The head of J.B. Hunt Transportation Services Inc.’s (NASDAQ:JBHT) final-mile operation said Thursday that significant investments must be made in the home delivery of big and bulky items because it is fast becoming the most critical part of the supply chain.
Nick Hobbs, who runs the Lowell, Arkansas-based company’s Dedicated Contract Services (DCS) and Final Mile Services operations, said during the FreightWaves Last Mile Logistics Summit that Hunt is aggressively investing in its final-mile network for heavy goods ordered online. That’s because it is a relatively new area and it is critical to its brand and its customers’, Hobbs said. Since the reputations of both brands are at stake, carriers and their customers must invest the time and resources to collaborate for the benefit of the end consumer, he said.
The key difference between home deliveries of heavy goods and small packages is that large-format items are typically brought into people’s homes. This requires an entirely new level of interaction that many companies with roots in truckload and less-than-truckload (LTL) services are not accustomed to or trained for.
For decades, home deliveries of heavy goods came from in-store buying. In recent years, however, e-commerce has taken a larger share of the delivery transactions. E-commerce orders of heavy goods have grown rapidly as more manufacturers and retailers expand the available volume of stock-keeping units (SKUs) that can be ordered online.
Home-delivery personnel should be paid a premium to account for the specialized training to deliver and assemble a product and remove the old item, if necessary, Hobbs said. A positive, damage-free experience raises a company’s customer experience scores, results in repeat business and avoids the nightmare scenario of dissatisfied consumers taking to social media to broadcast their complaints, Hobbs said. The rise of social media represents the loudest customer service megaphone Hobbs said he has seen in his 36-year career.
Hobbs acknowledged that final-mile deliveries can be expensive to develop and execute. But it pales next to the damage to a business’ sales and reputation should deliveries go awry. “We need to look at the total cost of a bad delivery experience,” he said.
Hobbs said that the industry needs to do a better job of “vetting and training” delivery personnel who enter people’s homes. To that end, Hunt is developing an application programming interface (API) tool to allow consumers to examine a driver’s profile, developed through background checks and other processes, before the shipment arrives, Hobbs said.
