We spoke with Grant Crawford, president of Roadrunner Freight, about the less-than-truckload operation's recent rebranding that focuses on offering reliable, non-expedited service at a lower cost. This interview has been lightly edited for clarity and length.
HDT: Roadrunner Transportation Systems recently underwent a complete re-branding and changed its official name from Roadrunner LTL to Roadrunner Freight. What was the impetus for this?
Crawford: When I joined Roadrunner in this role, what really attracted me to it was the space where Roadrunner Freight now plays, being an economy provider. It’s my belief that things have evolved quite rapidly over the last few years. Because of technology, customers and shippers are much more savvy and have the ability to plan their supply chains much more efficiently. I believe there’s a growing demand for an economical solution in your supply chain [for freight that can] wait an extra day or two.
We’re going to save you money if you use us. We want to be clear if you have time-sensitive needs, we’re not an expedited carrier, but when you can plan ahead, we can meet your needs from a reliability standpoint, from a quality standpoint, from an information standpoint with our enhanced technology, from a customer service standpoint. We’re centralizing customer service. We’re about 75% of the way through the consolidation process, where [customers make] one phone call to one location. All those factors coming tougher is what precipitated our name change as well.
HDT: We hear that e-commerce is pushing a trend toward demand for freight to be delivered faster. You’re essentially at the other end of that spectrum. Why?
E-commerce is a much different market than we’re playing in. What we’re sourcing is a large shipment from Long Beach at the port to the distribution warehouse in St. Louis. If you back up the supply chain far enough, it moved on the ocean 14 days. You can move it to St. Louis in two days with an expedited service, or in four days with ours and enjoy 20% savings.
There are pieces of the supply chain, especially that last move, there’s no debating customers and consumers are conditioned to want it as soon as you order it. But you and I [as consumers] don’t know how long it took that product to get from its source to that warehouse or distribution center [before it heads out on delivery.]
Our average length of haul is in that 1,400-1,500 mile range. Most of the traditional regional asset players it’s about a third of that. We do large shipments, long distances, from the manufacturer to a distribution center or the port to DC.
HDT: What role does intermodal play? We keep hearing that more of those long-haul loads that don’t need to be expedited are a great fit for intermodal.
Roadrunner Transportation has a great intermodal offering. It’s 100% exit port. The traffic we handle is coming into say a port, say Long Beach. There’s an intermodal move that precedes it getting into our trucks, [transporting containers from the port] into a container freight station where it’s broken down and tendered to us. The core difference being we’re moving LTL shipments and the intermodal guys are moving the full container.
With LTL priority and economy, you can have shipments at the same size, there’s customers that will move commodities that can be very similar, but… they may move one skid priority and one economy.
For example, a consumer brand virtually all of us use these days from a manufacturer in Shanghai, depending on whether it’s landing in Oakland or Long Beach, and depending on the newness of the model, some need to be at the DC in 48 hours, others may be a two-year-old model, so they move it at a slower pace.
HDT: The press release from November says, “The Roadrunner Freight business model allows for expansion without traditional inefficiencies and costs.” Can you explain that a little better?
Roadrunner Freight is made up of two segments — we have our segment of our product moves within our 19 service centers. But historically where Roadrunner LTL started was through an extensive agent and partner model complementing the core locations. We service all North America using agents. For example, we have a dedicated agent in New Jersey. We can grow and expand business in New Jersey without any cost of our own — it doesn’t require added infrastructure. That's really the backbone of the model.
"One of the things we are working to change the perception in the market is today we’re still considered asset light."
What’s changed, one of the things we are working to change the perception in the market is today we’re still considered asset light. I think at one time that was viewed in a much different way. I would consider us asset right — we have the right number of assets to complement the facilities we own, but without having 300 facilities, we’re able to serve the United States through these partners and agents. In the past most of our shipments were outsourced, now more of them stay in-house. We’re still given this asset-light label, but we have many more assets than the true asset-light products we compete with.
To me, it’s the best of both worlds. if you utilize us in the core 19 facilities we’re very much asset based company, if you utilize us outside of it we’re going to still give you great service and consistency. We try to be as transparent as the customer wants us to be. If someone sees Roadrunner Freight, they’re entrusting their shipment to us to handle it from start to finish. It’s our belief they jut want their shipment moved timely and intact and if we outsource they’re OK with that; they just want to understand when they choose our product that is part of it. If you tender freight in Atlanta to go to Columbus, Ohio, and they want to know if an agent will be involved, we absolutely will share that with them. We’ll give them as much information as they want. Most customers just want to make sure their shipment is being taken care of and moved timely. Generally speaking, customers are very aware that we have sort of a hybrid model.
HDT: In early 2016, you announced you had improved the LTL freight network, including adding more capacity to its facilities and adding an optional premium service. Was that part of this rebranding effort?
That was the first step last February when we started the process. This is something that continues to evolve as we grow density and continue to speed our network up. As we set the reset button last year, the goal was to be transparent about out capabilities and increase reliability, even if that meant adding a day to standards. The belief being through meeting our commitments on service standards we would grow business and density and then that would allow us to speed lanes back up. And we’ve done that, we sped up 155 lanes, which makes up almost 20% of our shipments, by at least one day, the last week of November. That was a big step for us as well. As we provided the customer with product that exceeded their expectations. Our tag line is, “less than truckload, more than expected.”
I'd say the number one right now is no different than any other company when you change your product: The challenge is to re-educate the customer on what your capabilities are and what to expect from your product.
A larger piece of the transition has been centralizing our customer service, we started the process in the third quarter of 2016 and it will be complete mid first quarter. It’s been a positive challenge, the end result, I couldn’t be more excited about in terms of the ease of doing business, from 21 locations down to one.
For us to continue to make progress every single day, drive our consistency and reliability higher. We literally review our shipments in transit daily and weekly and evaluate our service standards. The round of changes we made in November was just the first. We want to be competitive from a speed standpoint but protect our cost structure that allows us to offer such a great value. The lion’s share of our changes are in place, allowing seeds to pollinate and fully grow.
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