By George Lauriat, Editor-in-Chief, AJOT
Jeff Miller, recently appointed CEO of the warehouse collaborative E-Fill, has been in 3rd party logistics (3PLs) business for over thirty years. When approached by E-Fill to run the national warehouse collaborative, his first reaction was 'Been there, done that.' The warehousing collaborative model had been tried before with only moderate success, so why would E-Fill be so different?
A major flaw in the collaborative model is what happens when a customer wants to use facilities other than those in the collaborative. Or worse, the customer wants to use facilities belonging to one member in another member's territory? Generally, the spirit of competition trumps the collaborative effort. The real difference between E-Fill and the collaborative business model is, as Miller explains, 'E-Fill gives the service providers a skin in the game.'
The new business model makes all the service providers stakeholders in the company, sharing in the revenues, no matter whom, what or from where the business comes. According to Miller, in the beginning the concept of everybody sharing in the business was a 'tough sell' to the independent minded warehouse owners he was trying to recruit. But the idea of mixing and matching neutral warehousing and logistics services made a lot of sense. 'The 'big guys' are accountable to their shareholders to fill space, even if it doesn't match the needs of their customers,' said Miller.
'This is Ken's [Kellaway] vision of how the new public warehouse model should work,' Miller said.
Ken Kellaway has been in the drayage/warehouse business all his life. His father, now affiliated with E-Fill on the finance side, founded Kellaway Transportation, which now is part of the RoadLink USA group). Kellaway's business plan was gathering dust until last year when all the pieces fell into place to get the new company up and running. Kellaway's unique business plan rested on three broad concepts: that the service providers (warehouses/DCs) all are stakeholders in the collaborative company; secondly that the collaborative is neutral, without affiliation to any single corporate entity; and finally the 'E' in the company is that the whole system is linked through IT which provides both the platform and visibility for customers and stakeholders alike. The combination enables the warehouse company to go after the pick, pack and ship clients that are frequently at commercial odds with their service providers because of affiliations, geography or service packages.
By his own admission, Miller rapidly became 'a true believer' in the E-Fill plan, personally traveling around the nation recruiting warehouse service providers. E-Fill fills a special void in the marketplace, national in coverage, a neutral warehousing company that can offer just about any package of services.
'I don't care how much [capacity and facilities and service programs] you have. You can't satisfy every customer. You simply can't have enough facilities,' Miller explained.
'The warehouse/DC industry is fragmented and in a consolidation phase. More and more customers want to reduce the number of vendors, to the point of even cutting out long-term loyal providers as part of a growing effort to reduce costs.' 'What we [E-Fill] do is satisfy a customer's exact requirements. We [E-Fill] are not tied to any set of assets. If you can dream it, we can deliver it.'
100 zip codes
The 'recruiting' process has gone well for Miller. 'We now have 50 million sq/ft; 150 facilities in 100 US Zip Codes,' he said. It is the type of spread of geography and services that Miller believes you need to compete in today's new marketplace. 'Today there is a new global situation, with customers (shippers) needing inventory volumes maintained at just the right speed; not too fast and not too slow. It is a process to keep inventory and
