3PLs Put on the White Gloves

Tags: 3PL, Logistics, Third-Party Logistics, Supply Chain

Logistics service providers reveal how they treat their customers like VIPs.

Order breakfast in a diner, and if the server comes back fast with hot eggs and home fries on a clean plate, and then returns with refills on coffee, you’ve had good service.

But order breakfast in an upscale hotel and you might expect a bit more: table linens, just-baked croissants, maybe a rose in a silver vase.

Good service is what third-party logistics (3PL) providers must deliver just to stay in business. Outstanding service is what 3PLs deliver to stand apart from the competition, delight their shippers, and gain a stellar reputation.

How do 3PLs deliver white-glove service? Here are some examples.

Solving Problems Before They Emerge

Port Jersey Logistics starts the superlative treatment the moment it brings a new customer on board. “We have a well-refined onboarding process that we don’t stray from,” says Erik Holck, the company’s director of business development.

Asking a series of probing questions, an employee drills down into the customer’s business and logistics processes, looking for incipient challenges that maybe the customer hasn’t even noticed yet. “Then we take that to the next level, beginning to work on solutions to correct some of those issues before they turn into problems,” Holck says.

Based in Cranbury, New Jersey, Port Jersey Logistics offers public and contract warehousing, value-added distribution services, managed transportation, and transportation brokerage. Its customers are companies that sell food, food ingredients, food packaging, and consumer packaged goods (CPG). To solve problems for those shippers, and help them become more efficient, Port Jersey Logistics makes a careful study of its customers’ customers—big retailers such as Costco, Target, Sam’s Club, Amazon, and CVS.

“We want to be experts at servicing the retailer that sells the food or CPG,” Holck says. Each retailer has specific requirements for packaging, labeling, delivery, and more. Miss a detail, and a supplier gets slapped with a penalty.

Port Jersey Logistics takes on the compliance burden for customers, learning the requirements inside out and making sure shippers adhere. Averting errors saves customers a great deal of money. “It’s probably the single biggest area of cost savings that we bring to the table,” Holck says.

The 3PL also saves customers money by spotting other kinds of errors. Holck points to a European food maker that had been using Port Jersey Logistics for about one year to service its U.S. customers. “We began to notice that their inventory was at an unsustainable level compared to their order volume,” he says.

The products had a shelf life of about 18 months, but the company was stockpiling two years’ worth of some items. The shipper hadn’t noticed the situation, which could have forced the company to throw away some unsold product.

“We asked to get together to talk about it,” Holck says. A careful review established the customer was carrying 35 percent too much inventory. Dialing that back not only averted waste, but also cut the cost per case from about $1.50 to $1.25.

The shipper and 3PL then put their heads together on another problem: Customers were placing too many orders for loose cases rather than full pallets or full layers. Staff at Port Jersey Logistics spent three months coaching the customer on how to improve the situation.

“They instituted order minimums and got their cost per case below $1 for the first time since we began working with them,” Holck says.

Personal, Flexible, and Fast

If you do business with R2 Logistics, one special touch you might notice right away is that almost no one in the company has voice mail. “You’re always talking to a real human being on our operations team,” says Frank Dreischarf, vice president of supply chain solutions at R2, in Jacksonville, Florida. The company also cross-trains all of its operations employees, so anyone on the team can assist any customer if a shipment hits a snag.

A non-asset-based 3PL, R2 Logistics offers transportation services across all modes to shippers in all industries. Its devotion to direct communication extends not only to shippers who call one of its offices, but also to carriers on the road.

“It’s standard operating procedure for us to make five check calls to the driver,” Dreischarf says. “We don’t talk to dispatchers; we talk directly to drivers.” Those conversations, plus data obtained through the Descartes MacroPoint tracking system, help R2 head off delivery problems before they occur.

The 3PL also makes a point of responding to customers’ needs with speed and flexibility. Dreischarf recalls the Friday when a first-time customer called in a panic at 4 p.m., desperate to get parts to a plant in Virginia to prevent a shutdown. “We need a flatbed to pick up in the next 90 minutes and deliver tomorrow morning,” the customer said. The shipper had been looking for a truck all day.

R2 works with more than 14,000 carriers, with an average fleet size of 34 trucks. “We have a significant amount of capacity we work with day in and day out,” Dreischarf says. “We were able to quickly find this customer a solution.”

Joel Premuda, global transportation manager at Scotts Miracle-Gro in Marysville, Ohio, also cites R2 for its quick and creative responses. In 2017, for example, after Hurricanes Irma and Maria, Scotts’ chief executive officer became heavily involved in recovery efforts in the British Virgin Islands. Scotts and several partner companies needed to quickly truck donated supplies to a freight forwarder, who would handle the last leg of the trip. R2 agreed right away.

And then the 3PL moved fast. “We were giving R2 same-day notice to get loads picked up and moved from the Midwest to Florida,” Premuda says. “The logistics required, the extra effort, the steps required to be on call and get that delivery in there early, being on the phone late at night—it all went way above and beyond.”

