Associated has completed the acquisition of Peach State
Integrated Technologies Inc. Both companies are pro-
viders of integrated supply chain solutions. … Arpac,
an integrator of end-of-line packaging solutions, has
acquired Lambert (formerly Lamson) Material Handling,
a manufacturer of conventional palletizers. … Federated
Railways Inc. has acquired the company that operates
the “Cold Train” rail intermodal service, which trans-
ports fresh produce and frozen foods from the Pacific
Northwest to U.S. Midwest, East Coast, and Canadian
markets. … W&H Systems Inc. has launched a new Allied
Products program, which focuses on providing niche
products for maintenance, packaging, safety, and stor-
age operations within the warehouse. John Niemeyer,
who has been with W&H Systems for over 10 years, will
lead the operation. In other W&H news, the compa-
ny has announced that its warehouse control system,
Shiraz, now works on a “smartwatch.” … The Georgia
Ports Authority has moved more than 2 million 20-foot
equivalent container units (TEUs) so far this fiscal year
(July–February), for an increase of 6. 2 percent or an
additional 119,318 TEUs over the same period last year.
… Intelligrated has launched automated material han-
dling sales and engineering operations in China.
short takes

Large accounts are a less-than-truckload (LTL) carrier’s bread and butter, and with about 55 percent of its $3.4 billion in annual revenue coming from big users, Con-way Freight is no exception.

But for the Ann Arbor, Mich.-based carrier, pricing those accounts had come to resemble the application of peanut butter. Historically, rates have been slathered evenly across a large piece of bread, with little thought as to whether the pricing on any given lane made sense for the shipper or the carrier.

To change the spread, Con-way Freight in late 2012 launched what it termed its “360” program to introduce lane-based pricing to its top 360 accounts, which bring in more than half of its business. Framed as a network optimization initiative, “360” was designed to bring together the shipper and the carrier to analyze the unique dynamics of each lane and use the results to price Con-way’s services on that lane. The rates would be loaded into a shipper’s transportation management system (TMS), and the technology would determine where Con-way stood in relation to its rivals.

As Con-way sees it, the approach gives shippers deeper insight into their rate structure with the carrier and provides the carrier with greater clarity on how profitable—or unprofitable—a customer’s freight is on a particular lane and if that business is worth keeping.

An ancillary, though critical, benefit from the program, in Con-way’s eyes, comes from transforming a traditionally transactional relationship into a strategic exercise. The program does this by encouraging collaboration between the parties and getting the shipper—which is allocating time and resources to undertake the effort—to put skin in the game.

Stephen L. Bruffett, executive vice president and chief
financial officer of Con-way Inc., Con-way Freight’s parent,
said at a February conference that the LTL unit will “revisit”
the program with its top 360 accounts during 2014 while
also extending it to its mid-sized customer tier. Con-way
has said the program will impact about $900 million in
revenue from the mid-tier segment.

“It’s the same thing we’ve been doing. We’re just applying it to a larger piece of our customer base,” Bruffett told an annual transportation and logistics conference sponsored by investment firm Stifel, Nicolaus & Co.

Lane-based pricing is a familiar and often-effective concept in the truckload world because it is relatively easy to price loads moving point to point without intermediate stops. It is a trickier exercise for LTL because of the added complexity of breakbulk terminals that make load balances in general more difficult to calibrate.

William Wynne, Con-way Freight’s vice president of marketing, acknowledged that the program takes Con-way Freight out of its comfort zone. “What we feel we are doing is fairly unique,” he said.

Bruffett told the Stifel conference that the program has been successful and is gaining momentum. Yet data points to quantify its success have been hard to come by, at least for those outside the company.

Con-way executives shed little light on the program’s status during the company’s mid-February conference call with analysts to discuss 2013 results. W. Gregory Lehmkuhl, Con-way Freight’s president, may have come the closest to spilling the beans by saying that “we anticipate our revenue management activities to roughly offset all of our investment costs” and that the revenue increases along with efficiency gains “should provide our year-over-year profit improvement.”