Shared Dedicated Services Provide a Creative Alternative to Less-Than-Truckload Shipments
Combining the convenience of LTL with the benefits of a dedicated solution
Shared dedicated transportation networks provide shippers a unique offering that combines the benefits of dedicated contract carriage with the economic advantages of a less-than-truckload approach. Shared services also offer customized high-touch deliveries, minimal freight handling and consistent delivery times.
“The concept of shared services is providing a shipper with a level of service that, for all intents and purposes, looks like dedicated transportation with the same quality and integrity of the handling, but at a price point that is less than what a purely dedicated operation would offer,” said Ken Landego, senior vice president of business development at Penske Logistics.
Shared services combine freight from multiple shippers going to common geographic areas. “It is a mixed freight solution that is less susceptible to damage, more cost-efficient and more likely to meet scheduling timelines,” Landego explained.
In many cases, freight is delivered unattended during the night with a consistent driver handling the location. “The driver is well trained on the unique handling characteristics of the product and the unique requirements of a delivery site, such as how to gain entry and what product to bring back,” Landego said.
The reverse logistics, which is helpful for items such as shipping containers, product returns, buybacks or warranty items, is a unique feature shared services offers that LTL doesn’t. Shared services also ensure the same driver is servicing the account each day, which improves customer service.
A shared network is typically designed to handle industries with similar needs and freight characteristics. It works well for specific types of products, such as automotive, industrial or electrical service parts, but any products that need to be delivered on time and damage-free are good candidates for the model.
“Those within the shared dedicated services network typically need to have their products supplied on a nightly basis. They have unique items they may not stock regularly that are needed to get their work done the next day,” Landego said. “The more closely they align, the better sharing partners they are.”
It only takes two customers to have a shared services network, but there are advantages to having more. Penske has some routes with up to 15 sharing partners.
Penske uses sophisticated scanning systems to ensure the right products are loaded on a vehicle and that the correct freight is delivered to the right location.
There are also safeguards in place in case one partner’s freight is running late or if there is more freight than available space. “On a nightly basis, our scale allows us to make adjustments and move things around if we have to. We design routes so there is excess capacity, and we put contingency plans in place. Our goal is to get everybody’s freight delivered every night,” Landego explained.
In addition to cost savings, shared services also reduce the number of miles driven. “The environmental impact you can have can be dramatic. You may be able to reduce miles being run by 35 to 45% depending on the volume,” Landego said.
Customers can also use less packaging than they would with an LTL network, which typically requires shippers to package items in corrugated and wooden pallets to minimize the risk of damage. In the shared network, shippers can use minimal packaging as well as reusable shipping containers.
Currently, Penske’s shared dedicated services network delivers over 7,000 unattended nighttime deliveries at locations in 48 states. The operations are supported by 14 Penske cross-dock locations nationwide.
To learn more about multi-client shared network opportunities, contact us.