Wicker Services Inc.
Location: Burlington, N.C.
Principal: John R. Arwood
Equipment: 60 tractors, 350 trailers; International 8200 and 9400 tractors; Fruehauf, Great Dane and Budd trailers; Cummins and Detroit engines; Fuller and Spicer transmissions.
Freight: Textiles, furniture, general commodities.
Challenge: Losing freight as its core customers move production to Mexico.
Solution: Diversifying to new markets; identifying competitive advantages and selling them; operating more efficiently and intelligently through use of technology.
As the North American Free Trade Agreement has taken hold, many U.S. corporations are shifting manufacturing operations to Mexico to take advantage of lower labor costs. Few companies understand that phenomenon better than Burlington, N.C.-based Wicker Services Inc.
Located in Alamance County – the heart of the Southern textile industry – the 60-truck LTL carrier has endured significant weakness in textile hauling. To counteract this softness, Wicker Services turned to the furniture manufacturing industry for freight. But that industry too is shifting more toward non-U.S. production. Despite the decreases in its two core freight markets, the company’s managers believe they have set the stage for new growth opportunities through powering up technology and sticking with a niche service.
Ten years ago, Wicker Services hauled about 2,000 rolls of fabric a day in Alamance County. Today that number is down to about 200 rolls, says Jim Walker, the company’s general manager. Four years ago, Wicker Services began hauling raw and finished goods for the giant furniture manufacturers in central North Carolina, where approximately 60 percent of the nation’s furniture is produced within 200 miles of Hickory, N.C., just west of Burlington. The furniture market turned out to be a temporary solution.
“As time progressed, the furniture market has also been affected by NAFTA and the general shift to foreign manufacturing,” says John Arwood, president and chief executive officer of Wicker Services.
To sustain new business growth, the company must find new freight markets, Walker says. With textile and furniture manufacturers as Wicker Services’ largest accounts, the company consistently grew about 10 to 15 percent each year, bringing in about $8 million in revenue in 2000. Two years later, revenues remain stalled at $8 million as the company works to replace lost business.
One way Wicker Services is responding is by enlarging its service area and, consequently, its range of potential customers. Extending truckload and LTL movements out to 250 and 300 miles from its Burlington headquarters will open up some opportunities to attract new customers, Walker says. But “geographically, we can go no farther and still maintain a hub scenario. Not having line hauls and terminals is a competitive advantage.”
Within this distance, Wicker Services can offer customers same-day and overnight pickup and delivery services. “There are a lot of opportunities for pickup and delivery the same day,” Walker says.
While Wicker Services’ competitive advantage is its same-day service for time-sensitive freight in the Carolinas and Virginia, some potential markets are saturated with “deep discounters,” Arwood says. Large regional LTL carriers appear to have the handle on the distribution of wholesale and retail goods.
“We can’t compete on deep discounts on major distribution centers and freight for major retailers,” Arwood says. “I’m personally appalled at the way rates are based today.”
In the 200-mile radius from Burlington, about 50 percent of Wicker Services’ pickups and deliveries use the same truck, on the same cycle, without coming back to the terminal – a scenario that Arwood says is difficult for larger LTL carriers to match.
“A major regional carrier can’t do it because their business plan is set up differently,” Arwood says. “They run pedal operations that are dependent on coming to a sub-terminal or distribution terminal and then making the delivery.”
Rather, the larger carriers really represent more of a business opportunity than competition for Wicker Services. For many years, large LTL carriers have used the carrier as a partner to service Alamance County and central North Carolina. ABF, Averitt Express and Benton Express are some of Wicker Services’ customers. These LTL carriers drop freight off from a line haul operation to Wicker Services’ terminal and hire Wicker to make the final deliveries or pickups.
Included in the competitive reasons for maintaining its local focus is driver retention and insurance premiums. Wicker drivers work four days a week, are home every night and don’t work weekends. The average turnover is less than 5 percent over the last five years, Walker says. This year, the company renewed its insurance at only a 7 percent increase.
Despite the drop in freight volumes due to manufacturing moving to Mexico, Walker says North Carolina remains a strong manufacturing state, and thus the company is strategically located
Jim Walker, general manager of Wicker Services (left), and Hardy Butler, vice president of parent company Enterprise Distribution, are at the forefront of efforts to offset softness in Wicker Services’ core business.
to attract new business. Walker says one of the company’s top priorities is to establish a sales force to find new customers. And with the company’s new software system installed in the second quarter of 2002, managers will know which lanes are the most profitable.
“The industry is fraught with paper,” Arwood says. “When you get covered over with paper, management has a more difficult time finding and analyzing data to make good decisions and make improvements.” In late 2001, the company began looking for a software package specifically for LTL carriers to integrate the process of booking loads and invoicing, he says.
In the dispatch room, paper was “out of control,” recalls Hardy Butler, vice president of Wicker Services’ parent company, Enterprise Distribution, which is owned by Arwood. “Everything was written down in pencil four to five times and erased if something changed,” Butler says.
When Enterprise Distribution began looking for software, several companies were developing LTL packages and three or four had completed them, Butler says. “We had several companies that would allow us to be a beta-test site, but we didn’t want to do that because we knew we would already have enough issues with training. You never want to be the first to buy the first version of anything.”
In April 2002, Wicker Services went live with Maddocks Systems’ TruckMate for Windows enterprise software package. This was, in fact, the first time the company had a networked computer system of any kind at the office.
“The biggest task at first was to get all of the employees comfortable in front of a computer using a mouse,” Butler says. Before the company installed the new enterprise software, it got the network up and running so that employees would become comfortable with the Windows environment and with using the Internet as a tool.
Once the software went online, the first task was entering the customer database into the system. Three people in the company manually entered several thousand customers, and Butler says they “got to know that module very well.” But the real learning process began when the company went live.
“The first day, dispatch operated on both Maddocks and the manual (paper) system, side by side. That was a good way to go for no more than one day, then we threw the paper in the trash and made them start swimming,” Butler says. “During the first six days of the operation, I slept three times.”
The main benefit of the new system, Butler says, is that everyone in the company has access to the exact same information. The dispatcher is not the only one who has dispatch information. Anyone can take a call and put in an order for a pickup. If the general manager has a question about a driver, he doesn’t have to get up and ask the dispatcher.
“It saves a lot of time by having information at your fingertips,” Butler says. “It makes people more efficient.” Another benefit to the computer system is the management information, especially shipment history and customer history, all of which is just a matter of writing a Crystal Report.
“A couple of weeks ago, Jim [Walker] wanted to see the history of our customers’ shipments in the previous 6 months,” Butler says. “We looked at all customers averaging 10 shipments a week, but some had only one or two total. The system flagged those customers’ accounts, and he called them and asked why they are not shipping. Reports like that can help the company sniff out a potential bankruptcy situation and tighten its accounts receivable,” Butler says.
In the company’s previous billing and rating system, some of that information was in the computer, but the software didn’t give them the flexibility to retrieve it. Another useful report is to look at the drivers’ lapses between delivery times, as drivers are paid by the hour, Walker says.
Early this year, Wicker Services plans to roll out Maddocks Systems’ TruckMate for the Web to offer its customers the option to place pickup orders over the Internet to eliminate phone time and miscommunications. Customers will also be able to view their accounts online such as proof of delivery to track shipments.
“The phones ring constantly now,” Butler says. “If we could get 15 percent of people to use the Internet we could save massive amounts of employee time.”
While some customers will continue to prefer the phone, automating manual, repetitive processes with technology is perhaps the only way to absorb the rising costs of labor. After all, unlike a manufacturer, a trucking company can’t cut costs by moving its operations to Mexico.