Express-1 Expedited Solutions announced Tuesday, Nov. 18, that its operating subsidiary, Express-1 Dedicated, has been informed that its primary contract for dedicated services with Ford Motor Co. would cease effective March 2. The contract is administered through Schneider Logistics and initially was awarded to the company in May 2003. The company says its Express-1 Dedicated team consistently performed at a superior level for service, as evidenced by the multiple awards presented by the contract customer for outstanding service.
The St. Joseph, Mich.-based company says it currently is in the preliminary stages of analyzing the impact of this loss of business on the Express-1 Dedicated business unit and its employees, is hopeful that all employees will be retained by the new service provider, and is working with a transition team to facilitate a smooth transition for all parties. As of Oct. 31, the company employed 35 full-time and 3 part-time nonunion employees in its Express-1 Dedicated business unit.
Dedicated services have been provided on a daily basis with multiple pickups at Ford’s high-velocity parts distribution center in Evansville, Ind., with nightly unattended deliveries throughout the region to local Ford dealerships. The dedicated contract portion of business represents about 90 percent of the business volume within the Express-1 Dedicated business unit as measured in revenue. On a prospective basis, the contract called for about $3.8 million in revenue for the 2009 service year.
While the company says it still is evaluating whether it will remain viable to continue standalone operations in Evansville after this transition, its management team currently anticipates shutdown costs associated with this cessation to be minimal since the employees and building lease are anticipated to be transitioned to the new contract provider.
“We are all obviously disappointed with the news that the contract business has been awarded to another service provider,” says Mike Welch, the company’s chief executive officer. “Brian Glaser and his team have managed this operation in an exemplary manner over the past five years, winning numerous awards and recognition from the contract customer for their excellent customer service.”
Welch says the company is encouraged that the loss was due to economic considerations and not to the service levels of its operations. “At this time, our focus is on how to assist in the successful transition of our employees to the new contract provider and in successfully completing our commitment to service through the transition date,” he says. “With the loss of this contract business, our reliance on the automotive sector will continue to decline.”
Welch says that at the present time, the company anticipates automotive-related accounts, including domestic and foreign manufacturers, will represent less than 15 percent of consolidated Express-1 Expedited Solutions revenue after the expiration of the contract.
