Nailing a Niche in Logistics
From a simple start, Diane Gibson built Craters and Freighters into a global 3PL to corporate and other 3PL customers.
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The two companies have evolved a business model that satisfies a very specialized logistics need through local entrepreneurs yet overlays the systems and disciplines that help the domestic and international networks to serve larger corporate customers. Many of those customers are outsourced logistics providers themselves who come to Craters and Freighters for their specialized expertise.
The calls can range from the simply unusual—like the oversized O-rings—to the colossal. A growing area, says Barenberg, is in reverse logistics. He offers an example of a woman who called from major law firm to say the company had a number of servers that were lease returns to Cisco. They had to be moved out of the company’s eight locations, and by the time she had found Craters and Freighters, she had only four days or the company would incur another month of rental on all of the equipment. There were over 450 pieces in office buildings in major metropolitan areas across the US and Europe, all of which had to be crated and returned to the vendor.
“A lot of our bigger clients have footprints in China, the Pacific Rim, and Europe,” notes Barenberg. “They come to us and say we have equipment sitting in Amsterdam, we need you to pick it up, get it crated, and get it shipped to Chicago.” That has pushed the development of Craters and Freighters Global Logistics as a full third party logistics operation— including providing those same services to other third parties.
At the top end of the scale of unusual requests Barenberg recounts is a company that had purchased three sawmills in the US that were to be moved to the heart of Siberia. The sawmills were in different locations Barenberg said could only be described as the middle of nowhere--400 to 500 miles from any major metropolitan area. Craters and Freighters got a rigging team to break the equipment down and then a crating team came in and crated it up on site. They arranged to move the containers to a port where they were shipped to St. Petersburg, Russia and then hauled 3,200 miles inland by rail.
It isn’t all reverse logistics, says Barenberg. One large company came to Craters and Freighters when a big high-tech equipment manufacturer told the customer its terms were now FOB origin (ex works) at plants in China, Brazil, and Europe.
Cushioning delicate electronics requires different materials than heavy machinery.
On a smaller scale, one frustrated caller asked Barenberg if Craters and Freighters could move six servers from point A to point B. The caller admitted that he had been having his technology people handle the moves, but they were simply going to the local office supply store and buying bubble wrap and putting the delicate equipment in whatever box was at hand. At $15,000 per unit, the 35% damage rate had finally pushed the caller to seek another alternative.
It’s a common mistake, adds Gibson. Many people don’t understand the importance of the different crating techniques, which leads to damage. The type of cushioning is important, adds Barenberg. It depends on the size of the asset, the weight, and the fragility. There’s not one density of foam that’s appropriate, he continues. Knowing which density is appropriate for a server rack versus a 10,000-pound machine makes a big difference.
Proper insurance is also crucial, says Gibson. “We operate with a cargo policy that was written specifically for our company,” she explains. “We’re not a trucking company, we’re not a warehouseman, we’re not moving and storage, we’re not a forwarder.” The standard language on a conventional air waybill or bill of lading doesn’t cover what they do, and Craters and Freighters puts the coverage right out there for the shipper to see—in a large font and encourages customers to review the coverage with their risk management people, says Gibson. “We’re a big enough insurance player that our underwriters don’t mess around, they write a check. If there’s subrogation after that, then that’s another issue.” Clearly, the goal of the training and standards and best practices is to avoid a claim in the first place because, after all, concludes Gibson, “the name and the reputation is everything.”
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