Carrier Profiles
Carrier Profile: FedEx Custom Critical
Expediters Online.com has taken a different approach in offering this Carrier Profile. We've tried to present the background of this innovative company as well as use the article as an introduction to some of the aspects of expediting. It is for this reason that some of the information included here might seem rather basic for the veteran expediter.
FedEx Custom Critical.
This is one of the most recognizable names in the comparatively short history of the expedited freight industry.
The impact and influence that FedEx Custom Critical, formerly Roberts Express, has had on time-sensitive trucking is of major importance. It was the first company to fully realize the concept of surface expedited freight, was among the first to incorporate the new computer technologies into the industry and was the first to provide time-sensitive cartage of high-value freight.
In many ways, FedEx Custom Critical has set the standards in this industry through innovative use of technology and procedures, all of which focus on customer service.
The on-time, every time pick up and safe delivery of their customer's freight is the primary mission of the company and one in which they have led the way since the early days of Roberts Express.
In just a shade over twenty years, Roberts Express/FedEx Custom Critical grew from the visionary concept of one man to become the market leader in expedited freight; a position it has occupied since it's earliest days.
A Short History
Because Roberts Express was one of the true innovators in the surface expediting industry, establishing a business model that, with some variations, is emulated by other expedited carriers, a brief recap of the company is in order.
Roberts Express was formed in 1948 by the merger of two Ohio trucking companies, and had been involved with airfreight for years.
Based in Akron, OH, the company was a regional carrier that hauled time-sensitive freight for Emery and various airlines. Emery acquired Roberts in the early 1970's, but was sold to Bill Blodgett, a former treasurer of Emery Air Freight, a few years later.
From 1981 on, the company specialized in surface expedited freight, a new concept in shipping which bridged the gap between high-cost airfreight and conventional trucking.
In the early 1980s, a major portion of Roberts' business was in hauling the time-critical freight of the automotive industry - which was the formative days of the just-in-time inventory system. At first, expedited shipping was a novel concept and a "hard sell" to many potential customers who felt they would never need Roberts' services.
Over time however, the idea of this specialized shipping method gained acceptance as those same customers realized the value of time-definite and emergency freight. For years, Roberts Express was the number one provider of those services, capturing an enviable market share, while at the same time, establishing the business model for many similar carriers who would appear later.
Blodgett expanded the company's area of operations by securing authority for the US and Canada and put the company on a national footing. Blodgett eventually sold Roberts to Roadway Services Inc, which later became Caliber Systems Inc.
In the late 1990's, Roberts Express was acquired when FDX purchased Caliber Systems. The company entered the 21st century with a name change from Roberts Express to FedEx Custom Critical.
Company Growth
FedEx Custom Critical's headquarters (and a satellite location) house over 500 employees in an array of departments and divisions. Still based in Akron, OH, the company's facilities have expanded over the years, to the point of outgrowing the current location.
FedEx Custom Critical began its move in November 2002 to a new custom-built corporate headquarters located about five miles away. The re-location to its new 250,000 plus square foot building is scheduled to be completed by April of 2003.
Basic Facts
Surface Expedite
This the core of FedEx Custom Critical's operation and, as the company states, it operates 24 hours a day, 7 days a week - "We Never Close."
FedEx Custom Critical promotes its service as being one of the most efficient and economical methods of shipping time-sensitive freight up to 800 miles, at times surpassing even airfreight.
The company states that its customers' freight will be picked up in less than 90 minutes of the appointed time and delivered within 15 minutes of the scheduled time (depending upon location). This carrier's dedication to the time-sensitive needs of its customers has resulted in an on-time delivery record of over 96 percent - within 15 minutes of specified delivery time; an achievement of some note.
Today, FedEx Custom Critical is North America's largest surface expediter, maintaining a fleet of approximately 1200 trucks in five sizes, from minivans to tractor-trailers.
Cargo vans (a "B" unit in FedEx terminology) with a cargo capacity of 2,500 lbs. and straight trucks (a "D" unit) with company-required sleeper units and a 13,000-cargo capacity have traditionally been the most prevalent unit sizes.
