(Photo, from left, Rick Todd, Carlo White, Amy Sartain, Giuliano Marodin. Photo by Amy Randall Photography)

Moving goods from place to place is a crucial part of economic success, and South Carolina has a robust transportation and logistics system, including trucking companies, railroads, and both inland and coastal ports.

Integrated Media Publishing hosted a roundtable discussion with four leaders in the world of logistics and transportation on Aug. 19, 2024. 

Here are excerpts from that conversation, edited for brevity and clarity.

The participants were:

Rick Todd, president and CEO of the South Carolina Trucking Association

Amy Sartain, director of SC Logistics for the South Carolina Council on Competitiveness

Giuliano Marodin, Continental Chair Professor in Operations and Supply Chain, University of South Carolina

Carlo White, president and CEO of White Holdings Logistics Group

Integrated Media Publishing Editor David Dykes moderated the discussion.

Question: Statistics show that the transportation industry is so important to South Carolina's economy, and it's never been more evident. South Carolina has one of the nation's fastest-growing container ports, two innovative inland ports, 2,300 miles of rail lines, and more than 41,000 miles of state-maintained highways. And because of these assets, the Palmetto State has become internationally known, not only for making things and making them well, but also for our skill in getting those things where they need to go. From 2017 to 2023, transportation, distribution, and logistics-related firms announced capital investments of $2.1 billion in South Carolina. To accommodate this growth, South Carolina has been taking steps to ensure that our TDL capabilities exceed expectations. Evidence of our commitment is the project to deepen the Charleston Harbor to 52 feet, making it the deepest shipping channel in the Southeast. Let me ask each of you, what do you think is the biggest issue facing the industry right now?

Carlo White: I'm going to talk from the standpoint of the actual asset base or actually moving freight from point A to point B. One of the biggest challenges I see is the nature of the industry. The nature of the industry is built off of a very pure supply-and-demand model, whereas supply is plentiful, pricing goes down. As supply is constricted, pricing goes up. And so, what that leads to is when there's more trucks than freight, prices go to the bottom, when there's more freight than trucks, prices rise to the top. And what it does is it creates this imbalance to where you notice how many trucking companies are going out of business. It's because the model is too pure. What we try to do at White Holdings Logistics Group is work with our clients to actually come up with a model and partner on pricing and on service so that it can stay stable, even as the demand changes, even as the supply changes, so … there’s more forecasting and predicting. There's too many companies coming in the business and then going out of business. And that is a threat, in my opinion, to value. It's a threat to performance and ability to forecast for all parties involved. That's the shipper, that's the transportation company. So, in my eyes, it's a threat to the industry.

 

Giuliano Marodin: I think it's important to understand that we're a state that is growing. So, if you look at the other states, we're one of the fast-growing states in terms of population. So, more population will bring everything, right? More consumption, more industry. And then you need more logistics and distribution to get the products to the companies and to the customers. And also, what attracts companies to South Carolina. The port is a great attribute that attract companies here. We're not in the middle or in a good distribution position in the United States. We do a lot of network optimization and

find out what is the best place to put warehouses for companies. And then usually it's more like Indiana or even Tennessee or more West. Our great strength is the port and the rails and how can we connect them to export and import. Because of that, I think we should focus. I think the port expansions, it's very important to make our strengths even better for the companies that are coming. And also, our labor. We have labor that is a lot more competitive than states in the North. So, making sure that companies have labor-trained and skilled workers to work in their distribution warehouses and plants, and make sure that they can move products around very quickly through and from the ports. I think there’s some great issues there that we can overcome.

 Q. Amy, what do you think is the biggest issue facing the industry? 

Amy Sartain: I'm going to speak broadly for South Carolina as a whole and our growth across the economy because logistics is intertwined into every industry that we have that physically makes products or moves goods. Something that South Carolina Department of Commerce and many other stakeholders identified as a critical issue is energy and availability of power. For companies that are moving to South Carolina and planting their flag in the ground and building facilities, or anyone in South Carolina that wants to expand their operations, they need access to power and energy. That's been a limiting factor for the growth, or at least how long it takes to get that to your site and available. Because of that, South Carolina Department of Commerce and others have worked to get federal funding for energy-creation projects, energy-resilient projects through a consortium called SC Nexus. Department of Commerce is actually standing up a separate team to work on that separately and have it be a major focus area for the state. I see that as an overarching concern that affects everybody and certainly could limit manufacturing and then logistics that comes along with that. 

