Supplier diversity is increasingly a topic of conversation as it relates to sustainability and Corporate Social Responsibility (CSR). It is so top of mind, in fact, that more and more companies are incorporating specific questions addressing diversity in their RFPs or contractual agreements to ensure a certain percentage of their business will be guaranteed to go to a diverse supplier.
I was recently invited to appear on Ellen Voie’s “Women in Trucking” show on Sirius XM’s Road Dog Channel 146. We spoke about Convoy’s digital freight network and our commitment to reduce carbon emissions by addressing empty miles – a prevailing issue in the industry of cabs driving empty. Even more important, was our discussion on supplier diversity. Key takeaways from this segment are below. You can listen to Road Dog on Sirius XM’s channel 146 or access the playback on demand through the SiriusXM website or app. If you do not have a subscription, you can get a free 30 day trial here: https://www.siriusxm.com/sxm-tryfree.
What constitutes a diverse business?
A diverse business is >51% owned and operated by a person that’s a member of a traditionally underrepresented or underserved group. The most common classifications include minority-owned businesses and woman-owned businesses, but over time, the definition is expanding to include LGBTQIA-owned businesses, veteran-owned businesses, or businesses owned by people with disabilities. If your business falls into any of these classifications, reach out to one of the following organizations to learn more about how to get certified:
- National Minority Supplier Development Council
- Women’s Business Enterprise National Council
- National Gay & Lesbian Chamber of Commerce
- National Veteran-Owned Business Association
How you can seek certification?
The certification process can take between 1 and 3 months to complete. Certifying agencies are detail-oriented in their effort to confirm that your business meets their qualifications. While there are no long form questions that you’ll need to fill out, there is a formal document and review process. Oftentimes, if you don’t have the necessary documents easily accessible, like birth certificates, social security, ID cards, your business entity documentation that shows that you’re the owner, etc., the process of collecting and submitting it, and waiting for the review and approval process to complete, can take a lot of time. Other than that, it is a simple application form.
How are companies supporting supplier diversity?
Many companies are taking steps to improve the diversity of their supply chains by requiring a percentage of their freight be hauled by diverse certified carriers. Since we know that our customers care about this, enough to include it in their agreements, we’re building tools and systems to allow us to send that business directly to diverse certified carriers in our network.
Why does supplier diversity fall under sustainability?
Supplier diversity falls under the “sustainability” umbrella at Convoy because for us, and many other companies, sustainability means meeting the needs of the company without compromising the ability for future generations to meet their own needs. Supplier diversity does just that. There are actually many tangible business and social benefits for incorporating a supplier diversity program and investing time in it. For example, businesses are finding out that if they diversify their supply chain, they are able to create more resiliency and agility than if they were only to work with a select few suppliers. The COVID-19 pandemic this year actually showcased this in a huge way. Supply chains, if they are single-sourced or otherwise inflexible, can experience a lot of disruption, whereas those that have been built to be more diverse and resilient have been better able to withstand the volatility.
What are the common misconceptions about working with small businesses?
Some large companies worry small operators won’t have the enterprise level business processes and sophistication necessary to make them reliable suppliers when compared to their larger competitors. However, our data shows that small trucking companies tend to have better on-time performance metrics and are more reliable than many of their larger counterparts.
How does Convoy’s Supplier Diversity Program work?
To start benefiting from Convoy’s Supplier Diversity Program, all you need to do is get certified through one or more of the organizations mentioned above. Once you have your certification, just email firstname.lastname@example.org and include an attached PDF of your certification. A member of our team will follow up with you from there.
READ THE TRANSCRIPTION OF THE FULL SEGMENT BELOW
Ellen: Last week we were talking about diversity and we’re going to continue that conversation today and we’re going to talk about diversity again. Let me introduce my first guest, Jennifer Wong. Head of sustainability at Convoy and she helps transportation leaders and carriers save money while reducing carbon emissions for the planet. Welcome to the Women in Trucking Show, Jennifer.
Jennifer Wong: Hi, Ellen. Thank you for having me.
Ellen: Well, first of all, give our listeners a little overview. What is Convoy?