The FedEx Custom Critical fleet consists of 100% owner/operators. The owners are small business people, most of who own and drive a single unit that they lease to FedEx Custom Critical. A smaller number of owners maintain their own small fleets and sub-contract drivers to operate with the carrier.
White Glove Services
For customers who require specialized transport of their high-value, handling-sensitive or temperature sensitive freight, FedEx Custom Critical offers a premium service dubbed the White Glove Services.
The independent contractors involved in this division of the company have passed an even more stringent recruitment procedure and have undergone specialized training to transport the delicate and even hazardous cargos that White Gloves typically carries.
FedEx Custom Critical uses "C", "D" and "E" (tractor-trailer) units in White Glove Services and these have been equipped with specialized equipment such as air-ride suspension, extra straps and moving pads for securement and protection, power lift gates, etc.
White Glove Services units are also temperature and climate-controlled.
Air Expedite (formerly Charter Air)
For shipments that are beyond critical, and meeting a deadline is the customer's primary concern, FedEx Custom Critical offers a premium intermodal service - Air Expedite.
This service combines surface transportation with aircraft transport, from small piston-driven planes up to an Antonov - the largest freight aircraft in the world. The company states that it has access to virtually every on-demand aircraft in North America.
A customer's call will initiate a search for a suitable plane, including FedEx Express aircraft. A FedEx Custom Critical truck will pick up the shipment and transport it to the designated airport. The customer's shipment will be the only one on board the aircraft with continuous monitoring of the flight's progress.
Upon arrival, another FedEx Custom Critical ground unit meets the plane, and the shipment is transported to its final destination. That makes for seamless, door-to-door transportation.
Ms. Virginia Albanese is Vice President, Service of FedEx Custom Critical. Since joining the former Roberts Express in 1986, Albanese has served in a variety of management roles with the company. She spearheaded the implementation of the Customer Assistance Team concept, has been the director of safety, recruiting and contractor relations and has occupied her current position since 1999.
What separates FedEx Custom Critical from the rest of the expediting carriers? Ms. Albanese says, "The quality of service we provide to our customers from beginning to end! We have the ability to take a shipment from start to finish; if there are any problems with the shipment, we have the technology, fleet capacity and customer service representatives to resolve those problems."
"Since joining the FedEx Corporation, it's opened doors to new areas. We can now work closely with the various divisions of FedEx to better serve our customers."
The Technology
Roberts Express was one of the first transportation companies to link satellites and computers.
"Among the biggest changes for our company since the early days in expediting have been the innovations in technology," says Ms. Albanese, "the Customer Link, our internal computer technology, etc. We've been on the leading edge in implementing hardware and software to better serve our customers."
Before the arrival of computers, satellites and digital-mapping software, Roberts' personnel used pen and pencil to fill out run-cards and mileage was figured with a map and ruler. Agents would take orders from the customer call-ins and the dispatchers would pull the run card from a bulletin board, then work to cover the load.
In those early days, the venerable landline was the only method of contact between the company and the fleet. In the early days of the company's operation, nationwide paging was unreliable and cell phones were still on the drawing board. Drivers with a load on their truck were required to call Roberts every four hours with an update of their position.
Studies conducted by the company revealed that each driver made eleven phone calls per load. With position and constant dispatch inquiries, (not to mention the time the driver spent finding a pay phone) this method resulted in thousands of drivers' calls coming into Roberts each day. Drivers wound up being placed on hold for valuable minutes and more importantly, customers couldn't get through.
The solution to the telephone tie-ups was found in emerging technology. In 1988, the company began using Qualcomm, Inc.'s OMNI-TRAC two-way satellite communications system. After Roberts' fleet was equipped with satellite domes and terminals, the number of driver calls dropped by half and productivity soared.
The Early Days
Rich and Mary Moore signed on with Roberts Express in 1987 and they've seen some changes over the years.
