Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/716013
46 COMMERCIAL CARRIER JOURNAL | AUGUST 2016 out the southwestern United States and Mexico, as well as cross-border warehous- ing and transloading solutions. To better refl ect the expanded offerings available through its series of acquisitions, in August 2015 Roadrunner changed the name of its Transportation Management Solutions operating segment to Global So- lutions to further market its ability to help customers reduce operating costs, improve global supply chain effi ciency and enhance their customer service. "We believe the name Global Solutions better refl ects the growing importance of our global capabilities within our overall portfolio of service offerings," says Mark DiBlasi, chief executive offi cer. Refocused standards More recently, Roadrunner raised eye- brows when it announced several actions within its domestic LTL freight network in response to shippers watching costs more closely in today's economic environment. While many customers view shipping as a necessary cost of doing business, at the same time they are looking for opportuni- ties to reduce those expenses to help their bottom line. They want timely pick-ups, delivery when promised and dependable transit times – all at a reasonable cost. That's why the company refocused its network standards to further enhance the consistency of its service and provide ship- pers with better visibility to delivery dates, enabling them to more effectively plan their supply chains while economically managing their transportation expenses. Grant Crawford, president of Roadrun- ner LTL, traces the origins of Roadrunner's extended delivery strategy several years back to 2008 at the beginnings of the Great Recession, "when everyone was forced to look at their costs and their bottom lines, and how to manage their supply chain more effectively. Rather than push the easy button, we dug deeper to fi nd ways to make things more effi cient for ourselves and our customers." Crawford said that after an analysis of its customers and their needs, the company realized that speed was less important than had been anticipated. "What was more important with customers was reliability at a good price point," he said. "That was really the cornerstone of our changes." Roadrunner used that information to determine its capabilities to maintain and even improve its service standards while meeting an assumed price point "to keep us competitive in the space we wanted to play in – as a longer-haul economy provider," Crawford said. Roadrunner realized that adding days to delivery provided the best of both worlds for both the company and its customers. Crawford said the LTL industry's average for successful on-time delivery is just over 95 percent, but that by adjusting its lanes by adding days, Roadrunner's stronger lanes now average "in the high nineties." Crawford admits "there's a certain law of diminishing returns you hit, where the change in speed and price impacts the customer in different ways." He cites trips from Atlanta to Dallas as an example. "It's a two-day lane for the majority of asset- based LTL products," says Crawford, who came to Roadrunner after more than two decades at FedEx. "For us, it's a three-day lane. If the customer can schedule around that extra day at, say, a 20 percent lower price, it's a win-win for everyone – an op- portunity cost through time." Selectively speeding up Crawford says, however, that Roadrunner isn't necessarily locked in to its padded delivery schedules and that the strategy is part of a longer-term investment in its cus- tomers. "As we continue to meet or exceed expectations with customers who are fully understanding what we offer at what price, we have the opportunity to build density and look at ways to speed service up and help customers that might want to shave a day or two off in select markets," he says. To that end, Roadrunner has introduced an optional premium service that provides guaranteed delivery on a scheduled day in select major metropolitan markets, includ- ing Chicago, Dallas and Los Angeles. The company's Guaranteed Product service, now available in 72 of its lanes, offers faster delivery and weekend availability for a nominal upcharge. "The key is to increase our customer loyalty and base," Crawford says. "It puts us in a much better long-term position." He believes Roadrunner also will be able "to work backward and help our customers fi nd ways to speed it up in certain lanes." Crawford admits the company's revamped lanes might face skepticism. "A naysayer would say they just slowed their network down," he says. "We're letting the customer decide. We fi nd that a few months into this, it absolutely resonates. It's literally the need for speed vs. depend- ability. When you lay out the math, the cost savings and everything else for the custom- ers, they look across their offerings and see ways they can make it work." CC J I N N O VATO R S pro les carriers and eets that have found innovative ways to overcome trucking's challenges. If you know a carrier that has displayed innovation, contact Je Crissey at jcrissey@ccjmagazine.com or 800-633-5953. Grant Crawford, president of Roadrunner LTL, said that a com- pany analysis of its customers and their needs showed that speed was less important than had been anticipated. Peter Armbruster, chief nancial o cer, left, and Mark DiBlasi, CEO, are rsthand witnesses to the company's rapid growth.