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 John Wagner Jr., President


Space invaders article synopsis

DC Velocity, May 7, 2013 by Mark B. Solomon

I was honored to be asked for my insight into the growing trend of LTL freight being handled through 3PL intermediaries. Mark Solomon’s article touches many sources, each with a different perspective on the topic. Here are some of the highlights.

The large, freight-based 3PLs such as C.H. Robinson and Transplace have certainly expanded their LTL presence as the truckload market has seemingly maxed out and the growing brokerage segment seeks other sources of revenue. Today, LTL represents about 10 percent of a publicly held broker’s revenue.

Jeffrey A. Rogers, president of YRC Freight, admits that brokers have become a growing customer segment and if they don’t bring some value to the table they will lose capacity.

"If a broker already has a lot of LTL freight, he will be OK. But if you don't, you may find yourself struggling" to get adequate capacity at reasonable prices, said John E. Wagner Jr., president of Wagner Logistics, a Kansas City-based 3PL.

Wagner said 3PLs often underestimate the unique and challenging characteristics of LTL transport, notably the complex pricing scenarios and carrier rules, and the multiple stops and cross-docking events that can result in longer transit times, delivery variability and additional handling, which ups the chances of freight damage. For these reasons, along with the carriers' newfound pricing and capacity leverage, Wagner is leery about making a big push into LTL; his company solicits LTL freight only for customers that have an existing warehousing relationship with his firm.

Evan Armstrong, president of Armstrong & Associates, points out that the nature of an intermediary's involvement depends on both its level of sophistication and the size and complexity of the relationship with the shipper. If a 3PL is managing an entire customer’s network, it is adding client value through optimization and consolidating LTL into truckloads.

Click here for the complete article: http://www.dcvelocity.com/articles/20130507-space-invaders/.

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