Today we discuss one of the most overlooked aspects of a construction project and how to fix it. Listen now.
00:01 Brian Gomski: Welcome to another episode of Engineering Tomorrow. I am your host, Brian Gomski. Today we are talking about one of the most overlooked parts of an engineering and construction project. Stick around and find out.
00:14 Announcer: From the heartland of America, the gateway to the west, this is Engineering Tomorrow, the podcast. Keeping you entertained and in the know on the latest commercial and industrial heating, cooling and water treatment technologies.
00:36 BG: Jim Thoele, welcome to the Engineering Tomorrow podcast. How are you doing today?
00:40 Jim Thoele: Not too bad, man. Thanks for having me on.
00:42 BG: No problem. So this is our I think 11th or 12th or 13th episode. What do you think of our set up here?
00:48 JT: It’s pretty nice. I definitely like the office. It’s pretty cool, for sure.
00:51 BG: So for those of you who can’t see, which is everyone, our first episode we started with a USB microphone, one mic, and we were all gathered around it. It was echoey, sounded like we were talking out of a tin can. I would say we’re pretty close to where we wanna be here, so we’ve got four studio mics, we’ve got… Everyone’s got headphones, we’ve got a mixer. And hopefully if anyone’s starting the podcast from scratch, you’re gonna see, from the beginning episode to now, all the production quality, how it goes up and up every time we do an episode here.
01:28 JT: Well, hopefully I don’t disappoint you in the context then for today.
01:31 BG: No, I have a lot of faith in you. [chuckle] So today, we have an interesting show, and I wanna talk about one of the… In my opinion, one of the most overlooked pieces of any major or even minor construction projects, which is logistics and transportation. We have expensive equipment that needs to get from point A to point B, there are a lot of moving parts and pieces that need to happen for that to work, otherwise everyone’s losing time and everyone’s losing money, the customer’s getting frustrated, and everyone ends up looking bad if everything doesn’t work properly. So, Jim, tell me a little bit about your company, how it started, and how you specifically, your company, is solving the challenges of logistics in commercial HVAC equipment.
02:29 JT: Sure. So it’s pretty simple. We were started by a mechanical rep agency back in 2002. So our sole purpose is to help out the mechanical rep and alleviate some of the hardships that you just simply described when trying to do a start-up on a job. I think it would take any rep out there about 10 seconds to think of a project that went south on the 11th hour because material either A, arrived damaged, B, short, C, late, or even D, not at all. So with that being said, it’s important to take the logistics into consideration. In any given scope, that could take years to receive a PO on, and then you have 4-8 weeks of lead time from the manufacturer to fabricate the material that you’re purchasing. You’ve gone off and done your own thing until you get that phone call from the contractor on-site or from the end user saying, “Hey, my stuff showed up,” or, “Hey, my stuff never showed up… ”
03:44 JT: “What am I supposed to do? I got a crew out here waiting to do an install and I can’t do it today.” So unless the mechanical rep is going to take ownership of that, you can’t expect any different results until you actually consider what it actually involves in transporting the product that you sold from the manufacturer’s facility to the end user. So what we do is we try to look at the big picture. We’re not always going to be the cheapest option, but we’re gonna provide a solution that is catered towards your needs. I joke with my family so much about Amazon Prime because I feel like all of a sudden we click a button and something shows up on our doorstep the next day.
04:36 BG: Oh, yeah, absolutely.
04:37 JT: That’s not how it really works, though. There’s a lot more to it, and I’m sure you guys understand, and when you’re dealing with a manufacturer and trying to get a specific build item and the fabrication that it’s involved on, you don’t want to select the cheapest freight option to transport it from the facility in North Tonawanda to Dallas, Texas. There needs to be a little bit more care and consideration over what it was and what the implications could be if it wouldn’t arrive when it’s supposed to arrive. So that’s what our group specializes in, looking at what any given project is going to entail.
05:23 BG: Sure. Sensitive equipment, getting there from point A to point B correctly. In my mind, what would separate you is you’re not moving bags of chips, you’re not moving Pepsi, and it’s a lot more complicated than that, and…
05:40 JT: Yeah, absolutely. And I’m not going to go into all the details with the big companies out there; there’s a lot of third-party logistics companies, the world’s largest third party logistics companies out there that do amazing work. They move volumes and volumes and volumes of Pepsi and Anheuser-Busch from Buske warehouse to Walmart to this, to that; truckloads every day. Your guys are not selling truckloads of material every day. So the care that goes into transporting your truckload of material needs to be more than the individuals that are simply moving pallets of Anheuser-Busch from St. Louis to a Walmart distribution center, because the implications for you personally are much more severe, whether or not you buy one item off the grocery store shelf versus another item off the grocery store shelf.
