But over the years, managing drivers grew increasingly
complex and time-consuming. “It became a lot of work for
us between the [Department of Transportation] requirements, the drug-testing regulations, and the hiring of drivers,” says Al Altieri, Windowrama’s director of distribution.
“It reached a point where it was very difficult for us to continue to do it. Our focus really needed to be on our business, which is windows, doors, and skylights, and not on
running a trucking company.” In the end, Windowrama
decided to give outsourcing a try.
A ROUGH START
But the transition to outsourcing wasn’t easy. The company
initially contracted with a third-party logistics service
provider (3PL) under an “employee-based” arrangement,
whereby the 3PL hired Windowrama’s former drivers. That
model proved to have its drawbacks. For one thing, it
turned out to be very expensive because Windowrama was
required to pay for the use of 21 trucks, 21 drivers, and 21
helpers each day—no matter how many it actually needed.
Is outsourcing right for you?
On top of that, Windowrama had no way to ensure it got
the level of service it wanted, since it had no leverage with
the drivers. “[The drivers] had union protection and they
were employees of [the 3PL],” explains Altieri, “so if they
broke something or treated a customer disrespectfully,
there were no ramifications.”
That crucial link between last-mile delivery and cus-
tomer service was being lost. “There was nothing pushing
[the drivers] to be good customer service people, and in
our business, that’s key,” says Altieri. “Our sales people can
do a fantastic job selling the product, and my warehouse
and distribution people can do a good job handling and
receiving it. But when the driver is the last person to see
that customer and he doesn’t do the right thing at the job
site, you could lose a current customer and you could lose
a future customer.”
Furthermore, the new setup was proving unpopular with
the drivers. “We had a very good relationship with the driv-
ers when they worked for us,” says Altieri, “but when they
transferred over to [the new employer], there were some
bitter people.”
Despite several appeals from drivers to
take them back, Windowrama was deter-
mined to stay the outsourcing course. “Once
we had subcontracted out, there was no way
we were going back,” Altieri says. The com-
pany was convinced the outsourcing route
made sense, he explains; it just needed to
find the right model and the right service
provider.
While outsourcing was clearly the right decision for Windowrama, it’s
not right for every company. For instance, if a company has fewer
than five trucks on the road each day, the financial benefits of outsourcing are questionable, according to Will O’Shea, chief sales and
marketing officer for 3PD. Anything over five trucks, however, warrants taking a look at outsourcing.
Say you’re interested in going down this route. How do you pick a
provider that’s right for your operation? O’Shea suggests you start by
asking yourself the following questions:
▪ Are you only delivering in one local market? If so, a local provider
may be the most economical choice for you. But if you are a national company, it makes more sense to go with a larger, national 3PL
than spend time trying to manage a lot of different providers across
the country.
▪ What type of technology do you need? To provide the customer-service levels that your customers demand, do you need real-time visibility or can you get by with phone calls? Many companies choose to
outsource because the provider offers technology that they can’t justify buying for a fleet of 10 trucks.
▪ How important is last-mile delivery to you? Is it a key part of your
customer service strategy? If so, you should look for a provider that
has a core competency in this area and doesn’t view it as just another sideline business. “A lot of companies out there are trying to get
into this space with the economy being down and their revenue
being lower,” says O’Shea. “But at the end of the day, they are still
primarily a truckload provider or warehousing company.”
▪ How much flexibility does the provider offer? Home deliveries
tend to require more resources on weekends than on weekdays, says
O’Shea. Make sure your provider has the capacity to flex with your
demand.
IF AT FIRST YOU DON’T SUCCEED …
The right provider with the right model
came in the form of 3PD, a national third-party logistics company that specializes in
deliveries to homes and job sites—
particularly deliveries of heavy-duty appliances and
furniture. In fact, last-mile delivery is all 3PD
does, so the provider is very choosy about the
delivery teams it uses. 3PD’s business model
calls for subcontracting with owner-operators to make the actual deliveries, but that
doesn’t mean it’s willing to settle for whoever’s available. The 3PL takes great pains to
find delivery teams with the right skill sets,
and to make sure they understand exactly
what 3PD and its customers expect of them.
“We look for special individuals who have
very strong customer skills and are really
customer ambassadors because we’re going
into some very private parts of individuals’
homes,” says Will O’Shea, chief sales and
marketing officer for 3PD. “There’s a big
difference between that and bumping a
dock at a Target or Walmart and waiting to
