DC Velocity - May 2015

Dave LeMaster, vice president of the systems integration firm Associated, announced his retirement after 38 years of service to the material handling and supply chain industries. … Manuel Gonzalez has been named CEO of Scrum Alliance, which provides project management software. … Overseas Cargo Inc., a South Florida third-party logistics service provider, has promoted Shani Atapattu to vice president. … Buckhorn Inc., a provider of reusable plastic packaging and material handling systems, has named Anthony Turner director of finance and IT for Buckhorn and its sister companies within the Myers Material Handling Group segment, including Akro-Mils and Jamco. … U.S. Gain, a division of U.S.

Venture Inc., has hired Brandon Henderson and Mike McLouth as business development managers to continue growing the Gain Clean Fuel compressed natural gas network. … Kion North America Corp., a manufacturer of industrial trucks, has appointed Mike Gore as its new vice president, dealer sales. … Forte, a warehouse automation and warehouse execution software firm, has added H. Howard Turner Jr. to its consulting team as a senior facility design and software consultant. … CubiScan, which makes dimensioning and weighing systems, recently hired a new director of service and support, Jeff Wade. … Susan Stillings has joined IronPlanet, an online marketplace for buying and selling used heavy equipment and trucks, as its new chief marketing officer.

newsmakers

HENDERSON

An executive of one of the leading truck spot-market load boards said loads with the characteristics of less-than-truckload (LTL) shipments are populating its boards at twice the rate of truckload shipments, and today account for between 10 and 15 percent of posts on its boards.

Mark Montague, manager of industry pricing for Portland, Ore.-based DAT Solutions, said loads such as partial truckload shipments and so-called “hot shots,” expedited traffic that moves for one customer, “are growing a lot on the load boards.” Montague also said information DAT collects from property brokers shows LTL shipments are growing at a much faster clip than truckload traffic.

The data add to the growing evidence that the “LTL sector is something that a lot of brokers are very much into,” Montague said last month during a panel session at the Transportation Intermediaries Association’s (TIA) annual conference in Orlando, Fla.

Montague’s comments support the notion of a warming relationship between freight brokers and third-party logistics service providers and the tight-knit LTL industry, where the top 10 carriers account for about 90 percent of the roughly $33 billion in total LTL annual revenue. While LTL carriers and third parties have always worked together, there has been a certain reluctance on both sides to go all-in. For the third parties, the reasons are largely financial. Brokers familiar with the LTL business said its complexity makes it tough to turn much of a profit on these loads. LTL carriers, meanwhile, have shied away from doing business with many transactional brokers, labeling them “bottom feeders” interested far more in shopping around for the lowest rate than in building relationships.

BIG GROWTH POTENTIAL Few brokers specialize in the LTL business, and starting an LTL brokerage from scratch is a difficult undertaking, experts said. The market is also somewhat concentrated. About seven brokers and 3PLs of different sizes control about $3 billion in annual revenue, according to data from consultancy CarrierDirect LLC.

Those who are in the sector or follow it said there is significant growth potential. Not only is the LTL industry growing organically, but LTL has provided an alternative for loads that might have moved by truckload if it weren’t for tightening capacity brought on by the worsening shortage of commercial drivers. Montague of DAT said small to mid-sized shippers are an especially fertile LTL market for the brokerage community, as they may lack the volumes needed to get competitive rates on their own.

Some of the big truckload intermediaries have noticed. At the end of 2014, Eden Prairie, Minn.-based C.H. Robinson Worldwide Inc., the 3PL and brokerage giant, bought Freightquote.com with an eye toward capturing a larger share of the small to mid-sized shipper market that would be inclined to use LTL. Last October, Chicago-based broker Coyote Logistics LLC hired C. Thomas Barnes, the former head of Con-way Multimodal, to build an LTL business to augment Coyote’s traditional truckload segment.

Andy Berke, vice president, strategic development of Riverview, Fla.-based BlueGrace Logistics, one of the LTL brokers, said there is a “ridiculous amount of freight out there” and not enough people or time to move it all efficiently. This puts brokers who understand LTL in a terrific position, Berke said. “The opportunities out there are surprisingly great,” he said.