DC Velocity - August 2016

22 DC VELOCITY AUGUST 2016 www.dcvelocity.com newsworthy

Dorner Holding Corp. has acquired Germany-based
Geppert-Band, a European manufacturer of belt and
modular belt conveyors. … FastFetch North America has
officially changed its name to NextGen DC Systems. …
MHI, Messe München, and ITE Group have announced
the co-location of the newly formed Transportation &
Logistics Americas (TLA) exhibition with Modex 2018. …
Transportation and logistics service provider Schneider
has announced that it achieved a 99.999-percent theft-
free record for the 3 million-plus loads it moved in
2015. … A new comprehensive study projects that
cargo volume through Port Manatee in Southwest
Florida will more than double over the next 10 years.
… enVista executives met with government leadership
from Hyderabad, India, Indianapolis’ sister city and the
location of one of enVista’s overseas offices, to discuss
supply chain trends. … Florida Governor Rick Scott
has announced that Total Quality Logistics, one of
the country’s largest freight bro-
kerage firms, will be expanding
in Sarasota and creating 100 new
jobs. … Twinlode Corp., a suppli-
er of high-density storage racks
to the food and beverage sector,
has announced that its full man-
agement solutions are now available industrywide. …
Material handling solutions provider Daifuku North
America Holding Co. has been certified by the Michigan
Veterans Affairs Agency as a bronze-level status veter-
an-friendly employer.

short takes

TWINLODE

many drivers experienced in residential interaction and product installation. The shortage is particularly acute around holiday periods, such as the 4th of July weekend, when a nationwide surge in sales from retailers drives up buyer interest. Will O’Shea, chief marketing and sales officer for XPO Last Mile, the last-mile delivery unit of Greenwich, Conn.-based transport and logistics firm XPO Logistics Inc., said at the SMC conference that his unit has trouble recruiting drivers in some markets because they lack the “soft skills” needed to execute its full-service proposition. XPO Last Mile makes about 12 million deliveries a year and operates out of 50 dedicated facilities in the U.S.

USING WHAT YOU HAVE

One carrier that plays the last-mile game on its own terms is Pitt Ohio Express LLC, a Pittsburgh-based firm involved in truckload hauling, regional LTL service through its own network (it has a national U.S. and Canadian linkup with the “Reliance Network” of six U.S. and Canadian LTL carriers), and parcel deliveries. Pitt Ohio integrates U.S. last-mile deliveries with its LTL network and its solo drivers, according to Geoffrey Messing, the company’s chief marketing officer and executive vice president. It eschews team drivers and declines any requests to deliver goods that require two drivers to handle, Messing said. Pitt Ohio does not offer setup and installation services, and its drivers will not go farther than the “first threshold” of a residence, or the first covered area such as a foyer. Typically, the goods will be dropped off at curbside or on a driveway, Messing said.

Pitt Ohio chose to leverage its own network for final-mile
services after discovering that more than half of these ship-
ments moved 50 miles or more from one of its terminals,
according to Messing. The relatively long stage lengths gave
Pitt Ohio the flexibility to piggyback last-mile shipments
onto its traditional business-to-business delivery infrastruc-
ture, Messing said.

Using its own equipment turned out to be more cost effective for Pitt Ohio than relying on local delivery agents, Messing said. He noted in a separate phone interview that the “incremental cost” of adding last-mile deliveries to a route was more than offset by the generous fees the carrier charged its retailer customers. While its bread-and-butter LTL business is showing little, if any, growth, Pitt Ohio’s residential business is up about 20 percent so far this year, Messing told the SMC3 gathering.

LTL carriers will take growth anywhere they can find it these days. The nation’s industrial economy, the backbone of the LTL business, has been in a recession since last fall and has taken carrier volumes with it. Weight per shipment is down, reducing carrier revenue and margins. Carriers are reporting better operating ratios—defined as a company’s operating expenses as a percentage of its revenue—an indication they continue to run efficiently. They have also maintained the pricing discipline that was instituted following disastrous rate wars that took place from 2007 to 2010, as carriers sought to defend shrinking market shares and several tried unsuccessfully to drive YRC Worldwide Inc., then the industry leader, out of business.

However, there are indications that the rate resolve may be cracking. David S. Congdon, vice chairman and CEO of Thomasville, N.C.-based Old Dominion Freight Line Inc., arguably the best-run LTL carrier, said in late April that rate battles had become more commonplace as carriers struggled with a difficult operating environment. In early July, FedEx Freight, the LTL unit of Memphis, Tenn.-based FedEx Corp., reported that some price discounts “are reaching very high levels.”