06:40 JT: So with that being said, that’s why I feel that is an important aspect to always have price in the back of your mind, but always understand that you get what you pay for, and especially when it comes down to transportation as well. And there’s… Our group always jokes, there’s three things that any service industry or any rep can sell, there’s on price, there’s on service, or it’s on quality. And you can only usually get two of those.
07:15 BG: Right. Yeah.
07:16 JT: So which two do you want? So I think what we always try to drive is a competitive price, but at the service and quality that you guys need.
07:29 BG: Sure. In an ideal scenario, when should someone get you involved in the project to ensure that this goes smoothly?
07:40 JT: We can be involved in any step. I look at submittals all day long, so if you’re pricing out a specific heat exchanger and you just need a budget price to submit to the end user, I’m happy to throw one in there that’s a tangible number for you to present. If it’s something that’s an afterthought, then you already got that purchase order, freight was prepaid and that, and you just needed that final number, by all means give me a call. Again, we were founded by a mechanical rep, so we get the process. We often look at scopes year after year. It’s funny how in February, we look at the same project that we’ve been chasing for the last nine years because eventually they’re gonna have to buy something, is the joke. So it’s a good question, but it’s whatever is gonna fit effectively within your model.
08:38 BG: Sure. How does the pricing work, and what factors go into that? I would imagine it would be complicated based on the size of equipment we’re moving.
08:49 JT: Yeah.
08:49 BG: How does that work?
08:52 JT: Anyone in freight is gonna look at your dims: Length, width, height and weight. Ultimately, that’s what is going to dictate how much it costs to ship something, just those little aspects. But for our industry, it’s important to identify a few steps down the… A few other aspects of it. So are we looking at delivering to a job site in downtown Chicago at 7:00 AM on a Saturday? Well, there’s more than just length, width, and height, and weight taken into that consideration. Or is it simply going to a distribution center or a mechanical rep’s shop that’s open 7:00 to 5:00, Monday through Friday? So those aspects will dictate price, associated with what the scope is actually involved. And it’s imperative that that information is thought of during the bid process, because there’s any number of variables that can come into a factor when accurately bidding a scope, so…
10:07 BG: What are some of the potential things that could happen on a job if all the factors aren’t considered, like maybe having the wrong type of truck, or stuff like that? What are the things that need to be considered when we’re moving this equipment?
10:23 JT: Every contractor out there wants stuff delivered on a flatbed.
10:28 JT: I don’t know anybody that doesn’t… Wouldn’t want it on a flatbed. You just go, grab it from the side, set it on the roof. Oh, I got a lull, I got a crane scheduled, no big deal. Pick it and drop it. 50% of the manufacturers say, “Absolutely not.” [laughter] There’s no product out there you can properly strap it to a flatbed and travel it safely across the country. So it’s finding that middle ground to figure out what aspects are encountered. And your question is, what other problems there are. Just timing is everything, pretty much. Are we against the clock? Before this, I just got off the phone with a mechanical rep that was trying to schedule a project at a university, so he’s obviously under the wire, as they all are. They have a specific window that they need to complete the project in, and they’re waiting on materials. So we can review any given scope, or any given solution once material is available, but knowing what the time frame that we’re going up against is imperative.
11:36 BG: Sure. I don’t wanna put words in your mouth, but from what I’m hearing, it sounds like these shipments where things are in a pinch, and they’re complex, that’s right in your wheelhouse, and things that you can figure out.
11:50 JT: Absolutely, absolutely.
11:52 BG: So in any business, you’re gonna have different levels of service, you’re gonna have the cheap guy who’s not gonna answer the phone, you’re not gonna know where your shipment is, and it gets there at some point, and then everywhere in-between that.
12:07 JT: And we can be the cheap guy, too. [chuckle] I try not to have as many headaches every day as somebody else, so I prefer to do it the right way, and sometimes the right way is the cheap way. But it just depends on what your level of involvement or tolerance is to issues. We deliver gear reducers, Standard Ground, all day, every day, two day transit time, picks and delivers with no problems; it works out perfectly. Same thing with boilers, whatever, pumps, doesn’t matter. It just depends on who the end user is, and what the scope of the project is, too. It’s simple to deliver a heat exchanger or a pump to a manufacturer’s facility. But try to explain to a hospital that, yes, you are supposed to be receiving this pump. Yes, you actually do need this at your facility. [chuckle] I do understand that this does not look like anything that you’ve ever received before in your entire life. But it does belong to you, trust me. [chuckle]
13:22 JT: That is another big obstacle that we always have to face in the mechanical rep world.
13:28 BG: Really?
13:28 JT: Yeah.
