Dedicated Contract Carriage

What Is Dedicated Contract Carriage?

1) Replacement of the current private fleet

2) Extension of the current private fleet

3) A complete unique design of a transportation solution to satisfy your business requirements

Advantages of DCC:
• Avoid Capital Expenditures
• Reduce Labor Cost
• Improve Service
• Low Cost Access to High Technology
• Focus on Core Business
• Increase Flexibility
• Simplify Logistics Organization

Reasons for Outsourcing:
• Core Competency: Rely on external expertise versus developing internally; allows buying company to focus on developing core competencies.
• Leverage: Achieve economies of scale in logistics offerings, technology
o development and transportation optimization.
• Technology: Ongoing access to the latest technology and optimization tools with costs shared among multiple customers.
• Labor: Flexibility in matching personnel to changing volumes & requirements.
• Better Information: Technology tools and analysis/optimization techniques which transform raw data into actionable information.
• Shared Risk: A partner to share capital risk and provide expertise as new service offerings or markets are added.
• Government Compliance: Leverage expertise and burden to comply with governmental regulations.

Customer Requirements-
Before Outsourcing Private Fleet:
• Develop a solid benchmark and knowledge of your current operation.
• Truly understand all costs associated with operating a “private fleet” – much more to consider than just driver wages, fuel, equipment, and maintenance.
• Understand the dedicated contract carrier’s actual capabilities.
• Be sure to check references.
• Lowest cost solution is not necessarily the best solution.

Determining Cost Factors:
• Utilization . . . More miles per truck = lower cost per mile.
• Wages for drivers … are they market-based?
• Number of assets . . . Trailers, trucks, drivers.
• Number of on-site people.
• Backhaul opportunities.

Breakdown of Private Fleet Costs:
• Driver Compensation:
• Driver Pay (includes bonus pay)
• Payroll Taxes
• Driver – Paid Time Off
• Driver – Benefits
• Driver – Turnover
• Purchased Transportation:
• Contractor Pay
• 3rd Party/Interlining/Cartage
• Fuel Related:
• Fuel and Use Taxes
• State Use Taxes
• Equipment Related:
• Tractor Ownership
• Trailer Ownership
• Tractor Maintenance
• Trailer Maintenance
• Legalization (Permits)
• Equipment Rentals
• Risk Management:
• Accidents/Insurance Premiums/Claims
• Workers Compensation
• Cargo Claims
• Other Equipment Repairs
• Communication:
• Telephone/Fax
• Satellite Usage
• Satellite Ownership
• Driver Recruiting Costs:
• Advertisement
• Drug Screen
• Training
• Pre-Employment Physicals
• Other Operating Cost:
• Tolls
• Motels
• Other Costs
• Overhead Cost:
• MIS Charges
• Facility Cost (office, furniture, utilities, etc.)
• Customer Service Cost: (salaries, computer equipment, etc.)
• Field Operations Management: (salaries, comp. equip, etc.)
• Recruiting
• Training