Outsourcing Your Logistics Can Reduce Expense

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On today’s show, we’re pleased to welcome Mark Harvey, Vice President of Sales for Acertus, a tech-forward, automotive logistics and services company.

AcertusVIDEO TRANSCRIPT:

Jim Fitzpatrick: Hi everyone. Jim Fitzpatrick, thanks so much for joining us on another edition of CBT News. Today I’m so happy to have in the studio with me, Mr. Mark Harvey, who’s vice president of sales for Acertus. That is a company that I know that you’ve heard about. Today we’re going to learn a little bit more about it and how it helps dealers. So welcome to the show, Mark.

Mark Harvey: Well thank you very much. We really appreciate you having me in.

Jim Fitzpatrick: Sure. Great. So, for the people that are out there, for the few people that are out there that are not as familiar with Acertus as we are here at CBT News, tell the audience how it is that you help dealers.

Mark Harvey: Well, fantastic. Acertus is a vehicle life cycle company. We handle transportation, title and registration, drive away, final mile delivery and care services for the entire automotive industry. We do about a third with original equipment manufacturers, about a third with dealers and then about another third with OMCs on the transportation side.

Jim Fitzpatrick: Wow, fantastic.

Mark Harvey: Acertus is a combination of several very large companies that merged a few years ago. Metrogistics, which was a transportation company founded by Bill Billiter and Scott Naz. And then AmeriFleet, which was one of the country’s largest drive away services. And then Metro Title out of Kansas city, which is one of the top title and registration services for fleet management companies, retail dealers and other companies that are looking for assistance in title and registration.

Jim Fitzpatrick: So they were all brought together under one roof for the sole purpose of making it much more seamless for the dealer.

Mark Harvey: Absolutely.

Jim Fitzpatrick: One stop shopping.

Mark Harvey: Exactly. Each one of the service lines builds on the other service line to provide a dealer or a fleet management company with a sole source to handle their needs.

Jim Fitzpatrick: Sure. When you say, I think you said final mile delivery, was that it? What exactly is that?

Mark Harvey: You know, that’s an awesome question. And I was just at Used Car Week with my team last week, and the subject of final mile delivery came up countless times. Final mile delivery in the simplest form is when that Amazon truck pulls up in front of your house and brings the package out, the mile between the distribution center and your home is the final mile. As it relates to the automotive industry, the best examples are your Vroom’s and your Carvana’s, where they are now allowing you to purchase your vehicles online and they’re delivering those vehicles directly to your home.

Jim Fitzpatrick: That’s right.

Mark Harvey: So, with Walmart, King Supers, Kroger, whoever it may be offering delivery to your home, that’s going to bleed over and has bled over into the automotive retail sector.

Jim Fitzpatrick: For sure. Yeah. And you can help the dealers with that so that they don’t have to have these vehicles running or these transportation vehicles running all over. You’ll take care of that for them?

Mark Harvey: Absolutely. One of the most complicated things about final mile delivery is the fact that, how do you staff it? How do you have people around when you need them? How do you have people trained? And when you have a logistics company that has our breadth, then we can provide those types of services. We can work directly with the dealer and find out what type of services do they want to provide? What type of radius do they want to provide those services in? And how in depth do they want those to be? Do they want the people to be actually branded, the delivery people branded in their uniforms?

Jim Fitzpatrick: And this is something that we are going to be hearing more about, that final mile delivery, because of the industry heading towards digital retailing. I mean, dealers are doing it now, and it’s right around the corner that more dealers will do it and then there’ll be more transactions per dealership that where the vehicles delivered right to the consumers front door, right?

Mark Harvey: Absolutely. We’re seeing it in two of our service lines, the final mile of course, but we’re also seeing it in title and registration, because there are so many more cross border transactions now than there were in the past.

Jim Fitzpatrick: That’s true.

