Bob Delaney's world

Bob Delaney used to say that in the early 1950s, the Army was not only the best place to learn logistics, it was the only place. Exempt from transportation regulation, the military could negotiate with carriers and apply logistics practices that businesses couldn't imagine.

When Delaney was discharged from the military and entered the private sector, he encountered a different logistics environment - one circumscribed by truck and rail regulation. Shippers could not negotiate rates. They had to design their distribution systems around carriers' operating rights. The public suffered from poor service and high costs.

Delaney, who died April 3 at age 68, had a big hand in developing the 1980 legislation that toppled economic regulation of trucking and railroads. He's probably best known to Journal of Com-merce readers for his State of Logistics Report, which he originated and produced annually for nearly 15 years.

This report, co-authored in recent years by Rosalyn Wilson, was underwritten by Cass Information Systems and ProLogis until Delaney retired as executive vice president of Cass last year. The Council of Logistics Manage-ment will sponsor this year's report, to be presented June 7.

The centerpiece of the report is its measurement of logistics efficiency, based on logistics spending as a percentage of GDP. Delaney began calculating the ratio in 1973, when he was helping build the case for surface-transportation deregulation. He incorporated it into the State of Logistics Report when he began issuing it in 1990. Delaney's objective with the report was to quantify the logistics-productivity gains resulting from deregulation and to bolster arguments against re-regulation. His logistics-efficiency ratio showed that logistics costs as a percentage of GDP peaked at more than 16 percent in the early 1980s, then steadily declined to their current level of below 10 percent.

The index is a useful statistic, but the real value of the State of Logistics Report has been Delaney's pithy commentary on logistics trends and developments. Each year, several dozen logistics professionals made it a point to attend his presentation in Washington.

Their time was well spent. Delaney's comments were almost always prescient. He was ahead of the curve on virtually every logistics development - and fad - in recent years.

More than a decade ago, when every trucking company, warehouse operator and freight-payment service seemed to be calling itself a third-party logistics provider, Delaney was among the first to warn of problems. He said many 3PLs services relied on "strategic alliances" that amounted to little more than an exchange of business cards.

During the height of the dot-com boom, when others were promoting the notion that the right software could solve any logistics problem and that most carrier rates would be set through Internet exchanges, Delaney saw through the hype. "Relationships still matter," he said.

Less than a week after the Sept. 11 attacks, he provided clear perspective about the effect on logistics. He said post-9/11 security requirements

wouldn't undermine logistics efficiency, and that they probably would strengthen relationships between service providers and customers. "Just-in-time will bend, but it will not break," he said.

And, of course, there was Delaney's classic comment about shippers who'd been burned by disreputable freight-payment companies they'd hired because of their low prices: "You pay peanuts, you get monkeys."

Delaney's insightfulness can be explained partly by his long experience in the field. After the Army, he earned bachelor's and master's degrees from New York University, and worked with shippers Nabisco, International Paper, Monsanto and Pet Inc.; carriers Leaseway Transportation, Ryder System and USFreightways; and consulting firms Arthur D. Little Inc. and Ernst & Young, in addition to Cass.

But there was another explanation, and writer Chris Barnett got a glimpse of it when he spent a day with Delaney for a JoC article a few years ago. Chris noticed that wherever Bob went in St. Louis - at breakfast, at lunch at a German restaurant, at stops in between - people came over to say hello. They were businesspeople, waitresses, friends. Delaney chatted with them, asked how they were doing, and had a story to share with each of them.

What that showed about Bob Delaney was that he was interested in people, and curious about the world around him. That's why he so good at what he did, and why he noticed things that others missed.

Joseph Bonney is deputy editor of The Journal of Commerce. He can be reached at (973) 848-7139, or via e-mail at jbonney@joc.com

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