Posted by: Dan Oster
775 336 4665As 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.