More Than a Carrier: How Dedicated Logistics Changes the Game

Welcome to Beyond Point to Point, the podcast where we go beyond pickup and delivery and dive deeper into the world of logistics, freight, and supply chain management. From industry trends to expert insights, we're here to help you navigate the complexities I'm your I'm your host, Joe Greek. And today, we're diving into a topic that sits at the intersection of stability and strategy, dedicated transportation and logistics. For shippers, the pressure to deliver on time, control cost, and adapt to market changes is nonstop. But many are finding relief not by doing more in house, but by rethinking what they outsource and how. From dedicated fleets to full service logistics management, today's solutions are purpose built to reduce complexity while improving performance. In this episode, we'll explore the power of dedicated, both on the road and behind the scenes. We'll hear from experts who help companies build custom fleet strategies, manage major transportation transitions, and lead enterprise level logistics without losing the focus. Let's get started. For the first point on our route today, I'm joined by David Fussell, vice president of dedicated sales at Averitt. David helps shippers identify where dedicated fleet solutions make the most impact and what makes someone a good fit for this kind of a long term partnership. We'll cover how dedicated differs from other freight models, what misconceptions still exist, and how Averitt designs dedicated setups that are flexible, scalable, and fully integrated into broader logistics strategies. David, thank you for being on the show today. Thanks for having me. It's good to be here. Well, as our VP of dedicated sales, could you tell me the basics of dedicated transportation? How does it differ per se from traditional truckload or LTL? Yeah. That's a great question. And dedicated is a term that's used loosely in the industry. But for Averitt, dedicated really consists of three things. It's contracted business, it's round trip miles, and then our drivers are permanently assigned to the customer's account. So kinda touching on those briefly. One, our contracts are very flexible, but we are under contract and dedicated for anywhere from one year up to I'd say the average is three, but we do have some that are longer. And then, as far as the drivers, they're permanently assigned to the account, so we're not running drivers in and out. It's not a you know, with wild drivers, which is great for us. It's great for retention because the drivers love it. They know what they're gonna do every day. And it's also great for the customer because they really build relationships with them. And then the the second thing I mentioned was round trip miles. That is part of what we offer, and we will pick up vendor loads and returnable containers sometimes for our shippers. And then if they don't have that, if it's not a true one to one ratio, then there's plenty of ways to offset that with third party revenue, which eliminates empty miles and helps offset our customers' expenses. Well, let's say, for example, I'm a shipper and I'm moving lots of volume. At what point does it make sense for me to explore a dedicated transportation option? Many shippers today are struggling with, the challenges of especially operating a private fleet. So the three main reasons that a customer would wanna go to an outsource solution, number one is consistency. Number two is liability. And then number three, but equally as important as staffing. So when we look at the consistency and the demands that our customers face today from their customers, a dedicated solution is gonna be a lot more consistent service. And then with the challenging of staffing, which everybody in the industry knows has has increased rapidly over the last few years, our recruiting and retention is some of the best in the industry. Averitt, as you know, Joe, has put a lot into making sure that we have some of the best equipment and facilities and also one of the best benefits packages in the industry. And then aside from that, on the dedicated side, the work is fairly consistent. So the drivers like that. And, again, I think I've mentioned this earlier, but the customers really like that. It allows them to build relationships with those accounts. And as a result, throughout Averitt and especially in Dedicated, our turnover is some of the lowest in the industry. Well, I would make the assumption that outsourcing your fleet to a company like Averitt also brings a benefit of reduced, liability on the shipper's part. Would that be true? That's absolutely true, and that's a large reason a lot of shippers wanna get out of the trucking business today. It allows really, it allows them to focus on their core competencies and let us handle all the driver training, all the insurance requirements that come along with operating a private fleet, and more recently, the ever complex challenge of the hours of service requirements, which we handle through our onboard computers and and manage perfectly. We are very dedicated to taking care of our drivers. And when you're looking at a dedicated customer, we're taking care of their drivers, their associates, their image. Yep. And I know another aspect of, of our dedicated service offering is, our equipment and, that we also do, the repairs as well. So that's another element, of dedicated services that we offer. Correct? Absolutely. And so couple of quick