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CASE STUDY

Carvel Grows National Presence Via Strong Transportation Provider

For many Americans, the name Carvel conjures up delicious memories of birthday celebrations, after dinner trips to their local Carvel ice cream store, and stops on the way home from school for a must-have treat. One of the best-loved and most recognized names in its industry, Carvel was the nation’s first retail ice cream franchise, opening its doors in 1934.

For the past 70-plus years, the company has been making ice cream fresh daily and holds the distinction of being the birthplace of the original all ice cream cake. Today Carvel offers its creamy, crunchy treats in more than 500 Carvel stores and over 8,500 supermarkets nationwide. Its fans are loyal and passionate and they want their ice cream products delivered cold and on time.

Celebration Foods in Rocky Hill, CT manufactures Carvel’s complete line of ice cream cakes. Carvel’s geographic presence has expanded from 25 states in 2002 to nearly all 50 states today. So distributing the product to the retail market was initially a challenge.

The company worked with two different transportation providers to deliver its perishable products and experienced some serious problems along the way. Drivers would often call in sick and replacement personnel were unavailable. At times they could be unprofessional in appearance and manner, arriving on-site without uniforms and worse, unresponsive to customer’s concerns. Equipment malfunctions and the unthinkable for an ice cream producer — refrigerated trailers not operating at the proper temperatures — were making the entire distribution process anything but fun for this beloved brand.

“We had an instance just prior to switching transportation companies where a provider’s trailer caught on fire and burned to the ground. The trailer and all our products were a complete loss,” said Victor Perry, Director of Logistics at Celebration Foods/Carvel Ice Cream.

Perry can breathe easier now that these transportation issues are well behind him. Tired of mediocre service, Carvel hired a consultant to find them a transportation partner who could service their very specialized distribution needs. Some eight companies — from major transportation providers to smaller dedicated services operations — accepted the invitation to bid on the Carvel transportation contract. Following (ten) months of presentations, recommendations, relationship building, and delicate negotiations, Carvel chose AmeriQuest Transportation and Logistics Resources (Cherry Hill, NJ), a leading provider of comprehensive fleet management services in the United States and Canada. AmeriQuest delivers savings, expertise and opportunities to private fleets, common carriers, and truck leasing and rental companies, with a roster of A-list customers in the food industry.

What impressed Carvel most about AmeriQuest was the company’s collaborative approach to transportation services. “It was a long process of evaluation and proving value,” said Michael L. Oetjen, then Director of National Sales for AmeriQuest. “Carvel was looking for a true partner, not just a trucking company that would park trucks on the lot, haul goods, and check in with the customer from time-to-time. They saw in our proposal a comprehensive, sophisticated solution that included all the resources Carvel would need to help them adjust to ever-changing market demands and expansion.”

AmeriQuest was charged with improving the company’s efficiencies and service with on-time deliveries, a staff of professional drivers, and state-of-the art transportation equipment.

Transporting Specialized Product

AmeriQuest’s flexible approach to business, the depth of its resources, and its customized transportation systems design proved the ideal traveling partners for Carvel’s temperature-sensitive frozen ice cream cakes. The company paired Carvel with AmeriQuest member All Services Leasing (ASL) in Williamstown, NJ, to provide dedicated transportation services, including drivers, and tractors and trailers for distribution. A family-owned business that offers full service leasing, finance leasing, and trailer leasing and rentals, ASL also provides nationwide fleet maintenance services.

Carvel’s transportation team was now in place and included AmeriQuest’s Michael L. Oetjen, now Vice President of Integrated Logistics for NationaLease, David Beaudry, Director of Logistics, and Jim Donnelly, Jr., President of ASL. Together they created the first logistical design for the transportation system that Carvel would adopt to deliver frozen cakes between the Carvel plant and their distribution network.

Carvel ice cream must be transported at minus 20 degrees and the offloading of the product is very specific. The majority of the ice cream goes directly from the ASL refrigerated trailer into Carvel RSR route trucks using racks on wheels across a custom ramp connection.

In 2006, four years into the Carvel contract, AmeriQuest leasing members merged with NationaLease members to create the largest network of independent truck leasing firms in North America. The company, now operating under the NationaLease name, is supported by 700 facilities, 150,000 tractors, trucks and trailers, and annual revenue in excess of $4 billion.

Carvel utilizes up to 8 dedicated drivers, tractors, and trailers on a weekly basis. On several occasions, the ice cream giant took advantage of modeling software and a routing optimization logistical analysis to further improve efficiencies. These services were provided by NationaLease and ASL.

The ASL delivery routes are multi-stop, and sometimes multi-state. Donnelly, Jr. considers the Carvel account one of the largest and most challenging dedicated transportation delivery programs in the industry. His drivers are constantly dealing with the vagaries of weather during the transfer, battling heat, snow, and rain to maintain their demanding delivery schedules with an even more demanding frozen product in tow. If cakes are delayed at the creation center for any reason, it can require last-minute route changes.

To prevent problems and unmet expectations, there is constant solution-centered teamwork and communication among the Carvel RSRs, ASL’s dedicated drivers, the transportation and maintenance team, and often the Carvel cake creation center and corporate office.

Carvel’s footprint has expanded considerably over the last four years, and a majority of that business is brought to market by ASL and NationaLease. No longer a two coast regional business, their products are sold nationally in 46 of the 48 contiguous states.

“Our promise to Carvel was to operate like their in-house transportation partner,” said Oetjen. “On an annual basis we test routes and vehicle utilization, take into consideration the ‘what-ifs’ as the company grows, and recommend the most efficient approaches in service, equipment, and manpower to meet their needs. Carvel appreciates the true spirit of partnership that frames all of our team’s recommendations and actions.”

Bottom Line Results

NationaLease has helped to improve Carvel’s bottom line by maximizing the utilization of their dedicated drivers to drive down cost and realize a lower delivered cost per unit. Carvel estimates that in the past three years, the ASL and NationaLease transportation delivery program has reduced their cost-per-unit by 10 to 15 percent. “We get the most hours and miles out of these drivers and move more product through the dedicated program. That’s why Carvel counts NationaLease as one of its top three suppliers,” said Perry.

“Anything that can simplify my life is good. We turn to NationaLease for one-stop shopping and one point of contact for all transportation issues. We’ve come to have a very high level of expectation for ASL and NationaLease and they’ve continually delivered on that expectation.”

Carvel’s business is about to change fairly dramatically. In early 2008, the company will open a new production facility. “With that growth will come all kinds of logistical challenges,” Perry said. “We’ll be looking to partners like ASL and NationaLease to help us work through this transition, by increasing our drivers, equipment, logistical analysis, and other support resources to ensure that we make this change as efficiently as possible.”

Perry emphasized that Carvel’s strategic partners have always worked hard to make certain both sides are in a win-win situation. “It’s not me always cutting the rates and demanding more, and it’s not them always looking for increases or turning down business that’s not as profitable,” he said. “It’s been very accommodating on both sides which is why it is working as well as it is.”

ASL’s Donnelly credits “our strong entrepreneurial attitude, supported with a strategic alliance and the strength of the NationaLease system is what put us in a position to have this successful partnership with Carvel.”