Finding the Right Carrier: How Vulcan Steel Became a Preferred Shipper

Only a few years ago, Vulcan Steel Products (Pelham, Ala., www.vulc.com) was saddled with a bad reputation with its carriers. Among other problems that Steve Monson had to solve when he joined the company were loading times that sometimes stretched as long as 12 hours.

One of the nation's leading manufacturers and suppliers of threaded products, Vulcan also has heat treat and cold finished divisions, all located in Pelham. In trying to secure transportation Vulcan is a David versus the Goliath of a major steel center just 20 miles north in Birmingham, Ala.

Monson, Vulcan's logistics manager, says the company's biggest competitor for its steel rod products is China. "The Chinese can produce steel cheaper," he claims, "so we have to sell ourselves on service and speed and quality of product. That's really how we built our business over the last 28 years."

The majority of Vulcan's freight moves truckload, with a small amount of less-than-truckload and parcel shipments. End customers are wholesalers and distributors who serve builders, plumbers and electricians. Major customers include retailers like Home Depot and steel service centers.

In addition to having long load times, Monson says Vulcan's products aren't as appealing to flatbed carriers as some others. "Ours may require multiple stops," he explains. "The load has to be tarped. When drivers are hauling pipe or things of that sort there are straight shots with no tarp. When I arrived others were typically paying more than we were, so it was tough for us to compete. We were using anybody and everybody... anyone we could find to haul our freight."

During one 12-month period Vulcan used 36 brokers in addition to any truckers it could locate to move its freight. As Monson points out, the company is in the steel business, not trucking, so a private fleet would not be the answer to its capacity problems. Vulcan had to change its ways if it was going to attract and keep carriers.

"Not all brokers have a good reputation," Monson recalls. "Unfortunately some of them went out of business, and didn't always pay their bills and the carriers would turn around and call us. To me, it was obvious that on both the carrier and broker sides we needed to use quality rather than quantity vendors."

Monson took a look at Vulcan's shipping patterns and found that the company had several strengths it could use in attracting and keeping a core carrier group. For one thing, Vulcan's cargo is consistent throughout the year. In contrast, steel freight out of Birmingham runs in cycles, with heavy volume through the summer months and much less in the winter.

"When I arrived," says Monson, "our relationship with carriers consisted of us beating them up in the winter and then begging for trucks in the summer. One of the first things I did was to establish relationships with carriers and to let them know that for those who would help us in the summer, we would help them in the winter. ‘If you get me trucks now, I'll get you trucks then. We need to work together,' I said."

Another advantage Monson found was Vulcan's inbound freight. As a manufacturer there is always a need for raw materials.

"We guarantee carriers freight 12 months a year, both inbound and outbound," he says. "Three years ago we had 10 or 15 trucks a day delivering here and then driving away empty, going somewhere else to find freight. I approached our purchasing manager with the thought that we could capture the capacity that was terminating here at our facility."

Monson began tracking carriers coming to the plant on a regular basis. He went out and met with the drivers and wrote down the names of the truck lines and then when contract time came, he told the carriers handling inbound freight that Vulcan would like to have them handle some outbound, as well.

"It cuts down on their dead heading," says Monson. "They can unload at one door and re-load at another."

When it starting building a group of core carriers, Vulcan had 10 carriers of which it had to end up firing two or three because they didn't produce the promised equipment. For 2007, the company has a core group of six contract carriers that handle between 15 and 20 truckloads a day both inbound and out. The company doesn't contract 100% of its freight.

"We try to give 75% of our freight to our contract carriers," explains Monson. "We require our contract carriers to give us a minimum of one truck a day. Some carriers don't have enough trucks to do that and so really can't do that. But they've been there for us in the past and we don't want to cut them out of the picture. They played an important part of our growth and success by servicing us when we needed it. We have overflow or extra freight we offer to our secondary carriers and the few brokers that we use during the times of year when there's not a lot of freight out there."

Vulcan now keeps report cards on its carriers and lets them know how they are doing. It has also made significant moves to improve service to its carriers. For example, Monson worked with dock personnel and the company's average loading time is now 2 hours, 36 minutes, including truck driver waiting time. Actual loading can take as little as an hour.

"Our goal is to be as carrier friendly as we can," he claims. "We aren't the biggest guys in town, so we want to be the preferred shipper."