Driving Success: The Power of Partnership and Technological Advancements with Cox Automotive

In this episode, our conversation between Liz Crespo, Senior Director of Strategy and Carrier Design at Ready Logistics, a Cox Automotive brand, and David Hillson, Director of Transportation Solutions, DHL Supply Chain, provides an in-depth look at the collaboration between Cox Automotive and DHL Supply Chain. We discuss the complexities of auto transport, the evolution of our partnership and the impact of technology in day-to-day operations.  

Transcript

00:00:08:20 - 00:00: 45:06

Will

Welcome to All Business. No Boundaries.TM, a collection of supply chain stories by DHL Supply Chain, the North American leader in contract logistics. I'm your host, Will Heywood. This is a place for in-depth discussions on the supply chain challenges keeping you up at night. We're breaking beyond the boundaries that are limiting your supply chain. Today's episode is Driving Success: The Power of Partnership and Technological Advancements with Cox Automotive. Our guests are Liz Crespo, Senior Director of Strategy and Carrier Design at Ready Logistics, a Cox Automotive brand, and David Hillson, Director of Transportation Solutions at DHL Supply Chain. Let's dive in.

00:00:45:08 - 00: 01:06:20

All right. Welcome and good morning. Glad to have both of you here today and we'll start like we normally do with introductions. If you could please tell me what your name is and who you work with and what your role is there, and then we'll get going into the into the conversation. So Liz, how about you first?

00:01:06:20 - 00: 01:29:00

Liz

Hey, good morning. Thanks for having me. It's a pleasure to be here. Liz Crespo, I am the Senior Director of Strategy and Carrier Design for Ready Logistics. I lead all of the carrier experience, carrier sourcing, and the strategy and carrier operations for Ready. It's great to be here. Thank you.

00:01:29:00 - 00:01:30:19

Will

Super, welcome. David.

00:01:30:19 - 00:02:32:01

Yeah, thanks for having me. Really excited about the opportunity to be on here today. So, I'm David Hillson. I'm a Director of Transportation Solutions based out of our Detroit Control Tower. Been with DHL Supply Chain for a little over 16 years now, all focused in our transportation solutions. Currently focused in LLP, our lead logistics provider. I'm based, as I mentioned, in our Detroit Control Tower. We have two core control towers in the US, one in Harrisburg, Pennsylvania and one in Detroit. We operate over 25 customers, over 300 associates manage, I don't know, let's say 500 carriers and above and really supporting a 24-7 operation. With Liz today, I've been working on the Cox Automotive account for just under two years, started in August 2022 supporting Cox and really just helping transform the way the world buys, sells, and owns cars with ascalable technology solution.

00:02:32:01 - 00:02:50:06

Will

Okay. So thank you, David. Glad you're here. Liz, I hope you can help us bridge a gap. So you said you're with Ready Logistics and David talked about Cox Automotive. Can you kind of set the context of how those organizations are nested within each other and what the broader picture is?

00:02:50:19 - 00:04:17:00

Liz

So Cox Automotive is one of the divisions that Cox houses. There's four main branches really. So we have our retail division, which is Autotrader, Kelley Blue Book, dealer software, desking tools, all part of our retail division. We have a finance division, which is NextGear Capital, which provides floor planning and financing for vehicles for our dealers. We have a newer mobility division, which is all around autonomous vehicles and the future of autonomous vehicles that we're really looking forward to expanding and seeing what comes from there. And then we have the Manheim auction side. So Manheim auctions, they run about 7 million cars through the auction every year. And that is where our logistics piece comes in. And that's where Ready Logistics comes in. So, as far as the logistics side, we have really two services through logistics. We have Ready Logistics, which is full service and a managed services provider, and we provide end-to-end solutions for our clients. And then for other clients that are really looking more for a self-service option, we have Central Dispatch. We have about seven and a half million cars that run through Central Dispatch every year. And that allows anyone that wants to just self-service their transportation needs to be able to do that.

00:04:19:06 - 00:04:51:04

Will

We'll come back to this in a minute. We did an episode with you guys a while ago, but Cox is probably the it's not a consumer brand, right? But it's a huge presence in the car industry in the United States with all of those kind of associated brands that you mentioned just there. I wonder if you could help us understand sort of what percentage of the car marketare you guys touching on any given year.

