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One definition of logistics is “the integration and management of the product value chain from suppliers to the customer.” Another is “the management of inventory in motion and at rest.” For Ipswich, Mass.-based United Pipe and Steel Corp., logistics is how it provides value to the pipe, valves and fittings supply chain.
The United Pipe of today is different than it was even just a few years ago. Well-known as a master distributor of piping products since 1980, United Pipe is now filling a niche to help its customers sharpen their competitive edge. “We reflected about the value we add on the supplier side and the customer side,” explains Greg Leidner, United’s president. “The value we add to each is in logistics.”
Purchasing large quantities of pipe from a variety of manufacturers allows United Pipe to house a large and broad inventory covering numerous industry segments. The inventory can then be allocated across its 12 distribution centers, each focused on knowing and understanding a typical buying pattern of customers within the region. For distributors, this means a cost savings of purchasing only what is needed. They don’t have to deal with slow-moving inventory or dead stock in their own warehouse.
Instead, distributors can provide a high fill rate for their customers without the burden of carrying a lot of inventory. For manufacturers, it provides for market coverage across the country, as well as an easier way to get product to the distributor and then to the jobsite.
“The relationship component is what we pride ourselves on,” says Corey Lowsky, vice president of sales at United Pipe. “We service customers in the way the way they want.” The company allows customers to break bundles and mix-and-match products to make a low minimum weight for free freight, which saves money. In an economy where commodities change daily, the wholesale distributor customer can protect itself from carrying a large amount of inventory on its books. United Pipe even covers all steel and copper deliveries with tarps to keep them clean and undamaged.
Having substantial and diversified inventory is one way to set your company apart from others — but getting it to the customer is key. A 2017 report published by the American Trucking Association (ATA) projected a shortage of 50,000 qualified drivers by the end of 2017. If the current trend continues, the shortage could grow to more than 174,000 by 2026. An aging demographic of current drivers and the inability to attract younger workers have challenged the trucking industry overall.
“In addition to the sheer lack of drivers, fleets are also suffering from a lack of qualified drivers, which amplifies the effects of the shortage on carriers,” Bob Costello, ATA’s chief economist, notes in the report. “This means that even as the shortage numbers fluctuate, it remains a serious concern for our industry, for the supply chain and the economy at large.”
After its first year in business, United Pipe invested in its own fleet of trucks to ensure reliability and dependability on the “last mile” of service. The company currently has 52 trucks across its network, including the 2019 Cascadia Freightliner. Each truck has a dedicated driver, with a backup driver working in the warehouse — thus ensuring deliveries are timely, with familiarity and customized delivery. Each truck also has an additional flatbed, so when one truck is out for delivery, the additional bed is being loaded for that afternoon’s or next day’s delivery. When asked about how many miles the trucks have covered this year, Vice President of Operations Jon Renko says, “On a fleet basis, we are tracking to hit 4.5 million miles in 2018.”
Developing the Talent Pool
With the lack of qualified and certified drivers at an epic high, United Pipe set out several years ago to attract talent from within. Renko credits the company culture in attracting top talent. “We fill approximately 80 percent of our open positions from an employee referral basis,” he notes. “Our employees say this is a great place to work!”
Creating a company culture that feeds enthusiasm for word-of-mouth endorsement is an art form. Understanding the importance of mainlining a healthy and positive work environment ensures employees — across departments, from sales to purchasing to fulfillment — are engaged as a team. This is accomplished through annual meetings, summertime barbeques and employee postings on social media.
United Pipe also has an employee development program, where the company covers the cost for an employee to move from a current position to a driver. “We understand that the last mile of service is as important as the first, and delivery drivers are just as important as the individual who takes the order,” Renko says.
Red Monahan has been with the company for 21 years; 17 of those years were as a driver. Now serving as the director of warehouse operations for the Ipswich location, Monahan keeps a keen eye on the warehouse employees and serves as a mentor to those who want to advance. He knows which employees would make great drivers; not only because of their ability to drive the trucks but because of their personality.
“I can tell by the questions they ask ... and can spot an employee who would be great interacting with our customers,” he says. “Overall, we’ve got a good group who are motivated to ensure customer service.”
Employees are willing to invest in training and transition into driving because the company is investing in them as well. “We cover all their expenses for classes and permitting,” Renko notes. “We place employees into our trucks with our drivers and bring in temp labor to cover their position in the warehouse, so they can go out on the road for 30 or 45 days. They can get comfortable behind the wheel, get their drive time, spend the time with our drivers and learn the rigs to prepare them to sit for the test. We believe it’s our key to success — developing our own talent pool.“
For those coming into the company as new drivers, United Pipe is competitive and offers a signing bonus, as well as a referral bonus from current employees to encourage word-of-mouth endorsement. The company also goes the traditional route of recruitment by visiting job fairs and driving schools.
