Newark, NJ-based Guaranteed Overnight Delivery (G.O.D.) today announced its intention to discontinue LTL operations, according to New Penn Motor Express. New Penn said G.O.D. will no longer be making LTL pickups and is recommending that former customers use New Penn Motor Express.
G.O.D. was contacted but was unavailable for comment on New Penn’s statement as of press time.
“The LTL operations of G.O.D. will wind down with the customer service representatives being available to address tracing, proof of delivery and other questions regarding LTL shipments that were tendered to G.O.D.,” New Penn said. “Other services provided by G.O.D., such as airfreight, truckload and warehousing, will continue and service will not be interrupted.”
“After bringing innovation to the LTL market, and enjoying considerable success, it was a very difficult decision to discontinue our LTL operation,” stated Walter Riley, G.O.D. CEO. “We regret the impact that this action will have on our employees and customers. However, we are pleased to know that our customers will receive excellent service by selecting New Penn Motor Express for their Northeast regional shipments.”
G.O.D. is a privately owned company, so no quarterly financials are available to the public.
“It (the Northeast) is particularly competitive ,” Steve Ginter, New Penn spokesman, told Fleet Owner. “G.O.D. was pretty much along the I-95 corridor have regional niche players but so you could be a player in just a portion of the market because of the population and freight density. And because you have that kind of density you have a lot of competition from the small niche fleets and the long-haul. There isn’t anybody of any size that doesn’t have a presence that contributes to the competitiveness.”
“You have infrastructure issues in the Northeast. There’s a high cost to operate in the New York, New Jersey area. One of the portions is operating in the metropolitan, congested areas— that influences the cost to operate,” Ginter said.
Indeed, recent history shows that even a giant like USF Red Star wasn’t able to operate cost-effectively in the Northeast.
Analyst Chris Brady, president of Commercial Motor Vehicle Consulting, told Fleet Owner that G.O.D.’s pullout from LTL does not indicate any softening in the growing LTL market. Instead this may indicate that G.O.D. could be focusing on its airfreight, truckload and warehousing segments if they are turning out even wider margins than LTL.
“It probably means they’re (G.O.D.) making so much money on the other side, then why make more investments in LTL. As a company you want to put money on the highest return on capital,” said Brady. “It [their LTL segment] might be very profitable but internally they have a pool of funds they may be reinvesting in their company. They might not have enough to fund all their segments.”