00:04:51:04 - 00:04:56:08

Liz

We are touching over 10 million cars a year between all of our brands.

00:04:56:11 - 00:05:27:00

Will

We talked with you guys in 2020 when DHL was just getting started with Cox Automotive overall, and we promised to do a follow-up episode a year or two after. We're well past that goal, but we're glad to be back with you now. So I wondered if you could start Liz and then maybe David, if you could fill in the gaps on what is the nature of the relationship between DHL and Cox and Ready? Where did it start and where is it today?

00:05:27:00 - 00:09:21:00

Liz

In 2019, we started just our initial conversations on the vision and the objectives. What was our main goal at the time? And that was to transform our business from an auto transport broker to a full-service managed services provider. We spent a lot of time in conference rooms doing deep-dive meetings. And the very first topic was how do we bridge the gap between freight and auto transport? There was a big difference between the freight side that DHL is so great at and the auto transport side, which we were really good at. And we needed to understand what those nuances were. We spent a lot of time trying to put square pegs in round holes. And we really needed to understand how we were going to take a system geared towards parcel and freight and optimize it to support whole vehicles and all of the exceptions that go with it. Pretty soon after we started having these meetings, is when COVID hit and we were forced to regroup and shift. And now we are trying to learn all these things together in a completely virtual world, which just added some challenge to it. But, we really found a way to unite and collaborate and understand each other. DHL was a great partner through the whole thing. We spent an inordinate amount of time on Teams calls. But, we kicked off our first milestone in Q3 of 2021. We had a pilot launch in Florida. From there, we continued our regional rollouts throughout the end of that year. This was a massive effort. I mean, we replatformed our entire transportation management system, our entire business, and that doesn't come without its challenges. So, we decided in Q1 of '22 to pause and we made a conscious effort to go slow to do it right and then go fast later. DHL was a great partner, understood what we needed to do, the importance of getting it right versus going fast. And so they were very patient and we worked really well together. By Q2 of 2022, we were able to restart our regional rollouts. And ended up with our national client rollouts and we completed the full cut over by the end of '22. I think we built a very solid foundation for us to be able to grow on and since then we've had so many iterations. Now it's just ideation and implementation is what's happened over the last year or so. We've been able to provide our clients with a portal that allows them to self-service. They have insights into their inventory, reporting. They're able to escalate through there. They're able to track and trace. These are all tools that we never had before. Our carriers, which I'll get into probably a little later, you know with our sourcing capabilities, our load optimization capabilities. And just the automation that comes with DHL's technology that allows us to be less heads down and more heads up and be able to manage our business better. So, it has been a long journey, but it's been a great journey. And I think we have just made some incredible progress through the years. So, we're very excited about where we are and where we're going.

00:09:21:00 - 00:09:26:00

Will

 Terrific. David, from your chair, describe the same journey.

00:09:26:00 - 00:10:06:08

David

You know, it's a lot of the same messaging, which is fantastic. And one of the big parts of the journey in order to be able to kind of bridge the knowledge that Ready had with the auto transport and align that with DHL's expertise with our people, processes, and technology, it really was around communication and collaboration. And even Liz, I think your understanding even a little bit of how many folks on both sides were getting together and putting a lot of time and effort to make this the best solution and make it a scalable solution. It wasn't just a one time shop. We wanted to make sure we had a good base to be able to grow as the business grew.

00:10:06:08 - 00:10:44:17

Will

I want to go back on a couple of things that each of you said. So Liz, you had described going from freight to auto transport. Now, I'd like you to spend a little more time there explaining what that means, because it is sort of a specialized, it's not like sending a box, right? You're sending a car. I'd ask it this way. What was it like before and then what did you sort of enter into the DHL discussions with and what is it like now?