facts. Our the average age of our tractors is around two and a half years. In fact, in dedicated, I think it might actually be two point four. That number moves a little bit, but it's in the two and a half year range. So it's new equipment. We're not gonna have that many challenges with it anyway. But when we do, yes, most of our facilities have full service shops. We can run-in there and either get a quick repair, or if it's something that's gonna take a little longer, we also have what we call flex equipment that spread throughout the network. And so we can go in there and grab another tractor and repower quickly, in the rare event that we have a breakdown. But, again, at two and a half years per tractor, it doesn't happen very often. Yeah. And seeing some trucks on the road, you can see that there's plenty out there that are not at that age. So Well, I hate don't wanna don't wanna cascade on any of our competitors. But, yes, you we all see them running up and down the road. Yep. Well, from the Averitt perspective, what what is the ideal candidate for dedicated transportation? What what do you look for in a potential customer partner? Well, going back to our last point and seeing some of the older equipment on the road, if we see a a customer that maybe we're doing some LTL or truckload with them, but they and we notice they have an aging private fleet, or when we're in conversations with these customers and hear about struggles that they're having in recruiting. Again, aging fleets and maintenance is certainly a cost challenge to our customers, as well as the recruiting challenge that everybody in the industry is up against. Well, when I think of dedicated, I just imagine it's this way to here and back and forth and forth. But I imagine there's actually a lot of flexibility that go into dedicated operations. You're exactly right. And, yes, dedicated one zero one is point a to point b and back again. But in our case, that's not necessarily the case. We might go out and wind up at the end of a route, and then we'll run over and pick up a customer's vendor load and bring it back. Or, again, we might go get a third party backhaul to help them either offset cost or eliminate empty miles. And one of the unique things about Averitt with our five verticals with LTL, truckload, our dedicated services, distribution and fulfillment, and integrated, we are able to tap into that and we often do to bring in drivers, tractors from other verticals to help rapidly respond to customers' either peaks or lows in demand and and make adjustments to those changes. Well, that you bring up a great point about our five different, service units and talking about the integrated offering. So and and how our units work together, you can use drivers or equipment from other units as as needed, especially during periods where, maybe one of our retail clients needs to flex up during peak season. When it comes to, other modes of transportation such as drayage and things of that nature, are are we able to integrate any of that, our our different services together? Averitt dedicated is the second largest of the five verticals. And, we are able to work in conjunction with the other four from port of origin all the way to the customer's distribution center. We can offer visibility to that through our TMS platform, which is Averitt Enterprise, track the container until it lands at the US port, then offer drayage services from the port into one of our port side transload facilities. At that point, we can transload the container onto an Averitt dedicated trailer, take it to the customer's distribution center. So literally, from shipments point of origin to final destination, we offer control and visibility all the way. Inbound to outbound? Inbound to outbound. That's it. Well, great. I really appreciate your time today, David. Thank you for being on the show. Well, thank you for having me. I greatly appreciate it. Averitt has been delivering success for over half a century with passion, pride, and a powerful network. Introducing the Power of One, your single source for transportation and logistics. Our comprehensive services include LTL, truckload, dedicated, distribution and fulfillment, and integrated global solutions. But what truly sets us apart is our people dedicated to serving you. For any need, local or global, trust Averitt, the power of one. Next, we're shifting our focus to the shipper's point of view. I'm joined by Matt Ehlinger, vice president of transportation at NCH Corporation. Not long ago, NCH made the strategic decision to retire their private fleet and partner with Averitt for dedicated transportation. Matt walks us through the why behind that decision, what the transition really looked like, and the difference it's made in their day to day operations. He also shares advice for other companies considering a similar move. Hey, Domino. Hey, Matt. Welcome to the show. Morning, Joe. Hope you're doing well. You know, before we get in get into the discussion about dedicated transportation, I was hoping you could tell me a little bit about the history of NCH and yourself. Yep. Well, I sure would be glad to. So, first of all, NCH is a we're a global industrial maintenance products company manufacturer. We operate probably in about sixty different countries around the was a, privately held company I don't know. And about a hundred and five years old. So, been around for a while, myself. I've been here a few decades, somewhere in the thirty seven