Wheels of Fortune: Truckers Deliver a Wealth of Services
Motor carriers help companies optimize their core competencies by providing value-added services.
Motor freight carriers are assuming increasingly more prominent and crucial roles in the supply chain as products flow from manufacturer to consumer.
They do this through strategic development and execution of value-added services for transport buyers. Many carriers offer full-service solutions with numerous specialized components focused on worry-free, one-stop and cost-effective service.
The value-added solutions carriers offer include just about everything—from site work such as pouring cement for the placement of kiosks and ATMs—to wrapping and crating freight. In some cases, carriers use their own personnel to install and ramp-up equipment, assemble products, and even conduct product quality-control inspections.
Carriers have evolved into pivotal players in the supply chain, linking their own customers to their customers' customers. Because carrier personnel can be perceived by the customer's customer as representatives not of the carrier—but of the carrier's customer—the services motor carriers perform have to be beyond impeccable.
ATM and retail point-of-sale (POS) equipment manufacturer Fujitsu Transaction Solutions uses northAmerican Logistics to ship, deliver, and install its equipment at customer sites. For ATM installations, this process can include site preparation such as construction work, wiring, and even cement pouring.
"A representative from northAmerican visits the site in advance of the ATM delivery to make sure it is ready. We also use northAmerican to put the equipment into commission," says Dick Zarski, head of supply chain and logistics for Foothill Ranch, Calif.-based Fujitsu Transaction Solutions. "This service helps keep our costs down because our personnel can focus on work other than doing an install. Our customers appreciate that our carrier's personnel doing the installation are professional."
Fujitsu's resellers also appreciate this service. "It offers a tremendous advantage because resellers can concentrate on selling units and working with their customers and don't have to worry about the details associated with an installation," Zarski says.
Canon U.S.A. Inc. uses northAmerican's returns direct pick-up program for copier equipment de-installations. "Our national accounts and government marketing divisions lease large office copiers to major national accounts, and the copiers must be recovered at the end of the lease," says Jim Gordon, vice president and general manager of Canon U.S.A.'s logistics division, headquartered in Lake Success, N.Y.
"We use northAmerican's truck fleet and warehousing network to do the de-installations," Gordon says. Once the equipment arrives at northAmerican's warehouses, the northAmerican team of Canon-trained personnel conducts a full inventory, and inspects the recovered equipment.
"Canon analyzes the full report received from northAmerican. Based on that analysis, Canon decides whether the equipment can be sold as used through our dealers or broker channels, returned to our remanufacturing site to be refurbished or re-manufactured, or disposed of," Gordon says.
Consolidating all this activity with northAmerican offers Canon full life-cycle control of its assets, says Gordon. "Inventory management and serial-number control of each unit is very tight using this service," he notes.
"By offering customers such as Canon full turnkey solutions, they don't need a field staff of technicians to support the installation and can limit their field technical costs," says Debbie Maupin, vice president of northAmerican Logistics.
Canon can focus on providing a high level of technical support directly to its active customer base and its dealers. "Rather than tie up our highly trained technicians and specialists who maintain Canon equipment and keep it running, we use northAmerican's personnel—trained by Canon—to do the de-installations," Gordon says.
Companies are discovering that partnering with motor freight carriers makes good business sense. Building solid relationships affects growth for both partners.
"It's not about arguing over rates all the time, it's about driving delivery performance and cost to a better position," says Bill Naples, transportation manager for Ford Customer Service Division, Livonia, Mich. "Everyone is trying to minimize time and cost. You can do that when you partner with the right carriers who can blend their services and provide lower overall cost."
Naples discovered that taking advantage of backhaul opportunities with Schneider Logistics and other carriers provides efficiencies and cuts transport costs. In the past, Ford's inbound shipments had encompassed shifting from truckload to LTL and approximately 60 percent of the LTL movements were minimums.
"There wasn't enough weight or cube to get anything other than the LTL minimum," Naples says. "And because the shipments were so widespread, it was difficult for us and Schneider to turn those LTLs into truckloads using milk runs because of the time factor and added cost for all the stops."
Ford Customer Service Division has 11 destinations in the Detroit area, with the potential for 1,300 suppliers to ship into those destinations. Using its proprietary software, Schneider calculated the potential consolidations for any given day.
"Now we consolidate shipments from every supplier for a particular day. Instead of shipping to any one of these 11 destinations separately, the suppliers ship to one consolidation point," Naples explains. "We move the shipments to a crossdock in Detroit, sort them, and move full truckload shipments into the individual destinations. We've turned very small LTL shipments into larger ones, while reducing our freight costs."
