Justification rests on financially solid, fact-based model.
Entering its 180th year in business, Moline, IL-based Deere & Co. operates a successful private fleet consisting of 110 power units, 345 trailers, and 170 full-service leased drivers. John Van Geest, CTP, manager of Canadian Logistics and Fleet Services, says the purpose of the private fleet is to support the core parts delivery objectives for the Deere North American Parts Division. The fleet is the primary carrier for regional distribution center (RDC) inventory replenishment from the Deere 2.7-million-sq.-ft. warehouse in Moline, IL. There are three regional distribution centers located in Canada, five in the U.S., and one in Mexico. The fleet is a primary carrier operating line hauls of RDC inventory replenishment as well as dealer daily stock order and emergency overnight shipments to core carrier, final-mile regional cross docks.
The true value, if not the sole purpose, of the private fleet is the captive capacity benefit it gives to Deere World Wide Logistics for consistent execution of the Deere Parts Div. delivery network. The fleet objective is to partner with its core carrier to execute the Deere WWL strategy to the benefit of the entire enterprise. This ensures that lane balancing is optimized where possible for both parties.
Deere private fleet capacity is leveraged to the most time-sensitive/critical lane hauls and operational flexibility to address seasonality in company business and to ensure consistent delivery of goods and services to partners.
The Deere private fleet has had a long-time focus on cost management through lane balancing on vendor inbound freight for John Deere factories. The Deere fleet is currently operating most lanes at less than 15% empty miles, well below the NPTC benchmarking survey that shows a national average of 22%. To improve cost-effectiveness, the fleet obtained it’s for-hire authority and is actively engaging third-party freight providers to further optimize the fleet.
To position the Deere fleet for optimal near- and long-term efficiency, Deere outsources its driver management, all back office support, and has a third party to manage the tactical execution of the fleet operating strategy. Van Geest manages the Deere Private Fleet strategy and provides operational oversight to ensure the outsourced partners meet Deere-defined performance metrics for fleet operations.
“Clearly defined KPIs and knowing the total cost per mile (CPM) are absolutely essential in order to understand what lanes the fleet needs to operate when comparing cost to our core carrier base,” Van Geest says. “Private fleets have a tendency to include costs in their CPM that commercial carriers would list as accessorial charges, or include structural costs (freight consolidation, handling, etc.) that commercial carriers would not have in their CPM rate. These can skew the cost-benefit analysis against private fleets.”
Similarly, Van Geest adds, fleet equipment needs to be aligned with application, leveraging technology to improve compliance, improve cost-effectiveness, and contribute to driver retention and recruitment. Too many fleets add unnecessary options when spec’ing their equipment, which increases their costs, another example of putting the fleet at a disadvantage in the cost-benefit analysis, he says.
“For us, our private fleet rationalization is based on accurate CPM data, a solid financial business case, and monetization of the benefits of captive capacity,” he explains. “The result should be the lowest cost for the highest level of customer service for our enterprise.
“This is our winning formula.”
Private fleets excel in customer service, drivers and technology.
Results from NPTC’s 2016 Benchmarking Survey Report published last month provide an inside look into the differentiating performance qualities that private fleets bring to a broad cross-section of industries and customers.
Benchmarking Survey Report author and general editor Tom Moore, CTP, NPTC senior vice president, notes that member interest in the survey is at an all-time high, with several new fleet companies contributing for the first time this year. In fact, more than 90 fleets participated in this year’s survey, the highest level in four years.
“Fleet managers have a wide range of data available at their fingertips through new technology,” says Moore. “They seek continuous improvement against world-class standards and best practices in all KPIs and other metrics of assessment.”
Moore says the survey report creates a working dashboard to help fleets make continuous improvement more systematic and targeted. “Fleets like to gauge how well they stack up against NPTC national standards.”
Private fleets are valued for several reasons, according to this year’s report. Findings show that providing unparalleled levels of customer service is the primary and overwhelming reason companies operate private fleets. Other reasons cited are cost/efficiency at or below outside carrier rates, control/flexibility, competitive advantage, capacity issues, support of manufacturing/parent company, and specialized equipment.
With final-stage deliveries of finished products in particular, the private fleet provides a competitive and cost-effective advantage.
Accordingly, the report shows that 67% of all outbound freight movements versus 37% of inbound freight movements are handled by the company’s private fleet.
Having the best drivers is a hallmark of private fleets. While 75% of survey respondents rank driver-related issues as their biggest challenge, private fleets continue to attract and keep top drivers. The survey shows they are paid the highest compensation averages in the industry ($65,000); stay with their companies the longest (11 years); have low turnover (18% annually, mostly due to retirement); and by far enjoy the best incentive compensation and most generous benefits packages in the trucking industry. Safety performance of these drivers is roughly two times better than industry averages, based on federal crash rate figures, according to the report.