"Mary says she would not have lasted without Qualcomm," says Rich Moore. "Before the Qualcomm, it was not unusual to wait 20 minutes on the phone and then be treated with a less than warm attitude from a busy dispatcher."
"Then were there the check in calls every four hours; when taking the information on a run, we had to write down the directions over the phone, so we began taping the calls to dispatch."
Moore says that in the days before the cell phone was readily available, their sole option were pagers that only worked in the major cities. Because of the poor communications, it was unlikely that they would receive a run offer during a deadhead.
He also relates the technique used by some expediters who would stake out a pay phone that would receive incoming calls and hang an "out of order" sign on it, just to guarantee a call back number for dispatch.
The Moores say that the satellite communications system really improved their lives, and that they really don't long for the good old days.
It wasn't perfect however: "In the early days of Qualcomm, the system used Coast Guard Loran stations which would give drastically inaccurate locations, particularly out west."
When Terry and Rene O'Connell started with Roberts Express in May of 1989, the Qualcomm system was just being introduced to the company's contractors.
Roberts did not require their owner/operators to install and utilize the new technology, but as Terry O'Connell says, " My recruiter had told me that the free installation that was being offered at the time was being dropped and that in a few months, there would be a charge to put the QC system in the truck. I figured it was time to move to the Qualcomm."
"After the installation, what a treat it was to not have to make all the phone calls! We had to make a minimum of four calls on every load, and this was back in the pre-cell phone days. We were always looking for phone booths - in bad weather and in bad parts of town - it was always a problem."
"We also had to make an arrival call at the delivery, even before taking the freight off the truck. That got us some looks!"
O'Connell states that there were many holdouts in the fleet because they thought the Qualcomm satellite tracking would turn into a Big Brother with the driver being watched around the clock. Terry says, "Actually, we wanted them (Roberts Express) to know where we were! We figured that the best way to stay loaded with freight was for the company to be able to locate us instantly."
"The local directions and routing were very welcome," says the veteran expediter. "The mapping was not perfect back then, but it was very helpful. On-time performance is absolutely key to this business and I think that the local directions were a big part of Roberts' success in that area."
"In comparison with what I was already paying for a Cue pager, we soon discovered that the charge for the satellite equipment was actually a bargain."
How it Works
The Qualcomm system, modified and customized for Roberts' unique situation was assigned the name of Customer Link (C-Link), and is still central to FedEx Custom Critical's operation.
Today, the FedEx Custom Critical fleet has eliminated the heavy phone traffic of the early Roberts's days, thanks to over 17,000 daily C-Link transactions. In addition, the system generates automated tracking "pings" every hour. The C-Link transmits the latitude and longitude of every truck and the computers at FedEx Custom Critical translate that into a city and state.
In an average of only 30 seconds, the signal transmits data messages over dedicated landlines from Akron to Qualcomm's NMC in San Diego. From there it is sent to a satellite in outer space, then sent to the truck, wherever they may be. Approximately 30 seconds later, the signal retraces its' path to Akron with latitude-longitude positions accurate to within 1200 feet.
Many of the Roberts Express innovations have carried over into the FedEx Custom Critical era, including the concept of dividing operations into self-managed Customer Assistance Teams or CAT's.
Each CAT is assigned to a specific geographic area with phone calls from that part of North America being routed to the appropriate group of agents/dispatchers This system allows the dispatchers to achieve a familiarity with that region and its customers. In addition, the computer searches its database of many thousands of customers that provides a detailed customer profile, i.e., address, loading dock size, recent shipments and quotes, etc.
From the Akron headquarters, dispatchers instantly send a run offer to a driver with the total mileage of a job and what it pays. If the driver accepts the run, he downloads directions and any special instructions regarding the shipment directly into the terminal in his cab. The entire transaction doesn't require a single phone call.
This is not to say that phone calls to headquarters have been entirely eliminated, however. The driver must still call dispatch when the freight has been loaded on his truck and another call when the delivery has been made. At the completion of that run, if another run offer is not immediately available, the driver is given a location to which to proceed for a "layover."
