Executing automotive freight is hard. Assembly plants run on little inventory and need just-in-time deliveries. Inbound trucks often have multiple stops at suppliers before their final destination. The freight can be high-value and often must be handled with care. And great visibility data is crucial to measuring carrier performance and supplier efficiency.
The truckload carriers that run automotive freight tend to specialize in it and offer dedicated capacity solutions that can become embedded on very regular, repetitive lanes. That can make it hard for non-asset transportation providers to break into those verticals, and some might think that the particular requirements of the commodities might make them unsuited for digital freight brokerage in particular.
But when Faurecia, the French tier-one auto parts supplier, wanted to simplify its North American transportation network, reduce cost and improve service, it turned to Convoy’s automotive practice group.
“What we’re trying to do is reduce our panel and use fewer carriers and suppliers across the globe,” said Brian Mapes, a commodity buyer in transportation and logistics at Faurecia. “In that process, we selected Convoy because it doesn’t make sense for us to have one lane awarded to a small carrier and have 100 carriers set up across our network.”
As Faurecia whittled down its North American routing guide to a group of 30 core transportation providers, it awarded Convoy freight out of its Blue Springs plant (Kansas City, Missouri) and its Spring Hill plant (Nashville, Tennessee). Convoy matched capacity for both truckload and so-called milk runs, in which Convoy’s carrier would make pickups at multiple facilities before delivering to an original equipment manufacturer’s (OEM’s) assembly line.
“Our customers expect the freight to be ready at the OEM plant with no shortages and no quality defects,” Mapes said. “They run these plants on very little inventory, so the on-time piece is huge for us. A route that is a couple hours late is probably going to shut a line down. For us, cost is number 1, on-time percentage is number 2, and we haven’t really had any problems in terms of damage or missing freight.”
Convoy is the only digital freight network with a dedicated automotive practice group, which includes operations people solely focused on the auto industry and business development representatives with decades of experience working with auto parts suppliers. Conner Olson, senior enterprise account manager at Convoy, leads the automotive group, which now has several major customers, including the world’s largest global automakers.
Olson said that automotive’s typically static schedules allow Convoy to plan weeks ahead and drive down the cost of trucking capacity in its network and that Convoy’s ability to use its batching technology to offer round trips to carriers made the return of racks and custom packaging to parts suppliers much more efficient. But as streamlined and rationalized as automotive supply chains can be, there will always be surge freight that doesn’t work well with dedicated assets.
“If you ask a Faurecia or other automotive shippers what their carrier makeup is, it’s largely asset-based,” Olson explained. “We do those contract lanes, but one of the unique things we’ve been able to solve for is that long tail of their freight network — the excess freight. We’ve been able to play really well there for ad hoc style shipments and loads with less than one move per week. It’s not always transactional. We contract out those lanes and have launched our new Guaranteed Primary program, where we provide dynamic rates for primary freight, and we’re able to address those needs.”
Consistent, high-quality visibility data has allowed Faurecia to analyze the performance of its own facilities, measure dwell times and adjust how parts are routed to OEMs so that they arrive on time.
“The visibility tools are pretty key,” Mapes said. “Convoy is further ahead in the game than a lot of legacy providers in terms of geofencing and being able to show you detention or if someone is getting held up. Convoy also ranks which plants and suppliers are doing well.”
“We help with the optimization of the route,” Olson added. “We can suggest removing a stop if a supplier is holding the load up from getting delivered or look at a few other stops along the way. Those recommendations can be seen in our monthly business review data and at the end of the day, it’s about driving our customer’s cost and our cost down.”
Another way that Convoy helps keep Faurecia’s freight running smoothly, Mapes said, is by paying carriers quickly and accurately. Convoy QuickPay’s generous payment terms — paying carriers in two business days with no fees — helps small trucking companies with their cash flow and drives carrier stickiness on complex but regular automotive lanes where familiarity matters.
Convoy already works with, but Olson said there’s an opportunity to go much deeper with the OEM’s supplier networks and that his automotive practice is “just scratching the surface” of a vast industry.
“Automotive has become one of our core competencies, although we haven’t really put it out there yet,” Olson said. “It’s exciting to see the auto industry transform.”