Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/493405
52 COMMERCIAL CARRIER JOURNAL | APRIL 2015 C O V E R S T O R Y : 2 0 1 0 1 0 1 0 1 0 1 0 1 5 I N I N I N I N I N I N N O N O N O N O N O N O V A V A V A V A V A V A T O T O T O T O T O T O R O F O F O F O F O F O F T H E H E H E H E H E H E Y E A E A E A E A E A E A R traded entity. In 2001, Celadon began to diversify its business by purchasing distressed companies, but only be- cause it lacked funds to go after good ones, Will says. By 2004, the company had revenues of $300 million, but profitability remained haphazard at best. "I felt at the time that we ac- cidentally made money," says Eric Meek, who left an accounting firm to join Celadon that year as a financial analyst. Today, Meek is executive vice president and chief operating officer. Celadon continued to diversify and strengthen its bottom line, but then came the Great Recession. After this experience, executives decided to get into more stable freight markets such as food and beverage and cattle hauling. "Our whole focus is how do we make sure that we are making profit margins today in a great economy, but more importantly, how do we make sure this company is ready for the future," Meek says. "I think the next downturn – I don't want one – but when it happens, we will be in a much better position." Today, Celadon operates a variety of business lines that in- clude temperature control, intermodal, flatbed, dry van and dry bulk. It also offers over-the-road, local, regional, dedicated and expedited operations with a coverage area that spans the United States, Mexico and Canada. Celadon's market value today is close to $600 million with revenues this year expected to reach $1 billion from 4,000 trucks in service. "I placed a good bet," Russell says. Getting started As the economy started showing signs of life in 2009, Celadon began to lay a foundation for being more selective of customers and freight. Will and Meek saw that trends in freight volumes and capacity constraints – such as driver demographics, regula- tions and equipment costs – were headed in that direction. Like many fleets, Celadon had customer service representa- tives (CSRs) that managed all post-sale communications with customers. Their duties involved booking loads, entering orders, setting appointments and servicing loads from pickup to deliv- ery. "It was a lot to manage," says Marie Leapley, who joined Celadon five years ago as a CSR. Back then, the company had 60 CSRs and divided them into two groups of 30. Each group was led by a director of customer service. "There was no hierarchy and no rhyme or reason," Meek says. "We just split it up." CSRs were given general guidelines for booking loads based on capacity commitments. The freight selection process was memorized and written on Post- it notes, Leapley says. This always caused problems when CSRs were absent, as knowledge of their cus- tomers went with them. Keeping the network balanced also was a constant struggle. Every morn- ing, directors passed out responsibili- ties to CSRs for where to solicit freight. If the company had 15 extra trucks in the Dallas area, CSRs would get on the phone and find loads to move those trucks out of that market. The profitability of those moves was an after- thought and created another problem: landing excess capacity into markets, again. Path to improvement About 4½ years ago, Meek changed the hiring standards in Celadon's customer service operations. Rather than hiring people with experience in truckload, Celadon would hire college graduates with no experience in trucking and train them in the Celadon way. This young educated workforce came with experience in technology and new ideas on how to apply it. "With that technology savvy comes the push for (information technology), and that's the best thing that could ever happen because it's something that they want and they have knowledge of to push us to go down those paths," says Mike Gabbei, vice president and chief information officer. At this same time, Celadon took away the order entry process from CSRs. This removed any emotional bias for deciding what loads to book from customers. This also stirred internal debate, as customers no longer had a single point of contact within Celadon. "There was a lot of bitterness for making the change," says Jonathan Doss, who began his career in order entry and now is a director of customer service. "A lot of CSRs did not feel it was necessary to write down information and hand off a piece of paper to someone else." During this transition, the IT department created new software applications for order entry to make decisions. "They don't know the business and are not dealing with the customer," Gabbei says. "We had to arm them with tools to make educated decisions." Celadon started with a load commitment system, followed by a scoring system called Order Entry 2 (OE2) in 2013. The OE2 system has evolved with guidance from front-line users. From January 2014 to 2015, Celadon credited OE2 for an increase in delivered weekly miles by 10 percent, an increase in Two years ago, Celadon had 300 layovers per day on average. Today it has three.