L&M Transportation

Source: Manufacturing Digital

Date :08/05/2008 06:01:50

Soaring diesel fuel costs and a slow economy are putting the squeeze on the trucking industry. Exec learns how this is affecting operations at third party logistics firm L&M Transportation Services Inc.

Written by Ian Armitage and Produced by Crias Corrigan

L&M Transportation Services, Inc. (LMTS) is an extremely successful third party logistics company that enjoys revenue in excess of $100 million. The company started life back in the ‘60s as the L&M Brokerage Company and became incorporated in July 1977. Over thirty years later, the company is now a leading provider of innovative regional, national, and international transportation, warehousing, and distribution solutions and related information and customer services. Its original purpose, as Tom Devine, Vice President of Operations, puts it was “To transport trailers for Carolina Refrigerated Trailer Sales from Texas to North Carolina. Rather than hauling the trailers empty, the transportation division started transporting produce in those trailers.”

Shortly after, LMTS began moving regulated, dry freight and produce from various points across the United States. The company continued along much the same lines and was primarily a truckload (TL) transportation brokerage-company until it unveiled a less than truckload (LTL) division in July 2000.

“When the company started, it employed just two people and generated less than $1 million in revenue; we now have eight locations, over 50 employees, and annual revenue exceeding $100 million,” says Devine.

But why is this? LMTS owes its growth and success to its “shipping, receiving and carrier partners - while our loyal, dedicated, long-term employees are truly the backbone of the company,” says Devine.

High fuel prices

Soaring diesel fuel costs and a slow economy are putting the squeeze on the trucking industry. Diesel prices in the US have surged to record levels, and with crude oil continuing to hit new highs on the global markets, the price for diesel is set to climb further. However, as Devine explains, despite the difficulties, it could be an opportunity for the company.

“The shipping public is getting hurt by the escalating cost of fuel,” he admits. “The truckload carriers are also getting hit by the cost of fuel. Our job as a third party is to try to get the best truckload carrier available at the rate that our shipper wants to pay. The shippers are trying to hold down costs and the carriers costs are going up. We are in the middle of that battle, trying to referee.

“It’s difficult because all we can do is offer our services and find the best carrier for the load that is available at a certain time.”

He adds: “The challenge now is trying to keep our shippers’ costs under control while providing a fair rate for the carrier. Significantly, we are able to align ourselves with contracted services that can handle our customers’ business at a fair price.”

Devine feels that when the “chips are down”, LMTS customers tend to rely on financially strong organizations, whereas before they may have gone for the cheapest price. “When things get tough you want stability, and we have flourished in the last few years,” he says.

Future

So, despite the difficulties, LMTS remains a trusted name; a name that clients come to know well, respect and value. As a result, many come to the third party provider to see what solutions they have for the soaring costs. “We always have our antenna up for new challenges - if a customer comes to us and asks for something, we will put all our effort into doing it,” says Devine.

It is certainly a challenging industry, but LMTS is well equipped – as proven by its extremely high revenues. “There is a definite downturn,” admits Devine, “particularly in terms of rates and credit. A lot of customer have approached us and said they need help. We do everything we can to try and help our customers get through tough times and because we are doing very well, we have the financial strength to react. We are big enough and financially secure enough to handle different fluctuations in the market. We are also small and agile enough to be able to react very quickly. There is very little red tape in our company. My brother, Mike, is the President and we have discussions and can make decisions very quickly.

“If a customer needs something done, we can get our heads together straight away and come up with a solution and that keeps us flexible. It often takes a long time for big companies to make the same decision, which is a differentiator for us.”

Strategic planning

LMTS is currently going through a strategic planning process, which will set out plans for the company’s future. Although plans aren’t concrete, Devine has an idea of where LMTS is headed. “I think that over the next five years we have got to stress our competitive advantages in the industry. We have got to let our customers know that there is a difference between L&M Transportation and other third party suppliers. And we have got to let our carriers know and understand that they will be paid extremely quickly - that there is a difference in selecting the transportation broker. We aren’t the same as anyone else, and we need to get that message out.”

LMTS will also bolster its service offering to ensure it keeps up with customers’ changing needs. “Our goal is to provide our customers with the highest level of transportation services available in the industry. We are well aware that our customers and carriers have choices and strive to make choosing LMTS an easy decision.”

Click here to view the corporate brochure on L&M Transportation