The Power of Consolidation
Averitt Express, Cookeville, Tenn., designed a cost-effective solution for a Fortune 500 automotive supplier.
"This company was experiencing inefficiencies in transporting product between all its plants in the South," says Brad Brown, Averitt's marketing communications coordinator. "We customized a solution that incorporated not just LTL services, but also a dedicated fleet, logistics management services, and consolidation and distribution services that reduced the amount of inbound freight coming into the company's facilities. We put more freight on the dedicated fleet that operated between the warehouses."
When Georgia Power of Atlanta did away with its traffic department, it turned to Averitt Logistic's Supply Chain Solutions program.
"When we receive orders for shipments to Georgia Power, we bundle them as much as possible so they can move together," says John Creamer of Averitt's Supply Chain Solutions team. "Then we create a load and give it to the carrier, which can be one of 20 carriers Georgia Power uses."
The charges are kept in Averitt's system. Averitt audits the freight bills, pays the freight charges, and creates one invoice for Georgia Power. "Instead of receiving 20 separate carrier invoices, we just get one," says Pat Hudson, supply chain management coordinator of logistics for Georgia Power.
Georgia Power uses its accounting materials procurement system, along with Averitt's electronic interface, to review inbound shipments for possible load consolidation.
"For example, shipments might be coming to us from three separate suppliers in the Chicago area," Hudson explains. "In the past, we were not monitoring this shipping information and we wound up paying three separate freight bills for three separate LTL shipments arriving the same time." Now those shipments are combined, reducing Georgia Power's freight charges.
In With The New
Consumer convenience is one marketing strategy companies use to sell their products or services. If merchants' points of sale are disrupted for any reason, you can be sure time-squeezed consumers will look elsewhere. Motor freight carriers seamlessly help make sure their customers' products are on the shelves when consumers go shopping.
Take Fujitsu's relationship with northAmerican. "We are working with one of the nation's leading fashion specialty retailers, installing our POS equipment in their 143 stores nationwide," says Fujitsu's Dick Zarski. "Retail installations like these can be challenging because a retailer can't shut down the business for a day—or even an hour—while POS equipment is being installed. And retailers usually don't have a lot of room for us to deliver boxes of POS equipment days ahead of time because it clogs up their receiving dock. They usually want delivery the day before or the day of the install."
Other challenges arise by virtue of the location—usually major shopping malls, many of which restrict delivery times and truck lengths.
Fujitsu partnered with northAmerican, whose carrier personnel help with POS equipment installations on Sunday nights. "We pre-stage the equipment, then tender it to northAmerican for delivery to the store site," explains Zarski. "It's northAmerican's responsibility to work out the local delivery details."
A Month of Sundays
On Sunday evenings, northAmerican personnel and Fujitsu technicians arrive to de-install the old equipment and to deliver and install the new equipment. They also clean the check stands and secure all wiring, making sure it is cosmetically acceptable, Zarski says. Personnel from Fujitsu and northAmerican unload the equipment from the trailer and move it on site.
"Our agreement with the retailer is that by 7 a.m. Monday, all their new Fujitsu POS equipment will be ready to use and our personnel will have left. northAmerican has not failed us yet on this very complex exercise," Zarski says. He adds that through value-added services such as this, Fujitsu can offer its customers cost-effective solutions by taking advantage of the carrier personnel already on site and by not having to send out as many Fujitsu employees, thereby saving money all around.
Many Happy Returns
Returned merchandise can be a source of headaches to retailers, but Pittsfield, Mass.-headquartered KB Toys Inc. discovered a cure. KB Toys uses ABF Freight System's returns management program, which also incorporates other value-added components such as product visibility and time-critical web-based information.
"ABF collects and consolidates returned, recalled, and defective merchandise, which it holds at its freight terminals until there is enough quantity to move the defective goods to our returns center warehouse in Adams, Mass.," says Michael Strubing, director of transportation for KB Toys.
ABF, Fort Smith, Ark., provides a toll-free number for KB Toys stores to call to schedule a pickup, and it provides the KB Toys returns center with daily lists of the merchandise it has received into its warehouse. "ABF also provides bills of lading and offers better visibility through its web-based tracking and tracing capabilities," Strubing says. "This is a managed program. ABF collects and stages the goods, releasing them for shipment into our returns center after consolidating enough product rather than us just sending LTL shipments."
