By Deborah Lockridge, Editor in Chief
Getting the freight there on time and undamaged is just the beginning. (Photo: Con-way)
When a customer calls Southeastern Freight Lines, he doesn’t hear, “press one for sales, press two for maintenance, press zero for a company directory.” Instead, a real live human being answers, “Southeastern Freight Lines, how may I serve you?”
Trucking is about more than selling space on a truck. It’s about selling service. While the most basic measure of that service is the on-time delivery of an undamaged load, in a business that is becoming increasingly commoditized, customer service can mean the difference between a company that simply survives and one that excels, grows and prospers.
“We don’t build a product, we don’t sell a commodity. All we have to offer is our service,” says Mike Heaton, senior vice president at Southeastern Freight Lines. “We believe that to truly differentiate our company from the rest of the industry, we’ve got to serve better than anyone else.”
We talked with Southeastern and other fleets known for cutting-edge customer service to get their insights on serving customers well, and how that pays off in the long run.
Jim Mickey, co-owner of Coastal Pacific Xpress, a British Columbia-based refrigerated carrier, says communication is the single highest priority his company has identified for differentiating its service.
“The best way to stand out is within the sphere of communication throughout the entire process, but particularly when something is amiss with the initial commitments undertaken,” he says. “Customers value transparency and early notification above all else, and they feel distrust and disrespect when they are subjected to poor communication.”
At CPX, the goal is to keep the customer as informed of his load and its on-time status as if he had a permanent employee sitting on CPX’s central dispatch floor.
“The more our customer knows about any potential deviation from his stated plan for his load, the better that customer can run his own business,” Mickey says.
At A. Duie Pyle, which received top scores among LTL carriers in its region in Logistic Management magazine’s Quest for Quality awards, “our business is almost as much about information as it is about transportation,” says President Steve O’Kane. “To keep our reputation in the marketplace, we need to be great at both.”
Technology has changed the face of communication with customers. Satellite tracking has long allowed major fleets to be able to tell customers where their load is at any given time. These days, however, it’s gone well beyond that.
“The days of being able to retain a shipper’s business because you are a nice guy are long gone,” says Sean VanDyck, vice president of sales for PCS Software. “Today’s shippers want to track their freight online. They also want online access to invoices, proof of delivery and account statements.”
While a common way to do this is to have the shipper log in at the carrier’s website, VanDyck points out that many shippers, especially if they are using multiple transportation companies, will instead simply call the carrier as they always have. If the carrier gets more calls than it can answer and the shipper has to leave a message, this can be perceived as bad service.
“In this day and age, it is not enough to answer each phone call,” VanDyck says. “business people are multitasking more and more, and do not want to have to stop what they are doing to call their carrier.”
That’s why technologies are now available to provide automatic notification to shippers on their load status. And with the increasing use of smartphones, some fleets are taking advantage of that technology to communicate with customers. For instance, A. Duie Pyle recently launched a mobile site, allowing customers to enter pickups and track shipments and obtain transit times, ETAs, delivery notifications and PODs. Con-way Freight offers an app that allows customers to create a personalized rate quote, as well as track shipments, view shipping documents and locate and call service centers.
Technology also works behind the scenes to make sure loads get where they’re going on time. Dave Kramer, executive VP of corporate sales at C.R. England, points out that today, you can tell not only where a truck is, but with electronic logs, how many hours a driver has left.
C.R. England uses this and other information in an optimization program that will flag a shipment in jeopardy of missing its delivery time. The system also walks the customer manager through potential solutions. For instance, if a driver is almost out of hours, the system can direct the service representative not only to the nearest available driver, but also to the one who has enough hours left to complete the run.
The personal touch
Yet technology is no substitute for real, personal customer service.
At Southeastern Freight Lines, the people who answer the phone are trained to do it correctly and courteously. Its PD drivers are taught basics such as making sure to thank customers for their business, and not to be rude and talk on their cell phone while dealing with a customer.
Some fleets find it helpful for customers to have a regular person servicing their account.
C.R. England assigns a customer manager to each account. “Their whole purpose is to track shipments and meet specific needs and requests,” Kramer explains.
At A. Duie Pyle, incoming calls are automatically sorted by zip code. This way, each customer is consistently serviced by a small group of customer service representatives based on location.
“This provides us the advantage of the training, stability, flexibility and efficiency of a large customer service group, while the customer has the experience of dealing with only a limited number of CSRs familiar with their account,” explains O’Kane.
CPX has taken a cue from FedEx and aims to be the carrier shippers turn to when “it absolutely positively needs to be done,” and done right. The driver is key in this effort.
CPX has actively gone after freight that requires a better person behind the wheel, which in turn helps it get higher rates. Those higher rates, in turn, allow it to pay enough to attract drivers who provide excellent customer service.
With good drivers that can offer a higher level of service, CPX is able to go to shippers and offer to take their toughest lanes. Mickey says he tells customers, “Give us the junk that nobody else will do for you.”
“Once we perform spectacularly on their toughest stuff, every time the other guy stumbles, they’ll ask themselves, ‘Why are we using this guy when we could be using CPX?'”
SEFL’s Heaton agrees about the importance of driver relationships with customers. “We don’t have a lot of turnover, so many of our guys build relationships that solidify the partnership. That makes it difficult for a customer to make a change based on price, because our driver is serving them so well,” he says.
