Posted by: Dan Oster
Industrial Specialist
775 336 4665
As a member of the
Industrial Properties Group, Dan has participated in the sales and
leasing of a wide variety of Industrial properties from 1,000 to 700,000
sqft in Northern Nevada. Dan's primary goal is to provide unsurpassed
customer service to the clients he represents.
This afternoon you've been called into a sales meeting. You
have the opportunity to help pitch your company's product to a major new
account. The competition is fierce, so the CEO is pulling out all the stops to
win the business. The question is a simple one. What can we do better than our
competition to help serve this client?
You take a deep breath, clear your throat and raise your
hand. "We have a significant transportation advantage over the
competition."
What? The CFO just told me we paid $485 to drey a container
from Long Beach to Riverside, now we're paying $760 from Oakland to Reno. How's
$275 per container an advantage? With a thousand containers a year that's
$275,000!
True, but what we're losing on inbound freight cost is more
than offset by our outbound savings in truck load, LTL and especially in small
package delivery. In truck load we're saving 8% on our runs to L.A., Atlanta,
Chicago and New York over what we used to pay to originate loads from L.A. With
over 60 carriers here in Reno, most of them with more business coming into town
than going out, our LTL opportunity and cost are lower too. But it's really the
small package cost and timing where we are winning. We used to pay FedEx and
UPS next day fees by zones. Anything over 200 miles went to a different zone,
it always had to go by air to be there next day and the cost was killing us.
Now we have OnTrac. They deliver small packages, overnight, by ground to 60
million households in the 7 western states. For 40% of the US population, we're
paying ground rates instead of air. Internally, we're winning the
transportation cost battle.
But that's not what will win this account for us.
Inbound may cost more, but WE control the timing. Our
customer and our customer's customers control the timing of our outbound
orders. We can serve our clients better from Reno, because we can get their
orders to them the next day and at a lower cost.
Amazon.com, Barnes and Noble.com, Diapers.com, and many
other Internet Fullfillment firms recognized the Reno advantage over a decade
ago. In today's hyper competitive world, time is money. Order it on line, have
it tomorrow or 30% of your orders get returned because the customer has second
thoughts.
