Trucking, Shifting Expectations Drive HVACR Distributors to Adjust
Retiring drivers, a reluctant younger generation, and the ‘Amazon effect’ create three-way stop
A satisfied customer’s expression is the face that launched 1,000 shipping strategies. In industries that involve delivering the goods (literally), that reaction becomes more elusive when online consumer shopping norms have crept into the B2B world and turned the definition of an acceptable wait time on its head. The human sense of expectation can’t start a vehicle, but it is still a major driver when it comes to running a business.
Brandon Bateman is the director of supply chain for Airefco, an HVAC distributor headquartered in Tualatin, Oregon.
“E-commerce has significantly increased expectations for Airefco to not only deliver products more expeditiously, but to make product information available directly to our customers on demand,” he said.
Consider how two-day delivery was coined “Prime” by a vendor like Amazon, but in some cases, that is now eclipsed by same-day delivery. Rationally, people know the circumstances might be different, but those speedy experiences still have an effect on how much patience feels like enough when ordering equipment or parts.
So how does an organization like Airefco respond? Bateman reported the company has started to partner with local couriers to increase its delivery capacity. It has also opened new branches, reaching customers faster by starting out closer to them.
Before pulling the trigger on a purchase these days, a distributor’s contractor customer also expects that all the pertinent information about a product will be ready and waiting to inform the decision.
“This has required our company to evolve how we handle product data and to make more [material] available on demand to the customer,” Bateman said. “Ways we have been able to do this include providing inventory availability to our online users and creating a new position within our organization to ensure that the product data and content available on our website grows with our customer needs.”
Creating entirely new positions dedicated to that kind of thing isn’t as surprising as it might be, even in the age of a mature internet. The statistics on how long a user will wait for a webpage to load before moving on are well-documented. With no shortage of options, those users will be no more forgiving toward websites that wind up wasting their time with outdated or incomplete product information.
Mark Bray, director of supply chain for ACR Supply in Durham, North Carolina, agreed but noted that companies can tackle increasing delivery expectations from more than one angle.
“We constantly try to make [our software and website] more user-friendly,” he said. “With that being said, great e-commerce storefronts are only as good as the supply chains that support them.”
Finding ways to shave time off the process before a product ever hits the road is worth the trouble.
After all, customers are only concerned about when their shipment arrives, not about the breakdown of how much time it spent in which stage of the operation.
“We are currently making efforts to speed up our warehousing, [for faster delivery options],” Bray said. “Amazon has proven that many people are willing to wait for a product and order online if it is more convenient, but they won’t wait long. Speed of delivery is the recipe for success these days.”
In most cases in the world of HVAC distribution, a truck is still a major ingredient somewhere in that recipe. And for the moment, anyway, those trucks still need drivers, which turns the conversation toward another pair of personnel-related speed bumps that are rattling the world of commercial transportation.
MORE EARN, MORE CHURN
For anyone responsible for hiring and managing HVAC field technicians, familiar strains echo through any discussion about the shrinking base of truck drivers. On the good side for those who do choose to earn a living behind the wheel, the laws of supply and demand seem to be alive and well.
A survey conducted by the American Trucking Associations (ATA) in March showed continued pay increases across the board. Depending on the particular type of job and assignment, salaries rose between 15 and 18 percent since the previous survey in 2013. The pay for drivers in those categories topped out as high as $86,000.
“Our survey told us that carriers are offering thousands of dollars in bonuses to attract new drivers,” said ATA Chief Economist Bob Costello. “And once drivers are in the door, fleets are offering benefits like paid leave, health insurance, and 401(k)’s to keep them.”
Of course, the aggressive new wages are often being offered by a rival company. ATA reported last month that the annualized turnover rate at large truckload carriers jumped to a whopping 98 percent.
“While much lower than the truckload sector, seeing this kind of jump in the LTL [“less than truckload” freight] market tells me that this sector is struggling with drivers more than in the recent past,” Costello said, “and suggests the industry’s issues finding qualified drivers are continuing to deepen across the board.”
In an August interview with CNBC, Costello outlined a couple of unhelpful dynamics: a growing wave of drivers ready to hit retirement and get their chips cashed in and an almost total lack of women in this workforce.
He estimates that this population is 94 percent male. Sound familiar?
CAN’T FIND REVERSE
With younger people seemingly not as interested in taking all the newly vacated drivers’ seats, the one thing the trucking industry can’t afford to do is turn away those who are interested. That’s where the DRIVE Safe Act comes in.
Backed by multiple sponsors in both the House and Senate and also formally supported by Heating, Air-conditioning & Refrigeration Distributors International (HARDI), the bill aims to bring high school graduates into an apprenticeship for proper licensure. Currently, nearly all 18-year-olds are eligible to earn a commercial driver’s license (CDL), but they can’t work across state lines until the age of 21.
This legislation proposes an extensive training program, involving education and supervision by experienced drivers. In this scenario, young drivers could jump-start a career without waiting three more years, and business would benefit from some relief regarding the restriction on interstate work.
Both versions of the DRIVE Safe Act legislation have been referred to their respective congressional committees, where they currently reside. Whatever comes to pass regarding driver availability and compensation, Bateman warned that those who are not rethinking at this end of their distribution and implementing improvements will only find it harder to adapt.
Customer expectations seem poised to steer procedures and resources toward ever-swifter solutions for the foreseeable future. Successful businesses will find practical ways to reflect that the previous wait time sensibilities are in the rearview mirror for good.
Publication date: 12/3/2018