What is it?
Many companies' market and operate their dedicated services in different ways, so it's very important to pay attention to the specific dedicated model each company is offering. Most often, dedicated solutions involve a dedicated capacity of items, such as trucks, trailers, and drivers. Shippers choosing an entry level dedicated service may be securing dedicated trucks on certain lanes, but at the top tier of dedicated services, shippers may be creating an entire freight team using a specific cost structure business model with their partner. Regardless of the scope of services, the best dedicated services are built around the concept of valuing partnerships over transactions, and building lasting business relationships.
When is it used?
Many businesses will consider a dedicated model when they reach a point where managing their own freight is becoming too costly or time consuming. Shippers may find themselves in need of expertise or equipment that they don't have access to. They may also be seeking capacity to move their freight on the open market and finding the results inconsistent and frustrating. Going to a dedicated service provider could provide these shippers with a more predicable cost model (as the market risk moves to the provider in ideal cases), easier recruiting and retention of drivers, access to better industry talent, and more.
Things to consider: Specifics of the dedicated business model being offered
As explained previously, dedicated services can be extremely customized with many variables to consider and each company will have variations in their dedicated offerings. Here is one example of a full service dedicated model through Wellington Group of Companies, as explained by CEO Derek Koza:
At Wellington Group of Companies, our dedicated services are an open book, cost plus business model. We manage:
- all assets: trucks, trailers and associated maintenance
- driver recruitment and retention: which is an increasingly difficult area to manage for companies not already using dedicated, since the driver market is facing an increasing shortage
- safety: providing access to the best possible insurance rates with our impeccable safety record
- better buying power: resulting in newer, more efficient equipment, cheaper fuel, among other things
- day to day freight management by a team that is specialized to the dedicated customers specific business needs.
These are just a few ways a dedicated customer stands to benefit from a partnership with Wellington Group of Companies on a basic level. But more importantly, we want our dedicated customers to have a partner they can rely on and the capacity to focus more on their core business instead of managing their freight. Our partnerships are meant to be a win-win that open up and streamline revenue for both our companies.
—Wellington Group of Companies, CEO, Derek Koza
In essence, partnerships are key when it comes to dedicated service providers. Businesses seeking this service for their trucking needs are looking for a long-term business relationship and freight partner, not simply another carrier to move their load. Companies offering dedicated services should be committed to long term relationships with customers and working at building a win-win mentality into their business. Shippers looking for a dedicated provider will need to carefully consider the business model being offered the reputation of the business based on previous partnerships to ensure they find the right fit. In the end, dedicated services really are the long term relationship love stories of the trucking industry!