Estes is Fined by EPA for Air Violations - Another Volkswagen?

I just saw an interesting news article stating the EPA has fined Estes $100K (Plus Estes has to pay another $285K in projects) because they violated the California Truck and Bus Regulations.  From the news article:

"EPA Regional Administrator Jared Blumenfeld said Estes violated the California Truck and Bus Regulation dozens of times between 2012 and 2014.

The regulation, adopted in 2009, requires that all commercial heavy diesel trucks and buses operating in the state be equipped with diesel particulate filters (DPFs), which limit toxic emissions."

In light of the Volkswagen issues where the car company clearly violated environmental laws on purpose, I think we are going to see a lot more of this.  As we all know, with regulations companies take "calculated risks" and one of them appears to be around meeting environmental regulations.  My advice to compliance departments is they may want to tighten up what they are doing.

There were also two very important items embedded in the article and the first one has to do with sub-contractors to Estes:

"In reaching the settlement, Estes cooperated with federal investigators, admitting that the company or its subcontractors in California operated more than 80 trucks between 2012 and 2014 that were not equipped with diesel particulate filters"

What is fascinating in that statement is they are taking direct responsibility for their sub contractors. So, one way "around" the laws is not to just broker freight and say it is their fault.  Looks like Estes will own that liability too.

Finally, the article states:

"Sax said this was “the first of many cases” the EPA and CARB will bring against trucking companies in order to enforce the California Truck and Bus Regulation.

Blumenfeld confirmed the EPA has been investigating out-of-state trucking companies operating in California since the spring of 2014."

If that is not a direct statement of intent, I do not know what is.  Clearly, companies had better be careful with what they are doing in California and I would suspect you will see a lot of new trucks headed West soon.

I think the regulators are getting emboldened as they are finding more and more of this abuse. There also was a case against Samsung where they had defeated the Energy Star ratings in refrigerators and in that case had to compensate every consumer. We all know of the troubles International / Navistar has had.

If I were at a trucking company I would be less concerned about "more regulation" and far more concerned about whether my company was meeting requirements in the first place.  

Companies Mentioned in This Article:

1. Estes Express Lines
2. Volkswagen
3. Samsung
4. CARB - California Air Resources Board
5. EPA - Environmental Protection Agency

Omni Channel and The Ever Persistent Discussion of Final Mile

Over at Logistics Viewpoints (A blog you should be reading) Chris Cunnane gave us a sneak peek into a survey he conducted with DC Velocity magazine about different final mile modes and their current and anticipated adoption rates.  The results were not overly surprising.

However, the one that really stuck out at me was the feedback on the use of crowdsourcing  options. It would seem to me that forward looking executives, especially in the light of Amazon's Prime Flex announcement, would be more interested in this option.  Only 27.7% have said they include this option in their future plans.  

I then go back to think about the talk Dave Clark, SVP of Worldwide Operations and Customer Service at Amazon, gave at the recent CSCMP Annual Global Conference (AGC).  One of the most intriguing parts of his discussion was the idea of innovation and the categories of "one way" and "two way" doors.  Let me digress and describe this for you:

When innovating, ideas can be categorized into "one way" and "two way" doors depending on your ability to back out or recover from the idea.  The brief definition:

• One Way Door:  This is when the idea, once launched, either cannot be taken out or would be too costly to change back.  This type of innovation requires a lot of deep thought, analysis and modeling because once you go in, you are all the way in (See my posting on Cortes' boats).
  
• Two Way Door:  This type of innovation is one that you can experiment, pilot and then recover or back out if it does not work.  Thing Google Labs on this one.  How many things has Google launched, decided it does not work and just stop.  No harm, no foul.
  
  A two way door innovation is one you should develop quickly and try it out.  Worst case you will learn something and best case is it will work.  If it does work, because you moved so quickly, you will have incredible first mover advantage - something that is vitally important in the world of fast follower copy cats.  

It strikes me that crowdsourced final mile delivery is something that falls into the Two Way Door category.  It will cost some R&D dollars to develop but that is about it.  You can launch, manage, learn, adapt then either pull the plug or make it part of your core processes. 

Which is why I am so amazed only 27.7% said they are even thinking about it. 

But then again,  I once heard a trucking executive in the 90's say, "We will never do business with the railroad".  Some companies innovate and some whither.  Those are the only two choices.  Not innovating is not an option.