Not All in the Family

Not All in the Family

For more than 80 years, Kane Is Able has been a family-owned and family-run trucking and logistics business, hauling freight from Boston to Washington, D.C.

But last month, the company for the first time reached outside the Kane family for a new president and chief operating officer, Pete Westermann. For the company and the broader third-party logistics industry, it was a sign of the deeper changes altering the nature of longstanding companies as technology and new demands on operators send the businesses into new areas of growth and development.

Kane Is Able recruited Westermann, a 30-year logistics veteran, from Total Logistic Control, a Holland, Mich.-based company that Ryder System acquired in January.

He arrived at Kane Is Able shortly after Dennis Merriam, a former executive at retailer Family Dollar Stores, was hired as vice president of human resources.

Westermann reports to CEO Richard Kane, formerly president and CEO.

In December, Kane opened its board to new directors from outside the company, seating logistics experts such as Lee Stucky, a former Wal-Mart Stores executive, and Tom Escott, former Schneider Logistics president, alongside family members.

Until December, “we had a 100 percent family board,” said Chris Kane, chief customer officer and a grandson of Edward Kane, who founded the company in 1930. “Now the family members are down to 60 percent,” he said. Stucky, one of five non-family directors on the board, is chairman.

“Within the last year, the board really challenged us to take advantage of the economy to invest for the future,” Kane said.

That management shakeup and hot pursuit of external talent is a significant step in Kane Is Able’s evolution from a general trucking business to a post-recession, specialized third-party logistics provider. It’s a strategy that recognizes the importance of a management team with broad-based experience, particularly in third-party logistics markets where Kane Is Able plans to expand.

Industry executives such as Westermann, Stucky and Escott not only come with experience, but also bring a career’s worth of connections and, possibly, customers.

“We’re in a growth mode,” Chris Kane said. “This year we’re projecting high single-digit growth” in revenue. “We’re shooting for 10 percent.”

Kane Is Able shares a basic challenge with small and mid-size family-owned companies across the country and across industries: How to expand in an uneven economic recovery while battling larger, better financed competitors. Many family-owned businesses are looking for investors or a potential buyer, a big factor in the wave of trucking and logistics acquisitions this year. Others are buying companies themselves to acquire capacity, new services, territories and talent.

At Kane Is Able, adding external expertise and new technology is part of a strategy to make the company more competitive nationwide.

Chris Kane credited his late father, former chairman Eugene Kane Sr., with opening the board to non-family members and starting the recruitment drive. The senior Kane, who died last October, ran the Scranton, Pa.-based business for 55 years.

“He recognized the supply chain landscape is really changing and thought it was important to have the best industry talent available on our board,” he said.

Eugene Kane steered the company into logistics, starting with a 2,000-square-foot warehouse in 1955. “He saw it as a great combination,” Chris Kane said. The company now has 8.5 million square feet of warehouse space.

In addition to regional freight transportation, Kane offers inbound manufacturing logistics, warehousing and inventory management contract packaging and distribution services. Distribution centers in Scranton, Pa., Hagerstown, Md., Atlanta, Chicago, Kansas City, Kan., and Los Angeles give the company national scope.

Kane Is Able’s trucking service delivers freight overnight in the Northeast and Pennsylvania, operating about 200 tractors and more than 900 trailers.

In the Northeast, direct-store-delivery is a big part of Kane’s business, part of its focus on consumer packaged goods logistics as a vertical market.

In addition to retail logistics, the 3PL specializes in logistics services for the beverage, confectionary, food, health and beauty, and paper industries.

The business is “about 60 percent asset, 40 percent non-asset,” Kane said. “As capacity is really starting to tighten up, our customers are glad we have assets.”

Westermann’s consumer-packaged goods background dovetails with Kane Is Able’s strategic focus on the sector. “He knows the business from the ground up,” Richard Kane said. “His focus will be to maximize customer satisfaction and manage the continued expansion of our integrated warehousing, contract packaging and freight management services, particularly in the consumer packaged goods vertical.”

The new directors “have rounded out” the company’s board, Chris Kane said. In addition to Stucky and Escott, they include supply chain executives Martin C. Murphy and Tom Hall and Miami University professor Tom Speh, a past president of the Council for Supply Chain Management Professionals. There are eight Kane family members on the board.

-- Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter @wbcassidy_joc.