KB Toys benefits by receiving freight economies for the consolidated shipments. In addition, ABF's transmittal of 214-EDI and other supply chain data helps KB Toys operate its business more efficiently, Strubing notes.
Specialty chemical manufacturer Rohm and Haas seeks cost-effective value-added services that offer safety and reliability, says Mike Short, logistics bulk professional for the Philadelphia-based corporation. Rohm and Haas specialty chemicals are manufactured into paints and coatings serving the auto and building materials industries.
In addition to transporting these specialty chemicals for the company, Groendyke Transport, Enid, Okla., performs other value-added services, such as issuing EDI reports.
"These reports help us monitor our carriers' on-time delivery and performance," says Short. "This is critical to our customer relationships because many customers have shortened their supply chains. They don't keep high inventories in their tanks, so they demand on-time deliveries, usually within a 15-minute window." Groendyke also provides Rohm and Haas facilities with its own on-site employees.
"Having Groendyke employees on site means they can become more familiar with our loading processes and can help schedule and dispatch loads," Short says.
Lights, Camera, Action!
When Original Productions needed a carrier it could count on for on-time deliveries for its popular Monster House series broadcast on the Discovery Channel, the TV production company turned to Roadway Express, Akron, Ohio.
"There is so much money involved in TV production and the schedule is extremely crucial. When we need something to be delivered Saturday morning it has got to be here then—not sooner and not later," says Greg Dunigan, product placement consultant for Los Angeles-based Original Productions.
"Roadway is very conscious of our tight time frames and works out all the minutiae involved in shipments in transit. I don't have those worries on top of the production worries," Dunigan says.
Dunigan tried working with another carrier that refused to wrap and crate a pool table he needed. "Roadway did it for us and it arrived on time and in perfect condition," he says.
When John Esguerra of Orlando-based Art & Frame Direct realized his carriers were not handling the company's valuable and fragile products with the care he expected, he decided to make a change.
"The other carrier we used didn't know how to handle our merchandise," says Esguerra, executive vice president for the wholesaler of oil paintings, frames, mirrors, and antique reproductions.
"We want our merchandise to be delivered safely and we want good rates," Esguerra says. The retailer chose Roadway's sealed divider service to handle its merchandise, which is shipped to major national retailers, art galleries, and specialty shops.
"The sealed divider allows us to put all our merchandise in the nose of the truck," explains Esguerra. "Then Roadway installs a wall, and seals it so our merchandise is secured. The wall doesn't get touched until the truck arrives at our customers' location, and only they can unseal the merchandise."
Esguerra says this service eliminates worry about merchandise that could be damaged during a regular LTL shipment, where it would have to be loaded and unloaded repeatedly as it traveled from the wholesaler to its final destination.
Let There Be Light!
Georgia Power uses a small crew of Averitt dedicated drivers and equipment to help with emergency deliveries of equipment and material, especially when large industrial transformers go down unexpectedly because of wear or damage during storms, says Pat Hudson of Georgia Power.
"An outage may affect one of our customers, such as a hospital, which can't afford to be without dependable service for more than a few hours," Hudson says. "Averitt picks up the transformer from Georgia Power, delivers it to the customer's location, and helps our line crew put the new transformer in place. They also help us remove the old transformer."
Hudson notes this service helps Georgia Power contain costs. "It also means we don't have the expense of having to use a major crane company to set these heavy transformers because Averitt's trailers are equipped with knuckle-boom cranes for loading and unloading," Hudson says.
It's clear that motor freight carriers are getting more creative in the sophisticated value-added services they offer transport buyers. "We are looking for carriers who expect more from us than just picking a service that fits taking freight from point A to point B," says Ford's Bill Naples. "We want carriers to help us optimize our supply chain so we can drive efficiencies into our network as well as our carrier's network."
Transport buyers say that value-added services ultimately make it easier for them to do business more efficiently with their own customers. They can also focus on direct service and support to their dealer and customer base for ongoing and new business activities, says Canon's Gordon.
"We can offer our customers the full range of management and logistics services they require, and they know they can come to us for a total solution that is cost-effective and that offers them a better utilization of their own resources," says Fujitsu's Zarski. "By sending out fewer people to do an install, for example, we can leverage the labor already on site so we can all save time and cut costs."
Adding Value to the Journey
Here's a look at some of the customized value-added services motor carriers offer.
Quality control, kitting, project and freight management
"We are the eyes and ears of our customers," says Bob Kortenhaus Jr., vice president of operations for Elizabeth, N.J.-based Bilkays Express Company.
