Controlling more freight

Carriers expand services through customer relationships, technology

In June 2004, Robert Pike and Scott Smith started P&S Transportation after buying a 20-truck owner-operator fleet in Birmingham, Ala. Today, the company is an irregular-route flatbed carrier with 700 trucks and operates additional dedicated flatbed carriage, freight brokerage and third-party logistics businesses.

Sellers Logistics, its 3PL business, sprouted from within P&S Transportation. A core customer was planning to outsource its freight management. The owners had to make a quick decision. Could P&S Transportation be the one sponsoring a carrier bid package and managing freight for the customer? If not, it would be working for the competition.

About two years ago, the owner of RWH Trucking, Robert Howard, spoke to a longtime customer about the opportunities of using logistics data to make strategic business decisions. The customer agreed that change was needed, but was not willing to invest in transportation management software or hire a staff of logistical experts.

Howard offered a proposal. RWH Logistics, the sister company of RWH Trucking, would implement a transparent freight management system on behalf of the customer. The deal was sold. One month later, RWH Logistics began moving loads as a 3PL.

Beyond trucking. More carriers are taking customer relationships to the enterprise level of freight management.

Not half-hearted. Becoming a 3PL must be an all-or-nothing commitment.

Help available. Both the technology and the expertise can be outsourced.

P&S Transportation and RWH Trucking are on the forefront of a growing trend. More carriers are taking customer relationships beyond trucking and transactional brokerage services to the enterprise level of freight management.

“There is nothing wrong with being transactional, but the world is moving fast,” says Houston Vaughn, chief operating officer of P&S Transportation. However, Vaughn has a few warnings for anyone thinking of moving in this direction. Startup costs will be expensive for adding manpower and technology. Customers also will want to know upfront how much they will save – and they will remember that amount.

Being a startup 3PL can be complex and intimidating.

That’s why becoming a 3PL must be an all-or-nothing commitment. “You can’t go halfway, or you will lose the customer,” Vaughn says.