Rick Todd: That's a big question. Let me start out from a bird's-eye view. Trucking is just one of the modes. This state's blessed with a deep-water port, so we're an international hub for freight that brings distribution centers, warehouses. You got two Class I railroads that serve the state. You've got the state operating public railways, and you've got short lines. Then you've got trucking, and we all work together. From the view of trucking, nationwide, we've got a trillion-dollar market. Trucks move or account for about 80 percent of that revenue. We're just a truck-centric economy because that's the last mile, first mile for the other modes. We employ about 8 million American workers, 42 percent of which are minority. We spend about 1.4 billion on safety, compliance, and innovation. We're really not one industry. We're an eclectic mix of industries. In South Carolina alone, we've got about 10,000 individual motor carriers. Most of them are one-truck owners. So that means they're either an owner-operator or just a really small business. And then you've probably got 90 percent of those fleets have fewer than 10 trucks. So, we're really an industry of niche small fleets. We’ve got a new slogan, “Nothing without trucking.” That's pretty well true. 

Then on challenges, the windshield I view the world from is not as an operator, it's more in the public policy arena, legislative and government affairs. From the feedback that I get from our members and what I read … is just uncontrollable costs. You take the business cycle out of that. You still got fuel that fluctuates. You've got the driver or workforce market. You've got mandates from the government. So independent contractor model is being challenged by the administration in a couple of states. That has a downstream impact on whether you're asset- or non-asset-based. We've got traffic with congestion, growth, so we need more capacity, bridges that need to be replaced. That involves a lot of waiting time. … There's a lot of waste in the supply chain, waiting to load, unload, traffic. Risk management is getting more and more unpredictable with nuclear verdicts. If you find yourself in an accident in a bad venue, a judicial hellhole, they like to call them, you can't predict that risk.

So, what does the insurance market do in that situation? That’s an escalating problem. Compliance costs, technology costs, and then parking. You name it. There's not really one single issue. They're all variables that impact that cost.

Q. Rick, you've touched on it, so let me throw this question up on South Carolina's infrastructure. Are we doing enough to keep it viable for decades to come? And what should be the priorities?

Todd: We had a stupid-low fuel tax for a long time. We had to rebuild an entire coalition and then convince ourselves of what the needs really are. And then we convinced our constituent memberships that it's OK to raise the fuel tax. It's a user fee. Took a long time to convince the legislator population out there and the general public that user fees are OK. So, the legislature in 2017 passed legislation to increase the fuel tax and some other fees. The state, politically, has done a really good job of dedicating user fees to those intended purposes. Unlike Washington, our DOT and our legislature have worked very well together to focus new monies now, and we're seeing it on capacity on the interstates. We're seeing bridge replacement accelerating. And so, we're playing catchup from decades of deferred investments. But I'm pretty pumped up about what I see with what the port's done and then on the highway channel as well.

Q. Amy, you've been involved in public policy. What do you think?

Sartain: I would echo what Rick said and just add one piece to it, which is, some of us discuss what happens if that primary funding source from a fuel tax, if we have less dependency on fuel. There's a lot of interest from some parties in adopting electric vehicles and things like that. We'll just need to restructure how we get some funding if that takes a material component in the future. So that's a long-range thing to think about, but something that's being discussed.

Q. Giuliano, what do you think? And how would you compare South Carolina, where we are in infrastructure, to some other states?

Marodin: I echo with their opinion, I think infrastructure in terms of the roads is something that if you drive through the state, you see that most of our highways have only two lanes, and other states are open to more traffic than we are. And since we're growing so fast, that will need more development. But I also want to talk about the electric vehicles. Some companies already, a lot of companies, especially if there are European companies that have business here, and we have a lot of them here in Greenville, German companies, and also in Columbia. They all have these goals for 10 years or 15 years to go electric. And if you think about that, we already have some issues and problems to having cars, electric cars, and have stations enough for all the electric cars. When this gets into the trucks, then is a whole new infrastructure that you have to put in place. Some companies are already asking us to take a look at, what is the size of my warehouse now? Do I have to have batteries? And how am I going to recharge the batteries from a truck? And how many miles can I go with those trucks?

