Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
David S. Congdon wasn't exactly dealt an ace-high hand when he became CEO in January 2008 of the less-than-truckload (LTL) carrier that his grandparents founded 74 years before.
The company, Old Dominion Freight Line Inc., was doing OK. But the macro environment was crumbling around it. A freight recession had been underway for two years. The financial pillars of the U.S. economy were starting to crack, leading to a full-blown financial crisis and the worst recession in 70 years. The LTL industry, already hammered by the downturn, would face indigenous turmoil during 2009 and 2010 as vicious rate wars broke out over grabs for market share and a concerted effort by other carriers to drive the ailing YRC Worldwide Inc., then the market leader by size, out of business.
Through the maelstrom, Congdon and Old Dominion stood firm. It would not jump into the rate-cutting ditch with others. It kept pricing relatively firm, and when the economy and freight demand improved, it would not raise rates before it saw what others had done, and then would bring up prices to levels below its rivals.
Most important, Congdon and Old Dominion tuned out the noise and focused on the daily blocking and tackling that wins and keeps shipper and third-party logistics provider (3PL) business: reliable, damage-free deliveries at rates that the marketplace deemed fair and reasonable. In the process, a virtuous cycle was created where shippers would seek to associate with the carrier perceived as providing the gold standard of service.
Yesterday, Thomasville, N.C.-based Old Dominion said that Congdon, 60, would step down as CEO May 16 to become executive chairman, a position currently held by his father, Earl, who will then become senior executive chairman. Greg C. Gantt, Old Dominion's president, will add the CEO's title at that time.
Congdon steps away from the CEO role with a track record of success that will be hard to match, especially over a relatively short span. In 2007, Old Dominion posted revenue of $1.4 billion, operating income of $129 million, and net income of $71.8 million. In 2017, the company reported $3.35 billion in revenue, operating income of $575 million and net income of $463 million, the latter a remarkable increase of well over sixfold in just a decade. Old Dominion's operating ratio—the ratio of operating expenses over revenues, a key metric of operating efficiency and profitability—fell more than 800 basis points, to 82.9 percent, during Congdon's tenure, a sterling record given the complexity of synchronizing a national LTL network with dozens of terminals, multiple hand-offs, and so many things that could go wrong.
The company's performance has been reflected in the soaring value of its equity. Old Dominion shares, which on Jan. 1, 2008, traded at $12.96 a share (adjusted for three stock splits), closed Friday at $147.59 a share, a gain in percentage terms normally associated with a high-flying high-tech company instead of a well-established trucker.
Bradley S. Jacobs, chairman and CEO of Greenwich, Conn.-based transport and logistics provider XPO Logistics Inc., which acquired LTL and logistics giant Con-way Inc. in 2015, said in an e-mail that Congdon "created the benchmark (that) we measure our LTL performance against." Jacobs called Congdon's performance as CEO "stupendous."
C. Thomas Barnes, who ran Con-way's multi-modal transport unit earlier in the decade and today is president of project44, a Chicago-based logistics IT concern, said Old Dominion's operations were in good shape when Congdon became CEO. What Congdon brought to the role was "more focused leadership," Barnes said. Today, Old Dominion's yield-management practices are considered second to none, and it is widely regarded as the best among trucking firms when it comes to understanding costs. In yesterday's statement, Earl Congdon praised his son's "relentless execution" as a key factor in elevating the company to its current stature.
The elevation of Gantt to the CEO role marks the second time in less than two years that a big trucking concern with generations of family leadership has gone outside the bloodline. In May 2016, Omaha-based truckload and logistics provider Werner Enterprises, Inc. tapped Derek J. Leathers as CEO, ending a 60-year history of a Werner family member holding the job.
Gantt, who joined Old Dominion in 1994 as a regional vice president, is considered by many a natural fit to fill Congdon's big shoes. Gantt is "the best operator in LTL," said Barnes.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.