Background
A US-based chemical manufacturer won a supplier bid requiring a move into the Canadian market. The manufacturer turned to their current logistics provider, KAG Logistics, to help them optimize costs while maintaining and exceeding service levels. With a proven track record, consistent service, and expertise, the manufacturer was confident KAG Logistics was the right provider to launch them into the Canadian market. Additionally, KAG Logistics has a long-standing relationship with the end customer in other verticals and services them domestically.
Challenge
Without experience in the Canadian market, the manufacturer needed help calculating costs and ROI and designing a transportation solution to best service their customer. KAG Logistics built on their existing relationships with the manufacturer and their end customer to develop a 3-way relationship that was mutually beneficial. The knowledge gained from these existing relationships helped the KAG Logistics team leverage forecasting and budgeting in their solution to the manufacturer.
Solution
With a successfully established US model, KAG Logistics compiled valuable business intelligence and current trends to project various transportation modeling scenarios with visual simulations, including potential operational constraints and risks. Additionally, KAG Logistics gathered data from the end customer’s existing US business to estimate volumes and costs.
KAG Logistics optimized fleet sizing and strategically selected domicile locations to best serve the manufacturer by determining the required number of drivers and trucks, then projecting a daily, weekly, and monthly outlook from an operational standpoint.
Due to strict delivery requirements and the need for specialized equipment, only a few transportation companies had access to or were willing to build the necessary equipment, which could take up to six months to source. KAG is unique in that they will source or build specified equipment to meet their customers’ needs. The lack of accessible equipment and the long lead time for product/inventory placed a significant constraint on the manufacturer, as there was no immediate backup carrier available if needed. KAG provided the manufacturer with peace of mind by utilizing optimized trailers and call-and-demand drivers. This acted as an “insurance policy,” ensuring the equipment and drivers are ready when needed, reassuring the manufacturer that they can successfully service their customers for unforeseen needs.
Results
With a broad coast-to-coast network, KAG Logistics leveraged their access to KAG Specialty Products’ specialized equipment and KAG Energy’s dispatchers. This allowed the chemical manufacturer to avoid using resources from multiple companies to service their customer, saving them time and costs. The manufacturer moved forward confidently, knowing they had access to on-demand equipment and drivers as needed.
KAG Logistics utilized data trends and cost models to recommend optimal fleet sizing, resource positioning, predictable costs, and ROI, demonstrating successful entry into a new market.