So, this whole electric industry, which will come, maybe it'll take a little bit more time than some people imagine, but will go eventually. We'll need a lot of infrastructure. These other technologies that are also coming will need fast internet and fiber optic and all that because they're becoming more and more part of the day-to-day in a warehouse and a day-to-day inside a truck or in a manufacturing facility.

White: I actually agree that the money seems to have shown up all at one time. You notice we have projects going on on every one of our thoroughfares. It'll be I-26 or 85. It's all going on at the same time, and so it creates congestion, wait times, inefficiencies. And so now that the money is here, hopefully the lesson is not to just defer it to the next major thing, and we do it all at the same time, but we continue one project at a time, hopefully, and just this continuous cycle of working on our infrastructure and our roads, so that maybe once it's all done, 26 still has a project going, but 85 is clear, and we can run 85, we can run 95. And then we can move back over to 85, letting 26 be clear. So, it's not just anywhere you go right now. When you leave the area, you're running into construction traffic. Atlanta, Charlotte, Charleston, you're in it. So hopefully we can continue to just make a consistent investment versus big lump sum showing up at one time, and we're doing the whole state at the same time, hopefully that'll be the lesson learned, and it'll help with efficiencies going forward.

Q. Carlo, let me ask you about this. I was surprised to read this survey from Gartner, Inc. Seventy-six percent of logistics transformations never fully succeed. It cites various reasons: failing to meet critical budget timeline or key performance indicator metrics. The survey also showed that by effectively responding to team resistance and incorporating feedback, the odds of transformation success increased by 62 percent. Is internal resistance to change more of a problem than the industry in the industry than outside pressure?

White: I don't think it's an industry thing. I think it's a human thing. You just said resistance to change. You tell me of any industry (with) humans that are embracing change. It's just because humans don't like change. And so therefore, there will be resistance inside the industry and outside the industry. Inside my company, outside of my company. At my company, we are a continuous improvement company. I'm a Lean Six Sigma certified Black Belt. It's all about continuous improvement, and I fight it every day. And I work with some of the best people in the industry. And we will go to bat against anyone, and we resist change inside of our culture. It's a human thing.

Marodin: Working in any managerial (capacity, change) happens, right? But I just want to tweak and say that it's not that bad because sometimes the way that we implement those systems needs to be a little bit different. People on the floor, people doing the work, a lot of times know more than the people on the top in terms of how things are done, how the day-to-day (operations) work. Some resistance is good because things need to be adept. So, we need to use people people's knowledge and people's skills, adapt the systems to work for specific cases. So, these transportation systems were developed by consultant companies that may be developing one industry, and now you're implementing another industry. Every company is a little bit different. You're always going to have some resistance, and you have to negotiate your way through that. We’re going to get there. It's just that's the way to go.

Q. Amy, your thoughts? Is it an industry problem more so than outside pressure?

Sartain: I would say one thing that the supply chain logistics industry has that may make it more difficult to change than some other industries is, we're all interconnected. A chain, as it implies, is all interconnected. Even if you're trying to drive something within your organization, if you have suppliers that are resistant to get on board, your downstream counterparts throughout the supply chain aren't participating or someone's dealing with a challenge, you really have to work across the supply chain end to end if you're trying to make as big of a change as you'd like to. I'm thinking from the perspective of a manufacturer, they've got all their tiers of suppliers that they're working with, plus all of their logistics providers across all of those suppliers and then downstream to all their customers, too. It's quite difficult when you're making a big change to succeed at it because of all the interdependencies that you have. So, collaboration is very important. Visibility, communication across all of that.

Sometimes people don't want to share their data or information or what they're trying to achieve. If you're not willing to share that and try to get others on board outside of your organization, then you're going at it alone. It makes more difficult. That's just a nuance of supply chain that I would mention to think about how interdependent we all are on one another. The other thing I'll say is the speed of change is faster now than it's ever been, and it will continue to get faster. And so, adoption of technology and some of the things that are happening in the industry, some companies that have preferred to do things, and they've gotten really good at doing things one way for a very long period of time, with the rate of change happening so fast, it's very difficult for them to do that. So, it's something we all need to be focused on.