Jennifer: I’m calling in from Seattle where we’re headquartered. We are a technology company in the trucking industry really building new digital freight network to help the industry bring more efficiencies to the way that freight is moved across the country. So, what we’ve been doing is working with businesses and finding the best positioned truck for any given shipment. And like you mentioned, what that enables if for businesses to pay less on their freight, it allows carbon emissions to be reduced, and enables truck drivers to make more money because they’re actually keeping their wheels rolling and filled more often. So instead of typically driving your truck 35% of them time empty, most people would be surprised to see that if they’re driving down the road and they’re knowing that 35% of the time there’s nothing in that trailer for that big 18-wheeler blowing by them. But we’re actually giving them more business so they’re able to kind of have more take-home money and the ease and convenience of using an app like every consumer is used to that ease and convenience today.
Ellen: I mean, I’m curious for our listeners. That, you know, that is pretty ineffective.
Jennifer: It is something that was probably the most shocking to me. I’ve been with Convoy for about 3 years now and then prior to that my whole experience had always been in technology. So I’m very familiar with how technology can bring efficiencies into different industries, but for me, understanding the problems in freight and in trucking, the problem of drivers driving around with 35% of the time without anything that they’re hauling is a huge issue to solve, especially since they are not getting paid for a third of that time.
Ellen: Are there different industries that have a higher rate of, I’ll call it dead-head miles, or, yeah, dead-head miles? Are there industries, like, would it be dry freight or reefers or flat beds, or, you know, cars, are there industries that have especially high empty mile rate?
Jennifer: We actually see this pretty standard across every industry vertical that we work with. Across food and beverages, manufacturing, packaging goods, CPG products, its pretty persistent regardless of what type of freight you’re hauling. So, if you are a driver, I think that is one of the main priorities that you’re always thinking about to grow your business. How can you always stay loaded more often?
Ellen: Well, and okay…so, especially for owner operators, I wonder how many owner operators actually know what percentage [6:00] of their miles are empty. I mean, I would hope that would be something that everybody would know but, I mean, for a company driver they’re getting paid regardless but for an owner operator, that would be very very important. What about, is there a difference between, like, private fleets and for hire fleets? Or LTL or truckload?
Jennifer: Yeah. There is certainly a difference there. I think LTL is harder to calculate because you’re always getting loaded and unloaded little by little just based off of your deliveries. But for our research and what we’ve seen generally in terms of research across the industry, we’re primarily focused on full truckload freight. We see that as the biggest opportunity to reduce a lot of the waste that’s happening. The waste in the form of these empty miles, or dead-head miles, and for us we see it as a huge impact to the planet because if you are driving around 35% of the time with nothing in your trailer, that’s wasted gas. So, the driver is not only wasting their fuel paying more at the fuel pump every time, but it’s also just wasted and unnecessary carbon emissions that don’t have to be polluted in that way.
Ellen: Well, and industry wide we’ve always had a desire to reduce carbon emissions but also to increase efficiency. So, let’s talk about diversity.
Ellen: Tell us about supplier diversity. What is it?
Jennifer: Supplier diversity has been increasingly top of mind for businesses this year. The definition of it is a business that’s at least 51% owned and operated by a person that’s part of a, traditionally, underrepresented or under served group. Common classifications of that are kind of small business enterprises, minority owned businesses and woman owned businesses. And over time, that definition has actually increased over time so now minority groups such as LGBTQIA owned businesses, veteran’s owned, or business owners with disabilities are all classified under diverse business.
Ellen: When we talk about WBE’s at Women’s in Trucking, we encourage women to get their certification and there is some women who say, “I don’t want to be certified as a WBE because I want people to hire us based on how well we do the job,” but it does open doors. Do you want to talk a little bit about that?
Jennifer: It does. That’s a little bit of a misconception where I think, not just in the trucking industry but in general, if you think about working with small business owners, it might seem like, you know, they’re a small business. They don’t have the enterprise level business processes and sophistication but what we’ve seen with all the owner operators that haul within Convoy’s network, and that’s the majority of the companies that we work with, they actually have so much pride in their work because they are their own business owner. We often see them actually have higher service levels to our customers. Higher on time, higher on time to delivery, more reliable than some of the larger carriers. And we even see a little bit of a slight increase for the women owned businesses that are hauling for Convoy as well.