00:10:44:17 - 00:13:37:05

Liz

Sure, so it's interesting because we had a joke during those deep dive meetings that, you know, we're not moving boxes with wheels. That was a big joke. There's a lot of nuances in auto transport compared to freight. You know, one of the things that, you know, is most front of mind is most freight, you're bumping a dock, right? Your truck driver's backing up to a dock, they're loading his truck, he's driving to the next dock, bump, bump in that dock and he's unloaded. Auto transport is so labor intensive. You've got carriers that have to go out to, let's just say a 900-acre auction to find a car. It could be buried in snow, it could have a dead battery, it could have flat tires, it could be buried behind 20 other cars. It is a much different animal. And so when we're talking about, you know, DHL introduced dwell times and you know load optimization and you know hours of service that we could get this many cars along the route. Well, are we accounting for the fact that that guy could run into all of these issues at one of those locations and how are we going to properly manage dwell time and that sort of thing when we're not clear on what they're going to face when they get to the pickup or drop location. You know there are times that we get vehicles that are completely burnt to the ground that's just a chassis of a vehicle and we're expected to move that. So there's a lot of nuances and then it's a big exception world which is I think a little different than freight as well. You know there was a big aha moment when the DHL team realized you know when we were trying to explain here are all the reasons why a vehicle can go on hold. You know client rules, state rules, repo rules, you know, you need all of these certain documents before it'll get released. So it is an exceptions business and we live on exceptions, which was very different as well. So not just the mechanics of moving the vehicles, but everything that goes into every specific client, all of their rules, every client has different expectations, different needs, different rules. And that really is something that DHL has helped us manage. We're able to have different rules for different clients and the system knows what rules to implement for what clients, which has been a huge help for us. And it's just a different business, but they've learned and we've learned how to mesh those two businesses together and take the best of both worlds and make it a scalable solution for us.

00:13:37:05 - 00:13:41:12

Will

Great. And when you say clients, what does that mean in your world?

00:13:41:12 - 00:14:06:04

Liz

So our clients are our shippers, so they could be OEMs, banks, finance companies, dealers, consumers more and more. So pretty much anybody that needs to move a vehicle. The majority of our vehicles that we move is for our auctions, for Manheim, but we have a wide range of clients that we move for.

00:14:06:04 - 00:14:32:14

Will

So David, tons of complexity I'm hearing. And we do business with a lot of different types of shippers, many of which don't have that level of complexity even close. So how did you guys step up to the challenge of accommodating that within our managed transportation service offering?

00:14:32:14 - 00:14:41:07

David

It really came down to the early collaboration and making sure the teams were connecting to understand what the actual problem is that we were trying to solve.

00:14:41:07 - 00:14:45:02

Will

Liz, how do you engage with these systems?

00:14:45:02 - 00:16:41:04

Liz

From my level, you know, I've got a team of regional senior managers that oversee the operations day to day. And it, you know, the fact that we're able to scorecard the carriers, I mean, for me, that's a big one. How do we choose the right provider for the right inventory and make sure that they're performing where they need to perform, but not only that, if they're not performing, what is it that is happening that's preventing them from performing? And so these tools allow us to really kind of drill down into where are the problems? You could have a carrier that's hitting it out of the park in one area, but really struggling in another. And that helps us identify some of those challenges and try to remove that from them, so that they can perform better. So the carrier scorecarding for me is a tool I use every single day and I think it's really important and very valuable for us. The other one is the team member performance and our client performance. So we're able to drill down into very specific steps of the order creation, order verification, until it becomes a shippable order. Where are we struggling and are we struggling with certain clients or is it across the board? Where do we need to get better? We literally have a vehicle life cycle dashboard that tells us, you know, how are we trending in every aspect of, you know, cradle to grave on those orders. And it really helps us pinpoint where we need to be better or where we're just hitting it out of the park. So all of the tools that we've created together have really given us a leg up on just our visibility, our ability to service our carriers and our customers and provide our team members the tools that they need to be successful as well.

00:16:41:04 - 00:17:04:13

Will

And on the carrier question, so maybe big picture, Liz, if you could describe what a typical carrier looks like for you, and then what this solution has either made better for them or changed in their relationship with you all over the course of the last three or four years.

00:17:04:13 - 00:18:14:18 

Liz

As far as the types of carriers that we work with, it's very interesting. We have such a wide range of providers in our network. Anything from a flatbed, one car truck to nine and ten car carriers and closed, open. We also have a variety of drive service and last mile delivery. So we do have a company we work with that is able to provide just really on the spot service pickup within an hour. So we've really expanded our network. And now even more recently, we are really leveraging DHL's network of freight carriers to help us with some of our oversized and specialty units that don't really belong on traditional car haulers. So our network continues to grow and expand and really it's starting to get into very unique and new areas that we never had before. And I don't know that we would have without DHL's help on that piece of it. So very big network.