R2 moves just as quickly when Scotts needs special care in its ordinary operations. Not long ago, for instance, the shipper was looking for more frequent, more detailed information on the progress of some of its shipments. “I told them, ‘We want breakfast, lunch, and dinner updates,'” Premuda says. “Within 12 hours, they had information coming out at breakfast, lunch, and dinner.”

Premuda asked for the reports to arrive as emails addressed to specific people, with the information formatted in a specific way. “They said, ‘No problem. You’ll have it at breakfast tomorrow.'”

The Staff is the Secret Sauce

Like R2 Logistics, Knichel Logistics in Gibsonia, Pennsylvania, bases its white-glove service on strong communications. The company not only keeps information flowing freely between the 3PL and its customers and vendors, but also makes sure everyone on staff gets all the information they need to give customers what they require.

“If everyone is not on the same page, that makes it difficult to service a customer in the best way, whether from the finance end, or from operations, or even from sales,” says Kristy Knichel, the company’s president and CEO.

A non-asset-based 3PL, Knichel Logistics focuses particularly on intermodal transportation, which accounts for about 80 percent of its business. The company’s efforts to collect and disseminate information about a customer’s needs start with the onboarding process. “We follow a structure where every department does its job in making sure customers are assisted in the way they need to be assisted, throughout the whole transaction,” Knichel says.

For example, someone in the company’s finance group talks with the customer about setting up a convenient payment process, including the format in which Knichel Logistics will provide the necessary paperwork. Someone from the pricing group asks about the kinds of loads and lanes the shipper will give to Knichel Logistics, and what special requirements apply.

Also, like Port Jersey Logistics, Knichel Logistics makes a special effort to understand the shipper’s customers.

That’s the way to avoid chargebacks. “We want to make sure we understand what the customers expect and, in turn, what they can expect of us,” Knichel says.

Since a shipper’s needs may change over time, Knichel Logistics stands ready to respond. For example, if a customer’s volume surges, or it suddenly needs new services, the 3PL can increase trailer pools with little to no notice.

That’s what happened recently when one customer gave the company a new lane. “We established a pool of eight containers in one day,” Knichel says. Capacity was tight in the market, but Knichel Logistics had partnerships it could call upon to get the containers.

“Once equipment became available at the ramp, the shipper got the empties dropped, so that the customer could start loading right away,” Knichel says.

Although data plays an ever-increasing role in Knichel Logistics’ operations, the company tries to marry technology with old-fashioned customer service. Well-trained associates, many of whom have worked for Knichel for a decade or more, are key. “These people are obsessed with going the extra mile for our customers,” she says.

Knichel Logistics cultivates that enthusiasm by taking good care of its employees, buying lunches, hosting celebrations—once even offering in-office massages. “You can bring in a new account, but the people who keep it are the people who work that account every single day, the customer service people,” Knichel says. “If you take care of your people, they take care of the business.”

‘Yes’ is the Default Answer

At UTXL, about half the freight under management calls for expedited team transportation. But this 3PL treats even its non-rush loads as though every minute counts.

“We’ve designed all our processes around expedited service,” says Mark Hogan, CEO at UTXL in Kansas City. “That means 24-hour tracking, 24-hour live customer service, and micromanaging.”

This approach keeps operations simple, and brings a sense of urgency to all interactions with customers. “We think of everything we touch as though it’s going to shut down a manufacturing plant if it isn’t delivered on time,” he says.

A non-asset-based 3PL, UTXL focuses on door-to-door, over-the-road transportation, with heavy emphasis on full truckloads and, more recently, on multi-stop runs. Many customers turn to UTXL to find extra capacity during surges in their business. UTXL helps by tapping what Hogan calls “invisible capacity”—carriers who aren’t always easy to find.

“These are the carriers that don’t have sales teams, EDI, or electronic communications devices,” he says.

To make sure those carriers provide outstanding service, UTXL uses technology solutions that not only help staff operate quickly and efficiently, but that also enforce compliance with established processes.

UTXL keeps its operations staffed around the clock seven days a week. “We book almost 50 percent of our business after 6 pm, when everyone else has gone home,” Hogan says.

Another hallmark of UTXL’s approach is that when a customer calls with even the knottiest problem, the service representative may not say “No” without express permission.

“Our people are only empowered to say ‘Yes’ or ‘Yes, but…’ without a supervisor’s approval,” Hogan says. Before the supervisor okays a negative response, staff put their heads together to see if they can concoct a solution.

One night, for example, a company that makes packaging for a beverage manufacturer learned at 11 pm that this customer was nearly out of packaging. Unless the beverage company got a delivery right away—preferably two trailer loads—it would have to shut a production line in Houston. The distance from origin to destination was approximately 1,000 miles.

UTXL’s employees started contacting expedited carriers. “I had our people seeking out one or two teams in the neighborhood of the origin that could drop everything and do this,” Hogan says. No one seemed to have an available team. But then UTXL started asking for teams who were under loads but could afford to delay them. One carrier had two teams available.

“So they dropped their trailers at their yard and sent two teams over,” Hogan says. “We got new trailers, picked up the loads, and they were on their way to Houston within three hours of that phone call.”

Employees at third-party logistics providers might not literally don white gloves to dispense their special brand of service. But when they roll up their sleeves, the customer service results can be extraordinary.