Ellen: Oh, I’m going to have to get that data from you. I love saying it like that. I also want people to understand who are listening that the government actually specifies that if you’re going to work, let’s say if you’re going to help haul concrete or pavement, or, you know, highway materials, they require that a certain percentage of your vendors are disadvantaged business owners, don’t they?
Jennifer: Exactly. So, a little bit about the history of supplier [10:00] diversity. So, it was originally rooted in the civil rights movement of the 1950s, 1960s, and this was following a lot of the race riots in Detroit. And General Motors’ set up is one of the, kind of, regarded first supplier diversity programs and a lot of American automotive industry followed from that. Kind of, around the same time of the electronics technology side, IBM established a supplier diversity as well. And just a little bit later, there’s actually a law, I think it’s the public law 95507, something like that, they actually established a program to encourage government contractors, or maybe, its not even encouraged, required government contractors to include minority owned businesses in their supply chains. And that’s why 90% of Fortune 100 companies today actually have dedicated spend specifically to increase the diversity of their supply chain. So, in total that average spend is about 3 billion dollars annually. So, if you are classified under one of those supplier diversity groups, that’s a huge opportunity to tap into that spend.
Ellen: And before we take a break, why don’t you talk about what some of the groups are. Its not just women owned business, it’s also veteran owned.
Jennifer: It is. Yeah, so some of the groups, minority owned businesses, those are typically ethnic minorities. Women owned, veteran owned, a business owner with disabilities, LGBTQIA, and then small businesses. So, it covers a huge group of potential business owners.
Ellen: And, one thing I want you to say, Jennifer, is, you know, you gave a little bit of the history, but the reason is because people in the past would hire their friend. They would hire the people that they knew, the people that, you know, they rubbed elbows with on a daily basis and a lot of times, minorities or [12:00] other disadvantaged business groups couldn’t get a chance to even get to the table.
Ellen: So, and so I think, you know, I guess I have mixed feelings both ways because I wish we lived in a world where we didn’t have minority, that we didn’t make that distinction between minority and disadvantaged. Like, I wish everybody had a seat at the table without having to, you know, without having to…government intervention. But let’s talk about that. Keep that in your back, in the back of your mind because we need to take a quick break. But we’re talking about diversity and I have Jennifer Wong and she is the head of sustainability at Convoy. So, if you have a question or a comment, its 888-876-2336, double 8, double 8, ROADDOG. We’re talking about government and minority contracts. This is Ellen Voie with the Women in Trucking Association.
Announcer: Now, back to women in trucking on Sirius XM’s Road Dog. Here’s your host, CEO of the Women in Trucking Association, Ellen Voie.
Ellen: Today we’re talking about supplier diversity and my guest this segment is Jennifer Wong, and she is the head of sustainability at Convoy and Jennifer, we had someone that wanted to ask you a question or tell a story but he dropped.
Jennifer: Oh, no!
Ellen: So maybe he will get back on the line.
Jennifer: Call back.
Ellen: We were talking about supplier diversity and, you know, like I said, whether people agree or disagree with the fact that the government requires someone to use diverse vendors, I think it’s been positive. And to tell you a quick story, Diva Trucking is a woman owned business in Chicago and she was a professional driver with her boyfriend, and they split up. And so, she bought a 14-thousand-dollar dump truck. And because she was a minority and female, and I think she might have even been a veteran, she got her minority status, and she was hauling building materials with the big boys down in Chicago. So, it gave her a foot in the door, she still had to prove that she could do the job, but it opened a door for her so, that’s really what it does, right?
Jennifer: Right. Exactly. You’re still held to the same service levels as anybody else, this just gives you more opportunities to potentially grow your business in a different way.
Ellen: So why is diversity important and what are the benefits to companies who actually do focus on diversity?