Q. Rick, if three out of four logistics transformations never fully succeed, is that an internal concern, or is that outside pressure?

Todd: I'd look at it again from the trucking standpoint. That particular survey dealt with global entities, and all of them had 500 million in revenue or more. So, we're talking about an entirely different world, really, with trucking fleets. I think a lot of it depends on whether you're running a private fleet, a business running their own trucking and logistics operation, of course, using other suppliers, or a for-hire trucking company, which is typically going to be smaller. It could be just hauling general freight, it could be construction, raw material stuff, or it could be more sophisticated third-party logistics types of operations. All that has to be factored in when you look at whether it's internal or external. Smaller fleets can be more adaptable, but at the same time, they may not be as sophisticated or have the resources that some of the larger ones do, too. So, you have to look at each one of those individually. I do believe that the successful companies and the ones that are bringing in new management, generational change, I think they're much more willing to look at technology. I don't think their leadership style is what it used to be, which is command and control.

I think they're more objective-driven. They plan. They want to leverage technology. They set expectations and hold people accountable, and everybody's in, and then they manage that change that way. I think it's a positive thing going forward. I think we're all learning. The more we read and best-practice, I think we get better. We have gone through transformation, but a lot of that's been external, through government mandates. I mean, look at what electronic logging devices have done and what capabilities are coming. The government's going to get even more involved in a surveillance type of mode, possibly. … Hours of service really puts a hindrance on how much adaptability you've got. Then, of course, the green initiatives being pushed by the government, but also by your larger OEMs. And all those are forcing transformation, and it's a matter of the speed and your capability.

Q. And you've touched on this, Rick, earlier, but is staffing an issue in the field, and are we seeing enough students who want to get into the industry?

Todd: We're seeing more and more interest. The Department Employment and Workforce, working with the legislature, is the coordinating council for economic development and education. So DEW, Department of Employment and Workforce, is spearheading the breaking down of the silos and working with Commerce, state technical college system, Department of Education, and private-sector groups like ours and others to identify what are the most in-demand jobs that this state needs. Every state is different, and they're doing more public-private partnerships with legislative funding. Funds flow through DEW, and then the Trucking Association through our foundation with the Chamber of Commerce, homebuilders, construction, and a couple of others are providing a tractor and a trailer, a mobile workforce promotion campaign called Be Pro, Be Proud that gets into the high schools and middle schools and actually provides simulators and virtual reality experiences for these young people who are looking at what careers and education that you're interested in, which we think will drive them to the skilled trades and fill some of those gaps. Driving, it takes a unique individual, really an outstanding, extraordinary type of to be a truck driver from the safety and awareness standpoint and just the nature of the job. So that's probably the most difficult one of all these to fill.

Q. Amy, what are you finding, and what skills do you think are most needed?

Sartain: I've had a chance to go to some elementary, middle, high school, technical colleges, and higher education universities since I've been in this role and see specifically courses and activities that are related to supply chain and logistics. I have a chance to help teach some of those in schools sometimes as well. I do think that there's a lot of opportunity for students to get involved, but I think we need more of it for them to be interested. I think they're starting to get more interested, but it's such a large industry, and it's such a growing industry for South Carolina that we're going to have quite a need for people to be involved and students to be involved. I think it's important for companies to open their doors for tours if they can or come into the classrooms and talk about the jobs in their industry, because the more students who get exposure to the industry, the more we'll be interested in it. We had a very successful event this year with the Maritime Association and with SC Logistics, at the Port Cruise Terminal. We had 300 students from the Charleston area come through, and we had about 50 companies showcasing what they do.

We had trucks on-site for them to climb up in. The tugboats were out there circling around and showing off. It was a good event to experience the logistics industry for students. I think there's lots of activity and opportunity, but we can always have more of it. In terms of skills, I think one of the skills that comes forward, our team helped put together the profile of the South Carolina graduate, and one of the pieces of that is problem solving. In the supply chain and logistics industry, there's always things that arise that mess with your plans. Being able to think critically and solve problems is important at every level within the supply chain. That's the one I would highlight the most.

Q. Do you think more women are interested in transportation and logistics as a career?

Sartain: I've been in the industry about 15 years, and I see more and more women in the industry. It's not a large percentage from my perspective, maybe 20 percent or less, depending on the organization or the role. But there's absolutely lots of jobs within the supply chain that women can do and enjoy, and there's more and more of them that are getting involved.