Many customers require Bilkays to pick up products originating overseas from shipping piers; it then delivers shipments to one of two of its New Jersey warehouses, where products receive value-added services including quality control inspections.
"If they pass our customers' inspection standards, we ship the products to their final destinations," Kortenhaus says. Bilkays manages a number of customized solutions, including kitting, display assembly, and seasonal product distributions.
For example, a customer needed Bilkays to manage a Mother's Day promotion of distributing vases to florists. Bilkays did the pier pickup of the vases, performed the quality control, and shipped the vases to florists throughout the country. Bilkays also handles freight management for its customers.
Returns management, unique transport
ABF Freight System, Inc. of Forth Smith, Ark., provides transport buyers with a customized returns management call center.
"Typically, after we receive the call and evaluate the return shipment information, we issue a return management authorization number," says Chris Baltz, director of marketing and public relations. "We also create all the appropriate paperwork, including bills of lading and shipping labels. And we confirm that the shipment is properly packaged." ABF also provides detailed monthly reports to help customers understand the reason for the returns, with the ultimate goal of eliminating returns, Baltz says.
When customers need specialized equipment such as flatbed, air-ride, or refrigerated trucking—or even river barges—ABF's FreightValue division provides the transportation solutions and will manage these specialized shipments, Baltz says.
Freight management, expedited service, intermodal options, partnerships
Schneider National's team of industrial engineers studies companies' freight flows, then creates lanes to move their products efficiently and cost-effectively, says Scott Arves, president of the transportation division of the Green Bay, Wisc.-based carrier. "We balance freight flows and dedicate a team of drivers to handle that customer's freight needs every day."
For example, a company with 10 distribution centers, which purchase transportation services independently of one another, can benefit by not buying a lot of movements from Point A to Point B, says Arves.
Schneider's expedited service uses a team of two drivers to deliver products for sales promotions and new product launches, or during short seasonal spurts. The service is also used for high-value product deliveries. The carrier maintains partnerships with the nation's top five railroad companies to provide Schneider's intermodal services, Arves says.
The company also partners with about 1,200 carriers, who employ Schneider standards, to handle unique situations such as seasonal spikes, when products need to arrive within tight time constraints.
Security, emergency response, driver tracking
A large portion of the liquid bulk products Groendyke Transport carries are hazardous materials, and "shippers are concerned about security issues," says Allen Bolt, vice president of sales for the Enid, Okla.-based company. Groendyke uses the three color-coded levels of the alert system developed by the U.S. Department of Homeland Security.
Groendyke also contracts an emergency response company to handle spills or other emergency incidents. "They have a national network of safety and chemical engineers who can respond quickly," Bolt says.
"Safety is a huge value-added service from our perspective. Satellite tracking enhances security and performance," he says. "We have two-way communication with our drivers to make sure deliveries are on time. All these elements are performance-related and critical in our industry."
Portside deconsolidation, Web services, tracking and tracing, customized reports
Averitt's portside deconsolidation service gets ocean shipments to their destinations in a few days, rather than the traditional nine- to 12-day transit time, says Brad Brown, marketing communications coordinator for the Cookeville, Tenn., carrier.
"We can pick up shipments, strip them at our warehouse, get wheels under them, and get them on the road the same day," Brown says, adding that transport buyers need work with only one carrier while saving on inventory costs.
Averitt Express operates both public and private web services. Through its public-access web site, transport buyers can request pickups electronically, says Brown. They can also track and trace shipments, check service delivery schedules, and receive standard rate quotes.
"On the private side, we offer many customized tools and information specific to our customers' business, such as individualized rate quotes and document requests such as proof of deliveries and bills of lading," Brown says.
Shipping information is constantly being entered into the system by drivers equipped with onboard computers, for real-time shipment tracking. Customized reports are available so "our customers have the data to make the transportation decisions they need to make," Brown adds.
Engineered services, expedited deliveries
Roadway Express' new engineering services group handles customized solutions requiring unique services, says Bill Michael, vice president of marketing for the Akron, Ohio-based company.
"For example, when a manufacturer needs the mass distribution of products to arrive on the same day to retailers nationwide, this group helps design a cost-effective transportation solution."
Customers can use Roadway's time-sensitive expedited delivery service for inventory management and just-in-time deliveries, says Michael.
Driving to higher plateaus
You really have to have a higher level of employee with some special training rather than just someone who can provide unskilled labor," says Debbie Maupin, vice president of northAmerican Logistics, Fort Wayne, Ind.
"The products you offer may be the greatest, but the thing your customers will remember is how efficiently those products were delivered."