and still make next-day ground deliveries within a 400-mile
radius, something FedEx and UPS generally don’t do. This is
a boon for online retailers whose “stores” are open 24/7 and
who must placate impatient consumers and businesses that
want their products yesterday.
The growth of e-commerce could make the regional carrier world an interesting place by mid-decade. As e-merchants
expand their fulfillment locations to shorten delivery times,
they will also need to enlarge their transportation footprint.
They could continue to buy transportation or become vertically integrated by acquiring a regional carrier or two. It
wouldn’t take much capital for the likes of Wal-Mart Stores,
Target Stores, Amazon.com, or e-Bay to snap up a regional
player to have a closed-loop distribution network.
Foreign companies who lack an e-commerce presence in
the United States may find regional players appetizing targets.
FedEx and UPS, tired of watching the regionals siphon off
volumes in a fast-growing segment, may buy out some of the
players just to take them off their field. Even truckload and
less-than-truckload (LTL) carriers could enter the buying fray
to round out their product portfolios.
THE RISE OF THE SUPER-REGIONALS?
Then there is the chance none of the above occurs and the
industry morphs through a series of alliances into two or
three “super-regionals” forming a de facto national network.
One company that may be positioned to grab the baton is
Pitt-Ohio, a Pittsburgh-based regional LTL and truckload
carrier that three years ago entered the ground parcel business. Privately held Pitt-Ohio is cash-rich and has experience
with a super-regional infrastructure as one of the partners in
the Reliance Network. In 2011, it acquired US Cargo, a
Columbus, Ohio-based parcel carrier serving eight states in
the Midwest, Ohio Valley, mid-Atlantic, and Northeast. US
Cargo, which still operates independently, has an interline
relationship with Eastern Connection, a Massachusetts-based regional carrier whose network stretches from Maine
to Virginia.
Pitt-Ohio wants to expand its ground parcel operations,
which began as an adjunct to its core offerings. It already
interchanges tracking and billing data with OnTrac, US
Cargo, Eastern Connection, and other parcel carriers, according to Kent Szalla, general manager of its ground division. It
develops revenue-sharing arrangements with other carriers
on a case-by-case basis, he said.
Pitt-Ohio rolled out the parcel service on a limited scale,
initially selling it only to current customers or shippers
who’ve done business with the carrier before. At the time,
Szalla said it was building the parcel product piece by piece.
Three years later, the company still seems to be in no rush to
blast it out to the marketplace.
“Our mantra is crawl, walk, and then run,” Szalla said in
an e-mail. “We already began to crawl by bringing on
opportunities that fit. Walking, and then running, will take
some time.” ;
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