Filling a Logistics Strategy Vacancy
Prior to the launch of the partnership between the North American OEM and RXO, the automotive company’s incumbent solution provider departed the business early. This left the automotive corporation without a service provider and without an up-to-date logistics strategy. Additionally, the company and their service provider had accumulated years of institutional knowledge together that was never documented.
To fill this gap, RXO implemented a staggered launch of its managed transportation solution earlier than planned. Operations began in the United States and Canada before moving on to Mexico. Manufacturing plants and assembly centers were launched in phases. Because the implementation plan was changed drastically due to the early launch, RXO leveraged its other business units to help the OEM transition into the new strategy. Teams from internal groups including brokerage, air charter and freight forwarding shifted their focus to the manufacturer, coming together under RXO’s value of “Success Together.”
RXO’s governance model ensures that all stakeholders are informed on the status of any RXO operational strategies during implementation. The company chose key performance indicators (KPIs) that gave useful insights into the logistics operations. Daily operations meetings were held to give front-line leaders an opportunity to review the tactical work that needed to take place immediately. In addition, during the first three months of the partnership, RXO held executive-level meetings twice per week to understand the intricacies of the business and prepare a successful launch.
This communication approach supported seamless collaboration across regions and time zones and guaranteed that everyone on the RXO team was working toward the same goal. After this initial 100-day launch, the program was performing well enough to transition to standard management patterns.
Responding to Supply Chain Disruptions
In Q1 of 2022, shortly after the launch of RXO’s operations with the OEM, two unprecedented supply chain disruptions occurred that caused capacity issues across the industry. Fortunately, with RXO’s agile approach, the company found solutions quickly to keep the OEM’s supply chain running smoothly.
The first roadblock occurred in February 2022 when the flow of material was disrupted at the U.S.-Canada border due to a trucker strike and blockade. To avoid this blockade, RXO ran cargo vans through the Detroit Windsor tunnel, rather than using the Blue Water Bridge or the Ambassador Bridge, which were directly affected by the strike.
In March 2022, a similar event occurred at the U.S.-Mexico border. In response to this obstacle, RXO secured air charter capacity to bring stability to the flow of critical material out of Mexico to U.S. assembly plants. RXO’s freight forwarding team leveraged the company’s cross-dock location in Laredo, TX to mitigate the impact of the congestion at the border.