Tough economic times can make or break a relationship. And there's no tougher place to be right now than in a business that supports the housing industry.
No one doubts the ability of a giant like Weyerhaeuser Co. to weather the storm. But like most companies in the business, it has felt the effects of the nationwide housing slump. They are evident everywhere, from the corporate suite all the way down to individual distribution facilities.
Based in Federal Way, Wash., Weyerhaeuser operates 35 centers for the distribution of building materials in the U.S. One is located in Dacula, Ga., about 30 miles northeast of Atlanta. Product flowing through the 23-acre facility is valued at around $100m a year, according to operations manager Leonard Cassidy.
Dacula distributes mostly to lumber companies in the immediate region, with a small number of direct deliveries to job sites. It deals in a wide variety of products, from basic lumber to siding, wall-framing material, and the webbing used for strengthening decks and roofs.
Serving the Dacula facility is a dedicated truck fleet operated by Concord, N.C.-based Cardinal Logistics Management Corp. Currently the fleet consists of 11 flatbed trailers and a pool of 76 drivers, Cassidy says.
Weyerhaeuser has been using Cardinal out of Dacula for about five years. "It's a very good relationship," says Cassidy. "They're easy to work with, and willing to do whatever it takes to get the job done."
In Cassidy's eyes, Cardinal has proved its value to Weyerhaeuser even more over the last year, at a time when business has been down. Prior to that, the facility might have 70 loads a week. During a typical week in May of this year, by comparison, volumes were running at around 55 loads. The number of full-time drivers dedicated to the operation has gone from 10 to five during that period, and trailers have been reduced from 18 to the current level of 11.
Cassidy likes the fact that Cardinal is flexible about the resources it allots to Weyerhaeuser, depending on the customer's needs of the moment. Ed Jones, Cardinal's project manager dedicated to the Weyerhaeuser account in Dacula, is on site at all times. He can quickly make adjustments when informed of any changes in activity. When fewer drivers are needed by Weyerhaeuser, Jones finds them work in other areas, so that the total labor pool is preserved.
Jones can even secure additional drivers to handle a spike in demand, drawing on pools from other locations. For the most part, however, Weyerhaeuser sees the same drivers day after day, giving the operation a sense of continuity that might otherwise be possible only with a private fleet.
In fact, Weyerhaeuser ran its own fleet of trucks until the late 1990s. Eventually it came to the realization that the job could be better handled by a specialist. Issues of permitting and maintenance were among the factors it considered.
The final decision came down to a question of self-identity, and core competency. "We were a lumber distribution company," says Cassidy. "It got to be such a hassle, trying to be both."
Having a project manager right on site helps to close the gap between access to trucks and owning them. Jones works side by side with Weyerhaeuser's load builder, whose job it is to ensure that the shipment meets all requirements based on weight, dimension and service demands. Then the order is handed over to Cardinal for transport.
The handling of lumber tends to be a fairly straightforward affair, although some product requires a degree of special handling. Certain items, such as interior plywood, must be kept dry or are especially weather-sensitive. Cardinal takes all of those considerations into account, says Cassidy.
He is also impressed by Cardinal's emphasis on safety. Weyerhaeuser is a highly safety-conscious organization, and demands the same level of commitment from its vendors. When Cardinal makes deliveries, Cassidy notes, it is the face of Weyerhaeuser, to the customer and public at large. The reputations of both companies are inextricably linked.
"We have certain rules and regulations that must be abided by in our facility," he says. "We go through a safety orientation so that they understand [those] regulations." Cardinal itself conducts regular safety meetings to make sure that it's staying in compliance.
The two companies place a strong emphasis on communication. Neither hesitates to raise any concerns related to drivers or the physical requirements needed to move product efficiently and damage free.
Cassidy sees the relationship with Cardinal as continuing indefinitely. "They really look out for us," he says.
Cardinal Logistics Management, www.cardlog.com
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