How A Regional LTL Carrier Built A Final Mile Network
Accelerating growth in the final mile delivery portion of the supply chain has caused challenges for shippers. However, traditional full load and LTL carriers have also felt the impact. The main problem comes from the fact that more online shoppers are seeking residential delivery services. Additionally, these customers are also increasingly looking for value-added services such as white glove delivery.
In previous years, when tightened freight capacity wasn’t a huge issue, residential deliveries wouldn’t be as much of a challenge. Today, however, final mile deliveries have become a passive burden for regional and national LTL carriers. In response, we’ve seen several large LTL carriers purchase final mile couriers and even develop their own fleets that specialize in residential delivery.
Unfortunately, very few large carriers have the capital to acquire or build up a fleet of trucks and drivers for the sole purpose of handling final mile deliveries. This doesn’t mean that there are not other options for carriers seeking to reduce the burden of residential deliveries and white glove deliveries on operations.
How We Helped One Regional Carrier
In an effort to improve capacity for LTL freight without sacrificing customer service, Dickerson Transportation Solutions (DTS) integrated its final mile delivery network with one of the nation’s largest LTL carrier’s operations. The project resulted in the transition of more than 8,000 monthly residential deliveries from the carrier’s operations into the final mile network.
How It Worked
With dozens of facilities throughout the U.S. servicing several major markets, the carrier needed a customized final mile solution. First, the carrier would need a network that could provide a unified standard of service throughout its coverage area. Secondly, its network would need to be able to handle a variety of final mile and white glove delivery services, including threshold, room of choice and debris removal.
To build out the proper solution, DTS utilized several final mile couriers that have a presence in the LTL carrier’s coverage area. Each courier had to demonstrate strengths and reliability in terms of on-time service and customer satisfaction. Additionally, the selected couriers had to be able to provide white glove services in order for the LTL carrier to offer the final mile service to all of its current and prospective customers.
Having built out the network of couriers that could provide service from each of the LTL carrier’s terminals, the next step was to integrate technology. Fortunately, the DTS Final Mile network is essentially a plug-and-play solution. After working together to connect the carrier’s transportation management system with the DTS Final Mile network, field testing began.
Very soon, the test markets began to show improvements in comparison with markets that were not yet connected with the DTS Final Mile network. By the end of the project, the carrier found benefits in three core areas of its business.
1.) Improved Driver Productivity
Now that its drivers had to handle fewer residential deliveries, they were able to focus their efforts on standard less-than-truckload services. In the LTL environment, residential deliveries can be challenging and time-consuming for drivers. Neighborhoods can be difficult to maneuver around with a long trailer. Additionally, the deliveries tend to take more time than a typical business-to-business shipment does. As a result, the LTL carrier’s drivers were able to make more LTL deliveries in a day as a result of transitioning its residential shipments to the DTS Final Mile network.
2.) Increased Freight Capacity
The transition of thousands of monthly residential shipments to the DTS Final Mile network opened up a large amount of trailer space for the LTL carrier. This allowed the carrier to be able to accept more loads at a time in the industry when demand for freight capacity was incredibly high. In the end, not only did the carrier benefit from the extra capacity, its LTL customers did as well.
3.) Operational & Customer Service Improvements
The average cost of a shipment through a final mile network is generally considerably less than a standard LTL carrier can offer. This is because there are increased costs with LTL operations in comparison to final mile couriers. Additionally, the time that an LTL carrier spends on a residential delivery can quickly eat into the driver’s day. Delays can add up and cause missed deliveries for other shippers on his or her route.
By freeing up its drivers to focus on its core business, the LTL carrier was able to increase its capacity enabling it to grow its marketshare. At the same time, it was able to offer its customers access to a wider range of residential and white glove delivery solutions without sacrificing service standards.
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