Lauren Howard, Vice President of Customer Service at Celadon Trucking Services, spoke at Manhattan Associates’ Momentum conference in May. Celadon Trucking is one of the 20 largest truckload carriers in North America. They are headquartered in Indianapolis in the US and they offer a range of dry van truckload transportation services including long-haul, regional, local and dedicated, as well as refrigerated and flatbed services.
Celadon seeks to be a total solutions provider; they encourage their customer base to give them the ultimate flexibility to manage their freight – whether that is on their trucks, over the rail, or through a partner carrier. Ultimately, Celadon wants the customer to tender them their freight and service expectations and to allow them to determine the best way to move the freight. With capacity continuing to tighten in North America, this is becoming something increasing numbers of their customers are signing up for.
Celadon had recently implemented Manhattan’s Load Analyzer solution, a solution that drives profitability through better resource utilization; this is achieved by better balancing capacity with actual and “projected” demand. Through Load Analyzer, Celadon sees what is happening with the network based on what is currently booked in the system, along with what is anticipated to happen within the network. The projected demand comes from the system looking at which of their weekly commitments have not been met, as well as historical trends, and using the previous 90 days of data anticipates when those commitments and/or trending lanes will materialize and need to be picked up. Load Analyzer then identifies customer lanes in their network that they have run within the previous 90 days that will help balance their network in the most profitable way.
For example, Load Analyzer would know today that they are overbooked by 10 trucks in South Carolina 5 days from now based on current bookings. The solution also knows that one of their important customers will very probably submit a tender for five more trucks on this lane five days from now, meaning that they will be overbooked by 15 trucks in total.
To rectify this situation, Load Analyzer looks to see where extra capacity is available. So for example, the system might see that Celadon currently has extra trucks that will be in Dallas three days from now. Because they will have extra trucks in Texas, and not enough trucks in South Carolina, Load Analyzer will queue up the most profitable customer lanes for their customer service representatives (CSRs) to solicit that originate in the Dallas area and terminate near South Carolina. By doing this, the system works to balance their network with profitable freight that meets the on-time service expectations of their customers.
Demand can be balanced with capacity in other ways as well. The system can choose to move some trucks empty toward a destination; or they may ask a truck in an area with projected demand to pause for a few hours to see if an anticipated order materializes.
Load Analyzer’s capacity shift recommendations are based upon their unique weighting of optimization factors. At Celadon, commitments are the most powerful decision variable. But a number of other variables are considered as well: the previously discussed projected demand, a limit of how far they will shift capacity, where their capacity is currently located, regional scoring factors (this scoring helps to concentrate their equipment in defined operating lanes to create more predictable movements), transit time, hours of service, shipper behavior (like the seasonality of their loads, whether they are opened on holidays, etc.), and the profitability of a given move when considered in isolation.
Celadon got great results from the solution. They implemented this in November of last year. By the end of February, Celadon had decreased its dependence on broker freight by 49.4% by booking more targeted customer freight on their own trucks. Other positive results included a 3.5% increase in booked revenue in their third quarter as compared to their second quarter. Their layovers also decreased by 67.5% in the third quarter of this year as compared to the third quarter of last year. Clearly, their fleet was much better utilized. But customers benefited because fewer pick-up and delivery windows were missed, and drivers got a reduction in layovers.
So this is very cool technology. But that is only part of the story. Celadon’s success required process changes and clever change management.
At Celadon they have three key positions within Customer Service: a Freight Analyst analyzes all the tenders that come through the system and determines which tenders to book for their network; a Utilization Analyst who sets all of the appointments for loads and works to improve driver utilization based on Hours of Service; and a Customer Relationship Analyst, who is the customer’s direct contact for load inquiries and service. All of these positions are responsible for soliciting freight out of Load Analyzer, but only the Freight Analysts can actually booking freight.
Rather than just blindly soliciting business, CSRs were now expected to use the system intelligently. For example, they may have a customer that uses them for spot coverage that they know often tenders on a particular day for a particular lane. The system will tell that analyst to go after that load before it is tendered. This intelligent solicitation allows them to lock down a potential backhaul or headhaul move that helps to balance their network.
They started small. The project team sat down with each analyst and watched them use the solution. Initially, they required them to do one to two targeted solicitations per day; then it was 25 solicitations per week; and finally 5 asks on 5 lanes per day. Now they are at a point where they type in an analyst’s name in a portal and they can see which analysts hit this daily target and which need to be coached.
The usage of the tool is continuing to grow. Celadon just finished a Million Mile Challenge within the Customer Service department. Lauren challenged the staff to win 1 million miles through Load Analyzer solicitations last month. The team used the tool to successfully solicit 955,361 miles. This is more than they had won in total during the previous quarter.
Celadon also has created a tiered career ladder within Customer Service to attract top talent and promote staff retention. Three years ago there was limited advancement possible with only CSRs and a few managers. Today, the career ladder starts with a Junior Freight Analyst and has six rungs – with growing responsibility and remuneration at each rung – that climbs to the Director level. Perhaps, this partially explains a recent award; Celadon was recently named to “The Indianapolis Star Top Workplaces” list of the best places to work in Central Indiana for 2014.
The moral of this story is picking the right technology is of course very important, but don’t forget that technology is used by people; their behaviors must change!