What Is the Real Impact of a Third-Party Unloading Service?
by: Bo Pamplin, VP, Business Development, Eclipse IA
December 20, 2020
If you aren’t using a third-party unloading service for your shipped goods, you may be missing out on greater revenue, fewer expenses, and higher productivity.
An unloading service, or lumper service, is used to help load or unload freight from a trailer into the warehouse. Lumper services save truck drivers time and help them stay rested for the road. Warehouses see quicker unloading times and a better profit margin. They also receive a rebate for the use of the warehouse’s equipment.
Some warehouses are reluctant to hire an unloading service, and they do it themselves or allow drivers to unload. Usually, these warehouses have questions and concerns about increased costs, union conflicts, and other potential drawbacks.
Let’s take a look at these concerns, and the advantages you’ll receive when hiring a lumper service.
Increased Shipping Rates?
If you start using an unloading service, your shipping vendors will start getting charged for it. Some warehouses want to avoid higher trucking fees that get passed along, so they unload freight themselves.
In reality, it’s very rare to see your fees increase when you use a lumper service. That’s because your shipping vendor is already paying unloading fees all over the country at other facilities. The cost is already embedded in the shipping fees they’re charging you.
You’ll also see particular benefits that tilt the fees in your favor:
- Decrease in expenses because you aren’t paying your own people to unload the trucks.
- Increase in revenue from a rebate on every load that comes in.
- Decreased risk exposure to injuries.
- No need to recruit enough workers.
- No responsibility for damaged product — if your unloading service damages the shipment, they absorb the cost
Because your lumper service takes on the risks and the costs, you come out ahead.
If you’re a unionized facility, you might be reluctant to get into a dispute over unloading services. Certainly, you’ll need to have an agreement worked out with the union before a third party comes in. But in our experience, we’ve found that unions are usually happy to let someone else do the unloading.
Unloading a truck is one of the hardest jobs a union worker can do. Unions are continually looking for people who are willing to do the work, and there are often labor complaints to respond to. If you’re thinking about outsourcing an unloading service so that unions don’t have to deal with those hassles, you probably won’t find a lot of resistance.
Just be sure that the union contract states exactly what a lumper service can do and what the union does.
Impact on Profitability
As you’re looking for ways to improve your P&L, your two buckets are revenue and expenses. If you’re worried that an unloading service will affect either of those buckets, it will. You’ll see both revenue and expenses improve. Our clients often see a 15 to 20 percent increase in profitability.
Hiring a lumper service reduces these major expenses:
- Hourly wages
- Hiring and terminations
- HR issues
- Training and corrective actions
Not only that, but you don’t have to worry about potential unknown factors such as damages and injuries. Those are unbudgeable costs that could range from nothing to millions of dollars in a year.
Outsourcing an unloading service takes all these issues off your plate and makes your next year’s budget more predictable and more manageable.
Changes in Productivity
Some trucking companies and warehouses won’t use third-party unloading services because lumpers work too slowly. An unloading service is supposed to increase productivity, but that’s not always the case.
When you’re paid by the hour to do demanding work, there isn’t a lot of incentive to work harder or faster.
That’s why Eclipse IA pays our workers based on production. Our team-based pay model ensures that your freight is unloaded as quickly as possible, while also safeguarding the quality of the work.
Eclipse IA Stands Out Among Unloading Services
Eclipse IA is one of the largest unloading services companies in the country, and the only one that can offer temporary staffing and managed supplier services, as well.
We have our own productivity management system installed on the dock that helps boost the flow of the dock. The web-based system displays productivity numbers in real time to keep work crews accountable. You can login from virtually anywhere to view real-time status. View by truck, case, and pallet. See what has been completed within the expected time frame and what was late (and the reasons why).
In an environment where you have to constantly find better ways of improving productivity, outsourcing your unloading services is a sure thing. The lumper model is a proven method for increasing revenue, cutting costs, and improving productivity on the dock.
Find out what an unloading service can do for your company — start a conversation with us today.