13:29 BG: I never thought about that.
13:30 JT: So it’s very funny and interesting, the conversations that you have with consignees, because they’ll say, “Nope, this is not what we do. I don’t… ”
13:41 BG: Wrong place.
13:42 JT: “I’m a hospital, what do I need with this?” Exactly. Trust me, you need ’em. [chuckle]
13:52 BG: How do you track the… So the equipment gets picked up from point A. How are you tracking that once it leaves the originator to the destination?
14:03 JT: Sure. So in this day and age, we’re filled with technology all around us. UPS tracking numbers, everyone’s looked at them 100 times. LTL shipments all have PRO numbers assigned to them. Well, since in 2018 the Department of Transportation mandated ELDs.
14:26 BG: What’s that? What is ELD?
14:28 JT: Electronic Data Log.
14:29 BG: Okay.
14:30 JT: So no more paper logs. So your truck driver has a computer, basically, in his truck that identifies his hours of operation, and there’s no fudge in the numbers anymore. So you get stopped, you’re over your hours, it’s all right there; there’s no erasing what you’ve done. With that also comes with the GPS tracking. So if you say you’re supposed to be… You say you were at some place, there’s no getting around it. So most carriers will allow individuals to have access to that information. They’re not gonna give it away to anybody and everybody, but working with individuals that have access to that information that can give you GPS updates along the way is excellent. That’s one of the perks of the ELDs out there. So I think partnering with a logistics provider that’s gonna be able to give you those updates along the way is imperative. Anybody will have access to some tracking information through the big companies such as FedEx, UPS, R&L, ABF. But when you get into the hotshots and the full truckloads, it’s just working with a partner that has access to that information.
15:52 BG: Okay. What other considerations do you take into account when you’re transporting a load from A to B?
16:00 JT: Yeah, so it’s really the carrier that does all the work. At the end of the day, you and I can play into the nth degree, but eventually we’re gonna turn the keys over to a driver, and it’s his responsibility to take it from the manufacturer’s facility to the end user. And there’s a lot of hardships involved with that. We try to take more ownership of that process by operating our own truck, our own 40-foot hot shot gooseneck, looking to add more, because that line of communication is imperative. We’re always partnering with top-tier carriers to ensure that we have access to that GPS tracking, we have the driver’s cell phone number, we know exactly where it’s at in transit, and we know if there was an issue that it encountered. Well, all that is easier if you are driving the truck yourself, or if you have your own employee doing it. You would hope that that level of communication is on top… Superior than outsourcing it to somebody else.
17:16 BG: If you get… In any business, if you’ve got the right team, you’ve got the right people on your team, they understand what’s going on, they understand this industry, they’re gonna put a lot more care into ensuring that thing gets where it needs to go on time, instead of taking hour lunches, stopping every half hour to go to the bathroom, and…
17:38 JT: Right.
17:38 JT: It’s just like anything else, if… There’s many reps out there that partner with a specific contractor because you know and you trust them. That’s the same thing with the freight logistics industry, too. You have certain partners out there that you trust because nine times out of 10 they’re gonna deliver what they say they’re gonna deliver when they say they’re gonna deliver it. It’s always developing those relationships, though, and it’s always trying to stay on top of it to ensure that no one’s slacking off along the way. That’s the key, though, is finding the right person that’s gonna deliver it.
18:15 BG: Sure. What other, if any, services do you offer that people might not even know about?
18:22 JT: So again, taking the fact that we were founded by a mechanical rep agency, we have a 40,000-square-foot facility here that we operate out of. Our cornerstone has been cooling towers from day one. And anyone who’s worked on cooling towers knows that you have parts coming from all different corners of the country, usually. Your mechanicals are fabricated in a different facility than your fill, than your casing, so on and so forth. So what we do is consolidate all those items here at our facility for the reps, we wrap it up in a nice little pretty bow, and we send it all out to the job site for one delivery at one time. So in terms of job cost elimination, we pay our warehouse employees to check in all the material, confirm quality, confirm quantity. And once it’s complete we send it out. So it’s another huge aspect of our business, and we find it extremely beneficial to the rep to utilize it when the job would allow it.
19:41 JT: So I say when the job would allow it; it takes time to move material from one facility to another facility, then to an end user. So you have to build it within to your scope of work on the upfront. So when you asked about the bidding process earlier today, it’s important to take that aspect into consideration when we’re pricing it out. So if you’re just… Again, for an example, we’re doing another job at a university where you have a tight window of installation, you can only shut down the tower for so long. But we do have time available to us from when the material is going to be released to when the job is actually going to start. So in that aspect, it could be very beneficial to bring all those little boxes, and those pallets of fill, and those crates full of sheet metal to our facility, so then when the job is starting we can deliver all the material on-site at one time. And so you’re not playing seek and find across a campus to find your float valve that goes with your nozzles, that you’re looking for a gearbox and a motor and your fill. So it’s one more concept that we rolled out that I think is extremely beneficial.