Q. Giuliano, what do you think about staffing in the industry? And what are you seeing, hearing, experiencing?

Marodin: Yes, starting with college, right? Our major has been growing 10 percent every year for the last three years. So, we're very happy about that.

Q. Which major is that?

Marodin: Operations and Supply Chain. And most of them are going to supply chain. I would say 70 percent of them go into supply chain with less interest in operations. So, we're very happy about that. And one of the reasons for that was actually Covid started the awareness about logistics and the importance of distributing products. So, talking to the students, a lot of times I hear, I was in high school and started seeing all the problems that are happening or supply chain and products that are not there. And they were talking about supply chain all the time and understood that this is very important for us and it can really impact our lives. Because of that, a lot of more students and we get more attention there. We're working and trying to get to those students. We have events, and we invite companies to come and to talk about supply chain for our students. So, there is a whole initiative in getting more and more students into our major. If you're talking about … high school, I think there's a lot of interesting initiatives being done in Charleston, Trident Tech.

There are some interesting initiatives. I'm part of Greer High School. There is a supply chain and logistics class in their high school, which is a way for the students to understand a little bit more. So even if they don't want to go to college, if they want to follow another career, I think high school is the best place for us to try to make people understand what it is. I just want to highlight another initiative that was actually in Augusta, Georgia, that I saw work with a company, and this is public, so I can say, Textron. They did something really amazing. They set a school to happen inside (one of their facilities). So, they have a warehouse where the kids go to school in the morning and they work at the warehouse in the afternoon, and they, of course, get paid for that. So that was a way to integrate. Actually, they're choosing students that have more probability of dropping high school and working with them. And the main reasons for dropping is because they don't have enough money, and they need to support their family.

So, I think this initiative is really amazing that public organizations like the school system and private organizations get together and give this amazing opportunity where you can go to high school, study, get a degree, and start working for that company at the same time. And after they graduate, if they're doing everything good, of course, they usually get an offer to continue working in that industry. So, this partnership, I think, was really, really beneficial for everybody.

Q. Carlo, do you see enough apprenticeship programs to help address the labor needs? What’s your take on skills that are needed? And is the supply of students great enough?

White: Definitely, we're challenged. … Thinking about the trucking company, there's always been a barrier. For the longest, there was a barrier to entry. You couldn't get your interstate CDLs (commercial driver’s license) until (age) 21. But after Covid, legislation came, and I think you can get it at 18 now. So, for the longest, kids couldn't leave straight from high school and get into a truck. So, they didn't think about driving a truck straight out of high school, which is unfortunate because being a truck driver is probably one of the most lucrative career fields you can get into leaving straight from high school, going into the workforce if you're not going to college. But the change has happened, and it's given an opportunity for apprenticeships programs to happen. It's given an opportunity for us to do more work at the high school base, which everybody in the industry is responsible for getting involved in that. I hear the interest in supply chain going up, but I don't know that there's a direct correlation to that, to truck drivers, or what I would like to say, truck operators. You can get steering wheel holders, but we struggle (in finding) people that come in and really take this truck operating as a profession.

Yeah, there’s opportunity there. More apprenticeships are needed. On the micro, though, with White Holdings Logistics Group, the whole reason we started our company is because there was a shortage in drivers. And we felt like the reason why there was a shortage in drivers at any particular company had to do around culture. And so, we started our company to be around the colleague experience. And so, we like to offer something that other companies are not offering that hopefully will attract not only people within the industry, but also give something that's attractive to high school students leaving out and even technical college students that are coming out. Our mission is to create opportunities, so we do things around financial literacy. … Our school system doesn't teach financial literacy. So, although they make a lot of money, really still live paycheck to paycheck. And we're trying to create opportunities for them to learn how to deal with their money. We have a first-time home buyer program. Last year, we had four people purchase their home for the first time, which we celebrated.

We're trying to outdo that this year. … Ultimately, we partner with people like Carolina Foothills Credit Union, which we are a designated partner with them. They have all of these programs that help a person that is not as skilled with finances to actually start where they are, learn how to handle their finances, and begin to build something for their family. So, we're trying to do that to attract young people and people in the industry to us, but there are more programs that are needed to make this industry, from a truck operator standpoint, attractive – we're aging workforce – so that we don't run out of labor or hit this cliff that is standing in front of us.