Jennifer: Sure. So I think we all could agree that diversity has become an increasingly, kind of, visible topic this year with a lot of the social justice movements this year [18:00], and at the same time, sustainability is also growing in terms of top of mind for a lot of corporations as well. So, supplier diversity typically falls under sustainability. And sustainability for many companies means meeting the needs of the company without comprising the ability for future generations to meet their own needs. And supplier diversity does just that. There are actually true business benefits for incorporating a supplier diversity program and investing time in that. I think, like you mentioned, previously maybe, company owners or business leaders were really just working with their own friends and family members, kind of, inclusive of their own network. But now they’re finding out that if you’re actually diversifying your supply chain, you value chain, you actually are creating more resiliency and agility than if you were only just to work with a select few. And I think Covid this year actually showcased that in a huge way where supply chains, if they are only kind of single sourced or inflexible, there’s a lot of disruptions that happen. Grocery stores don’t have food, people can’t buy basic products and it’s just a downstream issue because of that. So, increasing supply chain resiliency is kind of top of mind for a lot of supply chain transportation leaders and supplier diversity is a way to do that. So when you think about more inclusive procurement, not just working with a couple of vendors, you not only benefit your business by reducing some of the risks downstream, not able to support your customers, your orders, your customer’s customers, but you are also supporting, kind of, broader societal benefits by generating economic opportunity for some communities that just have been under represented in the economic world. So, a lot of businesses are benefiting not only [20:00] because of increasing their presence in society and communities, but they actually see the business benefit as well. So, I think that’s just one of the true sustainability stories that we love to highlight and love to tell when businesses are successful in showcasing it in this way. Its not just a handout. It’s not just a program that businesses put on top of their businesses for, kind of, just a checkmark on their marketing agenda or just for their brand, it actually has true business value for them.
Ellen: And you’re preaching to the choir with me because I talk about diversity all the time and, you know, for example, for women in trucking, more of my focus is on gender diversity but, you know, women make decisions more differently than men. Women are more risk averse. Women might be more hesitant to maybe do an acquisition or purchase property or things like that. So, having those discussions and allowing people to bring their perspective to the table makes it a better company anyway. So, yeah, I totally agree and I’m glad we’re talking about this because I think a lot of people, you know, what’s sad is, like I said before the break, is that we have to do this but I see the need for it.
Ellen: If someone was saying and they’re an owner operator and they are a veteran owned business or a minority owned business or a woman owned business, what should they know about supplier diversity programs?
Jennifer: Supplier diversity programs are out there. The majority of the larger enterprises, the well known brands, have supplier diversity programs and what that means is they have a program, it’s a strategy for their business to ensure a diverse supply base in their procurements of goods and services. And what that means is, if you are a carrier, and you’re one of the classifications to become a diverse supplier, you can go and seek out these programs and simply apply for them. Most of the time, the programs are going to be publicized just right on their website. So, you can go to that brand, search on their website for supplier diversity program. If it’s available, they’ll probably have some sort of just in take form where they can simply apply to be part of the program. Often times a lot of these programs are free, you just have to show that you are certified under one of these categories and typically, to get certified you are working with a third party agency just to confirm the eligibility of your certification. Like you mentioned, there are a couple of different agencies. For example, we just became a member of the Woman Business Enterprise National Counsel. That’s one, if you were a woman owned business, you would likely work with that agency to get certified.
We just became a part of WEBENC to become certified by them and then you can start applying for all of these supplier diversity programs.
Ellen: I think one of the confusing things is that you can be certified by different entities. Sometimes it’s a government entity, maybe a city, maybe a state, but you can, for women, the WBENC organization does certify and…do you want to talk a little bit about the process because it’s pretty, I mean, the requirements to get certified are pretty…you can’t just, I mean, I’ll hear, let’s say, an owner operator couple and they’ll say, “Well, can we put the truck in the wife’s name so that we can get minority status?” Talk a little bit about that.
