Landstar Expansion In High Gear
Jacksonville, Florida USA
April 19, 2007
Al Reisman, EVP Sales
Kevin Fletcher, EVP Operations
Steve Jones, VP Emergency Transportation Services
Tom Larson, VP Marketing & Planning
Lisa Pate, VP Agent Recruiting
Priscilla Miller, VP Finance
Marcia Arnold, VP Administration
Don Jordan, VP Warehousing Services
Tim Ming, Director International Operations
Landstar Global Logistics is a high growth, high profit 3PL expanding rapidly in warehousing and freight forwarding. Landstar’s ability to grow is enhanced by its use of business capacity owners.
For its new warehousing operation, vice president Don Jordon has already signed up over 100 agents. These agents average two warehouses each and are located in 84 markets across the U.S. with 74 million square feet of space. They average 54 years in business and most have long histories in the public warehousing sector.
There are several major benefits Landstar brings to these WCOs (warehouse capacity owners). Firstly, membership in the Landstar Network provides a nationally recognized brand backed by a national sales capability. The national brand draws requests for proposals. Most of the WCOs receive few RFPs on their own.
In addition, WCOs can protect existing business when customers look for national solutions. Instead of being left high and dry, WCOs can now rely on a network with stability and standardized operating procedures. These standardized procedures include a good WMS (warehouse management system). Landstar also provides regular marketing, pricing and warehouse layout advice.
To help WCO cashflows, Landstar provides payment in seven days or less and carries the receivables.
Landstar’s WMS suite is a web-based transaction data handler system, the Infor SCM Warehouse Management FourSite front end and its Via View query and report tool. This software allows cross-network visibility. It is also integrated to Landstar’s proprietary transportation management system. For many WCOs, it is the first time they have had high quality, competitive WMS and TMS systems.
A major impact of joining Landstar’s network for most agents is the scalability, the option to move from being a geographically limited player to being a national player. An example of the impact of this added value, is that Landstar’s standardized WCO contract terms have been endorsed by the International Warehouse Logistics Association (IWLA). IWLA has a host of small members who find the Landstar solution attractive. The standardized contract saves new WCOs legal fees.
Because the WCOs own their individual warehouses, it provides Landstar with variable cost “instant capacity.” For new WCOs, IT startup including Landstar’s web-based system takes less than two weeks.
Landstar’s warehousing model has proved attractive to its existing customer base. Examples are McLaren, an industrial track and tread supplier, Aroostook Starch and Calgon Carbon.
Jordan’s warehousing operations are already significant. We expect these operations to reach $100 million in five years.
Tom Ming, a 28 year veteran of Crowley Maritime leads Landstar’s international operation. Ming has signed eleven agents who operate under Landstar’s NVOCC license. Twenty IATA airfreight agents are in place. There are currently four agents who do both. Landstar has two freight brokerage operations. Basic services include LCL/CL, breakbulk, project logistics, refrigerated, air charter and over-dimensional. Ming’s agents emphasize niche relationships. Several offerings blend well with other Landstar operations. This extended air/land service works particularly well for over-dimensional and express shipments.
Landstar agents use Cargo Sphere, a web-based management system for contract rate management. Forwarder Logic is used for international transportation management including AES Direct filings and marine insurance.
Ming is aggressively pursuing international agents for Landstar. By the end of the year, Landstar expects to have 25 offshore locations. Of these 12-15 should be in Asia including China and India.
Sources: A&A Primary Research, http://www.landstar.com/