US Traffic: Connecting cargo with carrier

Source: Exec Digital USA

Date :8/13/2008 10:15:53 AM

With three offices and clients on four continents, US Traffic solves problems and delivers the goods for its customers.

Written By Gabe Perna and Produced by Michael Magno

John McDonald’s journey to the top of US Traffic is somewhat symbolic of the company’s voyage to the top of their industry.

McDonald started out with US Traffic as a minor shareholder and subsequent part-time consultant and accountant when the company began in 1983. Then as the company got bigger, McDonald spent more time there and became an active VP. Finally in 2000, when then US Traffic founder and president James Jardine retired, McDonald became head of the company.

The company started out as a single office, small operation with a minute number of clients in a fledgling industry. Twenty-five years later they are now a three office and widely successful global operation with clients based on four continents. Meanwhile, the transportation brokerage industry has become universally recognized.

“Some of the most dramatic changes are recognition by the buying public that going to a source of market info that’s broad, going to a US Traffic company, or an insurance broker, or a website where they can look at multitude of travel offerings, is a better way to go then dealing with the individual providers. It saves the time and effort it takes to maintain multiple relationships. Even though you may have transport experience, the brokers are doing the leg-work and shippers are finding that to be more acceptable in our industry,” says McDonald.

US Traffic, which runs offices in Alberta, Ontario and Florida, provides a number of shipping services through road, rail, ocean and air transport. For large companies, they offer transport services to various parts of North America. For smaller companies, they also offer transport expertise. McDonald likens them to travel brokers. “We’re kind of similar to a travel agent. We act as the middleman. Our company tag is ‘connecting cargo to carrier with confidence’.”

Changes

The acceptance of brokers in the transport industry is not the only major change seen by McDonald in the past 25 years. Another key change is in technology. McDonald says back when US Traffic began, they mostly conducted business on the phone. “Back then the telephone and fax were the primary way of dealing with things. We actually used Telexes,” says McDonald.

US Traffic now uses the internet for data transfer. Everything from shippers booking loads, from carriers looking for work, to trucks for pick-up info, to government for customs clearance, and to customers for shipment status. McDonald says that even though customers usually only want to know of their shipment status has changed, they can get updates anytime via the web.

US Traffic also uses the internet for electronic billing and payment. “We do that for a couple of reasons. One is it’s faster and two it’s a lot greener, we don’t generate a lot of paper.”

As an environmentally friendly company, US Traffic consistently advocates green initiatives such as the Smartway program. The Smartway program is a new initiative by the US Environmental Protection Agency (EPA) which promotes the use of eco-friendly practices by corporations.

“It is essentially when you take a baseline of where you are at today and make conscious decisions to try to make your environmental footprint smaller. For example we use less paper, less utilities in terms of power. We try to participate with motor carriers that are Smartway or involved in similar programs,” says McDonald.

Challenges

According to McDonald, US Traffic is facing some problems in the shipping industry. The biggest concern is the decreasing number of truck drivers in the labor force. There was a time when being a trucker was a respected profession. Nowadays most people graduate from school and look past truck driving as a possible job says McDonald.

“Back in the 1980s, truck drivers would be esteemed. You’d have someone with car problems in the middle of the night and the truck driver would pull over and help them. They were considered good guys. Most people don’t have that impression of truck drivers anymore. They’re linked to trucks considered big, slow and dirty. Young people getting out of school don’t want to drive a truck. They want to stay at home. No one likes to be away from home a week at a time. The love of the road has gone away,” McDonald says.

To fight this troubling trend, McDonald says they’ve tried to provide solutions from an HR standpoint. For example, if there is freight heading from Ontario to Winnipeg, instead of a non-stop service they’ll have two truckers meet halfway and switch. This way both truckers get home to family faster.

Growth

It’s not unreasonable to assume US Traffic will keep growing and growing. In fact, McDonald says they are currently attempting to expand their global clientele base.

“We definitely plan on expanding in those areas. We have long-term plans as young management comes up. We want to evolve into a large number of international activities. Europe and Asia now makes just a tiny percentage of our business. There’s a big export surge in North America and US Traffic participates in that in a small way, we do truck transportation of those goods to the American port. Our services stop at the port. Our long term plans are to be involved completely from origin to destination,” explains McDonald.

McDonald says his interest in international business dates back to his accounting days. Last year he visited Zurich to meet his European counterparts. This led to talk about collaborative efforts. From 2005-2008 he chaired the international committee for the Transportation Intermediary Association (TIA) in Washington helped pique that foreign interest as well.

Working with TIA is not the only industry organization MacDonald is involved with. He is on the board of directors of the National Transportation Brokers Association (NTBA) in Canada as well. Both associations provide education for industry professionals, promote good business practices and protect the industry from unfavorable Government legislation.

McDonald enjoys working with smaller companies through these organizations. “The typical transport broker is a small company in the US$3-5 million range. We started out that size so we feel obligated to help them grow,” says McDonald.

Good business

McDonald says US Traffic constantly attempts to take care of its employees. They offer employees good benefits, competitive wages, training and even the opportunity for educational course repayment.

“It’s certainly cheaper from a business standpoint to take care of good people than it is to recruit,” McDonald says.

As for what makes US Traffic a unique company, McDonald says, “There are a multitude of brokers and the only way to differentiate between us and our competitors is to be better focused on helping solve whatever our shipper’s problem is then they are. We are interested in profit obviously; it’d be irresponsible not to be. But the thing that’s made us successful is putting the customer’s particular problem at the forefront of our focus. We help the customer with whatever transport issue they need help with.”