00:18:14:18 - 00:18:35:00

Will

Yeah, really interesting. And I think complexity is sort of a through line in this whole story. The dealer business, I guess, has grown. We talked about that on a preliminary call we had preparing for this. And you referred to something called the pilot. Can you tell us what that is?

00:18:35:00 - 00:19:45:08

Liz

Yeah, so I mean, Manheim is the industry leader in the automotive auction space and our goal is to provide a suite of services and technology to give our clients that one-stop shop feel for all of their needs. Transportation is a big part of that. We already serve a base of dealers, but we're focused on growing this business by creating an added seamless experience by linking Manheim sales with the delivery needs of the client. And we're easily able to add that option as part of their experience right through our Manheim platform. So orders are instantly priced and placed and it allows us to move quickly to delivery. We have also partnered with our Manheim sales teams to help promote the availability of these services. We just started in the Florida market. That has gone really well and I think David will probably talk a little bit about that. But we're continuing to roll out across the country and pretty soon we're gonna roll out an additional market in the Midwest coming up here in Q3. So we're really excited about the traction that we're gaining and the direction that we're going in with this dealer stuff.

00:19:45:10 - 00:19:53:14

Will

Terrific. David, I think she's teed it up nicely for you. Tell us about it from your standpoint.

00:19:53:14 - 00:22:22:20

David

Yeah, from my standpoint, it's extremely exciting. The dealer business is a big part of the volume that my operations team here touches. So anytime you're talking about growing, that just creates opportunity. And when the Ready team had approached us of, hey, we're looking to grow this piece of it, I was extremely ecstatic and excited. And what it really comes back to the communication and collaboration I've been hitting on, is being able to be involved early in the process of understanding what's coming forward, right? Having that forward mindset and understanding we're not just getting hit with a bunch of volume and we go, what's going on? What is this? It's that early collaboration of understanding what the goal is, what the intent is, and really how can we support to drive the most success. And so that communication and collaboration really happens. And what we've done with this one, so far we've seen about an additional 1,300 shipments through May in just one pilot area and that's just over a couple month period and expect that to grow. That's a relatively small drop in the bucket into the grand scheme of what's coming our way. But our operation teams, we started meeting daily. And when I say that, and Liz mentioned this, when I say they're getting down to the root cause, it's we're reviewing individual shipments. What are we doing really well and how can we leverage those strengths? And what are the areas of opportunity that we need to improve on so we can improve that dealer experience or improve that user's experience so we can really drive the best. And with the pilot of starting small, kind of getting a feel of what it's going to be like, allowed us to have a little bit more of that detailed conversation. And we've touched on it a few times, but how do we then scale it? So Liz mentioned we're moving into the Midwest. Well, you know, when we looked at Florida, that was, you know, maybe a singular state larger volume, so it's a good representation. But now we're spanning multiple states and we're going to get a little bigger each time. And that allows us to take a good strong step process into what comes next. So we're able to really service the customer as best as possible and really leverage those strengths and areas of opportunity. But again, it's really been around collaboration ahead of the time. And then our operating teams working together, building their relationships together so we know we can solve any problem that comes at us and how we can put our best foot forward.

00:22:22:20 - 00:23:02:09

Will

That's fantastic. This has been a really interesting update on this relationship. I mean, obviously there's been a lot of distance covered, literally and figuratively, since we talked in 2019 or 2020 in this. And I will commit to following up again to hear how the pilot is expanding into kind of steady state a bit sooner than four years on. But I wanted to thank you both for joining us today. It's really interesting stuff, and look forward to hearing about what comes next.

00:23:02:09 - 00:23:04:17

Liz

Thanks for having us.

00:23:04:17 - 00:23:09:10

David

Yeah, appreciate the opportunity. Thanks again and I look forward to the next time.

00:23:09:10 - 00:23: 12:03

Will

For sure. Thanks both. See you soon.

00:23:15:04 - 00:23:16:19

Will

If you enjoyed today's episode, be sure to rate us and subscribe to us on Apple Podcasts, Spotify, or wherever you get your podcasts. You can also re-listen to our entire library of episodes on our website, DHL.com/ABNBpodcast. See you next time.