Fleet Management News & Business Info | Commercial Carrier Journal
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INNOVATORS SIGHTS ON SERVICE Carrier creates cost structures based on customer needs BY JEFF CRISSEY I n the midst of the recession of 2008 through 2010, many carriers couldn't be picky about which freight orders they could accept. After all, any freight movement, regardless of how small the profits, meant assets were in motion. Now that the economy has rebounded and freight movement is up sharply in the last three years, many of those same carriers still operate under the same "take all freight" mindset – albeit at higher rates than during the recession. Central Pennsylvania Transportation, a short-haul truckload carrier based in Lancaster, Pa., has taken a different tact, instead using an activity-based costing model whereby it scrutinizes every potential opportunity based on the customer's specific needs. "Potential customers will call us and ask, 'What is your rate between Lancaster and northern New Jersey?' " says Thorny Embly, vice president. "The answer is always, 'We don't have one.' " Through careful analysis, its activity-based costing practice allows CPT to keep its costs low and in some cases allows the company to share those cost savings with its customers to help foster long-term relationships. "We've always modeled what the operation looks like and tried to work together with customers to create cost-saving measures," says Embly. "If someone CENTRAL PENNSYLVANIA TRANSPORTATION Lancaster, Pa. wants 10 of our trailers sitting in their lot, of course there is an expense associated with that. The innovative side is trying to create data points so that we can focus on how our operation works within their needs to help minimize such costs." Embly says one of the things that sets CPT apart from its competition is the willingness and desire to become intimately familiar with its customers' operations. "From a technology standpoint, the back-end systems that we use create data that we share and work together with our customers on to look for different improvements and problem areas without stepping on people's toes," he says. As a result, CPT's dedicated operations – roughly 15 percent of the company's business – often become an integral part of a customer's production process, working with a customer's finished product going to distribution centers and bringing vendor product back into the plant to help optimize the process. In unique cases, CPT takes it a step further with revenue-sharing opportunities whereby a customer would allow CPT to put other freight on its shipment. CPT in turn shares some of the extra freight revenues back with the customer to help lower costs and remain competitive. Out of its operation in Hazelton, The short-haul carrier goes the extra mile to earn and keep customer business by creating true partnerships with shippers. COMMERCIAL CARRIER JOURNAL | JULY 2013 CCJ_0713_Innovators.indd 43 43 6/24/13 5:03 PM