Jennifer: Yes. So, I would say the certification process can be pretty lengthy. It often takes anywhere between 1 month to 3 months to get certified and the reason why is because it just involves a lot of documentation. There are not essay questions that you’re filling out, it really is just more of a formal documentation process. So often times if you don’t have those documents easily available such as sometimes [26:00] birth certificates, social security, ID cards, kind of your business entity documentation just to show that you’re the owner, that process alone of collecting it and turning it in and waiting for the review and approval process, just takes a lot of time. Other than that, its not too much of a burden because it’s a simple application form but its just the hassle of gathering those documents that you probably don’t have on hand or you just haven’t pulled up for many many years.
Ellen: Well, and I know that, because I have friends who’ve gotten their WBE, Woman Business Enterprise certification, and you have to prove, I mean, they’ll come into your office and if you’re office is smaller than your husband’s, that’s a red flag. Also, they look at ownership. You must own at least 51% of the business and there is other criteria that they put to make sure that you are a women owned business.
Ellen: Why is Convoy investing in supplier diversity? Why is it important to your [32:00] company, Jennifer?
Jennifer: Sure, Ellen. So, I’d say there is two reasons why we’re investing in supplier diversity. One is because our business model is really just built to support supplier diversity. So, in trucking, we are talking about some of these stats at the very beginning, but there is about 1 million carriers and 3 million drivers. But 80% of those carriers typically have less than 5 trucks in their fleet. So, there’s so much fragmentation in this industry and those are the types of carriers that haul for Convoy most often. So, we are working with those small owner operators, typically less than 5 trucks, and we often see that those are the types of carrier that fall under the supplier diversity classification. So, they’re at least 51% owned and operated by a member of one of the diverse groups that you just called out. So, it really just fits naturally within our business model and that’s how our supplier diversity program initially started. It was an employee led initiative, really recognizing that this is an opportunity for us to kind of extend our business to really find another way to help drivers make more money and grow their business, which is why we launched it at the beginning of this year. The second reason is because we’re a technology company, we love to look at the data and we’ve also run a lot of surveys. In our most recent one, we ran a sustainability snapshot report, just understanding sustainability in the trucking industry. And we’ve actually seen a shift towards a more broader demographic representation in recent years. Where in the survey we collected about 500 responses and 64 % of those carriers reported that they are at least 51% owned and operated by a member of a diverse group. So that is a small segment compared to the tens of thousands of carriers that are in Convoy’s network, but we thought that that’s a signal, maybe directionally, where these are the carrier that we want to support. 64% could potentially be in the supplier diversity category and this matched with a lot of other industries surveys as well. The American Trucking Association also had a survey and they reported 40% of their drivers as minorities in 2018, so it’s a little bit older. But we are just seeing this trend of the increase of diversity in trucking over time, so we want to make sure that we have a program dedicated to support their needs as well.
Ellen: Interesting. So, you talked a little bit, but do you want to talk a little bit more about Convoy’s supplier diversity program? Anything else you want to add?
Jennifer: Sure. Happy to share more about the program. I did mention that it was employee led. We announced it at the beginning of this year, but our program is similar to most supplier diversity programs. So, anyone that is hauling with Convoy today or you don’t even have to be hauling with Convoy today and you could start within our supplier diversity program. You just simply have to get certified under one of the third-party agencies depending on your classification. Whether you are the woman owned business, minority owned, veteran owned, small busines, LGBTQIA or disability and what you do is simply go to Convoy’s website. We have a page dedicated to our supplier diversity program and you can simply fill out a form to sign up to request to be included. All we do is review your certification to make sure that you are certified [36:00] against one of the agencies and then we’ll start making sure that you are prioritized in getting freight specifically dedicated to diverse businesses. So when we work with customers, I would say, increasingly this year, we’ve seen so many of our customers actually have in their contractual agreements saying we want a percentage of our freight hauled by Convoy by diverse certified carriers. And now we know that they care about this, enough to include it in their agreements, and we’re going to send that business directly to diverse certified carriers that choose to join our program. So now is actually the best time to join the supplier diversity program because its on the newer end, we have all this freight dedicated to diverse suppliers. We’ll have more business available just to that dedicated segment of carriers that choose to haul with us.
