Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/388078
COMMERCIAL CARRIER JOURNAL | OCTOBER 2014 65 by changing their business models and information systems to ride the e-com- merce wave. THE BUSINESS MODEL In 1996, J.B. Hunt's (CCJ Top 250, No. 6) Dedicated Contract Service began deliver- ing bulk items, such as paver stones, for a major home improvement retailer to resi- dential addresses. With this, the company's Final Mile Services offering was born. In 2007, DCS started a pilot project with Whirlpool to deliver and install home appliances. Two years later, the Lowell, Ark.-based fleet won a bid to deliver appliances for the entire Whirlpool network. Final Mile Services also expanded to deliver other types of bulky items such as furniture, mattress- es and cabinets for merchants that sell items from brick-and-mortar stores and e-commerce sites. J.B. Hunt's Final Mile Services currently operates 650 trucks and a nationwide network of 90 cross-dock locations, and generates $200 million in annual revenue. The technology it uses includes mobile handheld com- puters and software to track products and create electronic delivery receipts for customers. As technology continues to advance, J.B. Hunt is moving its software to a mobile app-based delivery system. "We do not want to be stuck with the same device when a lot of new things are coming out," says Tom Lastovica, senior vice president of operations for Final Mile Services. The company also has invested a lot of time and money into routing and scheduling software systems. About three years ago, the corporate planning team at Southeastern Freight Lines (CCJ Top 250, No. 29) made a de- cision to expand the fleet's capabilities for delivering to residential areas. At the time, less than 3.5 percent of its ship- ments were going to home addresses. The Lexington, S.C.-based less-than- truckload company took note of devel- oping trends. Many home businesses had formed during the recession with garages becoming warehouses for pesti- cides, lubricants, cleaning products and other items for sale. "Over time, we have built our sys- tems to support a new way of doing business," says Braxton Vick, senior vice president of corporate planning. Pallet-size shipments to residential areas now make up 6.5 percent of the shipments in SEFL's network. Most de- liveries come from two large customers that sell home improvement products. These customers originally thought omni-channel strategies would increase parcel freight, not LTL freight, to resi- dential areas, Vick says. "The thing that has been different, considerably different, is that people are ordering a lot of palletized freight delivered to their homes," he says. ROUTING SOFTWARE About 69 percent of SEFL's home deliveries are in pallet-size quantities. To help support this line of business, the 2,900-truck company created a software program that automatically identifies pickups going to private residences. It helps that about 73 percent of SEFL's orders arrive electronically, either through its website or electronic data interchange. Lowell, Ark.-based J.B. Hunt's Final Mile Services currently operates 650 trucks and a nationwide network of 90 cross-dock locations, and generates $200 million in annual revenue.