When it comes to the delivery of large consumer goods, faster is always better.
That’s why HomeDirectUSA, a carrier of durable goods to consumers and businesses in the U.S. and Canada, launched its Direct Express service this past July.
The expedited white glove service seems to be taking off with HomeDirectUSA’s customers: The company reports that the number of retailers using it increased 300% in October and November 2008 alone.
It was customer demand that inspired HomeDirectUSA to start the new service, says Jim Mikrut, vice president of customer experience, adding that the company has about 1,500 customers. “A recurring theme that we’ve heard throughout the years is that, ‘hey, we’d like to get it there faster.’”
HomeDirectUSA, which is owned by Transportation Resource Partners (TRP), a private equity firm and affiliate of Penske Corp., already offered a white glove service – but the new Direct Express service offers the added value of guaranteed transit time of seven business days within 91% of the zips HomeDirectUSA serves, 12 business days to remote areas.
And if HomeDirectUSA fails to make a delivery on time, “then the cost of that shipment is free to our customer,” Mikrut says.
HomeDirectUSA is using the transit services of partner company Katt Logistics (which is also owned by TRP) for the new service. Katt Logistics, a global shipping company that specializes in expedited delivery of large durable goods, is responsible for transporting goods between manufacturers and HomeDirectUSA’s 73 distribution centers, which are independently owned and operated, as well as final mile delivery to customers.
Mikrut says the new service has been made possible through advance notification and enhanced communication between HomeDirectUSA and its customers.
“Here’s how the guarantee works: We’re tendered (the date of the shipment) information from our partners, who say ‘we have a shipment for you, HomeDirect USA,’” he explains. “If it’s given to us prior to 12 noon local time, we’ll make the pick-up the same day. The clock starts when we’re tendered the registration information. If it’s tendered to us past noon local time, it will be picked up the next business day.”
As soon as HomeDirectUSA receives notification of a shipment, it will start calling the end customer to arrange for drop-off prior to receipt of the freight at the destination DC.
“We can handle the transportation piece – but with that last mile piece, sometimes we’re at the mercy of the consumer either to A) be at home when we’re calling, B) to return our phone calls if we’re not able to reach them, or C) being able to agree upon a mutually agreeable delivery date,” he explains.
“We know that on average it takes 2.3 calls before we’re successful in reaching an end consumer and scheduling a delivery appointment,” he says. “And because time is of the essence, it makes sense to start that calling process prior to the receipt of the freight.”
Katt Logistics, he adds, “handles the pick-up from the origin point, they handle the actual line haul — but the real key thing is we can get it there faster using the same HomeDirectUSA DCs that are making deliveries today for the non-DirectExpress model.”
The advantage of the new service for HomeDirectUSA’s partners is that it offers them the opportunity to attain business that they may not have had in the past through offering a faster and more reliable delivery with a guarantee.
“Many of our partners were able to extend their holiday shipment delivery cut-off dates due to the Direct Express program, which in turn translated into additional sales for them – which is a plus during these economic times,” Mikrut says.
HomeDirectUSA offers three basic levels of service: “We have a total transportation service, which is from soup to nuts: We make the pick-ups from the manufacturer at the original location, we move it on our fixed network line haul system, we move it through potentially one of our cross-docks, to our destination DCs, and ultimately the final mile delivery to the customer,” Mikrut explains. “Then we have another model where it’s outbound one of our cross-dock locations — our customers bring freight into that cross-dock, we reconcile it there, and we load it out from there.”
The last of the three models is when HomeDirectUSA handles just the last mile: The customer delivers the product to the destination DC and it is shipped to the consumer from there.
HomeDirectUSA handled nearly 800,000 deliveries in 2008. The company ships a wide range of durable goods – from furniture to medical equipment to electronics (including large screen TVs) to fitness equipment to spas — for retailers, catalogers and e-tailers. There is no minimum/maximum weight limit, but the company mostly handles items weighing more than 100 lbs.
HomeDirectUSA has about 360 employees (not including its DCs, which are independently owned and operated) and has more than 150 tractor/trailer units providing interstate transportation. The 73 DCs employ more than 1,100 two-person delivery crews who make deliveries with air-ride/lift gate equipment. The DCs range in size from 18,000 to 300,000 sq. ft.