Confidence in the ability of third party logistics partners to provide flexible solutions is at a high says Tony Suggitt, joint managing director of Redhead International.
Over the last 10 years there has been an almost universal trend across manufacturing sectors for the downsizing of delivery batches. This has occurred in response to the leaning out of manufacturing processes, the reduction of stock and a growing focus on offering flexible services to match customer requirements.
For companies like Redhead International, which has long specialised in groupage operations, this has been a profitable trend. The company compiles a wide variety of small batch deliveries from a customer base reaching into the tens of thousands and ensures fast delivery to their disparate customer base – thereby helping manufacturers looking to scale back or do away with warehouses and storage facilities and encouraging their customers to order for their immediate needs.
Scepticism: a thing of the past
“Ten years ago there was a lot of scepticism about this kind of logistics arrangement,” says Mr Suggitt. Manufacturers were worried about the reliability of deliveries, about products getting lost at large central hubs and about who would hold the responsibility when something went wrong. Some were also worries about sharing haulage space with competing products.
“Over the last ten years services have developed that have got rid of those concerns,” continues Suggitt. “Good standards within the groupage networks have allowed them to prove that the model works and the development of technology which brings greater visibility, and therefore greater peace of mind, has also helped.”
That said, Suggitt does not over-hype the value of ‘track and trace’ capabilities. “Some customers use it fairly intensively and some are uninterested,” he comments. “What is important is that we are able to offer the same visibility to both. While there are still many companies who barely use our track and trace services, the principle stands that we are transparent and that we have accessible data to interrogate about how well we are delivering. The evolution of track and trace has been important for pushing up industry standards and allowing performance measurement.”
Another industry trend which has helped raise the credibility of small batch logistics arrangements, provided by third party carriers, has been the rising importance of carbon footprinting and environmental credentials. “Groupage is an intrinsically eco-friendly way to manage logistics,” says Suggitt. “One of our major costs is fuel and we only get paid for what we carry – so we are not going to trunk around a lot of empty space. We use modern, fuel efficient vehicles and we are driven by the fact that our profit margins rely on us consolidating as much freight as possible.”
This is far from the case with individually contracted logistics partners. “If you are contracting a partner as a sole client, to trunk your goods around the UK then they are likely to have empty vehicles burning fuel on return journeys. We charge for pallet footprint and we fill every vehicle.”
Redhead’s multi-user approach means that its fleet of vehicle’s shift’s a broad ranging variety of products all over Europe, from paper products to textiles and building materials. And customer needs can vary as much as the goods they are delivering. “Some customers need us to take 25 consignments a day, and some only need two or three a week,” explains Suggitt. Either way, a flexible approach coupled with good planning, means that Redhead is now helping upwards of 15,000 european customers – including many SMEs – get order to their customers in the quantities they need to maintain lean operations and high just in time standards.