Dealing with the curve balls

At first glance, the advertising inserts that appear in the weekend editions of newspapers don't look like much. The flimsy, four-color pages typically show off the wares and special sales of a variety of retailers, from sporting goods to groceries. Yet looks can be deceptive. The advertising-insert market a business that takes in roughly $300 million to $400 million annually is one of the more complicated

At first glance, the advertising inserts that appear in the weekend editions of newspapers don't look like much. The flimsy, four-color pages typically show off the wares and special sales of a variety of retailers, from sporting goods to groceries. Yet looks can be deceptive.

The advertising-insert market — a business that takes in roughly $300 million to $400 million annually — is one of the more complicated segments of the third-party logistics (3PL) market, demanding both long-range planning and last-minute command and control functions on a daily basis. Everything from less-than-truckload (LTL) and truckload (TL) services to boats and air cargo planes are marshaled to handle the transportation needs of this niche, requiring logistics providers to be exceptionally nimble.

Yet it's also a niche that breeds loyalty between shippers and their logistics providers, which can translate into a steady source of business.

“We use a lot of small TL carriers in this segment,” says David Stonier, senior-vp for Stonier Transportation Group (STG). “They know there are a lot of pluses to this business. For example, on both the pickup and delivery end, the facilities are open 24 hours a day; no appointments are necessary. Since they aren't tied to a particular time window, it doesn't matter if they are early or late by a few minutes.”

“Also, about 50% of the activity takes place at night, when highway traffic is minimal,” he adds. “That's important because most newspapers are still located in the downtown areas; working at night makes deliveries much easier.”

STG works with major retailers to coordinate transportation needs for the pre-printed advertising inserts that appear in more than 500 newspapers across the U.S. every week. Truckloads of inserts are typically picked up daily from eight major printers across the country. At STG cross-dock centers in Jackson, TN, and Arlington, TX, inserts from various printers are consolidated for delivery to several key newspapers. Most of those inserts are transported by TL carriers, although those headed for Alaska, Hawaii and Puerto Rico go by boat. If there are printing delays, inserts may have to be shipped via LTL or air cargo — something STG tries to avoid since it's so expensive.

Stonier says newspaper inserts represent some the best and worst aspects of the logistics business. “On the plus side, all the customer wants to do is get the inserts to the newspaper on time. They don't care how we do it,” he explains. “That allows us to develop the most efficient and practical transportation plan based on our logistics knowledge.”

For example, STG has the freedom to consolidate loads of newspaper inserts from several retailers. Mixing that freight lowers the fleet's transportation cost and improves its delivery efficiencies, while also allowing it to pass savings on to its customers.

The downside, however, is that STG has its hands full developing transportation plans that are invariably completely changed at the last minute.

Though most inserts are printed four to five days in advance, there are always some that are printed late, running right up against newspaper deadlines. STG has to do whatever it takes to get the inserts there on time. “Our customers spend big bucks to print these inserts,” Stonier explains. “If you're late with general freight, you can reschedule for delivery the next day.”

“With inserts, however, there is no next day. And it's not an insurable claim, because from a legal perspective the product is still good. So there's pressure to get it right despite last minute changes.”

If you can handle the logistical curve balls, customers will remain loyal. “Curve balls are an everyday part of the business,” he says. “That's why only a select few get to play in this market.”

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