E-commerce has revolutionized the delivery model for retail goods. Instead of waiting on stores to stock items, consumers have flocked online for lower prices, more selection, and the convenience of home delivery — even for large items like home appliances and furniture.
Online retailers have developed supply chains to be lean and flexible to get consumers what they need, when they need it, in a profitable manner. Local warehousing, cross docking, short-haul trucking and home delivery services have been critical for the promise of e-commerce to match reality.
Manko Delivery Systems was founded in 1999 as a local courier in Tampa, Fla., when e-commerce was in its infancy with an uncertain future. It started with what appeared to be a more stable line of business: delivering mishandled luggage for airlines.
The business came to a standstill in 2008 when the airlines started charging baggage fees. The founder turned to a friend, Bryan Bilchik, to help restructure the company. Bilchik was new to transportation but a problem solver with a degree in electrical engineering and Six Sigma certification.
“I tried to get us diversified,” he says.
Going the final mile
After a few months of consulting work, Bilchik was offered the job of general manager. The company was on its way to being a one-stop shop for shippers and carriers in need of final-mile home delivery services.
Manko also expanded into warehousing, scheduled cartage and air cargo services for domestic and international shipments. Bilchik describes Manko’s mainstay home delivery service as a boutique “soup to nuts” offering. Manko will pick up freight from its customer’s docks and schedule deliveries to the consignee at home and manage all returns and pickups.
With headquarters in Tampa, Fla., Manko has opened facilities in Fort Myers and Orlando for seamless, same-day and express coverage throughout central and southwest Florida.
Shippers that use Manko for home deliveries include all major big-box stores and online companies. Several major home furnishings retailers use Manko for an off-site warehouse. Truckload carriers also use its services for final mile and cross docking.
The company also delivers parcel freight for all the major small box companies during peak seasonal volume.
Most of Manko’s customers allow access to the same, internal software they use to manage shipments from origin to destination. When logging into these customer portals, Manko employees see where freight is coming from and when it will arrive at its facilities. It also has visibility to the service level requirement — delivery to the door, inside the house, or “white glove” unpacking and installation service.
With this information in hand, Manko employees schedule a home delivery with the consignee before the freight arrives on its dock. Once a delivery is made they update the shipment details in the customer portals.
Despite having a variety of customer types and unique service requirements, Manko does not assign customer service teams to specific accounts; it cross trains all of them.
“You are going to get the same service level no matter who answers the phone,” he says.
Just as retailers have supply chains that flex and bend to meet the dynamic demand from consumers, Manko has the same capability. Its fleet is comprised entirely of independent contractors. On any given day, the company is operating as much as 40 straight trucks, five tractor-trailers, and 30 cars and vans.
“It works out well for everybody,” Bilchik says of the contractor model. “Contractors can throw another driver in their truck at night and run for another company so their assets are always making money.”
Manko uses an external management service to offer its drivers all of the benefits they would want or need as an employee, such as health and occupational accident insurance. This arrangement keeps an arms-length transaction with drivers as contractors.
In 2010, Bilchik saw an opportunity to eliminate $2,500 to $3,000 per month in pallet costs. It began to offer a free service to customers to remove their unwanted, leftover pallets and dunnage from docks. Drivers load the refuse into their trailers after making pickups and deliveries.
Manko pays drivers to pick up and return the pallets to its own facilities. The new program made it possible to not only stop buying pallets but sell the excess to pallet recycling companies. Manko has been able to turn $500 to $700 in profit each month depending on the number of pallets drivers bring back.
In September, 2013, Manko moved its corporate headquarters to a new building in Tampa. With this change of location, Bilchik noticed another opportunity to save money and reduce landfill waste. Manko had been throwing away the cardboard, plastic shrink wrap, Styrofoam, steel and other material it stripped from packages while cross docking and delivering shipments such as furniture to model homes for staging.
The waste collected was enough to fill a 30 cubic-yard dumpster each month and Manko was spending between $500 and $600 a month to have it removed.
Bilchik had a baler installed in Manko’s warehouse in Tampa. The baler comes with a full maintenance lease for $175 a month. One bale of cardboard is enough to pay the lease payment, he says, and each bale of shrink wrap sells for between $150 and $300. Recycling companies pick up the bales from its warehouse.
Today, 90 percent of the waste that moves through its system is recycled, he says. Drivers also benefit from making an extra effort to clean up waste from customer locations.
“We pay drivers for everything they bring back,” he says.
Additional green projects include the recent upgrade of all of air conditioning units in its facilities and converting its warehouse from T12 to T5 lights to save money and further reduce its eco-footprint. The efforts show that even small companies can do a lot to reduce waste and improve the environment, he says.
Bilchik is currently mentoring 12 companies of similar size to help them set up similar recycling programs through his membership in the Florida Messenger Association.
“Everybody is working in that direction,” he says.
In January, 2014, Bilchik purchased the company with business partner David Armitage. Bilchik is now vice president and chief operating officer and Armitage is president and chief executive officer.
The strategy to become a one-stop shop for shippers and carriers for e-commerce and home deliveries is paying dividends. Manko is growing exponentially and saving money and eliminating waste. The company is on pace to increase revenues by 20 percent this year.