Mark Harvey: In the past, the title clerk in the middle of Denver, Colorado would be doing 99% Denver County city titles. And now that person, people may be buying online from Florida for their Florida home, they may not even be in the state, and now we’re asking somebody who does primarily their home state title to do a title somewhere else.

Jim Fitzpatrick: That’s right. That’s a recipe for disaster, right?

Mark Harvey: Exactly. And unfortunately it has been very challenging for a lot of the dealer groups, and we step in there and we can assist dealer groups with that type of challenge.

Jim Fitzpatrick: Sure. Especially if you’ve got a dealership that it borders a number of other states. You could be in the Northwest part of Georgia and still be hitting Tennessee, and Mississippi, and Alabama and such, and you know they’re sharing all kinds of customers there, right?

Mark Harvey: Absolutely. Look at the cities and counties and states in the Northeast, look at how closely they border each other. And then look at the snowbird population. The personal vehicle shipping market is a $3 billion market. So a lot of people are moving the vehicles from North to South and South to North every year, and so that involves the transportation aspect, and again, involves title and registration. And some of those will be new, so final mile delivery is-

Jim Fitzpatrick: Sure. Will you deal directly with consumers as well if they want to ship their car?

Mark Harvey: We do. We focus primarily on large companies, dealer groups and things like that, but we do do individual moves. And our team is designed to work with people who want to move their vehicle directly.

Jim Fitzpatrick: Okay. What’s the perfect size client in terms of a dealer group? Will you do business with the one franchise dealer that says, look, I’ve got a great Toyota store here or a Chevy store, are you still interested in that individual dealer’s business, or are you looking for the bigger groups that are out there?

Mark Harvey: Excellent question. We actually deal with everything from the AutoNations, the Sonic Automotives. We do work with Group One on a limited basis, to mid-market groups like the Garff’s, and then all the way down to a single point like a Hunziker Ford in Soda Springs, Idaho.

Jim Fitzpatrick: That’s great.

Mark Harvey: And we’ve got a team of sales professionals in house that take those telephone calls that come in. They also do prospecting. And one of those people will deal directly with the used car manager who needs to move one vehicle from an auction to their store.

Jim Fitzpatrick: Wow, that’s great. You are a full solution in terms of transportation, and then even in the registration part of it. I mean, where were you guys when I was a dealer? You’ve really been able to put together these great companies that is a full solution.

Mark Harvey: They just dovetailed together so easily, and especially in the larger groups. When you can limit or reduce the number of people that you have to talk to to operate your business and you’ve already got so much going on, it just makes your life that much easier to be able to pick up the phone and talk to one company, and maybe have a meeting with one company who can bring in three or four different divisions to address your needs.

Jim Fitzpatrick: That’s right. On the registration side, are you just offering the software to the dealers, or are you actually doing all of the necessary paperwork yourself for the dealer?

Mark Harvey: You’re going to find this very fascinating because it’s an interesting tale. There are over 700 different jurisdictions in the United States. We also handle Puerto Rico as well. So, every state, needless to say, does not agree with the way every other state does it.

Jim Fitzpatrick: Exactly.

Mark Harvey: Some states do it by county, some states do it throughout the whole state, some states will allow us to put our API in place and directly communicate with their computers.

Jim Fitzpatrick: Nice. That’s great.

Mark Harvey: We have great secured room where we can interface directly with 12 different states.

Jim Fitzpatrick: That’s fantastic.

Mark Harvey: And we’d love to have that with everybody, but it’ll never happen. In some states they do not want anybody doing anything with their computer systems, and we have people located in those markets where we will FedEx the paperwork to, they will walk into the DMV, get the title of work done, walk out of the DMV and send it back to us FedEx.

Jim Fitzpatrick: Fantastic.

Mark Harvey: We have another state where we actually have an associate embedded in the motor vehicle department. They are not a motor vehicle employee, but we use one of their terminals and we’re able to process license plates on the spot.

Jim Fitzpatrick: That is fantastic.