This layover will be in one of FedEx Custom Critical's 160 "Express Centers" strategically situated throughout the US and Canada. These centers are not a terminal or company facility, but rather a geographical area. They are typically located near major urban areas (some larger cities even have multiple Express Centers), or in areas where there is a history of freight shipments originating.
The very nature of expedited freight dictates that it is an emergency shipment that frequently has to be picked up and delivered "yesterday." The placement and allocation of fleet strength has always been a balancing act. FedEx Custom Critical guarantees that they will pickup their customer's freight in less than ninety minutes of the customer's phone call, so having the right size truck in the right area is key to achieving that pickup on time.
To accomplish this task, the company uses software called Dynamic Vehicle Allocation (DVA), to determine which trucks FedEx Custom Critical should dispatch where, and to predict future business. This programming looks at an extensive list of criteria pertaining to a region, the most important of which is the quantity and type of freight emanating from that area. The DVA will then assign the appropriate number and proper size trucks to that area.
The Fleet and Recruiting
As independent contractors, the owner pays all operational expenses of the business, fuel, licenses, insurance, communications equipment, meals, etc. The owner is paid a percentage of the mileage-based tariff that FedEx charges its customers.
In addition, the owner is compensated with certain accessorial charges to the customer for special circumstances along with a customer-paid fuel surcharge that is tied to the current price of fuel.
"The backbone of the expediting business is a D unit which covers a significant portion of our freight. In my humble opinion, if I were considering what unit size to run in expediting, I would go with a D unit," says FedEx Custom Critical Managing Director of Recruiting, Rick Renner.
Renner joined FedEx Custom Critical in 2000 as managing director of special projects, before his appointment to his current position in 2001. Renner has more than 30 years of experience in the transportation industry.
He tells the people asking about FedEx Custom Critical contractor opportunities: "This may not be the business for some individuals. I would recommend that a prospective contractor should drive for an owner already leased to FedEx Custom Critical; don't run out and purchase a new truck. This will give the prospective owner/operator the opportunity to decide whether this is the type of business that he or she wants to be in."
"Give it a few months before making the decision whether to buy a truck of your own. I would recommend buying a used truck at first, it keeps the payments down. By the time you're ready for that new truck, you will have had time to become adjusted to the requirements of expediting."
Virginia Albanese offers additional advice for the owner/operator: "It would be very helpful for both the driver working for a contractor and the owner/operator to take a Business 101-type class, perhaps at a local community college or other venue. There are also some trucking groups out there who offer support and education for the owner/operator."
"Many people do not understand the expenses involved in this type of business and the concept of cost per mile. We try to find different ways to help people understand this."
A small business truism is that while sometimes the income goes up and down with business cycles, most of the expenses remain. Renner says that given the unique characteristics of the emergency freight business, the prospective contractor should research and do his homework.
"You don't run miles in expediting, you run for a percentage. We're often contacted by truckload owner/operators who are looking into expediting. Many of them state that they want to generate high miles every week and we inform them that miles are not always the goal in this business."
Renner continues: "We tell our new contractors to learn our way of doing business; take every load offered for 60-90 days. That will give them a feel for the business and will give them the opportunity to learn the difference between FedEx Custom Critical and other companies."
Renner says that an understanding of basic economics is key to success when the driver makes the move to becoming an owner/operator: "Get a good accountant and get good accounting software to help manage the business. One publication I can recommend is the book 'Partners in Business.'
(Available at http://www.partners-in-business.com/ - Editor)
"Learn when to run, learn about the industry's slow and busy times, talk to dispatchers, talk to current contractors, possibly consult with the Contractors Council; in short, get some pointers.
The contractor needs to possess a "can do" attitude with an open mind. If they have those attitudes and character traits, they will be successful."
Getting Started
Renner says that prospective FedEx Custom Critical contractors come from a variety of sources - magazine ads, referrals and other expediting carriers. He notes that an increasingly popular method of applying for a contractor position is now the online application available at Expediters Online.com.
