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CASE STUDY

Cardinal Logistics Outsources Non-Core Services to AmeriQuest to Concentrate on Growth

Collaboration, flexibility, and expertise key to successful partnership

Cardinal Logistics Management Corporation (Concord, N.C.) was running a profitable business, but it wasn’t experiencing the growth that company officials knew was possible if they could successfully leverage what they were already doing – providing final mile deliveries to homes, jobsites, and commercial locations nationwide. Using a variety of equipment, including tractors with flat bed trailers equipped with dedicated forklifts, Cardinal is a premier provider of building and home improvement products to jobsites and homes.

But the minutiae of managing the many non-core facets of the business – from fleet management to used vehicle sales to supply management – was inhibiting the firm’s growth, so Cardinal officials were looking for an outside resource to help with other areas of the business.

Knowing that it needed a partner with a wide array of business services, Cardinal turned to AmeriQuest Transportation Services (Cherry Hill, N.J), a leading provider of fleet management services that leverages the strength of more than 700,000 vehicles in its network to deliver savings, expertise, and menu-driven services to its private fleet, truckload carrier, and rental and leasing members to help them remain competitive in their marketplace.

“We’re a very decentralized company,” said Cardinal Logistics Chairman Vin McLoughlin. “We have a lot of locations, but only a single support center.”

Presented with Cardinal’s business goals, and the challenges that needed to be met to achieve those targets, AmeriQuest proposed assisting with the company’s fleet planning, remarketing, and supply management needs.

“Cardinal needed flexibility,” says Jim Guice, AmeriQuest Vice President of Asset Services. “This is as close to a true partnership as you will find in our area of the transportation business. It’s a very good story of collaboration.”

Kim Whitten, Cardinal Logistics Senior Vice President, concurs and points to several areas where Cardinal has gained advantages that it didn’t have before.

Flexible Solutions

Cardinal has an expansive fleet that includes 2,804 trailers, 1,400 tractors, and 242 trucks, each with different expected useful lifetimes depending on size, miles driven, load types, and other factors. Whitten explained that repairs help keep the equipment running efficiently, but over time, become too costly. Ultimately the decision has to be made about the best time to replace the vehicles.

“Unfortunately, we didn’t have any good history of when it made more sense to replace something rather than repair it,” Whitten said. But we wanted to try to lower our overall cost for the life of each piece of equipment.”

Part of that total cost of the fleet is reduced by selling equipment at the highest possible price rather than when it does become too costly to repair. In the past, Cardinal had enlisted brokers to sell the equipment, but the company was never confident they were getting the best deals.

“We didn’t have a reliable history of being able to resell equipment at a good price. We lacked the resources and expertise within the company to do that. Now rather than going with brokers, AmeriQuest is helping us remarket our used equipment,” Whitten says. “They not only speed up the sales and our compensation for the equipment, but we’re also recovering about 15 percent more than we had been receiving previously for our equipment sales.”

In addition, Cardinal had relationships with several national parts and supply providers that offered varying discounts. When AmeriQuest showed the expansive relationships that it enjoyed with national suppliers, leveraging the strength of more than 700,000 vehicles in its network, Cardinal quickly recognized that it could save more money with AmeriQuest than with its previous suppliers. “It was a real no-brainer. We’re now paying 4 to 7 percent less than we were with our previous national suppliers,” Whitten said. With more than $2.5 million a year in annual supply and parts purchases, that savings contributes significantly to the privately-held company’s bottom line.

“Any money that we can save is important because that enables us to be more competitive in our proposals and bids for new business,” Whitten added.

Another benefit Cardinal realizes with AmeriQuest is back office efficiencies. Electronic Invoice Presentment & Payment (EIPP) through AmeriQuest’s partner Corcentric, provides Cardinal with a comprehensive electronic method to manage invoice data, disputes, approvals, payment disbursement, and payment reconciliation with little human intervention. This efficient system allows Cardinal officials to focus on the business itself rather than the administration of invoicing, payables, and receivables.

“AmeriQuest has experts in a lot of different areas, so that we don’t have to be,” Whitten said. “They’re our one-stop shop for some very specific needs. Now we can concentrate more on our core competencies.”

Jim Guice adds, “What’s enabled our partnership with Cardinal to grow is an ongoing effort to drive costs out and a constant commitment to find new ways to provide greater value and support to Cardinal that in the end, drives additional value to their customers.”