Mark Harvey: So, we have a solution for every state. Our founders on the title and registration, Eric and Barry Kaseff, they founded it, Metro Title, in 1981, and they have been working on it every day since and they still go into the office every day.

Jim Fitzpatrick: That’s fantastic.

Mark Harvey: Yes.

Jim Fitzpatrick: Wow. So you really are, I mean, it’s turnkey solution for dealers. I mean, to be able to have that access and that manpower in the different areas is incredible.

Mark Harvey: Absolutely. We have over 120 people working in our Kansas City office processing over 2000 titles a day.

Jim Fitzpatrick: Fantastic. Wow. Incredible. So, the answer is yeah, it’s not just a software package that you’re offering dealers, you guys are actually boots on the ground in all those different markets.

Mark Harvey: Yes. And we are in the process of interfacing with CDK right now as well to allow more dealers to be able to send over the information electronically, and then only have to overnight the wet signatures that are required in those particular states.

Jim Fitzpatrick: Right. Right. And then of course goes without saying, you’re going to be picking up vehicles from the auction for dealers as well as they acquire vehicles too. I mean, you guys handle that service as well.

Mark Harvey: Absolutely. So we work with, again, all the way up to the largest dealer groups down to single points. And we have a proprietary transportation management system called VINlocity that we developed that we provide at no cost to the dealers, and the dealers are able to get quotes 24 hours a day, 7 days a week. You know from being in the dealership, sometimes you need a quote for a customer at eight o’clock at night and it’s impossible to reach somebody. And that could be the difference between making a deal and not making a deal.

Jim Fitzpatrick: That’s right.

Mark Harvey: So our software allows whoever you would like to have access to the system, which is up to an unlimited number of users, the ability to get a quote, and then if they’re comfortable with that quote, they can order the shipping right then. And then it will provide them with nightly updates of the status, and the dealer will know everything that’s going on so they can convey that to the customer in real time.

Jim Fitzpatrick: Wow. That’s just unbelievable that those services are now out there available for dealers.

Mark Harvey: Yes. And in the future, we’re also going to tie all the rest of our platforms, our drive away and our title and registration right into that same system, so you’ll be able to order multiple different types of services from us off of one platform.

Jim Fitzpatrick: Wow. Fantastic. Some of the auction companies have gotten into the recon business. Do you see yourself or your company going down that road where a vehicle would be picked up from an auction and go into a recon center owned by Acertus?

Mark Harvey: Well, right now what we do along those lines is we call it our care services. Some of our largest clients are very large fleet companies. Wheels, ARI and such. And they manage fleets for companies, pharmaceutical companies, electronics companies, people who will have representatives out in the field. Those cars oftentimes will move between one representative to another or from one market to another. In the interim, while we have those vehicles in storage, and we also have over 55 storage lots across the country, while we have those vehicles in storage, if the company would like us to take care of a check engine light, send it out for a body repair, get a windshield replaced, we can do those things so that when the car or truck goes to the next operator, it arrives to them fully ready to go.

Jim Fitzpatrick: Wow, that’s fantastic.

Mark Harvey: So we do participate in some of the reconditioning. I don’t know that we’ll ever get into it at the level of a Manheim or at ADESA just because it’s so labor intensive and it requires so much space.

Jim Fitzpatrick: Yeah. Yeah, that’s for sure. That’s for sure. So talk to me about your retail automotive network now. I know that this is something relatively new for the company getting into it, or is this something you’ve been working with dealers in this area for years?

Mark Harvey: It’s been quite awhile.

Jim Fitzpatrick: Oh it has, okay.

Mark Harvey: Scott Naz and Bill Billiter founded Metrogistics back in 2010, and they’ve been working with dealers of all sizes. Sonic Automotive was one of their first very large clients and that’s where I came to know them. And so, we’ve got experience working with everybody for over almost a decade now of all different sizes. So we really have a sense of what goes on at the dealership environment, both on the single point, the small dealer group, the medium dealer group, and then the mega dealers as well.

