FedEx Custom Critical Surface Expedite Network
"FedEx Custom Critical is preparing to launch a new service to customers, FedEx Custom Critical Surface Expedite Network. A time-definite LTL service, FedEx Custom Critical provides the customer service while FedEx Freight provides the operational side."
So, how does this work and how does it effect the Fedex Custom Critical contractors? To get those answers, you have to go to the top. In this case, we went to Ms. Virginia Albanese, VP of Service for FedEx Custom Critical.
She begins, "This is an added service that we'll be able to offer customers in collaboration between FedEx Freight (our regional LTL carrier) and FedEx Custom Critical."
"Actually, what we're doing is taking the top of the expedited market and working collaboratively with the top of the LTL market to come up with this product."
She continues, "What this allows us to do, is when a customer calls into FedEx Custom Critical, we get the pieces, weight, commodity, etc., and where it's picking up and delivering."
"There are a number of times when we will give a quote for, let's say a 12-foot straight truck and the customer will tell us 'oh, I really didn't need that' and we would hang up the phone. Now, we know that the customer's need to transport that freight didn't just go away, and they continue to call somewhere else."
"With Surface Expedie Network, we will take freight that doesn't require exclusive use, but is still time-definite. We will take that into the FedEx Freight system. Much like we do with Air Expedite Network, we will wrap that freight with Custom Critical tape and put it into the LTL network. It will go on the truck last and come off first, so that shipment can move expeditiously through the LTL system."
Albanese says that whereas a typical LTL shipment is slated to be delivered at 1:00 PM, a customer may instead want it delivered it at 9:00 AM. FedEx will then work ahead through the service centers at FedEx Freight to ensure that when that freight comes off the truck, it will go onto another truck for that earlier delivery time.
She touches on a key component of the new service:
"Today, FedEx Custom Critical has 60 sales professionals. Over the last two months, we have had the opportunity to train 600 FedEx Freight sales professionals about expedited freight, FedEx Custom Critical and all of its services as well as the new FedEx Custom Critical Surface Expedite Network. They are not only trained but they are now focused on expedited freight."
"So, we have gone from a sales force of 60 to a sales force of 660 plus. Logic tells us that more people will be calling into FedEx Custom Critical looking for expedite service."
She explains, "We have been running a test of this and the customers have loved it, because when a customer calls, we're giving them options and a customer wants options. Whether we book the load in Surface Expedite Network or Exclusive use, the good news is that we have kept that customer with FedEx, a top-of- the-line brand. That keeps the customer happy and that customer will call us back again!"
"It's great for our contractors, and we've seen this already during our testing. We are seeing a whole new group of customers and getting shipments from a whole new spectrum of markets. Sure, some of the customers who call in will book FedEx Custom Critical Surface Expedite Network, but we are seeing a good number of them who are booking through exclusive-use, White Glove and Air Expedite."
"We have seen an increase in Custom Critical's core businesses and that was just in the testing phase. After the actual launch of FedEx Custom Critical Surface Expedite Network, our FedEx Custom Critical contractors are going to see a whole new variety of freight and a whole lot more freight as a result of this great relationship between the FedEx operating companies."
"It's all about giving the customer options at the right time for what they need to ship."
Albanese says that she believes this influx of new business from new markets will help smooth out the seasonal highs and lows that is typically seen in expedited freight. And, because of this expected business level increase, FedEx Custom Critical needs to grow its fleet.
Albanese says, "Today, we have approximately 1,400 trucks and we want to grow our fleet up to around 1,800 trucks in order to handle that increased business."
She says, "One of the things we've done is to increase the referral amount. We've got excellent contractors and they refer us excellent contractors. They do a great job of talking to people who might want to come into the business or come to FedEx from somewhere else. They do a great job of explaining the whole picture, so we want to continue to encourage our contractors to refer good people to us. We need excellent contractors to make all of this work."
"Since around November," she continues, "we have initiated an all-out push in the areas of recruiting and retention and it extends from Jack Pickard and myself to the dispatchers and the people at the front desk."
"Certainly, we're focused on the recruiting side - getting those good quality contractors through the door, but our main focus is retention. The bottom line is, once we have those great contractors, we need to make sure they stay."
"We have been looking across all of our systems - how do we communicate with the fleet, how do we pay the fleet, what do we do after orientation?"
"Our Contractor Council has suggested a mentoring program - a "buddy" system, if you will. They say that they have talked to a lot of contractors out there who just need someone to talk with and we're investigating how best to achieve this."
"We're also working on an "out call" program from the Custom Critical leadership out to our trucks. We would reach out to our people by calling them on an ongoing basis and asking if there is any way we can help them."
"I know that contractors want to talk to people in the company, whether it's a supervisor, manager, director or whoever it might be. Scott Garcher, our Marketing Manager, is working very closely with us on this because it all comes down to communication."
"We've been testing a new service from Qualcomm that a contractor can sign up for, free of charge, that will send a text message to their cell phone at the time they receive a dispatch offer. This means no more missed load offers."
She adds, "The net incomes our contractors generate continue to be the highest in the industry. People have wonderful earning opportunities with Custom Critical and we're adding new services that will really help our contractors be very successful with us."
Albanese identifies some issues affecting driver retention: "Back in mid- 2005, when fuel prices wereso high, that was one of the biggest issues. Our contractors weresaying, 'the fuel prices are just burying us, it's more than we can bear.'"
"We did a lot of analysis by looking at the competitive landscape, the customer landscape and we almost doubled the fuel surcharge that was going to our contractors in October."
"Another issue that we're visiting in our retention program is the lack of drivers. We have trucks purchased by our independent contractors and they cannot find drivers to put in them. So, one of the things we have done is to ask Karl Kussow, our Safety Manager, to put together a program to help our contractors find drivers."
She explains, "We get a lot of leads through the recruiting organization, so we are going to try to help. Over the past couple of years, we've tried a few ideas to find drivers for trucks, but this time we're doing it internally. I think this will help get drivers in the trucks and reduce turnover."
"Another area in which we can help our independent contractors be successful is in the area of discounts. We get a lot of discounts because of the FedEx buying power, so we're always looking for more for our contractors."
"We're establishing a program called 'Home Run'. If a contractor has been out for two weeks, we are trying to facilitate them getting home. We realize that we are in the type of business where you don't know where you're going next, but we recognize that when they have been running like crazy, we need to help them get home."
"Over the last four weeks, we have had a tremendous amount of success with this new program and getting people home."
"Custom Critical's White Glove division (and temperature control freight) has met with great acceptance by its customers, says Albanese, and that this service is paying great returns to the contractors in that area. "It's really growing and we're very excited by it," she states.
"I think our contractors will see that we're putting our best foot forward and making our best effort to make FedEx Custom Critical the pinnacle of expedite and the place where everyone wants to be."
She concludes, "I think it's a great time at Custom Critical - we've got all the right things going on, we have new services coming out and we have the right focus for our contractors. It's going to be a good year."