year time frame. So, I have enjoyed a, my time here with the company and and, enjoyed being part of the logistics community for a number of years. Well, being around NCH for close to thirty seven years, making the decision to, outsource dedicated fleet operations doesn't really just come out of nowhere. So what kind of challenges or goals, did you come across, in your discussions internally that led you to the decision to outsource? Yeah. That's a great question, Gav. We you know, just like a lot of bike fleet, fact after COVID, we had a number of challenges that we saw. First of all, driver recruiting was just, you know, it's tough for everybody, but it was particularly tough for us and that we didn't have a, we don't have a large private fleet and so driver recruiting is something that you give up on each side. That was number one. Number two, equipment sourcing, just the the massive and quick, rise in inflation for practice, trailers, just just the availability of it was tough. And then, obviously, the rapid increase in cost of insurance, an aging fleet, and a and a general kind of the liability exposure that we were at, operating in private fleet. All those kind of things were kind of, what drove us down the path of, hey, we really need to get back to to kind of the core competencies that we got. We're a chemical manufacturer. Right? And we're a service company. And trucking was part of the way that we did business. It's not what we did for business. So that's what drove this decision. Well, that's certainly, I I think those are the probably the most common pain points that we see with companies that are approaching us to, outsource their dedicated fleet operations or to, onboard, completely new dedicated operations. So when you're going through the evaluation and decision making process with Averitt, what what really stood out for you during that? Another great question. Couple couple of things that, that we looked at was, first of all, the flexibility in the way that it the agreement was structured, you know, the ability to scale up your sleep as needed and redundant, that's where you started. Simplicity and agreement. You need some maintenance that you can make an agreement with a partner that's several pages long, not forty or fifty. Now again, also the reputation that Uber has in the industry. They think, and likely approach business and partnership. And lastly, kind of the whole revenue sharing structure that you're under and, all of any backhaul, up against that began to go flake. So So those were some of the things that we considered when we looked at when we were talking about what made Averitt separated Averitt from the other option that we looked at. That's great. Well, now that you're about two years into, using Averitt dedicated, what have been some of the biggest differences or benefits that your team has seen? Well, with the, number one, consistent service. That's that's that's one of the wonderful things that we saw out of it. Flexibility, like I talked about, the quality and and predictable tolerance that we were looking for in operating the price of food. So that that we've seen that much so far since we've taken the sleep, to the evil king. Well, I know that change, can sometimes be challenging. So dedicated fleets, whether you're outsourcing or just bringing a dedicated fleet in for the first time, that can be a big transition. So how has this, experience been for your team and Robert? Well, you know, we I don't need to tell anybody on this call or on this, webcast that, it changes tough tough person to build. Right? And it it was there was part of it that was that was, tough for us. And and the thing is that, you know, two years into this, we now see that consistent service, that, quality and flexibility of what what the the outsourcing effort has provided to us. That really was the right decision for us, in the company, for our customers. And then so, yeah, it it's, there's some there's some challenges with change. It doesn't matter if you would answer with what partner you pick, but, so far, it's been a good long term decision for us. That is great to hear. And finally, for other companies that are looking or don't even know about potentially outsourcing their fleet operations, what advice would you give to them? Well, when we when we saw this, opportunity, there's a couple of things that we did. Number one, we kinda looked across the dedicated fleet by the industry. You know, there's some very large fleet operators out there. There's kind of the middle market and then a smaller market. So we actually looked at all three segments of the business, talked to a number of providers in those segments, and each of those have your closing thoughts, right, and and so when we looked at it, put that all together, what, what stood out was Averitt's kind of established the nickel to excellence, safety, and the way that they treat their drivers. Those are kind of the three things that really stood out to us. That's what was important to us, also the long term financial stability, definitely like we saw in the behavior team. So those were some of the qualities that helped them ride that decision led people. We would finalize, you know, the options that we looked at. That's great. And I think we always consider our drivers to be your drivers in the end, and that's what it's all about, being a great representative of your business. Absolutely. Well, Matt, I really appreciate your time on the show today. Thank