Jim Fitzpatrick: Sure. For sure. Now that you’ve got your hand in delivering vehicles directly to the consumer, I think you called it that final mile, what do you think the future is? What’s the future for digital retailing for dealers? I mean, you’ve been in the business a long time, you think consumers are going on to pick up their phone and just say, okay, send me the vehicle with a liberal return policy and bypass the dealership?

Mark Harvey: I don’t think we’ll ever bypass the dealership, as Elon Musk is found out. I think that that’s going to be a challenge from time to time, and it’s probably going to go back to a dealership model for all people just because it’s a simpler way to interact. And service is such a critical part of dealership operations.

Jim Fitzpatrick: Yeah, it really is.

Mark Harvey: But when I started, if you had said to me that somebody would order a car online, never see the car, and take delivery of it and be completely happy, I would have said, no way, that’s not going to happen.

Jim Fitzpatrick: Right. But 176,000 consumers did it that way last year with the Carvana.

Mark Harvey: Absolutely.

Jim Fitzpatrick: It’s crazy.

Mark Harvey: And it’s only going to increase in my opinion, because of the fact that as a society we are used to having things delivered directly to us. And we also, I believe are a more believing society than we’ve been in the past. So if I tell you that the condition report is X on the car, and I show you 100 pictures of the car, and I give you a reasonable guarantee or even an unreasonable guarantee, the consumer, if they can avoid having to go to the dealership and spend two, three hours … We’ve been talking about doing one hour transactions forever. Even some of the dealers that promise one hour, one person, and I had a friend of mine that said it took three and a half hours at that place. So, if consumers can come home, have their car delivered, they’re going to do that.

Jim Fitzpatrick: They’re going to do it.

Mark Harvey: Absolutely.

Jim Fitzpatrick: And that’s where a company like Acertus comes in and helps dealers. Because to your point, does a dealer really want to have trucks, a fleet of trucks, and a fleet of people and such that you’ve got to manage in order to get these vehicles delivered to consumer’s homes, right?

Mark Harvey: I don’t believe that the dealers are going to want to do that. I believe they’re going to want to take advantage-

Jim Fitzpatrick: It’s cost prohibitive.

Mark Harvey: Yeah. Absolutely. They’re going to want to take advantage of every possible sale that they can get through every channel they can get, but they’re going to need to work with partners like Acertus to find out the best, most effective, cost effective way to deliver those vehicles. And having a transportation management platform like VINlocity, and having a partner that can help you with a title and registrations, final mile delivery, all of those services will make it easy on even the smallest dealer to be able to branch out. No longer limited by just his or her PMA, but selling to the entire country.

Jim Fitzpatrick: That’s right. That’s right. So, you do agree then that we’ll see more and more digital retailing taking place in the industry?

Mark Harvey: I think the genie is out of the bottle, and I don’t know that we’re ever going to be able to put him or her back into the bottle.

Jim Fitzpatrick: That’s good point. Well, for dealers that are listening, here’s your one stop solution, I mean for all things digital retailing and beyond. I mean, to think you’ve got somebody out there that’s going to be able to get you registrations from all 50 states and in Puerto Rico and such. Mark Harvey, vice president of sales for Acertus, thanks so much for joining us on CBT News. This has been very enlightening. I did not know a program like this existed for dealers. So, for the dealers that are watching, Acertus is is the answer.

Mark Harvey: Well, thank you very much for giving us the opportunity to share our message with the dealer body.

Jim Fitzpatrick: Sure. Thanks so much.

Jim Fitzpatrick: Today’s CBT tip of the day is brought to you by Acertus.

Speaker 4: For even more CBT, please follow us on Facebook, Twitter, YouTube, and LinkedIn. Thanks for watching everyone. Have a great day and we’ll see right back here tomorrow.

Thank you for watching the official news source of the retail automotive industry. This has been a JBF Business Media production.

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