KANE’s new Chief Commercial Office is Stan Schrader, a 35-year logistics industry veteran with a strong background in building and scaling successful logistics sales organizations. We recently sat down with Stan to discuss some of the changes he has seen in the industry over the years and where he sees the greatest opportunity.
Q: What’s the biggest change you’ve seen during your time in third-party logistics?
A: It’s speed – on a few different levels. Customers want their orders shipped and delivered faster than ever and they also want easy, online access to real-time data on order and shipment status. There’s also the pace of change and the absolute expectation that 3PLs should provide a “turn-on-a-dime” response capability for breaking events or new strategies.
Q: It sounds like much of this is being driven by the end customer.
A: That’s right. Let’s say our client is a manufacturer. The pressure amps up on 3PLs when that manufacturer’s biggest retail customer asks to receive products in a different packaging configuration or when buyers on their online store want one- or two-day delivery. We become the enabler. A mistake 3PLs make with regard to success metrics is that they don’t consider how their direct customers are measured by their customers. When those two sets of KPIs are aligned, 3PLs become the critical enablers of an agile supply chain.
Q: How about the 3PL market, specifically? What changes have you seen over the years?
A: We’ve seen tremendous consolidation among providers. Whether that’s good or bad depends on where you sit. If you are a global company with a wide range of logistics requirements, it could be a good thing since the mega 3PLs tend to prefer large-scale, multi-service engagements. If one such 3PL makes up its mind that a particular customer or prospective customer is important, it has the financial resources and depth of talent to develop and support the most advanced solutions.
Q: Obviously, not everyone fits that bill.
A: Actually, very few fit that bill. The vast majority of companies out there are smaller shippers who would not hit the radar of these mega 3PLs. When they do, they become the proverbial small fish in the big pond where it’s hard to attract the focused attention they want and need. That’s why I think there’s such a great opportunity for companies like Kane Is Able, where the focus is really on that middle market.
Q: You’ll be leading business development efforts for KANE. How has selling changed in the 3PL space.
A: Well, for one thing customers have gotten much smarter in terms of how deals are structured. For instance, when I started it was pretty much a given that a 3PL would own the assets but now companies may look to own some or a portion of those assets. We’ve also seen a sharp increase in the involvement of the purchasing department in logistics contracts. That could be fine, but 3PLs do need to be somewhat wary here. It takes significant resources to develop and price a solution so it’s important that available resources are not pointed at RFP processes that are merely pricing exercises.
Q: What do you consider to be the keys to success in selling new logistics contracts?
A: It starts with listening and being willing, as a provider, to adapt the solution to a customer’s unique wants and needs. Frankly, some 3PLs are not so willing. They have specific packaged solutions or preferred deal terms and try to convince the customer of the merits of that approach. Arrogance has no place in modern selling. We can’t assume we know better than the customer. We must be flexible enough to adapt the solution to the customer’s expressed objectives.
Q: How important is the business development role to winning new logistics engagements?
A: At the risk of receiving a pay cut, I’d say it’s very important, but secondary to the operations side of the business. I’ve not met the sales person yet who can overcome a poor solution design or bad operational performance. My own background is about a 50/50 split between operations and business development. I love the operations side of the business. The best sales people are problem solvers who can bring the right resources together to achieve the customer’s objectives. But at the end of the day it’s the warehouse operators, logistics solution architects, and IT folks who win the deal.
Q: Do you think today’s shipper is looking for something different from their logistics providers?
A: Sales channels are blurring, so omni-channel distribution is a must. 3PLs must be comfortable running both retail and consumer distribution operations and doing so in a very integrated and seamless way. That includes having the in-place IT systems to manage this increased complexity. On the B2C side, there’s a lot of hype about the “Amazon effect,” but it’s real. Businesses feel the pressure of an ever-shortening order-to-delivery cycle and struggle to achieve the right balance of cost and service. 3PLs can help here, particularly companies like KANE that have the national fulfillment network to put products closer to customers for both faster delivery and lower parcel costs.
Q: Third-party logistics is a maturing industry. What opportunities do you see?
A: It goes back to something I said earlier. The mid-market is underserved. To compete, these growth-oriented companies know they need a highly efficient and effective logistics infrastructure. They want a logistics partner that can bring them these robust capabilities, while also giving them a high degree of attention and resource focus. Shippers have become leery of 3PLs that try to be all things to all people. They’re looking for a perfect culture and service fit, and that’s not always easy to find.
Q: Is that one of the reasons you landed at KANE?
A: For sure. It’s great to be part of an organization that, as a competitor, I’ve admired for many years. We have a great logistics solution for those growing mid-tier businesses. And, honestly, we also serve larger companies that came to KANE because they want the kind of personalized service that our customer-intimate model delivers.
Q: Any closing thoughts?
A: As a 3PL, I’d rather be great at a few things than mediocre at many things. My job is to find those companies whose needs align best with the things KANE does great.