Q. I'm going to switch gears here. Artificial intelligence. What does that mean for the industry's future? And will it lead to a smaller workforce?

Marodin: That's a big question. No one exactly knows what AI is going to do in the future. There's a lot of talk about that, a lot of projects going on to try to understand. … We have several companies that are reaching out to see how AI will change supply chain. Based on what we know so far, it's going to be a change, but it's not going to be a drastic change. So that'll be over the course of 20, 30 years since any technology that we're seeing. There's a lot of enthusiasm now, and I think those ChatGPTs and other some of those generative AI that you can put in a cell phone or you can have it in your hand are making things exciting. The basics, we still need the basics, right? We still need people to move products. We still need people to put them on the shelves. You're going to have a lot of an advantage in automating some of these steps, getting, let's say, better analysis of our problems. But you're always going to need people to understand what AI is doing and how are we manipulating the data and what kind of data it is that we're using.

Because there's still a big importance in how the data is coming from, where is it coming from, how good it is, and how to understand it and analyze it. Which AI will help us understand them, analyze, and give us answers, but we need to be sure that it's coming in the way that it should be, clean, and we'll still need people to get through that step. So, I think it's coming. It's going to be a little bit at the time, but we need to train our students to solve problems, which would we do. We do a lot of experiential learning, a lot of problem solving, and that will help them into this.

Sartain: I think one of the pieces that's most frustrating and time-consuming and maybe wasteful within the industry is the administrative and manual, clerical work that needs to be done within a warehouse or within a dispatch operation. I'm pretty optimistic that some of the automation and generative AI capabilities will be able to remove some of those administrative and clerical headaches for people so that they can best use their time for something else. I’ve already seen some of that happening in South Carolina with some organizations that have integrated it into their operating practices, and they were able to solve some problems that they've never been able to before in terms of when you have contracts with lots of different types of customers and being able to know the nuances between all of that is a very difficult job for somebody to do in their mind. Or some of the examples they gave is you might have to have 15 tabs open on your screen and toggle between those. But with the AI capabilities, you can do a lot of those things more automated. So, I'm pretty optimistic that it'll get rid of some of the headaches and frustration of some of the job functions and then let people spend their time on the more proactive pieces.

And I do think it might be a little quicker, or some companies will do it a lot quicker than maybe you were suggesting, because I've already seen some of it in practice today.

Q. Rick, let me ask you that, but also, as an addendum to that question, is self-driving trucks the future.

Todd: It's pretty easy to segue from artificial intelligence to autonomous trucks. The hype is still way ahead of reality. The highway environment is so unpredictable and so dangerous. The risks to our workforce and our equipment from other vehicles is tremendous. And so, I don't think we're going to find trucks running up and down 26 or 85 without a driver. For a long time now, driver-assistance technology is helping us. AI is going to exponentially increase advances in how well that type of technology works to make that driving job a little (more) stress-free. They're still not going to be able to take their eyes off the road or their mind off of what's going on around them. But as other vehicles around them … become more technologically advanced, and those systems start working together, I think it will be a huge improvement in terms of safety and efficiency. There are like seven fleets working with some Silicon Valley entities who are working with OEMs, so they're putting this technology in trucks, and they're running what I'll call middle-mile test operations, where the driver doesn't have his hands on the wheel, but he's sitting there, and they're accumulating billions of data points so that certain operations in that certain lane, let's say, can begin to use and then expand that type of operation, and I think that'll improve efficiency and safety.

White: I really agree with him. It's an efficiency and a safety thing. Our last question was the labor shortage or the labor challenge. I mentioned a cliff that we are possibly going towards with the aging workforce. Autonomous vehicles, as they come on, I think they could probably fill some of that gap. To Rick's point, they're running from exit to exit, but someone still has to take it from the exit and then navigate the city and get it to its final destination. Some of that working together actually could improve our industry rather than be a threat or take away from our industry. I really think it's going to be an improvement, opportunity is going to abound, and it's just a matter of who embraces the change and who gets on board and makes it work to their benefit.

