Dec 05, 2015

White Glove Delivery Services

White Glove Delivery Services

According to the Wall Street Journal, online orders of bulky items are rising faster than overall online sales. Consumers are getting more comfortable with buying big-ticket items online.

This has created more competition for UPS and FedEx. Companies that do “while glove delivery” services are bringing more and more of these bulky packages to peoples’ homes.

White Glove Delivery Services Definition

White glove delivery services are defined as companies that combine traditional, commodity-priced delivery with a value-added service. These companies deliver the package itself. But they also offer services, like assembling furniture, setting up electronics, and removing trash. They offer a commodity rate on the delivery, then earn a higher margin on the service.

These companies are different than traditional delivery businesses. FedEx and UPS aren’t set up for custom services like furniture assembly. Their massive infrastructure is built up around delivery only. So they are structurally forced into staying a commodity service with lower margins.

Heavy Duty Repair and Maintenance

Most of these white glove delivery services operate medium to heavy duty trucks. This presents an opportunity to diesel repair shops.

Haul Your Own Freight

As a general rule, companies that deliver other companies’ freight run on very tight margins because there is so much competition in the space. That leaves less budget for things like maintaining their fleet. These companies tend to do the bare minimum maintenance necessary, and run their trucks as hard as they can.

Companies that haul their own freight tend to have better margins. They’re not making money on the delivery, they’re making it on the product. That means they have more funds to keep their trucks maintained at a high level. They are more willing to do extras, like body work and less urgent PMs.

A great example of this are beer and soft drink companies. They make thousands of deliveries a day, but don’t make their money from delivering. They make it from selling their product. Because they have such great margins, they have plenty of funds to keep their trucks and trailers looking very good. The heavy duty shops that maintain their fleets get to be a part of that.

Perform a Service

The white glove delivery service market is an exception to the rule. It’s true they are hauling someone else’s product. But they also perform a service. Companies like XPO Logistics Inc., Pilot Freight Services and Fidelitone Last Mile Inc. get better margins that plain commodity carriers because they perform services too. This means they have more breathing room to maintain their trucks. The diesel repair shops that maintain their fleets get to participate in that.

How to Maintain the Fleet of White Glove Delivery Services

As a diesel repair shop, if you want to build a long-term relationship with a white glove delivery service, you need to be prepared to help them maintain their fleet. Use software that makes it easy to track PMs. Give the customer a portal to request repairs, see service history, and maintain their fleet listing.

If your shop management software does not do these things, you may want to have a conversation with us. Request a demo and let’s find out whether what we’ve built would work for your shop.

Jacob Findlay