How DiversiTech Reduced Demurrage and Per Diem Fees

I'm joined by Matt Krause, chief operating officer at Diversitech. His team faced major inbound challenges from warehouse congestion to rising demurrage costs, and they needed a better way to handle their freight flowing through the port of Savannah. He shares what it looked like before, what changed, and how a new inbound strategy gave them better visibility, flexibility, and control. Matt, welcome to the show. I really appreciate having you here today. You know, before we jump into the logistics behind Diversitech, I'd really appreciate if you could maybe tell us a bit about the company. Oh, yeah. Diversitech, was founded in nineteen seventy one, by Charles Lipscomb, with a focus on providing parts, supplies, and accessories to the HVAC industry. Most of our business is, within the United States and Canada. Although recently, we've we've opened several locations in Europe as well. So over the years, we've grown essentially from our founding of of equipment mounting, accessories all the way into a broader way of product families that we serve the the mostly the residential HVAC industry with. Well, just like Averitt, you started back in nineteen seventy one. I would assume it was a small business, and over the years, it's grown and grown and grown. And like with many companies, growing pains occur along the road, and particularly when it can come into supply chains. Mhmm. And so I understand that, a lot of your volumes are coming in through Savannah. And, over time, you guys identified potential issues within your supply chain. And what were you seeing, at that point? What was what was your supply chain looking like? Yeah. So about fifty percent of what what we sell, we make in the United States. The other fifty percent comes in from around the world. And like you mentioned, our primary support, import port is in, is in Savannah, Georgia. So, where we started running into problems is we had such volume coming into there that staying in control of that volume, where it is, when it's coming in, getting it off the port, getting containers back before the merge and delay fees started, became essentially more than we could handle. So we needed, we needed a new a new thought around how we were gonna handle this. We need new partners that could help us handle that so that we could focus on our customers and not necessarily have to provide a lot of our resources and time focusing on what was coming in through the ports. Gotcha. And then I believe at some point, the teams here at Averitt as well as with the Diversitech team got together and started kinda looking at your supply chain from a higher level. And could you kinda tell me, what we're doing now and what kind of problems that may have solved for you? Yes. The the partnership at Averitt has been fantastic. So we went from not knowing when our freight was coming in, not knowing when it was gonna get picked up, paying hundreds of thousands of dollars in delay and demurrage fees for trailers and carriages to a partner with Averitt who, goes to port, picks our stuff up, brings it in. Another piece of what Averitt started doing for us was, taking our floor loaded containers and palletizing that material for us, and then holding it at their terminals in Savannah so that we could we could, we could bring it into our warehouse in in outside of Atlanta, when our warehouse was ready for it. And, what that did for us is it took out a hundred percent of our delay and demurrage costs. We see zero since we've partnered with Averitt, which I think is just a a great testament to to your customer service, you know, the same type of service we try to provide to our customers in addition to the flexibility that we need. You know, warehouses depending on we're a very seasonal business. So, you know, when we're out of season, we can usually take things the minute it comes to the port. But when we're in season, that's when it it really matters and that things have to be really scheduled in, And we need the flexibility in Averitt and and the site there the customer site you have there in, in Savannah has been has been a real a real competitive advantage for us, keeping our supply chain out of control within the capacities that our warehouses can handle. Well, at Avery, we don't see ourselves as really a service provider. We see ourselves as a partner. And I think, companies like us, we share some strategic cultural values, that comes with the longevity of being around for almost fifty four years each. And that culture is built over time, and it's something ingrained within our companies. So from your perspective, why do you think the relationship with, Diversitech and Averitt is thriving the way it is? Well, I think we have we have a lot of the same focus in our core values. Now we go by a core value of our first core values. So focus, integrity, results, safety, and teamwork is what we try to, work in. I think very successfully work into really how we think about solving our customer problems or issues, how we solve and and lead our teams, and then how we partner throughout the the network. And that's very much, obviously, you have different, core values. But I think at the core of them, it's about, it's about people. It's about making sure that people understand what it is you that we're trying to, we're trying to execute for our customers and for each other and and live those values. And, you know, you know, Peter Drucker has a saying that I think is a great saying, which is culture eats strategy for breakfast. And, that's true. If you can set the right culture, you can really provide the customer experience that you need to grow, not just your employees, but your customers as well. Great. Well, thank you very much for your time. But before I let you go Yeah. I kinda wanna switch the questions up and maybe go to something a little more personal and just ask you over the course of your career. I know you've probably experienced challenges, as a leader and when it comes to operations management. But what has been some of the best advice or a learning moment that you recall? I think, you know, very early on in my career, I was fortunate to have a leader, who was very involved more as a mentor, than than a boss. Right? Somebody who really cared about seeing you develop. And, you know, what what he used to do is all the time, he used to say, you know, you wanna earn the trust of the people that you work with, the people that work for you, solve a problem for them. Make their jobs easier, that they can execute what they're being asked to do. And I think that's, really the number one focus that I try to do with my team even today, you know, twenty five years later is, you know, what are the problems we have? Or how can we work together to solve those problems? How can we make our jobs easier so that we can provide the customer service and the experience that we need for our customers? And I we've lived by that. I've lived by that no matter where I've worked and with the VersaTec itself. And, and it's it's delivered for us and for our customers. I think that is great advice that our viewers and listeners can take off into their own careers, and I really appreciate your time today. Great. Thank you. Thank you. Yeah.