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Integrated Solutions & Dedicated Fleets—How They can Maximize your Supply Chain

Archives, Global Trade Daily, Trucking

Integrated Solutions & Dedicated Fleets—How They can Maximize your Supply Chain

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As the demands facing manufacturers, wholesalers, and distributors continue to evolve, so must the services transportation and logistics companies provide their customers. All parties involved are recognizing that integrated solutions—a blending of multiple transportation and distribution options—can enable companies to maximize their resources and streamline their supply chains. With one-dimensional measures proving inadequate for overcoming what are often very particular supply chain challenges, transportation and logistics companies have implemented various custom services which take into account the distinct business characteristics of their clients and effectively provide an even greater value proposition.

Companies are wise to consider choosing a service provider offering an integrated business model which encompasses their transportation and logistics needs. By partnering with an integrated solutions provider, companies are afforded the opportunity to implement an assortment of options specifically designed for meeting all of their transportation needs with a single point of contact. These services can range from value added warehousing and less-than truckload offerings to freight brokerage options, all of which can be sourced accordingly to satisfy the complex demands placed upon businesses’ supply chains. An integrated solution thus permits shippers enormous flexibility and convenience in their operations.

One of the most advantageous services integrated providers can offer is dedicated contract services.  Utilizing a dedicated option, business owners are alleviated from the stressors and costs that correspond with owning and managing a truck fleet. A custom dedicated supply chain solution is more adept at incorporating specialized equipment demands and can execute unique delivery requirements especially well. For example, companies in many industries require turn-key or after-hours delivery, while some may require heated or refrigerated transport, tankers, or other distinct equipment.

Custom supply chain solutions are engineered to accommodate these unique circumstances for many client verticals. Equipment and maintenance issues, complying with updated federal and state regulations, recruiting qualified drivers and being exposed to liability claims are just some frequently encountered issues a custom dedicated solution can help resolve.

Even if a company owns a private fleet or outsources their transportation or distribution to a third party, there may be hidden opportunities to add value, at which point a cost-benefit analysis weighing options such as fleet supplementation and other integrated solutions should take place. There are many different needs and expectations involved when it comes to addressing the specific demands within an industry or company.

Custom services in the transportation and supply chain industry can take many forms, but there are common pain points which often exist across industries. These include: recruiting qualified drivers and warehouse specialists; ever increasing customer service and shipment velocity demands – later pickup and quicker transit times; better visibility and communication enabled by technology; the need for continuous process improvement, unencumbered by internal company politics or relationships; and opportunities to curtail rising transportation and distribution costs.

Even though each industry has unique supply chain challenges, integrated providers can draw upon their knowledge of these common areas when analyzing the needs of customers. A successful collaboration must include a partner with demonstrated experience and understanding of these key components.

Utilizing an asset based supply chain provider; with expertise in operating dedicated fleets, LTL networks, brokerage services, and engineered integrated solutions throughout the supply chain, enables organizations to focus on their core competencies while enjoying the efficiencies derived from optimization.

Frank Granieri is Chief Operating Officer of A. Duie Pyle and a member of the company’s Board of Directors. He joined Pyle in 2012, bringing more than 15 years of transportation industry, logistics and executive management experience to his role with the company. Facilitating company activity in marketing, sales, technology and logistics consulting, he is also responsible for A. Duie Pyle’s Custom Dedicated, Warehousing & Distribution and Brokerage business units, which comprehensively serve a wide-array of industries. 

Warehousing shipments of export cargo and import cargo in international trade is increasinigly being driven by ecommerce demand.
Archives, Commentary, Global Logistics, Global Trade Daily, Warehousing

How to select the right warehouse for your business

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While ecommerce has revolutionized how consumers purchase products, it has also changed the warehouse and distribution industry. Ecommerce sales increased more than 16 percent in the first quarter of 2018, creating strong demand for warehouse space and particularly for last-mile deliveries. Additionally, ecommerce demand makes up more than 20 percent of industrial leasing activities, compared to five percent just 10 years ago. Because of this demand, average rental rates rose more than five percent in the first quarter.

