COMPANY: Schneider Logistics
OPERATION : A time-definite LTL operation using a mix of vehicle classes handling 2,000 deliveries a day along 175 customized routes
The industry-wide driver shortage paired with rising fuel costs encouraged Schneider National’s logistics operation (Schneider Logistics Inc.) to explore new possibilities for helping its customers address freight capacity problems and manage costs.
It was a tall order that would require transforming mission-critical supply chains using new processes and procedures with the aid of technology.
It would also require persuading automotive industry shippers, in particular, to give a new solution a try, even if it meant actually sharing supply chains with competitors who also moved LTL freight in the same geographic area. That was exactly what happened, however, and in November of 2010, Schneider Logistics’ Integrated Delivery Services (IDS) operation was launched.
IDS is a “shared-channel” approach to moving time-definite LTL freight. The new service merges freight (even competitor’s products) into a single truck or trailer and moves it along routes customized to address multiple shippers’ cross-docking, dedicated delivery, pool distribution, reverse logistics, and LTL consolidation needs.
Today, there are nine IDS cross-dock locations across the U.S., the most recent one added in Dallas, TX, says John Vesco, vice president and general manager of Schneider Logistics. “We are making 2,000 deliveries a day now, along 175 routes,” he notes.
IDS not only solved capacity and price problems for shippers, it has created productivity improvements as well. “For one customer, we took 20 hours out of the delivery cycle,” Vesco says. “We can track freight from the time of pickup to delivery, including when it is at one of our facilities.”
Using a mix of vehicles from Class 8 tractors with 53-ft. trailers down to 14- ft. straight trucks has also helped to improve productivity and shave costs. “We use a combination of our own capacity and various third-party entities. It is not always the best value for a customer to put their LTL load on a Schneider truck,” Vesco notes. “We have just a few contractors—using contractors is something that is relatively new to us—but it makes sense here. And the experience for our customers is seamless.”
Vesco credits the success of IDS to the company’s people, processes and technology. “Good business processes come first. Good people execute those processes, and technology is an enabler,” he says. “Technology can always be replicated, but our people and processes are the differentiators.”
The software management systems that have been controlling this new service have largely been homegrown, according to Vesco, but the company is currently working with a major enterprise management solution supplier to create a more seamless system. “Everything but our handhelds at the cross-docking facilities are managed with homegrown systems,” he notes. “Our systems all integrate today, but they are not really as seamless as we would like.”
The IDS approach has also enabled Schneider to offer a better lifestyle to its drivers than is usual in typical OTR operations. “Lots of good things are coming together here,” Vesco points out.
IDS began with Schneider’s automotive parts business, Vesco says, but retail and chemical suppliers and Tier 1 and Tier 2 automotive suppliers are expressing interest, too.