FedEx Custom Critical stresses safety in all aspects of its operations, especially in recruiting. The qualifications for owner/operators and drivers seeking to partner with the company include:
*No more than three moving violations within the last three years, and one or less in the previous 12 months
*Ability to pass a Department of Transportation physical and drug test
*A proper class CDL with HAZMAT endorsement
*Unrestricted access to and from Canada
If a prospective owner/operator or driver meets the necessary qualifications, FedEx Custom Critical requires a visit to Akron to learn about the company before taking any loads.
As a result, orientation is a required four-day program for new contractors held at company headquarters. During the orientation, the Qualcomm system is installed in the contractor's truck, accompanied by instruction in its use.
Although base plates (the state the truck is registered in) are the responsibility of the owner operator, FedEx Custom Critical supplies permits, free of charge, enabling the truck to be operated in the contiguous United States and Canada
Owner operators receive a percentage of the gross revenue on every load they take and settlement (pay) checks are issued on a weekly basis.
FedEx Custom Critical independent owner operators are required to have workers compensation or work accident insurance, depending on the regulations of the state in which they are based.
Owner operators are responsible for providing their own workers compensation or work accident insurance. Those who choose to purchase work accident insurance from Protective Insurance Company may have the payments deducted directly from their settlement checks.
ComData Services
"An easy way to receive and to spend money on the road," says Rick Renner. This widely-accepted method of fund-transfers allows the FedEx Custom Critical contractors to receive cash advances while away
from home. ComData offers other financial services as well."
Truck Insurance
"We have negotiated with several companies for the best possible rates. An individual will probably not find insurance that compares to the rates that our insurance providers are able to supply. It's also convenient in that the premiums are simply deducted from the settlements."
Truck Specifications
The FedEx Custom Critical fleet is composed of five different sizes of trucks with the following specifications:
"A" Unit - Minivan*
Cargo payload capacity of 500 pounds
48" high door opening (minimum)
48" wide door (minimum between walls)
Color must be white
"B" Unit - Cargo Van*
Cargo payload capacity of 2,500 pounds
Minimum 8-1/2' foot cargo bed
48" minimum width between wheel wells, door opening 48" high minimum, 48" wide
Color must be white
"C" Unit - 14' Weather-tight Cargo Box
Unit must be able to legally scale 5,000-pound payload
Box floor must be dock high, 48-52" from the ground
Inside dimensions must be 90" wide x 92" high
Rear door opening must be minimum 88" high, 85" wide (roll up or swing doors are optional)
Safety support legs at the rear of the frame of the unit (minimum rating 25,000 pounds)
Legal sleeper between cab and box
The cargo box must be white
"D" Unit - 22' Weather-tight cargo box
Must be able to legally scale 13,000-pound payload
Box floor must be dock high, 48-52" from the ground
Inside dimensions must be 90" wide x 92" high
Rear door opening must be minimum 88" high, 85" wide (roll up or swing doors are optional)
Safety support legs at rear of frame of unit (minimum rating 35,000 pounds)
Legal sleeper between cab and box
Box must be white
"E" Unit - Tandem Axle Tractor with Sleeper
Cargo payload capacity of 44,000 pounds
Eight model years old or less
Must have a total of four tire chains in truck
*Minivans and cargo vans must be panel van type with no side windows.
The service life for cargo vans leased to FedEx Custom Critical is 5 years and then, depending on the serviceability of the truck, another year's service is optional.
The service life for straight trucks ("C" and "D" Units) is 5 years and then up to an additional 2 years.
Rick Renner states that FedEx Custom Critical is actively seeking temperature-controlled straight trucks and tractors at the present time, and of course, team operations.
Communication with the contractors
Over the years, FedEx Custom Critical has expanded its lines of communication with its owner/operators and drivers by utilizing a variety of communications media. These include:
The Voice Response Unit (VRU)
A FedEx Custom Critical contractor can access the VRU via phone and after inputting his digital password, it enables him to access his business information and statistics, order supplies, etc.
On Times
This bi-monthly 8-page newsletter presents information for contractors such as new company policies, safety tips, profiles of unusual loads, etc.