The report also states that industry-leading use of onboard technology (98% of fleets surveyed) helps score driver performance, safety, and productivity. This year, a major trend continues with more fleets using active safety technologies such as automated transmissions (65%), disc brakes (55%), in-cab cameras/videos (22%), electronic stability controls (33%), collision avoidance (24%), and lane departure (24%).
In addition, to increase productivity and efficiency, fleets reported they are lowering empty miles (21%—a 10-year low), using for-hire authority (64%), and using slip-seating (66%).
The report concludes with a bright outlook for private fleets. Some 66% of respondents expect to grow their fleet by adding more equipment and drivers and handling more company freight in the next five years.
With $2.7 billion in annual sales, Chicago, IL-based Hill-Rom Inc. is a leading provider of medical technologies for the health care industry, including the manufacturing and distribution of hospital beds, furniture, patient lifts, operating room, diagnostic and other health care equipment, and medical technology systems. . . . read more . . .
Road congestion, eroding, unsafe roads and highways with insufficient lanes for high traffic volume, and dangerous bridges are at epidemic levels. Poor road conditions account for one-third of highway fatalities. Lawsuits, jury awards, and settlements from accidents involving commercial trucks are routinely at multimillion-dollar levels. . . . read more . . .
Measuring private fleet performance is reaching higher standards of accountability with each passing year. Ten years ago, fleets went through a seasonal exercise comparing how well their numbers "stacked up" against. . . . read more . . .
Headquartered in Naperville, IL, KeHE Distributors LLC (KeHE) distributes natural and organic specialty and fresh products to retailers across the U.S. and Canada. In the past three years, KeHE has grown rapidly through both organic sales increases and strategic acquisitions. . . . read more . . .
Aaron’s Inc. is the nation’s leading sales and lease-to-own retailer of furniture, home appliances and accessories, computers, and consumer electronics. Founded in 1955 and headquartered in Atlanta, the company has more than 2,000 company-operated and franchised stores in the . . . read more . . .
Founded in 1982, Dallas-based Daryl Flood Relocation & Logistics is widely recognized as one of the best diversified transportation businesses in the United States. Under the innovative and visionary leadership of founder and CEO Daryl Flood, the company has a long-standing reputation for hiring quality people . . . read more . . .
Over the past 15 years, the National Private Truck Council’s annual conference has become the centerpiece event and premier marketplace crossroads for the private fleet truck industry. Each year, the conference grows a little bigger and provides more value than the year before.
The annual conference has steadily grown in overall attendance figures . . . read more . . .
Since its founding in 1968, Southern Wine & Spirits of America Inc. has expanded through both internal growth and acquisition of established wholesalers. It is now the country’s largest wine and spirits distributor, operating in 35 states and . . . read more . . .
At its founding and from the time of its charter class graduation in 1993, the National Private Truck Council’s Certified Transportation Professional (CTP ®) program’s guiding vision was to create a widely recognized and respected . . . read more . . .
Founded in 1921, Coborn’s Inc. started as a produce market in Sauk Rapids, MN, and has grown to 52 grocery stores in five upper Midwest states under a family of brand names including Coborn’s, Cash Wise, Marketplace Foods, and Save-a-Lot stores. In addition, the company provides a home-delivery operation with $36 million . . . read more . . .
Part of a privately held family business of integrated companies started in 1946, American Foods Group provides highly dependable on-time delivery of the freshest beef to foodservice, retail, and international markets. The company ranks as the fifth largest beef producer in America, shipping over 4 million lbs. daily. . . . read more . . .
As disciples of Jesus Christ, members of The Church of Jesus Christ of Latter-day Saints strive to follow the biblical admonition to feed the hungry. Welfare services—helping members in need with basic life necessities—became a cornerstone of the Church’s mission at its founding . . . read more . . .
The opening general session of this year’s National Safety Conference will highlight a report on a year-long study that just ended. Titled The Efficacy of Active Safety Technologies and Policies within Private Fleets, the report was sponsored by NPTC and conducted by the . . . read more . . .
Three years ago, the privately owned company formerly known as Hickory Springs Manufacturing changed its name to HSM and began a dynamic transformation of corporate rebranding and reinvigoration. A new CEO with dynamic and visionary leadership came on board, organized a new ... read more . . .
UNIFI Manufacturing in Greensboro, NC, is a leading producer of multi-filament POY, textured and staple polyester, nylon-textured yarns, recycled PET chip, and premier value-added yarns. Since 2007, UNIFI has become a global leader in offering transparent and certifiable read more . . .
Last year, Papa John’s Pizza celebrated its 30th anniversary and was recognized as # 1 in customer satisfaction among national brand pizza companies. The company’s enormous success remains driven by read more . . .
By reputation within the industry, working as a truck driver for Walmart’s private fleet has always been viewed as one of the best jobs to have – a company with outstanding pay and benefits, an industry-leading read more . . .
This year’s NPTC Annual Conference scheduled for April 26-28 at the Hilton Cincinnati Netherland Plaza and Duke Energy Convention Center is on track to be the largest, best-attended, and greatest read more . . .