Ask more for premium service
John Larkin, who heads up transportation and logistics research for the Stifel Nicolaus investment firm, told refrigerated carriers this summer they “should not be bashful” about negotiating higher rates, because they offer a premium service, “a very difficult service to provide well.”
Speaking at the Truckload Carriers Associations’ Refrigerated Division meeting, Larkin said, “From my point of view, the temperature-controlled business is a much more specialized business [than dry van]. The equipment is specialized. The freight that is being handled is much more subject to damage, much more perishable, and it should really be a premium service. Shippers are entrusting you with very expensive product that, if not transported properly, could go bad quite easily.”
Now is an excellent time to emphasize that premium service to shippers during rate negotiations, he said, with capacity tight and a driver shortage looming.
At the same time, he noted, refrigerated carriers can’t rest on their laurels. “Carriers need to keep their ear to the ground and be flexible. They have to be able to consider at least offering multimodal, intermodal or regional services, as those seem to be a big area of growth. In some cases, a comprehensive, turnkey logistics solution for your customers may need to be in your service offering.”
For some companies, customer service means a cooperative approach between the shipper and carrier to solve a logistics problem.
Slay Transportation, a bulk chemical transportation and logistics company in St. Louis, Mo., is a good example.
Huntsman, a chemical producer based near Houston, last year issued a bid request for a dedicated carrier to ship propylene oxide to its chemical plants in Texas and Louisiana. With the common carriers it had been using, tractor-trailer configurations and payloads varied considerably, making it difficult for Huntsman plants to know what to expect from inbound loads. Huntsman wanted standardized equipment, increased payload, and more safety features. Slay won the business because of its commitment to collaboration.
Slay worked with Polar Tank, the supplier of most of its 1,200 trailers.
“We brought everyone to the table – us, Polar, and the Huntsman shipping personnel and logistics team,” explains Mike Jackson, vice president of operations at Slay. Polar worked directly with Huntsman plant personnel, visiting facilities to observe loading and unloading.
They came up with a spec that allows Huntsman to move 20% more payload than it could using common carriers. Jackson says Slay’s approach may lead to more work with Huntsman. “It shows what’s possible when you have a great relationship with the carrier, the customer and your equipment supplier.”
Providing this kind of customer service day in and day out requires a corporate culture of customer service.
At Southeastern Freight Lines, “Our mission is to be not just the best in class in the trucking industry, but to be recognized as best in class in all industries,” Heaton says. And to do that, customer service has to be a mainstay of the corporate culture. In fact, he calls the company’s culture “a competitive weapon.”
From the top down, SEFL believes in a “servant leader” culture, which deals with how both internal customers (employees) and external customers (shippers) are treated. “We take care of our internal people first, because we believe they’ll take care of the external customer,” Heaton says.
CPX’s Mickey also emphasizes the importance of a culture of customer service.
“What the leaders tolerate and encourage is what you will get in the long run,” Mickey says. “If the ‘walk the talk’ is present at high levels, the front line will deliver a similar value.” He points to the Ritz Carlton hotel motto, “We are ladies and gentlemen serving ladies and gentlemen.”
“We try to deliver a deeply respectful attitude from our management to our frontline drivers and ops staff in the sincere hope that they will in turn deliver valuable and respectful service day after day.”
To stay on top of ever-changing customer service challenges, some fleets follow a “continual improvement.” program. Whether it’s Lean Six Sigma, Peter Senge’s “The Fifth Discipline,” or a homegrown program, the best fleets are always working to measure, to monitor, to improve. These fleets also aren’t afraid to get ideas from the best, inside and outside of the industry, whether it’s FedEx, the Ritz Carlton hotel, or Chick-Fil-A.
Southeastern Freight Lines, for instance, started a formalized quality improvement process in 1985. In 1991 it was a finalist for the Malcolm Baldrige National Quality Award. Today, SEFL uses strategies such as flowcharts, brainstorming, and various types of diagrams and charts to help it make improvements and measure those improvements. The company says its quality improvement process has been the single most effective means of keeping every Southeastern Freight Lines associate focused on meeting the diverse needs of its customers.
“We can’t allow ourselves ever to become complacent,” Heaton says. All processes, he says, can be made better.
Mickey says a good continual improvement program could be described as “caring enough to never really be satisfied with the service delivered and always be asking what can be made better.”
In fact, feedback from customers is really the only thing that matters when it comes to determining ways to improve customer service, says A. Duie Pyle’s O’Kane.
“We define customer service by a large number of quantifiable performance metrics, but we are more interested in how the customer defines it,” he says. “While we use surveys, such as Quest for Quality, to give us some feedback, the best measurement is repeat business.” A. Duie Pyle still has its very first customer, from 1924.
Making it pay
In order for cutting-edge customer service to truly pay off, it takes customers who appreciate and are willing to pay a little more for it.
“There will always be a very fine line between ‘cheap enough’ and ‘good enough,” Mickey observes. “We try to find a customer who has learned his lesson about the adventures below the ‘good enough’ line, and one who now values the tiny investment on the ‘good enough’ scale to keep his own business on track. If a customer cannot find a differentiating value in what we sell, the mismatch is destined to kill any future relationship.”
At Southeastern Freight Lines, Heaton says the company’s reputation for service is often the differentiator when it goes into a bid situation or rate negotiations. “Even if we’re priced a little higher, oftentimes the things we’re doing win out over price. If we allow ourselves to become a commodity, we’re going to lose.”
From the November 2011 issue of HDT.
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