Taming the beast

| December 12, 2008

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UPS Supply Chain
www.ups-scs.com


COMPETITION DRIVING DOWN SOME RATES
Dozens of loads of weapons and equipment move through the Anniston Army Depot gates in Alabama every day, thanks to certain fleets that maintain facilities nearby. Baggett Transportation, for instance, has an installation for its munitions haulers. So does Landstar Ranger.

Pate Morrison, a Landstar Ranger agent at “Ranger Station” on Alabama Highway 202 and owner of a small fleet based there, started doing business with the military in the late 1960s when he was selling sack coal at a service station he owned. “Somehow we got a contract to furnish them coal one winter,” he recalls. After selling the service station in the early 1980s, he went full time with Ranger Transportation, which became Landstar Ranger in 1988.

Ranger Station is base for more than 60 Landstar owner-operators hauling FAK (freight of all kinds) and munitions, among some commercial loads as well, out of Anniston. Morrison says rates have been declining for three years, since the military’s Tailored Transportation Contract program has drawn more third-party logistics firms to FAK. 3PLs such as Blue Wing Express and Eagle Global Logistics secure dedicated lane contracts and drive down rates, Morrison says.

Morrison cites an extreme low-ball example: FAK moving 776 miles at gross revenue of $1,124. Even if the owner-operator moves it with his own trailer and keeps 75 percent, that’s gross revenue of only $1.09 per mile.

On a recent Tuesday, owner-operator Joe Rogers was doing paperwork at Ranger Station before hauling an FAK load just under 400 miles to the Lexington Army Depot in Kentucky. He uses that fairly regular haul to put him near a Johnson Controls plant, from which he hauls batteries to a General Motors facility in Atlanta.

“That puts me home every weekend, and I’m back out after church on Sunday,” says Rogers, who lives close to the depot. It took him years to get the set-up. He formerly ran east to west and typically was out six to eight weeks at a time. Today, with his partially dedicated haul, he nets around $55,000 to $60,000 a year, he says.

Morrison is the agent on a dedicated Landstar lane for van freight from Anniston to the New Cumberland Army Depot near Harrisburg, Pa. A few times a week Danny Gooden, a driver for Morrison and a Landstar inspector, runs empty to the Anniston depot. The military loads his van, which he drops back at Ranger Station. An over-the-road Landstar owner-operator hooks the load later.

Since the Sept. 11 attacks, “security is much tighter in many ways,” says owner-operator Sandy Hart, who hauls munitions with her partner, Joe Griggs. They stopped at Ranger Station before heading off to parts known only to military brass, the agent on the load and themselves.

“We don’t work a whole lot,” says Hart, who expects to retire with Griggs within two years. “Some of the teams really put the miles and the money down – anywhere from $350,000 to $400,000 a year, gross.” Hart says she and Griggs have gotten everything they’ve wanted at this point, including a 180-inch bunk they added to their 1994 Kenworth W900 in 2001.

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