PrivateFleets.com

Since one of the purposes of this blog is to track the trends in private versus contract carriage, I recently interviewed a large fleet that provides dedicated carriage for several large manufacturers and retailers. I found an interesting development that could impact the value equation for whether to use a private fleet versus a dedicated carrier/3PL with significant information technology resources.

In the age of e-commerce, people have become comfortable buying things that they can’t take home with them. Most online retailers at least provide an estimate for when orders will be shipped, followed by shipment tracking information through carriers like UPS and FedEx.

Although shopping from home is a major convenience of online commerce, there are many items that buyers want to see and touch before buying. For many home improvement products such as kitchen cabinets and windows, this is the case: items must look and feel just right to buyers before they can decide.

Just as in online commerce, buyers are comfortable ordering items from retailers that stock only showroom merchandise; but only if the wait is short. After all, e-commerce has come to mean visibility of order status from purchase to the time of home delivery.

When shopping for home improvement products, why should the visibility provided by the best e-commerce sites be any different than the experience of ordering directly from a retailer with a physical showroom?

When a key customer approached Cardinal Logistics with this challenge, the company turned the challenge into big opportunity for new business. The Concord, N.C.-based company developed a dedicated delivery system for its retailer customers to provide buyers (its customers’ customers) total visibility of their order status, regardless of where the order originates — through the Internet or in person at a showroom.

The idea was first put into practice in 2004 when Kraftmaid Cabinets asked Cardinal Logistics to track its orders all the way from point of sale to home delivery, says Clay Holmes, director of information systems for Cardinal Logistics. Traditionally, Kraftmaid received orders from distributors of its products such as Lowes or Home Depot. Neither Kraftmaid nor its big-box retailers managed the home delivery.

After the successful launch of a dedicated fleet and order tracking system for Kraftmaid, Cardinal Logistics began to market its ability to provide complete supply chain visibility and delivery to other customers. In 2006 the company announced the Signature Delivery Network.

Today, when a buyer comes into a Lowes or Home Depot and purchases a custom window that the store does not carry in inventory, for example, the order flows through Cardinal Logistics’ information systems. To enable this flow of information, the company developed a platform agnostic system, Holmes says, that uses data mapping technology to translate data feeds from any source — e-mail, Excel files, EDI, XML, etc. — into a standard format.

“Regardless of what the customer sends us, we get one data transformation,” Holmes says.

To view the order status, the buyer goes to a website that is maintained by Cardinal Logistics but designed to look like the customer’s site. Cardinal Logistics places the buyer’s order directly with the manufacturer, such as a window company. When the order is ready to ship, an advance shipping notice (ASN) comes to Cardinal Logistics, which then shows when the items were shipped and in transit, received at distribution center, put away, and waiting to be scheduled.

The next step is to call the buyer in person or by computer to schedule an appointment for delivery. The order is picked and ready to load on truck, and once an order is out for delivery, the buyer can see the real-time delivery status — i.e., the time or distance remaining. At delivery, the driver captures a signature and notes any abnormalities, and transmits the completed order to the retailer. The retailer can immediately take note of any exceptions with the order and proactively call the buyer, Holmes says.

“It expands visibility from the time the buyer creates an activity with our customer until that buyer’s needs have been satisfied,” Holmes says. “That’s pretty powerful.”

With most home delivery systems, buyers do not find out about the status of their orders until they are ready to be delivered, Holmes says. This is because the majority of private fleets or contract carriers can’t schedule delivery until the product arrives in their warehouse or is loaded onto their trucks.

Because Cardinal Logistics’ Signature Delivery Network is an entire order management system, the company can pick up a 5 to 6-day advance on scheduling delivery. As soon as the order is picked up from the manufacturer, an ASN is sent to the warehouse that says the order will arrive in four days, for example, and fleet dispatchers can begin to schedule delivery appointments with buyers.

Fleets that specialize in dedicated contract carriage know that by improving the satisfaction of their customers’ customers, they always end up the biggest winners of all.