Three Myths of Dedicated Fleet Management
June 5, 2020 Comments Off on Three Myths of Dedicated Fleet Management
Now more than ever, companies from all industries need the flexibility of a dedicated fleet. Whether you are experiencing massive surges or the need to control your costs, dedicated fleets have a lot to offer.
Nevertheless, making the choice to outsource your fleet is a big decision. While it’s scary to feel like you’re relinquishing control of your fleet, we’ve found a lot of that apprehension is based on misinformation about what it actually means to outsource. These are a few of the misconceptions we hear most often and how we’re addressing them with real customers.
Myth: We can’t afford to outsource our fleet.
When you own and manage your own fleet, you also hold all the risk associated with your fleet. If one of your trucks is involved in an accident, your company could be on the line. If your supply chain is disrupted, you have to piece it together. You may be stuck with empty trailers and excess drivers when volume is low, or pay high spot market prices to get extra capacity when you need it. So the question really becomes—can you afford not to outsource?
Due to the COVID-19 crisis, many food manufacturing companies experienced a massive surge in demand to stock grocery stores. Our flexibility as a dedicated fleet provider meant we were poised to meet these rapidly changing needs. For example, we immediately increased the weekly load count for one food manufacturing customer by 10 to 20 loads at their contract rate and secured five to 10 additional drivers to handle the surge in volume. We also assigned an extra manager to quickly get the extra drivers up to speed on customer-specific needs and food safety protocols.
A privately owned and managed fleet would have been forced to either secure those extra weekly loads at expensive spot market prices, or to source and buy the additional assets and hire more drivers. As a dedicated fleet, we were able to offer this customer the agility to quickly adapt to their needs as the market evolved.
Myth: If we outsource, our current drivers will lose their jobs.
Safe drivers will always remain in high demand, and most dedicated providers make it their goal to retain as many existing drivers as possible during a fleet’s transition. After all, these drivers are already familiar with your routes, your customers, and your product. When they transition to a dedicated provider, they keep their jobs while gaining access to ongoing training.
In fact, when you have excess capacity, dedicated providers can even “loan” your drivers to other jobs until you need them again. Those extra drivers we provided to the food manufacturer? We were able to pull them from one of our retail customers who needed to control costs. Instead of furloughing or laying off some of their drivers during the pandemic, this retailer received credits for releasing a portion of their drivers to another J.B. Hunt Dedicated fleet. When their normal volume rate resumes, those drivers will return to their account.
Arrangements like this can save you money, while helping your drivers get paid even when your volume is low. In the end, you can retain the quality drivers you need—and their connection to your customers—while releasing many of the responsibilities that come with employing drivers.
Myth: We want to make sure this is done right, so we’ve got to do it ourselves.
Many companies believe their transportation needs are too specialized for anyone else to manage, but for most of these companies, transportation is not their core competency. When you outsource your transportation to the right provider, you’re handing your fleet over to someone whose core business is designing and executing custom fleet strategies for specialized companies like yours.
One of our medical supply customers experienced skyrocketing demand nearly overnight as COVID-19 began spreading in their region. This required re-arranging delivery schedules to meet resource needs at the 30 healthcare facilities they serviced, as well as sourcing as many extra trailers as we could find. As a dedicated fleet provider, we possessed the expertise and manpower to quickly pivot operations and consolidate these new routes into a schedule that actually produced cost savings for the customer. We could also leverage our contacts and asset resources to quickly source the extra trailers they needed at their contract rate instead of them finding a third-party carrier to meet capacity.
When you outsource your transportation needs, you gain the benefits of a private fleet, without the headache. J.B. Hunt Dedicated offers flexibility, guaranteed capacity, and a customized fleet designed with your company in mind. By taking transportation and logistics off your mind, we’re letting you get back to your core competency, while we focus on ours.