he integration of the best resources in any given market can be achieved in many different ways. One of the most powerful ways is to partner with an expert that will not only deliver what you ask but also help you to make your organization better. It’s a give and take.
In June, Exton, Pennsylvania-based TW Metals, an operating company of O’Neal Industries, signed a long-term partnership agreement with Phoenix-based GlobalTranz Enterprises LLC, a third-party logistics solutions provider, to manage a substantial portion of its transportation needs.
“Proprietary technology is pivotal in our platform,” says Ross Spanier, head of operations at GlobalTranz Enterprises. “How we engage with customers can be highly transactional on the one hand—managing rates and service in a commodified manner—if that is the level of service they desire. But with TW Metals, this is a more integrated offering. That engagement includes process and technology. We are an extension of their business.”
According to Spanier, TW hired GlobalTranz to manage about half of its freight activity.
That broad knowledge base—plus a network that encompasses 25,000 customers and 35,000 carrier contacts—helped the company reach revenues of $1.5 billion last year.
“We have the people, the process, the technology platform and the relationships to match and marry customers with outside carriers,” Spanier says.
“We must have the right liability insurance. We hire only those carriers with no prior FMCSA [Federal Motor Carrier Safety Administration] restrictions or service failures or claims for damages. Many variables are weighed.”
That is all work that TW Metals now does not have to perform on the shipments it has shifted to GlobalTranz.
Another feature included with the partnership is “reverse logistics.” When companies have damaged products, or freight on recall, “there must be controls in terms of how that freight is returned and refurbished due to damage,” Spanier explains. “We have the ability to assign authorization and coding to shipments to make sure it’s accounted for and included in any network outside the traditional supply chain network.
“This means there is a highly controlled environment. Maybe certain widgets are being recalled. We have to account for every piece,” he says.
TW Metals is a top 20 customer within GlobalTranz’s managed transportation portfolio, according to Spanier. “We have a three-year roadmap. During year one, we must establish relationships with customers, including internal customers. We must hit service levels and pricing. During years two and three, we must further [TW Metals’] supply chain optimization and network design. We must improve on delivering customer satisfaction and bring savings to the bottom line.”
In the metals vertical supply chain, participants want to expand into new markets, tackle acquisitions and just do more, he says. That requires “a stable, scalable transportation platform.”
“From TW’s perspective, as a distribution company, transportation is critical. The last mile is critical and the last mile can make or break us with the customer,” Hurst says.
The company was working with other 3PLs while pursuing continuous improvement in “how we distribute products throughout our transportation network. We looked at multiple solutions providers, shortlisted six and had them out to Exton,” he says.
“As large as we are, many don’t know us well. We explained our products and services, and employees and customers. GlobalTranz went through a couple [internal] studies” before presenting a strategy.
What cinched the deal, says Hurst, is that “they share our core competencies and they share our philosophies about employee retention and communications. They matched us at a core values level.” The upshot is that GlobalTranz is already “engaging parties on our behalf.”
It’s the same for TW, he continues. Years of service at the metals service center chain averages 13 years, even with new starts. “When people join our company, they tend to stay. Some are here 45 years. I am here 15 years. At GlobalTranz, they also have high retention. It’s how the person is motivated and committed to the relationship.”
“We have trucks moving in a 250-mile radius from 18 locations,” Hurst says. “We also have trucks in a hub-and-spoke network between our service centers. Outside that radius, we use LTL and truckload volumes, and that is about 65,000 shipments a year. That takes a great amount of organization. We are looking at aggregation, commingling and we want efficiency.”
GlobalTranz will move loads outside TW Metals’ local radii, which is “about 50 percent of all of our freight,” Hurst says. “With GlobalTranz, we want to stretch the boundaries and determine whether we should keep a load or give the load up to them. We assess routes, costs, etc., and they may have the advantage in terms of lead time.”
The quality of service is paramount. “Some of our customers—aerospace and others—have certain expectations, like 100 percent on-time delivery. If we fail, there can be penalties. These customers want us to have skin in the game.” He expects GlobalTranz to live up to its commitment and “perform for our customers.”
If the 3PL performs well, its contract may be extended. Meanwhile, TW Metals will perform monthly business reviews and seek out continuous improvement to keep up with the market. Hurst says customers being served by GlobalTranz should expect “a completely seamless transition.”
TW Metals, Exton, Pennsylvania, 888/588-7818, twmetals.com.