Visit Our Sponsors
The collaborative transportation program at Dal-Tile is based on the heavy, dense nature of ceramic tile, says Jones. Typically weighing in at 80 to 90 pounds per cubic foot, these tiles reach a vehicle's weight limit long before the cubic capacity is filled. "We realized that that space had value to someone," Jones says. "The idea was to collaborate with external partners outside of our own industry vertical who could use that capacity and help us reduce our transportation costs."
It has worked like a charm. With help from third-party provider Transplace, Dal-Tile is now working on its sixth collaboration, Jones reports. The prior five collaborations have resulted in more than 4,000 co-loads, most from Monterrey, Mexico, into the U.S.
Low density is a key criteria in finding co-loading partners, but "density is not all there is to collaboration," Jones says. After one false start, Dal-Tile identified several factors important to a successful collaboration.
Density is the first. "We need products that are typically less than six pounds per cubic foot," Jones says. Surprisingly, one of its partners loads appliances on top of the tiles. "You think about appliances as being pretty heavy, but they also are very bulky so from a density standpoint they are within our range," he says. Other co-loading products, like Styrofoam cups, are only a pound or two per cubic foot, "so from a collaborative standpoint there is a pretty good range of options," he says.
Geography and lane also are important considerations. "We need to have similar origins and destinations," says Jones. "What so far has worked best for us are opportunities that originate in Monterrey, Mexico, and terminate in the Baltimore, Md., area. Essentially we are looking for major metropolitan areas, where most large companies have distribution operations," he says.
In terms of the collaborative relationships, Jones says the focus that each company has on the financial benefits "keeps us coming back to the table, even when we have difficulties." There certainly have been challenges, because every company operates differently, he says, but there is a certain respect that flows from each party knowing that they cannot do this alone. "They need us and we need them just as badly, and that creates a mutual respect that allows us to get through the difficult times," says Jones.
Along with respect, transparency is a must-have. "We need operations transparency so we can design a solution that will produce results, and we need cost transparency so that everyone understands what the benefits will be for them and can count on these benefits being delivered," Jones says.
So far those benefits have run from a 10- to 15-percent reduction in transportation costs all the way up to a 60-percent reduction, he says. "If you consider the long lengths of haul out of Mexico into the U.S., reducing transportation costs even by 40 percent, which is the middle of that range, is a pretty powerful thing."
To view the video in its entirety, click here
Enjoy curated articles directly to your inbox.