you very much. Hey, Joe. Appreciate it. Thank you very much. Efficiency, visibility, flexibility. They're the qualities every successful supply chain depends on. But achieving all three at the same time can be a challenge. That is until now. Introducing Averitt Enterprise, an entirely new approach to transportation management. Turnkey simplicity, transparent costs, complete carrier neutrality, all driven by the best technology in the industry. Our our cloud based Oracle technology delivers perfectly integrated solutions at every stage of the process, from order management to shipment planning and execution to freight settlement and reporting. With Averitt Enterprise, each risk free implementation is designed around a customer's unique needs, providing all the advantages of a third party logistics model, but with the flexibility to choose your own carrier, which means you can outsource all the planning and execution of your transportation operations to an industry leader with over fifty years of shipping expertise while enjoying predictable costs, complete transparency, and total freedom. Find out for yourself what happens when best in class technology meets unequaled service with Averitt Enterprise, the turnkey way to optimize your transportation management. I'm joined by Russell Young, director of integrated services sales at Averitt. Russell leads Averitt Enterprise, a transportation management solution that brings together technology, team support, and process control to help shippers manage their entire network. He shares what makes enterprise different from a traditional three p l or brokerage, how it complements dedicated fleet services, and why more companies are leaning in to manage transportation to gain visibility, flexibility, and strategic clarity. Russell, thank you for being on the show today. Thank you for having me. So you head up Averitt Enterprise, our dedicated transportation management solution. Can you tell me exactly what that is? Yeah. So, it is a managed transportation solution. We, use TMS as our backbone. We use Oracle, best in class TMS. So we're offering the best technology as part of that solution. As all also part of that solution, we're offering the, you know, the setup for that that technology. And, you know, that requires us going in, understanding what the customer does, what they wanna do better, and then setting that up. And then we'll offer some business process outsources, outsource solutions where we say, you you need an extra plan or or you need some people to audit your invoices or maybe you need somebody to just, you know, track your shipments for you. We will provide the manpower for that as well and then support the system. So, so, yeah, kind of just a a full sort of any anything you need us to do on top of that technology. Is that team that a customer would have, is that centralized? Yeah. We for the most part, our folks are in Cookeville, Tennessee. We we are a little bit, like, dedicated in that. Some of our folks can be on-site if that's necessary. For the most part, you know, with the with the work from home movement or work from anywhere movement, our folk we like to have our folks in Cookeville. It helps us with, support and and, you know, working through, you know, calendars, people being off, and things like that. We can we've got a little bit of redundancy there. Well, how does Averitt Enterprise differ from a traditional three p l or brokerage? One of the things that we we like to be is carrier agnostic in the Averitt enterprise group. You know, we're not pushing all of our Averitt solutions onto customers. They don't have to use Averitt for all their their solutions. Sometimes the Averitt solution doesn't make sense for the customer. So we wanna bring we obviously wanna bring the Averitt solutions to bear, but we like for the customers to hold, the carrier contract. So if they're using another LTL provider, if they're using another truckload provider, We want them to work directly contractually with that customer. It keeps us out of a couple things. It keeps us out of having to, you know, pay the carrier and and, wait for payment from the customer. And it also just keeps us pulling the rope the same direction with the customer. So so that's the biggest difference. In in a traditional three p l model, there's usually, a a rate margin in the middle there. That middleman gets a gets a cut, and that's not how we operate. You know, we want a fair wage for the services that we offer, and then work with the customer to get the best rates, for the best solutions that they bring to bear. At Averitt, we do offer dedicated fleet services. Does that ever tie into, Averitt Enterprise? Absolutely. You know, we were born out of the dedicated group. There are a lot of similarities in our services that the the main ones being that, we we're a long term contractual. It's it's not transactional in nature. You know, we spend a lot of time on the front end understanding the customer and building a solution out. So you wouldn't wanna do something that put pricing in place for six months for something like that. So it's usually a couple years to five year, contractual obligation and and and solution there. So, those are some similarities, but we have deployed both offerings, dedicated fleet as well as the enterprise solution. Or one of Oracle's big strong points is dynamic routing, so taking a, you know, group of orders and building the best routing options. And when you when you're