We caught up with Frank Powell, our COO, who’s an expert in auto parts logistics, to get his thoughts on the auto parts industry, the need for speed, and how USPack has created an auto parts logistics service that permeates all parts of the industry.
Tell us a little bit about our auto parts service, and who are some of our customers who utilize those services that we provide?
We offer several different services for the auto parts industry: We do direct from wholesale distribution to the retail storefront, we do distribution from retail storefront to end user true final mile to the repair shops, and then we also do some distribution center activity to dealerships.
In what way do our services impact the speed of delivery and, overall, how does speed impact the entire auto parts delivery industry?
There is a lot of competition in the auto parts industry, for repair shops particularly, to repair a person’s automobile as expeditiously as possible. A lot of that is at the dealer level where dealerships compete not just for the purchase of a vehicle but for outstanding service awards, etc., to retain customers. So, a lot of it has to do with speed and how fast you can move parts. USPack provides a couple of different services – a lot of timed activity for some of our customers. For our wholesale to retail storefront customers, a lot of that business is very set time so the stores can anticipate a delivery on a set schedule. So, if they have a customer or a shop that needs a part, they know they can order it from another store in the loop or from their distribution center, and it’s going to be on the next delivered vehicle, which in a lot of cases is within 90 minutes.
A lot of what we do is final mile type delivery work, so we’re picking up from the store with a driver that’s on standby at the store and immediately delivering direct to a repair shop, which is essential for the shop to complete an order, get a customer’s vehicle repair down off the lift, free up some bay space and, you know, it’s all a revenue generation. So, the shops are making money, the stores are making money, etc. Moving those parts is critical and it’s highly competitive. Each shop wants to get the same part as fast as possible and they’ll go around from different suppliers to pick, not just maybe their favorite supplier, but the one that can get the part that they need to them the quickest is much more important to them than just about anything else.
In what ways does US pack use our technology to help our customers better manage their inventory or just any other part of their business?
We have software that will provide dynamic routing and allow the driver to know the best way to go. It will also give the store or the end user a timing of when the driver is going to be there, and we have the visibility – or the possibility – for the end customer to see exactly when they’re going to get the part. So, they can plan as to how they need to staff their repair center, or they could take a guy off of one repair vehicle and put him on another, knowing he could do a small job before the parts get there, or know the parts are going to be there in a few minutes and he could continue on the job that he’s on... all of that is software that we provide. Taking it to the next level, we can also provide some information on the volume of parts that we’re delivering on a scheduled routed activity and share that information with our customers and make suggestions to improve that routing.
You know, it could be adding a loop where you’ve got really heavy volume, it could be not going to a store on one of the loops that has lower volume. Using data that’s been compiled you know through a time period and then reviewed and then through our logistics analysts, along with some of the software we use making routing suggestions for efficiency for our customer base.
What are some ways that you think the auto parts industry is changing to meet the new demands of the post-Covid economy? Is there some sort of lasting effect that you think is going to take hold and just be the new accepted norm in the industry?
We’re already seeing some effects through the pandemic of more of the work from home or limited–touch type of activity. In a post–pandemic world, the Amazon–effect of how people expect a product to be delivered to them is fast. During the pandemic we saw a huge spike in other portions of our business: The home repair business to Do–It-Yourself on the home side where we delivered a lot of contractor type items to the home took a huge spike in the middle of the pandemic. I think post–pandemic and right now, we’re seeing more and more of a demand for a very quick delivery to a final mile that’s not just a shop, but now is the person working at home. And if you know this is somebody in their garage who’s changing their brakes or they’re doing an oil change and missing a part or whatever they can simply get online or on their phone and order a part, you’ll probably have it delivered within 30 minutes in most places in the country. It is another service that we offer. And a big advantage of USPack is the size of our fleet and the availability of our fleet across most of the major cities in the country or the major markets in the country.
So, we have this flexibility of multiple drivers in a certain area that we can pull from to dispatch to go grab a part versus a store having to keep several people on staff just sitting there waiting for the customer to call. Our drivers are out doing additional customers and then we have that availability for the emergency call or the need-it-now type part and grabbing it, taking it and delivering it to a shop or to a home.