dcc article

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.

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Just as artificial intelligence (AI) and machine learning (ML), remote sensing, and predictive analytics are transforming supply chain operations, they are also bringing huge changes to safety programs.

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At Penske Logistics safety is not characterized solely as a priority, safety is also one of the company's core values. This philosophy reflects the importance of safety, a small word for a vast area of responsibility that has become more challenging in line with the growing complexity of the logistics business.

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Dedicated contract carriage (DCC) ensures committed capacity, and there are several metrics that measure the efficiency of an operation and help control costs.

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The "take-make-dispose" approach to economic growth is becoming less tenable as more consumers demand sustainable products, and companies face increasing pressure to conserve the planet's finite resources.

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Penske Logistics has earned Cold Carrier Certification, adding to its strategic approach to safety. The certification, which is the first of its kind, recognizes cold trucking carrier companies that comply with the Refrigerated Transportation Best Practices Guide from the Global Cold Chain Alliance, a trade association representing all major industries engaged in temperature-controlled logistics.

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As is the case with any mode of transportation, demand for dedicated contract carriage (DCC) services can change with the ebbs and flows of freight markets. However, shippers often get the most out of the DCC model when they deploy it as part of a long-term logistics strategy.

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Retailers looking to improve efficiency and reduce labor costs are embracing a direct-store-delivery (DSD) model, with goods traveling directly from the supplier to the retail store. DSD models save time and minimize touchpoints for industries such as food and beverage, automotive and health care, where just-in-time deliveries can reduce inventory levels, freeing up capital and floor space.

“It is a strategy for taking work out of retail,” said Jeff Jackson, senior vice president of operations for Penske Logistics. Jackson added that when retailers have a high level of execution, they can stretch inventory. “You can have a much lower order quantity,” he said.

Identifying Added-Value

Penske Logistics works directly with its customers to find additional ways it can streamline operations. “In a DSD model, we truly are dedicated to do whatever customers want us to do,” Jackson said. “We’re going to work with them to achieve their goals. We’re here as their private fleet to figure out how delivery can reduce pain points in the store and the business.”

For example, for one customer, drivers deliver donuts directly into the display case to maximize freshness. For another customer, Penske partially thaws pre-made doughs so the product can be cooked when it arrives. “That gives the customer space, because we have removed a step from the process, and the customer doesn’t have to do the work,” Jackson said.

DSD also may benefit retailers that offer a large number of SKUs but can’t store them all onsite. “We can look at orders and needs, pull product from a distribution center and deliver it into the store in the middle of the night,” Jackson said.

Through DSD, Penske can limit the number of tractors and trailers needed to make a delivery. “In a retail environment, a truck is disruptive in the parking lot,” Jackson said. “With DSD, we can collect from three or four suppliers, consolidate that in cross dock, load it onto one truck and deliver.”

DSDs can give retailers greater quality control, too. “The less people touch it, the less chance there is for a problem to arise,” Jackson said.

Measuring quality effectively becomes more important as customer standards and government regulations increase. “At some point, everyone is going to have to have a full electronic chain of custody from farm to table,” Jackson said. “That’s why visibility in a cold chain is critical.”

Ensuring Performance

Because DSD relies on just-in-time deliveries, Penske uses its technology to help ensure accurate delivery times. Penske closely monitors drivers’ progress, weather and traffic to get ahead of any potential risks. What’s more, Penske can provide status updates and arrival/departure notifications to customers through an app or via email.

Penske also can plan ahead for known surge periods, such as the holidays. “We push the limits the most when there is inclement weather,” Jackson said. “We enhance our emergency response plan in these scenarios.”

If a customer needs additional equipment or if a tractor needs maintenance, Penske Logistics can access rental tractors from Penske Truck Leasing, which minimizes the risk of any downtime.

Training Drivers

DSD requires specific standard operating procedures and auxiliary driver training. At Penske Logistics, drivers undergo additional training in DSD operations. “The investment in training is much longer because it is so white-glove,” Jackson said.

Penske Logistics also seeks a specific driver profile when hiring for DSD operations. “We put more emphasis on finding someone who has the temperament to deal with the general public,” Jackson said. “We aren’t directly charged with engaging customers, but our drivers will engage with them because they’re in the store.”

Penske Logistics has more than 10,000 drivers on staff and hires more than 3,000 drivers a year. “We build in transparency through our very sophisticated recruiting model and robust scope documents that describe each driver’s role,” Jackson said.

Identifying the Keys to Success

For DSD to succeed, both parties must have thorough operating procedures and a high level of trust. “We have a tremendous amount of rigor,” Jackson said. “For one customer, products must be there by 4 a.m. We are 99.9 percent accurate with on-time deliveries.”

He added that both parties must commit to collaboration and disciplined execution. “If we don’t collaborate, we’ll never even get to a solution design, and we can’t get further than that.”

Understanding When DSD Makes Sense

DSD may be an ideal solution for operations that have:

  • Daily fresh deliveries.
  • Just-in-time deliveries to manage high SKU inventory.
  • High-volume products.
  • The desire to maximize space.
  • A need to control the chain of custody.
  • Products that require special handling and driver training.

Penske Logistics works closely with its customers to create a solution tailored to their operation. To discuss DSD opportunities, contact Penske Logistics.

A company’s public image is critical, and Penske Logistics works closely with its customers to ensure its equipment and drivers reflect the company’s brand. That is especially important in direct store deliveries (DSDs), where drivers may interact with the public while providing value-added services and making in-store deliveries.

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In many consumer-facing businesses, logistics is more than an activity for transporting products – it is an integral part of the brand. This is why shippers in these markets often choose dedicated contract carriage (DCC) as their preferred trucking logistics option.

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In today's highly dynamic competitive environment, companies often change direction tactically, strategically or both. These changes can come in many forms, such as the arrival of a new management team or a lucrative market opportunity the company decides to pursue.

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There are various reasons why shippers choose dedicated contract carriage (DCC) services to move their freight, but one of the less obvious—and increasingly important—ones is that DCC truck transportation takes a significant amount of risk out of the supply chain.

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Operating in today's service-oriented world means placing a high priority on your brand and ensuring it delivers the best experience possible for your customers. You juggle scheduling, purchasing and operations, making sure the items customers demand are restocked frequently.

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Increased freight demand and tight capacity are leading to higher prices, with major carriers reporting increased revenue per mile in their third-quarter 2018 financial reports. While increased rates can be good for trucking companies, they can be challenging to manage for shippers.

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Continuous improvement—the ongoing process to improve the products, services or processes of an organization—can create significant advantages for a business, and Penske continually invests in technology, equipment and training to help improve its customers' operations.

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Over the last several years, the North American trucking industry has seen an incredible amount of freight demand thanks to a robust economy, historically low unemployment, and strong consumer confidence and spending.

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Companies that need guaranteed capacity or a high level of service can gain additional control through Penske Logistics’ Dedicated Contract Carriage (DCC).

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The driver shortage, rapidly changing technology and tightening capacity are causing many shippers to rethink how they get their products to market. A dedicated transportation (or dedicated contract carriage) solution may be the answer.

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