running a dedicated fleet, efficiency is is king there. Obviously, quality and and consistency and, you know, reliability of having your trucks, but you also want them running as efficiently as possible. So where we deploy enterprise, building the best routes, the best routing combinations, and then having dedicated do their thing, quality, service, right on top of that works really, really well. I would assume Averitt Enterprise is not for every shipper. When it gets to the point in that, company, life cycle, what are the common pain points that they may be coming across where they need to begin asking themselves that I'm ready for this kind of a solution. Yeah. A lot of times, it's multiple DCs. It's multiple shipping points. It's, you know, maybe a vast network of vendors, that they're trying to get their arms around. And, you know, those that's where, you know, a system like Oracle and and the way we deploy it allows to take, you know, a lot of complex, components, bring them in, normalize them, and make a lot of sense out of it. Right? Like, shuffle the deck a little bit, and and all of a sudden, now we have a real good, network, to to work off of. So, you know, a lot of the pain points are, over the years, we've heard things like, I I don't know that I'm getting a truck from a vendor until it arrives, you know, at my yard or, you know, things like I I I've been working through static routing of my outbound shipments, and it's becoming more and more inefficient because of I'm shipping a little bit of this one day. I'm shipping a lot of this the next day. So using kind of the dynamic routing solutions there makes a lot of sense too. And then just overall efficiency, it takes a lot of people to audit invoices. It takes a lot of people to track shipments. It takes a lot of people to plan shipments. If you can build some technology in there and some efficiency in there, really can can kinda help that. So, the more complex, the better, really, for for our solution. And we have a team of of of folks that have seen kinda seen it all. You know, a lot of different industries, a lot of different pain points, and we can really guide the customer to here's here here's two or three options for you that will make your process a lot more efficient. That's great. Well, the industry is constantly evolving as well as technology. Over the coming years, where do you see managed transportation going in terms of its evolution? Yeah. It's a good question. It it it kinda there's a few paths that these, transportation managers or with our shippers, take. You know? One is just complete wash my hands of it. Right? I'm I'm just gonna pay a a a three p l to do it. I'm not gonna think about it. I wanna write one check a month or whatever. So just just complete outsource. You know, I think another one is they want a little more control, and they want a little more visibility into what they're doing. So, you know, one of the things that Averitt Enterprise offers is a little bit of best of both worlds. Right? We we will take the process improvement. We will take all those pieces, and then we'll also give you the transparency that you need. So I think that's kinda where it's going. On one hand, it's a little bit of a pendulum with each shipper. Right? If you were all the way into the three p l bucket, you may have some pain points. You may be moving back into I want a little more control. If you were all the way in that have all the control and I'm doing everything, you may be moving a little bit back towards, gosh. I gotta get some of this stuff off my plate and get some efficiency in my processes. So, either way, everyone's looking at their their technology stack and going, I need to improve that. And so systems like Oracle and others will allow you to to bring in, you know, the best of what SMC three is doing or the best of what, some of the like, four kites and others are doing from a visibility standpoint. Bring those all into the the technology that you have, and I think that's what they're looking for. I think Averitt's look Averitt's doing the same thing internally. You know? Bring a good platform in and and add Appify it. Right? Bring bring some some of the best apps that are out there. And as new apps come along, add that along. So I think, it's a little bit it's it's a little bit of of everything, but just incrementally improving your tech stack. And that's more important than ever. So I appreciate your time today. Sure. Thank you, Jeff. Thank you. Let's take a moment to recap. We started with David Fussell, who laid the groundwork for what dedicated transportation is and how Averitt builds fleet solutions around each shipper's unique needs. He reminded us that dedicated doesn't mean inflexible. It means reliable, strategic, and built to grow. Then Matt Ehlinger brought it to life with a real world example, walking us through NCH's transition from private fleet to a dedicated partnership and how that shift has enabled his team to focus more on strategy and less on the daily grind of fleet management. Finally, Russell Young gave us a broader view of logistics management through Averitt Enterprise. From sourcing carriers to managing exceptions, Russell explained how shippers can offload the burden of transportation while gaining more control and insight than ever before. Thanks for listening to Beyond Point to Point. If you haven't already, hit that subscribe button so you don't miss what's coming next, and we'll see you on the next episode.