Retailers’ challenges

In addition to booming growth within the ecommerce channel, a large share of demand for warehouse space comes from consumer demand for same-day or next day shipping. This is consequently putting retailers, transportation companies, and warehouse and distribution centers under increased pressure to deliver. In this current environment, many retailers are implementing a variety of creative pickup and delivery options, but meeting lofty consumer expectations and delivering consistent, quality service is proving to be a difficult task for some.  As well publicized business closings have demonstrated, traditional brick and mortar retailers face significant obstacles meeting these competitive challenges due to the limited capabilities of their existing supply chains. In order to keep up with the current breakneck speed, retailers and others are being forced to come to terms with the limitations of their supply chains and take a fresh look at their logistics management processes.

As part of this modernization and evolution, traditional retailers need to expand warehouse space for their growing e-commerce operations and more adeptly meet consumers’ last-mile delivery expectations. However, because of strong demand and tight inventory, particularly in densely populated metropolitan areas, companies face stiffer competition investing in new facilities that allow for quick and affordable access to major markets. This is significant at a time when the market is shifting toward a more regional distribution model allowing retailers to meet delivery demands. Warehousing capacity will only continue to tighten, so growing companies need to stay ahead of the curve in order to safeguard the continual satisfaction of their customers’ expectations.

Selecting the best warehouse

With warehouse capacity constrained, it remains imperative that companies choose the right type of warehouse for their business. While it can be challenging, companies need to consider the fundamental requirements regarding their business warehousing needs. There are numerous factors companies must evaluate before making a final decision. Some of these factors include:

Diverse capabilities. Utilize an integrated solutions provider for seamless storage, fulfillment and distribution. Working with a company offering a range of services increases service reliability and supply chain efficiency. With one provider working across the supply chain, it will allow for easier coordination, increased visibility and more flexibility for pick-up and delivery windows. An asset-based solutions provider should deliver value above and beyond that of a traditional non-asset or asset-light 3PL, both operationally as well as from a cost perspective.  An asset-based solutions provider develops the design/solution and also invests capital in trucks, facilities and people; therefore, the asset-based 3PL has a greater level of investment in making the partnership successful. From a pure pricing perspective, most companies have enough buying power to command as good, if not better, pricing by working directly with an asset-based solutions provider. Bundling these services with a single source provider also allows for more competitive rate structures as they typically do not charge management fees on top of the transportation and warehousing rates.

Technology. Warehouses should be equipped with EDI as well as software enabling continual visibility for shipments in transit. Companies should also be able to monitor orders and inventory as well as integrate their ERP systems with the warehouse’s existing software. Finally, the facility needs to be able to support future technological advancements and automation.

Labor force availability. Companies need to understand labor force demands and labor costs at new warehouse locations to ensure efficiently managed operations for order fulfillment and timely delivery. Companies need to look at whether the warehouse will have the capability of operating 24/7 and whether there are competing businesses nearby that could limit available labor capacity.

Safe storage. If a company is seeking warehouse space for products with strict safety and integrity requirements, such as perishable food items or hazardous materials, the warehouse must be fully equipped to handle those products. For example, warehouses should have alarms, secured entry, sprinklers and risk management processes along with the necessary credentials, people and equipment to ensure safe storage and handling.

Lease considerations. Companies need to be aware of their specific needs when considering a warehouse’s rental contracts. If a company is distributing seasonal products, a location with flexible storage accommodations is ideal. If a company is considering a long-term contract, the warehouse should provide room to expand to allow for the company’s future growth.

Storage requirements. When selecting a warehouse, companies should carefully consider all their storage needs to ensure all requirements are met, including racked or bulk storage, proper square footage and the compatibility of products being stored with one another. Warehouses have differing specialties and capabilities, so it is critical to evaluate which facility is ideally suited to one’s business profile.

Location. Location is key to positioning products close to customers for cost-effective and timely delivery. Determining transportation costs to and from the warehouse, including final-mile distances to end customers, will assist companies in choosing the ideal warehouse location. Note that consumers’ expectations regarding time in transit are now often referenced in hours versus days.

There’s no doubt retailers are going to need to expand warehouse space and think differently to meet evolving consumer expectations. Selecting the ideal warehousing and distribution center is not without its challenges, but by considering the factors above, companies can ensure they choose the space that best fits their needs and operations.

Frank Granieri is Chief Operating Officer of A. Duie Pyle and a member of the company’s Board of Directors. He joined Pyle in 2012, bringing more than 15 years of transportation industry, logistics and executive management experience to his role with the company. Facilitating company activity in marketing, sales, technology and logistics consulting, he is also responsible for A. Duie Pyle’s Custom Dedicated, Warehousing & Distribution and Brokerage business units, which comprehensively serve a wide array of industries.