When Old Dominion Freight Line first ventured into warehousing, capacity was tight and space was at a premium. Unfortunately, that was in November 2008.
“Could you pick a worse time?” said Rick Keeler, senior vice president of pricing and strategic development for the LTL carrier. Shippers “withdrew completely back to their roots and hunkered down.”
It was especially tough for a carrier in an industry having a difficult time scaling back capacity because LTL carriers have one key area built on fixed assets: the real estate for the terminals forming carrier networks.
Now, Keeler said, ODFL’s warehousing business is growing.
ODFL this month opened a 160,000-square-foot warehouse in Thomasville, N.C., about five miles from its corporate headquarters. The Southeastern warehouse will serve as the headquarters for its OD-Warehousing and Distribution Services division, which also has warehouses in Commerce, Calif., and Worcester, Mass.
“We’re seeing interest in warehousing slowly rising, just like freight volumes,” Keeler said. “We’ve had several calls since we opened the warehouse from people wanting to get quotes for 5,000 square feet and 10,000 square feet.”
ODFL’s expansion into warehousing is part of a broader strategy to move the company, founded in 1934 as a regional LTL carrier, beyond pure trucking.
It’s a route blazed by companies such as UPS, FedEx, YRC Worldwide and Con-way that many carriers are following. “The guys in front of us are big guys with multiple services they offer customers,” Keeler said. “We’ve got to be competitive there.”
In addition to warehousing, the company offers dedicated fleet services, truckload brokerage, freight management and supply chain consulting. By working with partners such as Hanjin Shipping, ODFL is extending its reach from the Carolinas to China.
Its expansion into new areas of transportation follows its geographic expansion from a 15-state region to full 48-state coverage. “We’ve got no geographic area left to expand into, so we’ve got to grow in other directions,” Keeler said.
“As that geographic piece matures and our growth rate slows on the LTL side, we want to use these value-added services as jet fuel to get where we want to go.”
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