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Selective Pallet Rack • Drive-In • Push Back • Flow
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Jones of LSO said he shies away from serving the retail
industry and instead focuses on sectors like legal and health
care, which have better margins. He steers his company to
clients and sectors with supply chain needs that go beyond the
basic transportation solution. And unlike other regionals that
have de-emphasized the more time-sensitive express service in
favor of the much larger ground parcel business, Lone Star
pushes its express products and lets the ground parcel category “come along for the ride,” according to Jones.
The Lone Star CEO said he wants to avoid situations where
his firm’s value play is based on price alone. “I don’t want to
get into a commodity price war with multibillion dollar giants
who can crush me,” he said.
A NATIONAL NETWORK?
For years, there has been talk among the major regionals of
knitting together a unified national network to compete with
FedEx and UPS. Until now, the extent of their cooperation has
been to share information that would, for example, allow
Eastern Connection to refer a customer to On Trac if the shipper needed a regional presence out West.
Berluti of Eastern Connection said that although there is no
specific timetable, the development of a national network is
“absolutely going to happen.” He said the “marketplace needs
a third player because the duopoly is not working for the cus-
tomer. The regionals are interested, and the shipping commu-
nity is as well.”
There is no shortage of obstacles, however. They range from
building a uniform IT system, to establishing a presence in the
Southeast, to working out revenue-sharing issues, to harmo-
nizing disparate product lines among the various players.
The regionals have “different billing systems, different
accounting and tracking systems, and different tracking algorithms,” said Jerry Hempstead, who runs the Orlando, Fla.-based Hempstead Consulting and was a top U.S. sales executive with DHL and the former Airborne Express, which DHL
bought in 2003.
Hempstead said DHL tried to convert Airborne’s customers
to DHL’s tracking, billing, and shipment rating systems, only
to encounter enormous problems in the execution. The failed
conversion “killed the Airborne acquisition,” Hempstead said.
“The wheels just fell off.”
Berluti said regional carrier executives are mindful of the
challenges and are working diligently to remove them. He
noted that Eastern Connection has an interline relationship
with U.S. Cargo, a regional carrier that serves Ohio,
Pennsylvania, Virginia, and West Virginia, where Eastern
Connection tenders packages to U.S. Cargo for two- to three-
day deliveries into a region mostly beyond Eastern
Connection’s geography. In return, Eastern Connection han-
dles packages originating in the Ohio region for delivery
throughout New England, the Northeast, and the Middle
Atlantic.
“We are already a super-regional carrier through this relationship,” Berluti said. ;
