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A highly varied product line almost always requires a supply chain of matching complexity. And Royal Building Products is no exception to the rule.
In business for nearly 50 years, the division of Axiall Corp. makes and distributes a broad range of materials for home remodeling, building and municipal construction. Products include siding, trim, accessories, moldings, decks, window profiles and patio doors. As if that weren’t enough, Royal also manufactures pipes and fittings for the electrical, irrigation, plumbing and industrial construction industries.
All of which adds up to a significant challenge, when it comes to getting product to demanding customers on time and in good condition. In fact, Royal provides just-in-time delivery of materials through two distinct channels: retail home-improvement stores, involving the use of less-than-truckload (LTL) carriers, and retailer distribution centers, with shipments moving in full truckloads. In the case of the latter, Royal product is often bundled by original equipment manufacturers (OEMs) with window, shutter and garage systems, in addition to building materials being moved by distributors to lumber yards.
“OEMs and distributors need just-in-time delivery,” says Royal transportation manager Cliff Sturgill. “And the retail channel requires constant, frequent turns with short lead times.”
Royal operates out of 23 manufacturing locations in the U.S. and Canada. It had been operating its own trucks, but came to realize that the function didn’t square with its core competency. So the company turned to Ryder System Inc. for an outsourced solution.
It was no stranger to Ryder, which had been serving Royal for more than 20 years, according to John Diez, president of Ryder Dedicated Transportation Solutions. Now, the provider stepped up with a dedicated fleet of 23 drivers, 23 tractors and 38 trailers, supporting Royal out of locations in Marion, Va. and Bristol and Newbern, Tenn.
The partnership begins with basic transportation functions. Each week, says Sturgill, Ryder downloads all orders booked for that period, then uses the information to build truck schedules and determine which shipments will move on its own equipment versus being tendered to outside carriers. “We have daily meetings for shipping and scheduling,” he says. “Ryder is an integral part of those day-to-day processes.”
Royal needs the flexibility to serve big retailers and warehouses, as well as smaller customers with LTL requirements. Distribution manager Ben Adams says the deal with Ryder allows for the building of full truckloads whenever possible, or multiple orders within the same trailer. In the process, Royal minimizes its reliance on costlier LTL.
According to Sturgill, the Marion and Bristol locations are responsible for delivering approximately 115 million pounds of product per year, with an average of 30,000 pounds per truck. A typical truckload departing from Marion, and destined for the eastern U.S., might contain orders for six to 10 customers.
Ryder’s specialized equipment allows for the efficient movement of outsized or bulky items such as 20-foot-long PVC molding. Curtain-side trailers help to expedite unloading, while offering protection from the elements. “You just the slide the product in on the side and latch it down,” says Sturgill.
Ryder’s responsibilities extend well beyond the booking and loading of equipment. The company also performs route design and engineering. “Not with all of my clients do I get to interact at that deep a level,” says Diez. “Often they’re providing instructions and we execute delivery. This one is a true partnership. They trusted us to be their entire transportation group, and execute on their behalf.”
Ryder has supported some of Royal’s recent money-saving moves, such as consolidation of the Marion molding division with the Newbern siding division. Previously, Newbern had been served by a private fleet, moving some 33 million pounds of freight each year.
“Trucks were passing each other going back and forth,” says Jim Billings, Royal’s director of supply chain management. “We knew having one dedicated fleet for both Marion and Newbern would open up possibilities for savings.”
Skilled drivers are becoming an increasingly rare commodity these days, and Ryder makes best use of them on Royal’s behalf. It sets up stations at the midway point between plants, where a fresh driver can take over the loaded trailer and return it to the plant.
Filling the Backhauls
The setup is combined with a program to increase backhauls in order to minimize runs of empty equipment. “Where we previously had trucks coming back empty,” says Billings, “now they come back full.”
The backhaul and driver-management program saves Royal an estimated $150,000 a year. At the same time, Ryder is able to recoup transportation costs that are generated by the use of specialized equipment, which is often difficult to book in both directions.
“Because Ryder has access to our orders,” Sturgill says, “they can build truckloads around backhauls and route trucks so they end up in the right place.” Total savings from the deployment of dedicated equipment, backhauls and optimized loading are in the neighborhood of $500,000 a year.
Ryder offers additional efficiencies through its nationwide fuel program. By combining its Newbern, Marion and Bristol operations under one master agreement, Royal became eligible for volume discounts on fuel, with savings of nearly $50,000 a year.
“The market price of fuel may go up or down,” says Sturgill, “but our price always remains consistently below market price.”
“Based on their footprint,” says Diez, “we’ve been able to create one fleet concept.”
Billings says the transportation savings are essential in a time when the housing market is on the rebound, and the demand for building materials is growing. With the help of Ryder, “we’ve been able to hold the line on freight costs, and are actually seeing a reduction in unit freight cost.”
Looking ahead, Diez says Royal still has some operations around the country that are subcontracted, presenting Ryder with an opportunity to implement further efficiencies. But the provider’s main focus will continue to be on organic growth at the locations that Ryder already manages on behalf of Royal.
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