Private Fleet Management/Batesville: Winning the backhaul battle
By John D. Schulz, contributing editor -- Logistics Management, 4/1/2008
&& Back to the beginning of this article: “Silent Sucess”
Batesville: Winning the backhaul battle
Winning the battle of the backhauls is an age-old challenge for private fleets. But a well-managed backhaul operation can often add revenue directly to the bottom line—just ask Keith McWilliams.
McWilliams is transportation director for Batesville Casket, a manufacturer of hardwood and metal caskets that operates four manufacturing facilities for the production of its metal and hardwood products. He oversees a private fleet of 375 straight trucks, 191 tractors, and 571 trailers. For 2006 the fleet logged 29.8 million miles. Its operation includes hauling raw materials from internal terminals to four manufacturing plants and six regional DCs; a second leg from those DCs to customer centers; and a final leg from those customer centers to funeral home customers.
The challenge for McWilliams and his team was to develop a methodology to obtain external backhauls to offset empty miles and raise some revenue. Immediately, McWilliams realized the type of equipment Batesville was using was key. Although caskets could be delivered in smaller, 40-foot trucks, that type of equipment is not conducive to profitable backhauls. So he chose to use 53-foot, 102-inch high trailers instead to help build the backhaul business. And while a 53-foot trailer is not absolutely necessary for raw materials and caskets internally, that extra capacity was what he needed to enter the for-hire market.
“Although we get a few more caskets in there on headhaul deliveries, the larger trucks create the business opportunity coming back,” McWilliams explains. And the results have been splendid. In addition to hauling some Batesville-bound raw materials on these backhauls, McWilliams says he has been able to manage a for-hire backhaul business that brought in close to $1.1 million in revenue on top of the $1.85 million in internal backhaul he did for Batesville’s own operations in the company’s most recent fiscal year. All told, Batesville backhaul revenue was $2.95 million.
“We been very successful in some geographic lines, like coming out of Texas,” McWilliams says. “We haul bottles, electronics, recycled plastic, a variety of goods. We don’t have specific customers...and we use brokers because we’re not quite at a point where we can definitively say, ‘We’re going to be in Dallas next Monday, Wednesday, and Friday.’ But we’re working on that.”
Managing this business takes loads of extra effort, but it’s been worth it, McWilliams says. “It’s a challenge. We have to find a balance since we have a limited amount of assets.”
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