Unlike over-the-road, long-haul trucking of logistics companies — where load deliveries and travel routes may have a driver gone for several days at a time — each United Pipe & Steel driver knows he will be at home every night. This is appealing to the next generation of drivers. “It’s challenging to find class-A licensed applicants to begin with, and we are selective on who we hire, even among this scarce pool of labor, because our drivers are the last touchpoint between United Pipe and the customer,” Leidner says.
Mark Finegan, a driver with United Pipe in Elyria, Ohio, for 4 1/2 years, was a driver for another local company. His friend, a United Pipe employee, enticed him to apply by simply asking him if he wanted to be home every night. He immediately said yes, applied with the company and was hired shortly after that.
Technology Enables Superior Service
United Pipe & Steel has invested in technology to provide the best service to its customers. Utilizing Omnitracs RDC (routing, dispatch and compliance) “Roadnet” solution, the software organizes the customer’s order and provides dynamic routing capabilities daily. It sequences orders and sends them to the warehouse team to pick, pack and load. Dispatch sends all the unique customer data and routing information to the drivers and monitors the progress against the planned route.
The compliance piece allows the company to meet the newly established electronic log requirements. All this tech is allowing the company to move closer to a paperless environment by replacing the driver’s traditional clipboard with an electronic tablet.
“The big advantage of a transportation management system like Roadnet is the institutionalization of the knowledge that was once only in the DC managers head,” Renko explains.
It’s all about servicing the customer the way they want, where they want and when they want.
“Every day I’ll call the customers we are delivering to,” Monahan says. “The other day one reminded me the delivery needed to be on the passenger side. I put it into Roadnet and the driver takes it from there. Whether customers buy material weekly, bi-weekly or monthly, we provide any size delivery based upon their schedule. It’s not just the relationship between United Pipe and our customers, it is also between driver and receiver and then our customers’ customer.”
Finegan describes United’s concierge service: “In Elyria, our routes vary a bit. You may not see the same customers every week, but if I have a question, I can call the driver who has delivered before to get up-to-date on their special instructions. I make it a point to park the truck, go in, introduce myself, say I haven’t been there before and ask where they want me.” It’s not uncommon for drivers to help unload the product but sometimes the hardest part is getting to the delivery site — and on time.
For Finegan, his most challenging delivery was to a cell tower site in Warren, Pa. Delivering to a site on a road where no trucks over 10 tons were allowed, United Pipe had to secure permits to do so. Delivery was on a snowy day, and the road was about 12 ft. wide with hills and curves along the river.
“I unloaded on the road, then had to drive a mile past the jobsite back into a side road that was even narrower to get turned around and back to the main road,” he recalls. “It doesn’t sound so bad now but at the moment, the main road never looked so good.”
Another example of customized delivery is in New York City, with its tight street turns, and delivering to wholesaler locations that have little to no material handling equipment. “Our drivers are getting up on the truck, pulling the tarps off, breaking the bundles and handing them down stick by stick and through the sidewalk basement doors,” Monahan says.
This concierge-type of delivery service can only be achieved by drivers who go the extra mile — literally — to ensure orders are loaded and delivered correctly. Wholesalers receive their orders either at their place of business or schedule drops at jobsites.
“It’s much different than if you’re buying material elsewhere and dealing with a common carrier, where the likelihood of seeing that carrier driver again is slim to none,” Leidner says. “There’s less of a relationship built between others than there is between United Pipe and our customers. The benefits to the customer include increased turns of the material and less cash tied up in inventory. More importantly, they have direct knowledge of when they’re going to have the material they need to serve their customers because of the reliability of our delivery schedule.”
Also, the postings on the company’s LinkedIn website of daily deliveries keep customers informed and are a friendly way to keep everyone involved in the success of customer service.
In addition to the increased social media presence, the company website is a great tool for guidance on commodities pricing. The COMEX page shows wholesalers daily fluctuation in pricing and adjusts their orders to maximize cost savings. The website also is used as a tool to promote the latest happenings within the delivery areas being hit by storms, as well as a Twitter feed to hear from drivers about customer deliveries.
United Pipe & Steel put processes and procedures into place that ensure its employees provide its distributor customers with the product they need, when and where they need it. They live the company’s mantra — dependability is everything.