Chris Hines, newly installed president & COO of Celadon Group sees the cross-border truckload carrier facing a mix of challenges and opportunities ahead. But in his view, the opportunities clearly outweigh the challenges.
“Obviously, in this soft freight environment, our immediate struggle is to keep our drivers loaded and on the road – that keeps him happy,” Hines told FleetOwner. “But when you look at the overall shape of the industry, we don’t have to grow 10% to do that. In much of transportation, you have to take market share away from the other major players in order to grow significantly. In trucking, however, the largest carriers only control a small percentage of the total freight available. So we just need to grow in small increments to do well.”
“Look at our position,” added Steve Russell, Celadon chairman & CEO “We have a fleet of 2,500 trucks vs. an industry total of somewhere over 1.6 million. The biggest carriers don’t even have 1% of the market because there are literally thousands of competitors out there. That means there is plenty of opportunity out there.”
Celadon, like many larger carriers now, also has a much more diverse mix of freight business than in the recent past. Six years ago, said Hines, 40% of its freight came from one automotive shipper. Today, that shipper is no longer a customer and no one freight segment dominates Celadon’s tonnage mix.
Cross-border trade is another huge benefit, added Hines. “Canada and Mexico are the number one and number two trading partners with the U.S., respectively,” he pointed out. Canada’s annual trade with the U.S. topped $533.36 billion with the U.S. last year, with Mexico-U.S. trade reaching $332.43 billion.
Hines is no stranger to the cross-border freight business. Amember of Celadon’s board of directors since June 2006 before stepping in to replace the retiring Tom Glaser, Hines is a 27-year veteran of the trucking industry. He spent 16 years with General Electric, serving as president of Transport International Pool (TIP), its North American trailer equipment leasing business, where he launched TIP’s Mexican subsidiary-- now the largest leasing company in Mexico. TIP’s operations also included over 20,000 trailers in Canada, which was the largest equipment leasing company in Canada.
“Having cross-border capabilities in place is vital,” Hines said, allowing Celadon to benefit freight-wise from that trade – balancing out continuing soft domestic-only freight activity. “It looks tough for the second half of the year at this point,” he noted.
Finally, there’s the payoff from Celadon’s effort to reduce the age of its trucks, while seeking to raise the age of its driver pool – putting more seasoned, experience hands behind the wheel of the best equipment available.
“The average age of our drivers is now 47, while our tractors are 1.5 years old,” Russell told FleetOwner. “We want older, more mature drivers paired up with younger trucks-- that allows you to provide the best customer service.”
And that structure is key to getting tighter with both current and new customers, said Hines. “It’s about making our current lanes more dense, about getting more of our customers’ overall freight spend,” he explained. “So while the freight market overall may by static, getting more of our customer’s freight allows us to keep growing. That’s the key going forward.”
