As 2011 gets under way, less-than-truckload carriers increasingly are thinking outside the pallet, expanding and launching non-traditional services in a bid to secure more freight and reach deeper into customer supply chains.
ABF Freight System is rethinking its international strategy and augmenting it with services that go beyond its traditional less-than-containerload business. Southeastern Freight Lines is launching a new subsidiary focused on truckload transportation and multimodal logistics services.
Both moves are part of a multimodal struggle for freight that is likely to become more intense this year as the economy recovers from recession, truckload capacity tightens and intermodal rail lays track into shipper transportation strategies.
“The world economy is changing, and ABF is changing with it,” said Russ Aikman, director of marketing and public relations at the Fort Smith, Ark., company.
Specifically, ABF is shifting from an old-line non-vessel-operating common carrier business model to one based on providing global supply chain services. It’s a move from transactional pallet shipping toward a broader, more contractual model.
Like its main competitors, ABF, the nation’s fifth-largest LTL carrier, is primarily a domestic operator, but having overseas reach is increasingly important — especially as the company strives to rebuild business and return to profit after deep losses.
Side Bar: ‘Trucking’ to the Caribbean.
“Our traditional international shipment might have been one pallet coming to the U.S. from a port overseas,” Aikman said. “Now shippers are telling us, ‘I don’t have just one pallet, I’ve got 1,500 containers annually. How can you help me?’ ”
ABF launched its global supply chain services division in 2008. “It takes a new operating model to meet the demands of the globally focused customer,” Aikman said. “It’s not that we’re serving new territories as much as how we serve them.”
That’s true in the Dominican Republic, where ABF this month expanded its NVOCC offering to include full containerload as well as LCL service, with consolidation available in Miami.
The addition of full containerload and consolidation services is a big part of ABF’s plan. “We’re handling a lot of full containerloads,” Aikman said. But behind that transportation expansion is a layer of technology and online tools needed to provide logistics management. “We have the ability to provide visibility on a container from the manufacturer’s floor in China, as it is loaded on the ship, while it’s on the ocean, and all the way through to its final destination in the U.S.,” Aikman said.
ABF is competing for those containers and shipments with other LTL carriers, including YRC Worldwide, which has operations in China. UPS Freight and Old Dominion Freight Line also recently expanded expedited LCL services.
“A lot of the freight we’re looking for is coming into the United States on a boat, and we’ve got to capture it before it gets here,” Wayne Spain, executive vice president and chief operating officer at regional LTL and truckload operator Averitt Express, said late last year.
All of ABF’s expansion efforts fall in line with the strategic goal of being a single-source solutions provider, Aikman said. That’s also why Lexington, S.C.-based Southeastern Freight Lines launched Southeastern Logistics Solutions.
LTL will remain Southeastern’s core service, President Tobin Cassels said. “At the same time, we recognize that a number of our customers have additional needs for a partner with the ability to provide all modes of transportation.”
That includes expedited and truckload service, flatbed and intermodal rail. “We want to always be positioned to say ‘yes’ to their transportation needs regardless of service type,” he said.
Southeastern Freight Lines will rely on its own resources and new “capacity partners” to meet those needs, over time adding cartage, drayage, air freight, residential delivery and import distribution capabilities to its network. “We’re carefully establishing a group of dependable capacity partners that will give us the ability to offer this broad range of services across the nation,” said Mike Moss, president of the new subsidiary.
Contact William B. Cassidy at firstname.lastname@example.org.