary services provided by the firm, how long have they been in existence, how
they evolved to their current situation, e.g., mergers, acquisitions, expansion, etc.
○ Private Company
○ Transportation
○ Founded 1935
○ Merged early in existence with Park City Transport (1964) and Garrison
Transport (1968)
○ http://schneider.com/About_Schneider/History/index.htm
Could be included with previous point for an overall history and current status of the company.
Jointly may be a full page
20. 19
○
Company Profile (4-6 pages)
● Provide the most recent operating statistics, i.e., traffic volume, commodities handled,
etc.
○ 19,318 truckloads per day
○ $4 billion annual revenue
● Identify the primary markets served, include geographic as well as product and
service. What kinds of transportation do they provide? Do they also offer
warehousing, consolidation, end customer distribution, or assembly?
○ US, Mexico, Canada, China
○ No product; services are “Truckload, intermodal, and logistics”
● Who are their primary competitors? Intermodal? Intramodal?
○ Intermodal (more than one mode of transport: trucking, rail)
○ J.B. Hunt (US, Mexico, Canada), Werner Enterprises (globally), Swift
Transportation (US, Mexico, Canada); all intermodal
○ Could do either one paragraph quickly detailing each, or a short paragraph for
each competitor
● Who are their primary customers (if you can find it)?
○ Serves two-thirds of the major Fortune 500 companies, which include Wal-Mart,
General Motors, Proctor & Gamble, Sears, Roebuck, and Staples
● Does the company have any inherent advantages? If so, identify them. (Hint: Inherent
advantages may be attributable to the nature of the mode of transportation or some
comparative advantage of a firm within that mode.)
○ There are no geographic advantages as they operate the same zones
○ Schneider existed first amongst the listed major competitors, so could have been
laying track and claiming rail territory for ~30 years before the others; however,
much of this company is trucking over rail
● IT systems used if you can find. For example do they use online customs paperwork
systems?
● Security issues and measures in place
○ The only thing I have found so far is mention of their processes for border
crossing (clearance en route to border crossing so as to limit interrupted service)
● What are the major current issues facing the company? These may be related to issues
facing all firms in this business, or issues that only this company needs to address.
○ “Requirement” of going green in today’s society
○ Cost management (driver wage per mile plus other costs vs. revenue per mile)
● To what extent are the firm’s cost fixed? Variable? Explain and discuss.
○ Most fixed costs were in the purchasing of capital (trucks, trains, building
railways, etc.); variable depends on upkeep of vehicles/trains, gas/coal/power for
21. 20
vehicles/trains; salaries/wages will be variable or fixed depending on the position
the person holds
● Is the firm subject to economies of scale, scope, density, or network economies?
Explain why or why not.
○ Economies of scale: it is an enormous capital investment to have a fleet of
17,000-some trucks
○ Economies of scope: it is plausible to assume that having trucking and rail may
make both cheaper, or at least trucking cheaper; in 2012 “Launched Bulk
Intermodal Trailer service, becoming the first in the industry to offer a bulk
tanker-trailer that can be used interchangeably over the road and on the rail”
○ Economies of density: due to the nature of the business, sending freight all across
the US, Mexico, and Canada, it is plausible that Schneider organizes collecting
any supplies necessary for the business; not necessarily the definition of
economies of density, however
○ Network economy: if new technologies emerge, and Schneider can make use of
them, then they are subject to a network economy
● Discuss the firm’s future prospects? What are their strengths? Weaknesses? Is the
firm financially and competitively viable? What are their opportunities for growth?
What threats exist within and outside the firm? (SWOT analysis)
○ A detailed SWOT could probably take a full page
● What actions does the company need to take to continue to prosper or to become more
prosperous?
○ Competition would be a major issue for a company like this; all the competitors in
the industry are nearly identical in the services they provide
○ Growing demand on going green: having thousands of trucks and trains can label
you as a major creator of pollution; in the current world, people may shun you
over a competitor if the competitor is green and you are not
22. 21
Critique and recommendation (3-5 pages)
● Going green
○ https://www.schneider.com/www1/groups/webassets/@marketing-
public/documents/webcontent/sustainability-pdf.pdf
○ Schneider has had green efforts to some degree since the 80’s
○ Make one more step and look into electric trucks over gas, diesel, and hybrids
○ Can vastly improve energy costs (gas is ~3X the cost per gallon as electric)
■ http://www.dailyfinance.com/2013/06/24/gas-vs-electric-cars-cost-
comparison/
● Horizontal integration/improved economies of scope
○ Trucks and trains will probably, typically, travel truckload from a central
warehousing location to its destination, and empty or near-empty on the return
trip
○ Improve efficiency by finding ways to incorporate delivery on return trips
■ Partner with personal moving companies
● People already tend to wait a decent while for a moving company
to move all of their stuff
● Partner with these companies by organizing their clients’ moves
with our return and LTL trips
■ Increase number of suppliers
● The more suppliers we have (for whatever parts), the more
broadly-located said suppliers can be, and thus the more likely we
are able to pick up suppliers in conjunction with our return trips,
wherever returning from
● Use a John Deere-esque type of grading strategy for suppliers (Complex Parts case)
○ In favor of efficiency, the best suppliers must be used
○ “Suppliers” can include auto dealers, repair/parts shops, major gas suppliers and
charging stations, etc.
● Diversification
○ It’s difficult to differentiate between freight companies
○ Take steps to make yourself look different from the rest
■ Going green
■ High customer service and employee relations
■ High safety standards
■ Bulk Intermodal Trailer Service
● Trucking industry as a whole experiences:
○ Slow technology advancements
○ Driver Shortage- also technician shortage
○ Regulations
23. 22
● Use FOB destination/origin as a means of insurance/revenue
○ Allow customers to choose to choose FOB destination or origin
○ Charge a premium for FOB destination, as any risk involved is then solely on
Schneider until delivery is finished, whereas with FOB origin the risk is the
customer’s as soon as delivery begins