Ellen: Wow. You know, we actually will get companies that will contact us and say, “Do you have any minority business owners that can do this?” Maybe drive a freight or, you know, in mobile, or whatever, and we do ask. We do keep a list of women owned enterprise at Women in Trucking. That’s one of the questions we ask when someone joins as a corporate member, we’ll say, “Are you a woman owned business?” because sometimes they don’t know where to turn to find WBE or a DDE or you know, minority owned business, whatever. And so, yeah, and yet, if they’re required then they have this obligation but they’re not sure how to go about it. So, you said your shippers, customers, sometimes require it. So, I mean, that tells you a lot about the fact that they’re aware of it, they know the value of diversity, and that they want to be a part of that. So, kudos to Convoy for doing that.
Jennifer: Yeah. And that’s exactly what I’m most excited for, I think. We’ve seen a lot of [38:00] customer demand for this. I think it’s a great signal in terms of what business minds are thinking about moving their business forward but I think, because it has been customer led, its another area for us to kind of help them solve a problem. They want to increase the diversity of their supply chain, they’re looking to Convoy as a partner, and it fits our business model perfectly. And that’s always what we just hope for when we think about sustainability and a way to make an impact, not only for customers and for their bottom line, but also a greater societal impact and of course for the planet as well.
Ellen: So, talk a little bit about how Convoy makes their employee base more diverse.
Ellen: Like, what does Convoy do to make sure…yeah. Because that’s hard these days.
Jennifer: It is. And its something that we are very focused on today. I think we’ve had a lot of great employee feedback, and comments and ideas for how we can start being more intentional about diversity for our team and what we’ve done is just some early work to understand the diversity of our workforce. Early on at our company we never collected that information in the first place, which was challenging when employees wanted to know the diversity of the workforce at Convoy, we just didn’t have a response. But now we’re actually starting to collect that information and once we actually have that information, we can actually start setting goals to see the diversity that we believe that we want to see moving forward to reflect the customers and communities that we’re serving. Yeah, so I think we’re very early on in trying to understand that but it’s something that we are completely focused on today.
Ellen: Well, and I’m glad you said that – goals. [40:00] Because you can’t monitor what you don’t measure. So, of the larger companies out there don’t even measure their diversity supplier, you know, vendor program, things like that. So, I mean, obviously Convoy had the foresight to think, “Well, let’s see what our numbers are and how we can make sure they’re healthy numbers.” Right?
Ellen: So, Jennifer, we have just a couple minutes left, and I’ve really enjoyed having you on. I think this is an interesting conversation. I think that a lot of people don’t understand minority business, you know, diversity, vendors, things like that. I think people have a misconception on what it is. Its like, you know, instead of giving someone special treatment, they’re actually…like one woman said to me, she said, “It means I get to the door but I still have to open the door and go in and do the work.” So, I think that people need to understand what the focus is, but it really does help the bottom line and there is so many studies out there that talk about that, right?
Jennifer: Exactly. Businesses wouldn’t be doing it if it wasn’t also helpful for their own business and their revenue growth, so its not a complete just handout for a business. They actually see value in it also. So as a small business owner woman owned business, you can really see yourself as a business partner. You’re helping that business achieve their goals as well. Its not something that they’re doing just for, kind of, social or corporate charity work.
Ellen: Absolutely. And how do people find you at Convoy?
Jennifer: Yes. At Convoy we’re very easy to find. You can just simply go to convoy.com.
Ellen: But you also have a tab on there for diversity suppliers, right?
Jennifer: We do. So, you can go directly to convoy.com, our website for supplier diversity is convoy.com/supplier-diversity.
Ellen: Okay, and you’re out in Seattle, right? I visited your facility. It was probably a couple years ago.
Jennifer: Yes. We are all out in Seattle, we also have an office in Atlanta as well. Everyone today is working from home and we will be for a little bit but hopefully you get to make a trip out to Seattle soon.
Ellen: Oh, I’d love to. I have a sister who lives out there so…
Jennifer: Its wonderful. Its sunny today.
Ellen: Thank you so much, Jennifer, for being on the Women in Trucking Show and talking about supplier diversity at Convoy.