Going the Extra Mile to Add Value
3PL Landair makes Sonoco’s supply chain hum.
It’s not easy. Each of those locations has its own peaks and valleys in supply and demand. A plant might average, say, 15 truckloads a day, but that means it will run five to six during slow periods and up to 20 at peak demand. What’s more, Sonoco doesn’t make money dealing with all the complexities of operating a fleet. Its core businesses are those cores, tubes and packaging materials.
From Performance to Innovation
To lighten that logistics load, Sonoco in 1999 turned to Landair, a Greeneville, Tennessee–based third-party logistics provider (3PL). For Sonoco, Landair operates as a dedicated contract carriage (DCC) service provider–Landair owns and operates about 170 trucks that transport products and recycled materials between 19 Sonoco facilities. Landair provides an on-time delivery rate of 99.95% for Sonoco, but even that excellent record isn’t what distinguishes Landair from other 3PLs.
As Sonoco’s 3PL partner, Landair has added engineering value and innovation over time. By monitoring weekly performance metrics through technologies such as track and trace, Landair responds flexibly and strategically to Sonoco’s changing business and capacity needs. This agility to optimize routes, flex up and down on capacity and maximize backhaul opportunities takes cost out of the supply chain — a model that’s rare in the trucking and logistics business. “We do the right thing for our customers, even if it means less revenue for us,” says Mitch Plesha, Landair’s vice president of engineering. “We’re on Sonoco’s side looking for the best solutions.”
One of those solutions is reducing the number of trucks needed. To find those efficiencies, Landair has developed a profound understanding of Sonoco’s operations. “We take a deep dive into everything they do, from tractor efficiency to driver efficiency,” says Landair strategic analyst Patrick Norris. Norris and other analysts dig deep into data such as loading and unloading times, current market rates, customer appointment windows, and ebbs and flows in inventory and production. And instead of looking at each Sonoco facility separately, Landair’s analyses generate a holistic view of Sonoco’s entire business and how the parts fit together. “Through logistical engineering analysis and supply chain modeling tools we analyze Sonoco’s plants and delivery requirements to make them more cost-effective,” says Plesha.
At Sonoco’s Newport, Tennessee, paper mill and manufacturing facility, Landair discovered that loads were being transported every night from Newport to Sonoco’s Greenville, South Carolina, facility, and that every night loads traveled from Hartsville to Newport. At the same time, there were loads to Hartsville that were originating from Greenville. Rather than each facility having its own set of drivers and delivery schedules, Landair proposed a new approach: Have drivers meet in the middle in Greenville, swap loads, then return to their respective locations in Newport and Hartsville. The new, interconnected schedule allowed Sonoco to reduce the fleet serving those locations by two trucks.
In another part of Sonoco’s operations, Landair determined that it could deliver more material with fewer trucks by purchasing new lighter-weight vehicles. These new trucks allow Sonoco to load more into a trailer without violating highway weight restrictions. Landair is also developing new timetables for delivery and pickup for these routes so that drivers can maximize loads.
Empty or underfilled trucks, after all, cost Sonoco money. To minimize underutilized capacity, Landair has staff focused solely on finding backhauls from other Landair customers for Sonoco’s trucks returning from deliveries. Landair and Sonoco then share the additional revenue, with about 80 percent going to Sonoco.
The logistics partnership between Sonoco and Landair goes beyond operating vehicles. At one Sonoco plant, drivers not only deliver products–they also take inventory of those products on the warehouse rack. The drivers report that information to plant managers, who can then adjust production accordingly and appropriately.
Each quarter, Landair and Sonoco meet to discuss new strategies to cut costs and generate revenues. Together, they study all of Sonoco’s operations — manufacturing, recycling, sales, customer service and transportation — to discover how they can create a more efficient and effective Sonoco supply chain. Plesha notes that Landair plays the role of “an unbiased group that’s looking for straight-out cost savings.”
That approach might cost Landair money in some cases, but it also delivers shared success. “In our manufacturing group,” says Tim Myers, Sonoco’s director of corporate logistics, Landair is “certainly our best logistics-oriented supplier.”
For customers like Sonoco, Landair is more than a provider. It’s an active partner that adds value, which in turn drives long-term growth.
To start a conversation with a Landair logistics engineer, request a consultation or call 1-888-LANDAIR (1-888-526-3247).
See Reducing the Cost of Dedicated Contract Carriage for more strategic cost-saving ideas.
Mitch Plesha’s nearly 20 years of logistics-industry experience includes engineering analysis and strategy design across a range of supply chain operations, including dedicated transportation, distribution/warehousing and transportation management.