The Extranet
Instituted around 2 years ago, the FedEx Custom Critical Extranet is the online version of the VRU. This password-protected site provides the contractor with personal business records and vital statistics concerning that owner's truck(s).
Contractor News Network
These professional studio produced cassette tapes are created on a quarterly basis and contain both general and company-specific information to benefit the FedEx Custom Critical contractor and driver.
Hometown Forums
One of the company's recent innovations is these regional meetings between company representatives and contractors. The company makes it easy for contractors to attend by staging these "town hall" forums by visiting a number of Express Centers.
Contractor awards and incentive programs include:
Asset Club - a program that awards savings bonds to contractors based service and accident-free operation.
Four Star Award - an honor given to the top 50 FedEx Custom Critical contractors who meet the award criteria for safety, availability and on-time service.
Negotiated discounts with certain hotels, truck stops, fuel stations and more.
Surveys
Customer feedback and satisfaction is essential to the FedEx Custom Critical operation and the company measures this through a monthly canvassing of those customers by a market survey firm. The survey asks 150 of the most recent FedEx Custom Critical customers about the service they received and their level of satisfaction. At the end of each of its reports, the survey firm attaches a run-down of some of the comments from customers.
This expedited carrier also employs the same market survey firm in contacting its contractors on a quarterly basis to measure the drivers' satisfaction with FedEx Custom Critical.
Contractor Relations
Throughout the trucking industry, and particularly in expediting with its predominantly independent contractor structure, the relationship between dispatcher and driver, contractor and company is a sensitive area. Resolution of misunderstandings and disputes can be a balancing act between the company's needs and those of the owner/operator and driver.
Scott McCahan is a veteran of the FedEx Custom Critical operation. He joined the former Roberts Express in 1982 and has worked in many departments of this expedited carrier before assuming the duties of Senior Manager, Safety and Contractor Relations in 1997.
McCahan has witnessed many changes from the early days to the current FedEx Custom Critical, including his role in Contractor Relations. His main focus presently is dealing with vendors, and as he puts it, "finding ways to do things better."
If a FedEx Custom Critical contractor has an issue that he/she needs addressed, it is handled by one of thirteen Contractor Coordinators. These specialists are located in the dispatch area where they function as a liaison for the contractor. McCahan says that most issues can be resolved right there.
McCahan echoes Virginia Albanese in his praise for the contractors leased to FedEx Custom Critical: "Our fleet is a high-quality, professional fleet. These are small business owners who are also very smart and very intelligent people. They allow this company to provide world-class service."
"We're always trying to do the right thing by the contractor," adds Virginia Albanese, "we know they're in business to make a living, and we're sensitive to those needs. To that end, we pay for the survey of contractors every quarter to find general themes and make changes where necessary."
"We formed our Contractor Council several years ago, composed of active FedEx Custom Critical owner/operators. This Council meets two or three times a year, and the members of the council give us very valuable input."
Ms. Albanese continues, "We also have contractor coordinators who monitor the trucks assigned to them to see how they're performing and consult with those contractors in the interest of making their partnership with the company a profitable one."
"I can understand that the contractors can, at times, feel isolated. After all, the drivers' only contact with us on a daily basis is on the phone or over the Qualcomm system. We monitor our dispatchers regularly to ensure fair play with our contractors."
"We try to give each of our contractors and drivers individual attention, but they need to remember that we are dealing with hundreds of people in the fleet and that they have to be patient with us at times. We feel that our current FedEx Custom Critical fleet is the best group of contractors and drivers we have ever had and we want them to be profitable and happy."
Ms. Albanese says that the company is currently involved in moving into its new corporate headquarters, which should be done around late April 2003.
There will be a separate entrance for the drivers near Safety, Recruiting and Contractor Relations. This should provide easier access
to the different departments that the contractors and drivers visit most often.
What's the outlook for FedEx Custom Critical? Ms. Albanese states,
"We will continue to grow, while enjoying our relationship with our parent company. We also look forward to providing new, and improved service with our sister companies in the FedEx family."