21:02 BG: Can you provide any tips for reps or anyone even seeking your services of things to do that will just make their lives a lot easier in the long run when it comes to getting this equipment where it needs to be at the right time?
21:17 JT: Yeah, I would always say just look at who’s buying it, number one. Are you bidding it directly to an end user, or are you bidding it through a contractor? Did your contractor reach out to you to get a number on X, Y, Z, or are you talking to the end user directly? A lot of that is going to play a factor in it. We’re always looking two steps ahead on how we’re gonna deliver the product. So it’s simple if you have a contractor that you’re gonna deliver to their shop. Let’s drop it off at the contractor’s shop, and they’re gonna go do the installation, they’ll just drive it over. If we’re bidding it directly to the end user, the university, and they’re gonna have their maintenance department install it, I think it’s important to… As you as a mechanical rep, know that you’re gonna be answering a whole lot more questions to that university than if you had sold it potentially maybe to a contractor. Maybe I’m mistaken, but just being involved with it enough, that’s what I’ve seen. So taking that into consideration, and taking into consideration what your lead time is on fabricating the items, I think, is very important. If it’s a stock item or if it’s a low-commodity value that’s a quick turnaround, then I would say you can give it a little less thought. If it’s a long lead time on fabricating something, then yeah, I think you need to check more boxes off the list before you just allow anyone to pick it up for you.
22:53 BG: Yep. Alright, well, I want to segue into my favorite part of the show. We started to do this in the first several episodes, and we got away from it, but it’s talking about nightmare projects. I have a logistics story. Obviously, we didn’t use MaRRS, I don’t think we even had an option to use you guys on this, but we had a boiler go out at a school, middle of winter, and the boiler company decided, “Yeah, we need to send you a new one. We know it’s an emergency, so we’re gonna hot shot this down to you.” And so we had it all set up, got notification that the driver had picked up the boiler in Canada. A day later, truck pulls up to where we need the boiler, they open the back of the truck, and the truck is empty. [laughter] They forgot to actually put the boiler onto the truck before they closed the back door, and we ended up with no boiler and some very upset customers.
23:58 JT: That’s amazing. [chuckle] I’ve never actually heard it be that bad. [chuckle]
24:03 BG: So it pays… Like you said before, it pays to make sure you’ve got the right guys. But tell me maybe about one or two crazy stories you’ve heard with logistics in the past.
24:15 JT: Well, bridges are terrible. [laughter] I’ve seen many units get a haircut in Jersey on that turnpike that, A, is extremely, extremely dangerous. It could cause a major accident with many people hurt. But the hardships that would be involved with transporting some of the bigger units, that’s always the ones that I see are the most painful, A, ’cause it’s got the biggest lead time, and B, it takes the right operator to ensure that the load is transferred correctly. So yeah, it’s a… Yeah.
24:58 BG: We’ve… This didn’t happen to us, but it happened to someone in another state. They definitely… They had a big chiller go under one of those low overpasses and just turned it into scrap metal.
25:11 JT: Oh, man. Yeah, it’s rough. And again, I say that New Jersey Turnpike because it’s a frequent occurrence that all of a sudden, you’ll be 13-11, and then you’ll hit a little overpass, and…
25:24 BG: Gone.
25:25 JT: Gone. [chuckle] Yeah, or all over the freeway is the problem.
25:29 BG: Well, Jim, I wanna thank you for being on the show, Engineering Tomorrow podcast. Now, we really started, originally focusing on commercial HVAC, but the last episode we had an engineer on, and we’re really looking to expand our show to all things construction and engineering. So again, thank you for being on the show. And if anyone wants to reach out and possibly work with you or get a quote, what is the best way to do that?
26:02 JT: So always call. We’re on the phone 24/7, but someone’s always answering it. Phone number…
26:08 BG: What… Yep, go ahead. What’s your phone number?
26:09 JT: Yeah, 636-536-6800, or you can always email us, I’ll just give you my email, it’s Jim, J-I-M, T as in Tom, at MaRRS, M-A-R-R-S distribution.com. So it’s firstname.lastname@example.org.
26:33 BG: Alright, thanks for being on the show, and thank you all for listening, and we will see you next time.
26:38 JT: Thanks, bye.
26:39 Announcer: You’ve been listening to Engineering Tomorrow, the podcast. For more insights and downloadable content, please visit our website at www.engineeringtomorrow.blog. Until next time, engineer for tomorrow today.