The Business Of Independent Service Provider Contracting

DRO Expectations vs Reality

Posted by Dave Bowen on Jun 4, 2020 4:40:10 PM

businessman hand working with modern technology digital tablet computer and graphics layer effect as business strategy concept

In today’s world with the latest AI (artificial intelligence) technology, we can use voice commands to control not only our devices,- “Alexa” / “Hey Google” “Play Crazy Train by Ozzy Osborne” (yes choice of song intended), but we can also control our lights (remember the clapper?), garage doors, air-conditioning, and appliances through apps from the palms of our hands.

One would think that a world class company like FedEx would be able to offer a highly sophisticated routing solution software as a tool to fine tune the routing for today’s exploding e-commerce market. You would be correct to hope for that to happen.

For various reasons, that is not the case. I am not here to justify the reasons for this, nor advocate that the Dynamic Route Optimization (DRO) tool is either a great or terrible tool. However, it IS the system that you have which integrates your CSP operation(s) with FXG operations.

green dices on white backgroundFor those of you who started your business making the choice to jump in with a young start-up company that was taking on 78-year-old delivery company, UPS, had you focused on the negatives, you would never have started your business. For those entrepreneurs who have established and built other companies and are now investing in FedEx Ground Contractor Service Provider business(es), you became successful by focusing on what was possible and Taking Action in that direction vs dwelling on the shortcomings, or the reasons something would not work.

Frustrating

Yes, it is frustrating to be required to use a system that for many of you - limits your efficiency potential. You have worked hard with your team to adapt to changing market conditions and remain efficient. A highly sophisticated routing tool would be a great asset to help you make routing decisions to run your business more efficiently. It would also allow you to automate some of your daily leadership decisions.

DRO was designed as a tool to optimize routes to a point of improvement and not perfection. The DRO solutions are guides for routing your operation, not a perfect guide; however, it can be a positive guide with some value. FedEx Ground had its full-time Vision Coordinators working with the old system daily as their main job. You have been given three weeks to anoint a member of your team as the technical expert for a new system that is still evolving.

The DRO Roll-out Team and even Route Smart programmers themselves do not fully understand the issues that are being caused by their programming logic and prioritization on your real-world operation. On the technical side, the level of detail and sophistication for the tool is poor, and your critical comments are accurate. If it was super easy, Contractors wouldn't need help.

Changing Biz Model

FedEx Ground is changing its business model to capture the e-commerce market by “taking steps to increase the efficiency and lower the cost of residential deliveries as e-commerce continues to grow at an explosive rate.” They are moving at a blistering pace to address challenges from a new (smiling) competitor in the last mile residential delivery arena. They are offering a new e-commerce contract changing the levers that produce your revenue.

These changes have moved your delivery company into new, unfamiliar, and downright uncomfortable territory. It has become noticeably clear over the last twelve weeks how dramatic an impact the new model will have on your operation. It should be noticeably clear now that you must rethink and adapt your approach to the changing world around you.

close up of hands using laptop and holding credit card  as Online shopping conceptE-commerce rates will soon be the largest percentage of your revenue. The distance traveled from a Start-Up as a Business to Business (B2B) delivery company is so great, it is almost impossible to look back and see, or remember, from where you came. Looking forward, you can complain about the discomfort; however, you must adapt, or your business will meet financial failure and become extinct.

All these changes have a direct and interrelated impact on each other. As the e-commerce train rolls forward, DRO is a tool providing you direct control to set up your daily plans. It is important to have a systematic approach that will allow you to maximize the limited tool in order to navigate these changes effectively .

DRO was designed to raise all boats, mainly those below the waterline. Those of you who have been above the waterline and cannot figure out how to shift your entire operation in three weeks of training are struggling to adapt from the old philosophy of “static route techniques” to a more open approach of daily dynamic route planning.

Implementing Processes

Fortunately, we have built a system & a process to help guide you and actually help implement sound dynamic route engineering practices, through the DRO system.

eTruckBiz can teach you the systematic approach that enables you to do the best you can with the tool that you must use to integrate your operation with the FedEx Ground system.

If you want to get at the heart of running an efficient, productive & profitable operation, give us a call and we can give you a hand with both setting up both your DRO and an accompanying driver schedule. It’s actually a fairly complicated task that we can make easy for you.

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Topics: FedEx, FedEx Ground, Profit, Scheduling, Dynamic Route Optimization, DRO

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