Kitty Hawk expands ground freight logistics network to 46 cities

By Jeff Berman, Senior Editor -- Logistics Management, 12/20/2005

DALLAS—Driven by customer demand and a potentially promising way to expand its business, airfreight transportation provider Kitty Hawk has started taking steps to expand its ground freight transportation network. The network, which will comprise 46 North America-based business centers by the end of next quarter, will offer coast-to-coast, scheduled LTL service and better serve the logistics needs of shippers, according to the company.

Over the course of the past 30 years Kitty Hawk has cemented its reputation as a well-known commodity in the world of air freight and charter cargo transportation services. Bob Zoller, Kitty Hawk CEO, says the company’s main specialty has been mission-critical next morning delivery of heavy freight. And Kitty Hawk offers this service throughout the lower 49 states, as well as Alaska, Hawaii, Puerto Rico and Mexico.

“Early last year [2005], some of our [freight forwarder and logistics] customers came to us and asked if we would consider expanding our ground network”says Zoller. This request is based, in part, he says, on Kitty Hawk’s solid reputation for shipment reliability, dependability, safety and security. And its customers indicated that if the company could do something similar on the ground network side, they would support it. “Some customers said they were receiving less than stellar performance from their ground transportation providers, so they were not so much looking at a cheaper price but more at a higher level of service,” adds Zoller.

In going forward with its ground freight transportation network plans, Zoller says Kitty Hawk is laying down the groundwork for a whole other network which would be independent of the air network and mirror it with the same customer base and facilities.

Because ground transportation is not Kitty Hawk’s forte, Zoller says it plans to pursue an asset-light strategy to get things started by contracting companies like CRST and Werner that provide TL and LTL capacity for regional hauling. He adds that Kitty Hawk is contracting these companies—and several smaller ones—for their services, and will then subsequently schedule a dedicated network for its customers.

The next steps for Kitty Hawk’s ground freight transportation network depend on how the expansion process goes over the next few months. Zoller is looking at how well the company achieves desired service levels as a barometer for the future. “Whether or not we achieve the service level that the industry is looking for will determine our plans for future expansion…and execution on the strategy side is our biggest challenge with this.”

Zoller believes the new endeavor is off to a strong start and has the statistics to back that up. In its first month of ground freight transportation network service, Kitty Hawk trucks operated with an average load factor of approximately 47.5 percent, arrived on time to customers more than percent of the time and completed 99.99 percent of the published schedule.