Q. And finally, the pandemic laid bare the consequences of relying on faraway factories and container ships to keep humanity supplied with goods. It revealed the risk of leaning on transportation systems staffed by people whose wages and working conditions have been decimated by cost-cutting. Unregulated behemoths left to dominate markets in the name of efficiency turned out to yield results that were efficient only on Wall Street. And the broad chaos to the global supply chain helped deliver another economic affliction, inflation. So which regulatory or government-related transportation issues should we be most aware of?

Todd: One of the ways I view my job as an association or a sector leader is to try to make conditions as favorable as they can possibly be, particularly for small businesses and entrepreneurs, to do business in South Carolina and to help this economy grow and thrive. We are in a hyper-competitive industry. Trucking is in a hyper-competitive region, in a hyper-competitive world. And one of the biggest problems that we are seeing is the increasing vulnerability of our fleets and our drivers being abused after an accident, generally when they're not at fault or they're not primarily contributing to the accident and the injuries. So, it's liability insurance. It's the threat of having an accident in a judicial hellhole, which is a bad venue. So, there are certain counties where you are literally facing off against an aggressive plaintiff's attorney who knows, the way the law is written that the legislature refuses to fix, that a 1 percent at-fault trucker can be held for 100 percent of the damages.

It's called joint-and-several liability. They settle out all other parties who don't have insurance, and then they get the deep pocket because the only entity that can be listed on the jury form is the defendant. And so, this exposure to the threat of punitive damages for an accident and having 100 percent liability dumped on you forces companies to settle rather than go to a jury for grossly inflated amounts. So, either you settle or you face the prospect of a nuclear verdict. And some people like to define a nuclear verdict as judgment over 10 million. In my mind, it's anything that's excessive. If it's beyond a reasonable settlement for restitution, then that is nuclear, and that is driving what we call social inflation. And it's roiling insurance markets, and it's causing smaller marginal fleets, the next generation, looking at a trucking operation to go ahead and just say, I'm out. I want South Carolinians to have their names on the side of these trucks instead of some larger national carrier.

Q. Carlo, you wanted to pivot to Rick, so now I'm going to pivot back to you.

White: It is a huge thing. So, you have the largest cost within a trucking organization. One of them is going to be insurance, and that's driven by all of these claims. The statistics is only 30 percent of the time that a big truck, 18-wheeler, involved in an accident, only 30 percent of the time are they actually at fault. Seventy percent of the time, they're not at fault. You have to understand, drivers or operators actually are professionals. Only drivers on the road that actually went to training to do what they do to be on the road. And so typically, statistics show that they're not at fault, but yet they have to take the responsibility, I think, over 70 percent of the time. That's why we instituted with AI. We have cameras, and actually the cameras are to protect us. We have cameras on all of our vehicles to show that our drivers are driving well because ultimately we feel it's going to protect us from nuclear verdicts because we have to be so vigilant around nuclear verdicts to stay in business. And so, it's an existential threat to the industry if we don't get it under control. And I know Rick has been doing an amazing job trying to lobby and get the legislators to pay attention to it because, like he said, in South Carolina, the trucking business actually gives everyone a chance to really play a part in this booming economy that we have. Logistics is an amazing industry that South Carolina has done so well in the supply chain. It's robust, with all the manufacturers that we have. But the average person normally enters that through an owner-operator, through having their one truck, their family name on it, and doing business. It's going to get to a place to where they're not going to be able to afford the insurance to get in business. And we got to do something about that. 

Marodin: I want to start with what you were talking at the beginning, with the global supply chains. I think it's in the mindset of every big company, where should we expand now? We're working with a big automotive company supplier that's looking for, where should we expand our plant? Where should it be? Before the pandemic and even before the tariffs, the decision was easier. Then there was this whole instability because of tariffs, how we navigate through this legislation and changes. Now, because of Covid, a lot of companies are understanding that being far away is not a good choice. They're talking about a concept called nearshoring. It's offshoring, but offshoring to near. Then it comes to mind Mexico. … Chinese companies are actually putting plants in Mexico now. They're still Chinese manufacturing, but they're going to be in Mexico, so they're going to be close together. People are trying to understand how that will impact us here. This company has this debate, right? Should we put also a plant in Mexico or expand a plant in Mexico, or should we produce here in the United States?

