January 2011 | Commentary | Carriers Corner

White Glove Services: Ask for What You Need

Tags: 3PL, Last Mile Delivery

Jerry Levy is executive vice president, sales, Specialized Transportation Inc.
260-429-3002
jerry.levy@STIdelivers.com

White glove service is one of the supply chain’s most complex specialty areas, encompassing everything from first- and final-mile value-added services, to delicate or high-value product handling. Because of white glove services’ specialized nature, shippers must define their specific requirements for these projects in their RFPs, and service providers need to thoroughly evaluate the scope of work to prepare accurate pricing.

Problems can arise when general freight companies attempt to provide first- or final-mile solutions together with commodity line haul using different suppliers. For example, the logistics director of an electronics manufacturer recently complained that his company was being “accessorialed to death” by its freight forwarder. The manufacturer’s RFP had not clearly stated its customers’ requirements, and the forwarder supplied a solution that did not address some specific needs. Hence, the agreed-upon pricing covered some, but not all, of the actual services required.

More importantly, the non-asset-based forwarder did not have the necessary equipment and control needed for the project. It outsourced some services and did not have the expertise to cover all service requirements. This arrangement resulted in angry customers, higher-than-expected logistics costs, and product loss and damage.

State Your Expectations

The following guidelines can help ensure your RFP gives potential service providers an accurate summary of your white glove service needs:

1. Use metrics whenever possible. Vague information leaves room for interpretation— and miscalculation. Instead of descriptions such as “some consignments will need pad wrapping,” cite specific numbers to help service providers develop accurate pricing and assess a match with capabilities.

2. Identify all handling characteristics. Include details about shipments’ susceptibility to damage, weight ranges, and packaging characteristics. This information enables the provider to assess your equipment and labor needs.

3. Give examples of the toughest customer deliveries. If you require deliveries within one-hour windows to meet installation technicians, for example, be sure to mention this fact on the RFP.

4. Outline liability. Explain the shipments’ replacement and retail costs, and identify the liability requirements you expect of the carrier.

Consider the Big Picture

A common mistake shippers make when buying supply chain services is considering only the transactional delivery price. They end up paying more in freight damages, lost customers, and returned shipments.

One producer of delicate computer equipment chose a third-party logistics provider that used a standard less-than-truckload carrier and agents at each end for packing and unpacking. The company saved $500,000 over using a true white-glove provider— and ended up paying the same amount in freight damages, not to mention future lost orders.

Whether your white-glove service needs focus on business-to-business, home delivery or pickup, inside delivery, or installation services, consider the importance of execution and know your needs— and those of your customers. Then evaluate suppliers on their ability to give the best value, not necessarily the lowest transactional transportation price. This approach will put you on the road to a successful logistics program.