newsworthy
period. Robinson is the nation’s largest freight broker,
and its total nine-month gross revenue of $10.1 billion, most
of which comes from brokerage, dwarfs that of any rival.
A PUSH INTO LTL
Like other third-party logistics firms with brokerage operations, Robinson’s roots lie in the truckload sector, which
is 10 to 14 times larger than the $35 billion-a-year LTL
category. However, brokers have begun to expand more
deeply into the LTL segment, where they’ve always had
some degree of exposure. Today, third-party logistics firms
control about one-fourth of the LTL market, up from 2
percent in 1998, according to data from SJ Consulting.
The increasing encroachment of 3PLs and brokers into
the market has meaningful implications for LTL shippers
and carriers. These intermediaries bring with them large
freight volumes that they could leverage to extract lower
carrier rates, thus negatively impacting carrier margins,
according to Satish Jindel, SJ’s founder and president.
Jindel said the firm is preparing a study examining the
trend. The study was to be published sometime in mid-Jan-uary, about the time the Robinson-Freightquote transaction was expected to close. Jindel said in a phone interview
that LTL carriers would need to be vigilant to protect their
profit margins from high-volume 3PLs seeking to use their
clout to drive down prices.
In moving into LTL, brokers see an opportunity to penetrate a less-mature market for their services. In addition,
they want to diversify away from truckload, as big asset-based truckload carriers like J.B. Hunt Transport Services
Inc., Schneider National Inc., and Werner Enterprises Inc.
form their own broker units to compete with the traditional players.
There are differences in the two segments. The truckload
market is very fragmented, while in LTL, the top 10 carriers
control the bulk of the shipments. While a truckload shipment involves a relatively simple linehaul from points A to
B, LTL transactions typically involve complex pricing scenarios and carrier rules. They also typically involve multiple
stops and cross-docking events, which can result in longer
transit times, delivery variability, and additional handling,
which increases the chances of freight damage.
Robinson’s last big acquisition took place in September
2012, when it bought Phoenix International Inc., an
international freight forwarder and customs broker, for
$635 million in cash and stock. The transaction expanded Robinson’s presence in the global trade and transport
arena. Through the first nine months, international services
generated about $242 million in net transport revenue,
about 15 percent of the company’s overall transport net
revenue for the period.
—M.S.
Ted Stank, a professor at the University of Tennessee,
Knoxville, Haslam College of Business, was recently
elected chair of the board of directors for the Council
of Supply Chain Management Professionals. …
Con-way Multimodal, the freight brokerage division of
San Francisco-based Menlo Logistics, has
appointed Gregory L. Orr president. …
Purolator International, a freight and
parcel solutions company, has named
Rebecca L. Saenz branch sales manager in
Houston. … Teresa Finley was promoted
to senior vice president, global marketing, for UPS Inc. … CenterPoint Properties has appointed
Harold Campbell property manager for the company’s
East region as a part of the operations department. …
Westfalia Technologies Inc., a provider of logistics solu-
tions for plants, warehouses, and DCs, has appointed
Aaron Corcoran account executive. … NACCO Materials
Handling Group (NMHG) has promoted Chuck Pascarelli
to the position of president of sales and marketing,
Americas. David Furman, NMHG’s president of sales,
Americas, will expand his areas of responsibility to
include the marketing, leasing, and remarketing func-
tions. Pat DeSutter, director of fleet management, has
been promoted to the position of vice president of fleet,
service and aftermarket. Vice President of Finance Ray
Ulmer will also assume overall responsibility for human
resources. … T.C. Baker has joined the software company
LLamasoft as vice president of sales. … David Caines has
been named chief operating officer for Kenco, a provid-
er of integrated logistics solutions, real estate services,
and material handling equipment. … Crowley Maritime
Corp.’s Puerto Rico liner services group has promoted
Ken Orben to general manager of terminal operations
in Jacksonville, Fla., and Karen Dempsey to director of
port operations in Pennsauken, N.J. … Southeastern
Freight Lines, a provider of regional less-than-truckload
transportation services, has promoted Seth Fetzer to
service center manager in North Atlanta; Todd Herbert
to service center manager in Houston; Austin Winters
to service center manager in Huntsville, Ala.; and Dan
Poteat to service center manager in Baton Rouge, La.
… Crane Worldwide Logistics has appointed Michael J.
Karam country manager for the United Arab Emirates.
newsmakers
SAENZ
