Making the Last Mile Work

In an environment where e-commerce continues to enjoy double digit growth, retailers require fresh solutions from their logistics partners tailored to their ever changing distribution channels. Whether you're supporting a hub-and-spoke system or a network of brick-and-mortar retail sites, your ability to adjust and adapt is critical. Quite often "speed to market" is your most important differentiator. Here are tips on making that work:

Q: How do you strategically navigate today's market in a manner that provides value to all stakeholders?

A: The customized logistics or last mile space can be inherently confusing. Our position in the supply chain establishes us as a potential liaison to a myriad of transportation genres, all of which have a unique set of rules and requirements. At any moment, we could be supporting a number of verticals: air express, freight forwarding, LTL, TL, white glove, courier, etc. The key is to “know thyself". Every provider has a wheelhouse or niche-core competencies. It is essential you determine yours; for the sake of all stakeholders.

Q: Where do you begin?

A: Go to your data! Review your current revenue stream. Break it out by service verticals. Review your service metrics. How well are you serving each vertical/client? Where does your profitability come from (NOI)? Are core competencies in line with the needs of today's markets? Be honest with yourself for the sake of your clients, associates, shareholders, and the communities in which you operate. Ultimately, you have a responsibility to sustain a safe, effective, and profitable operation.

Q: Is all business good business?

A: No—not for you or your potential client. Once you've objectively determined your position of strength within the last-mile space, you must focus and act with intent. Your Business Development Plan must have appropriate boundaries. You must establish target accounts. You must have the discipline to say "no" to opportunities that aren't a good fit. You need to align marketing and communication with your value proposition. Whether it's a particular set of service verticals, a particular geography, or industry, it is imperative your decisions are made with intent. The next step is replication. Reproduce what works for all parties. Replicate within your wheelhouse. This breeds success for all.

Q: How do you quantify new opportunities? What filters do you employ?

A:  We have developed an internal tool called an Opportunity Matrix. It is a workbook that takes an in-depth look at new opportunities. It compares two independent opportunities competing for the same resources. We have taken the time to identify the criteria that are key for sustainable success in new ventures at Priority. The criteria include everything from our ability to competently serve the client, future growth opportunities, and potential profitability. Each criterion is weighted based upon importance and given a score based upon a predetermined scale. For us to proceed with a new opportunity, a minimum score is required. In cases where we are comparing two opportunities vying for the same resources, we score and compare, ultimately making an objective decision on the way forward based upon a quantified approach.

Making the most of a wealth of opportunity

In a market in which demand exceeds supply, there exists a wealth of opportunity.  As a service provider you have a unique opportunity to control your destiny. It all starts with revenue. Like anything else, it's a matter of choosing the right course, the right partners, and the right business model for you. If your organization is disciplined enough to take on the work that is right for you, everyone wins. When that happens service levels meet the expectations of your clients—you create a niche—you are more likely to be efficient and effective and ultimately fiscally sound. 

Look at revenue as the nutrients your body requires daily. Stay away from the sugary snacks that will only produce a momentary high and ultimately be followed by a crash. Stay disciplined and make well thought-out decisions with intent. Do this and your diet will remain a healthy one!

About the Author

Brian Surber is Vice President of Operations, Priority Dispatch. The company is an active and involved member of the CLDA.