Because we don't know what the legislature is going to be, and maybe from one government to the other, everything changed. Remember, there was a BMW plant that was going to start. They had already started foundations in Mexico, and when legislation changed, they had to abandon everything, and they had to expand their plants in the United States. They're always looking at these factors, how that will impact their business. That's one point. The other point I want to talk about is the electric vehicles and that infrastructure. So that expanded a lot in other countries because of legislation. So, if that is the future or not, we don't know, but it seems like companies, automotive companies in China or even Europe, if that is the future, are going to be ahead of us in the United States because they're already investing in producing more electric vehicles and knowing how to do it. In China, for example, the big cities, if you have a gas vehicle, you can't drive one day of the week. Only electric vehicles can drive every day of the week.

So, all the Ubers and all the transportation companies are going to electric vehicles because they need them running every day. I think that's the big challenge with a legislature in terms of electric vehicles to see if that is the future, then we need to start doing a little bit more about that or we’re going to be far behind.

Q. Amy, your final thoughts?

Sartain: I'll add to the electric vehicle piece for a minute. I guess you could broaden that out to say sustainability initiatives in general. Because of the foreign direct investment that we have in South Carolina and where the companies are located, a lot of them from Europe here, they get to drive some activity through the supply chain because they're the buyers, the consumers of logistics services. So, there are plenty of European manufacturers in South Carolina that are driving change throughout the supply chain here in South Carolina because of the initiatives coming from their governments, but also their organizations. So basically saying, if you want to work with us, you have to do these things. And some of that might be perceived as good, and some of that is a challenge financially for those companies. So, I would just say that some of that is happening in the United States, too, California and other places, basically making it almost a requirement to switch over to more sustainable types of vehicles or fuel. I think diesel locomotives in California are outlawed after a certain date, and so now there's got to be different types of trains used in California after a certain date.

If it's already a margin-constrained business, then that makes it even more difficult. Just sustainability topic in general, globally and locally, is something that the industry is experimenting with, trying to figure out how to make the business case profitable for themselves so that they can be compliant with what their customers are wanting. That's just an extension of what you were saying. But the question was, what do we need to be monitoring or looking at from regulations? Our team does legislative monitoring at the South Carolina Statehouse, and we send people there for most meetings, and we report that out to our stakeholders. Some of the positive things that are happening are job tax credits and apprenticeship credits, and some of those have been increased to help with some of the workforce pieces that we've talked about. That's positive, and seeing that move in a good direction, even veteran school credits for your military service. I'm optimistic on some of what we're doing locally in the workforce realm, and then we're monitoring all types of issues as well.

Todd: I'm not a Luddite, and this stuff is coming and it's exciting. But when you look at total impact, there is no such thing as zero emission. Every type of fuel and engine, no matter how it's driven or put together to propel, that has an effect on the planet. I've been lobbying the legislature for 45 years. I do not see our legislature mandating something that cannot be done and that is impractical. We've got to have the power-generation capabilities before we go all in. I will tell you that there's still a long life ahead for the internal combustion engine, and we're a long way away from seeing diesel engines dead and buried. Renewable diesel has now exceeded biodiesel in terms of use, and it doesn't compete for grain feedstock. So that's a clean fuel, cleaner than any. So, there's a bright future there. And then every other different sector, depending on their application and use of that truck, will be able to pick what type of engine and fuel it needs. I will tell you that battery electric trucks are 5.8 times more expensive.

When Carlo talks about the economic cycle and the fact that you've got to be able to operate a profit and that your customers aren't going to be willing to pay but so much and you don't want to generate more inflation, then we've got to look at what the reality is and then be innovative and support reasonable, sustainable alternatives.

Q. Where does hydrogen fit in there?

Todd: I think it will be a niche player, too. That's in the works. I think Benore Logistics is probably looking at a hydrogen production facility. I know they're into renewable diesel. You've got fleets that service the automotive sector, driven by their more generally green European view than most average American folks look at from that perspective. They're pushing and driving a lot of that cutting edge, but we've got to be all sources until we can figure out what works best for our economy.

Q. I want to thank each one of you again for your time this morning. It's been a good discussion. It's an important issue, one that we'll keep following in our magazines. So again, thank you.