Trucking news: The Reliance Network makes its debut as U.S. long-Haul LTL network

John D. Schulz, Contributing Editor -- Logistics Management, 3/13/2008

WASHINGTON—Shippers looking for long-haul national and interregional less-than-truckload (LTL) service have a new option. The Reliance Network, a high-tech alliance among six top-flight regional carriers, is now offering what it claims is seamless, national LTL, truckload and supply chain freight services.

The six carriers are Averitt Express (South and Southeastern U.S.), Canadian Freightways/Epic Express (Canada), DATS Trucking (West), Lakeville Motor Express (Midwest), Land Air Express of New England (New England) and Pitt Ohio Express (Mid-Atlantic and Central States). Together the six non-union carriers offer more than 285 years of collective experience and are recognized by many shippers as service leaders in their respective regions.

Instead of managing shipments with multiple carriers to service their regional, national and worldwide shipping needs, customers can work directly with their local Reliance Network member. Shippers now have the value of a strong chain of experienced transportation specialists while continuing to work with the provider they’ve already grown to trust.

“We have really high hopes for this,” Charles L. Hammel, III, Pitt Ohio’s president, told Logistics Management. “We’re competing against YRC Worldwide, ABF Freight, FedEx Freight and UPS Freight. We’re competing against the big guys who have global supply chain capabilities. That ability is very relevant in today’s market place. We don’t want them to be the only ones participating in this.”

More importantly, Hammel says, “It’s a way for the small regional carriers to basically stay relevant in shippers’ minds.”

Satish Jindel, who analyzes the $37 billion LTL industry as principal of SJ Consulting, says if the six Reliance members are truly committed the high service the network has a chance to skim some freight from the major national carriers.

“If they do it as a team and not as individual carriers who argue over who gets what piece, they have an opportunity to do it better than carriers who have interline arrangements,” Jindel says. “This has an opportunity to do it better than that. They have a concentrated resource from sales, technology and marketing to target the right accounts to present the right value proposition and support those customers from a technology point of view. It has a chance.”

Should the traditional, national long-haul LTL players be worried?

“The long-haul guys have to worry about how this market growth affects their space,” Jindel predicts. “It’s not going to take a huge amount of business away. But any business it takes is less for them.

There are many differences between the setup of the Reliance Network and traditional interline services between carriers. For one thing, shippers will get a single PRO number and will deal only with a single carrier for billing and other details. Another is the level of commitment the six carriers are promising to shippers—and each other.

“All the carriers are committed to a very high level of service,” Hammel says. “A traditional partnership was more a convenience sell. Carriers would say, ‘We’ll deliver it but it’s really not our customer.’ We’re bringing service to the forefront.”

Another difference is the customization that is available for shippers. They will have the ability to deal with a flexible regional carrier who can customize some offerings—inside delivery, appointment scheduled times, etc—that sometimes is not available at other carriers. “The big guys typically sell one-size-fits-all,” Hammel says.

Phil Pierce, Averitt’s executive vice president of sales and marketing, said the Reliance Network fits Averitt's long-term vision to continue to move more shipments in and out of the South, its traditional region.

“We expect the Reliance Network to make a significant impact in our ability to do that because it opens the door for us to compete for a whole new category of business for which we previously were not strongly competing,” Pierce said. “It's exciting because this network has the potential to help take us to a whole new level in providing solutions to our customers.

Both Pierce and Hammel said some of their existing customers have always had national freight demands that they would have preferred to tender. “Up until now, though, we have not been able to provide all of the benefits of a national network that our customers require, such as complete shipment visibility, seamlessness and a consistent rate structure,” Pierce says. “With the Reliance Network, those limitations no longer exist. Now, we can take the personal, flexible approach for which regional carriers are known and extend that to shipments going to and from anywhere in North America."

Pierce says he expects this network to make an “immediate impact” in helping Averitt grow lane density while operating in a challenging, economic environment. “The timing could not have been better in terms of the need for new business meeting the potential for new business,” he added.

Hammel says his customers have long been asking Pitt Ohio to expand beyond its traditional Northeast footprint. Pitt Ohio last year expanded into Wisconsin. But he says it takes years—sometimes as much as a decade—to build sufficient lane density when opening a state from scratch. Through this consortium, freight density is much greater from Day 1.

“It’s a difficult time to expand traditionally,” Hammel explains. “It takes us a few years to out of the red and into the black traditionally. But the bigger picture is we are looking as so much freight coming in off the ocean from the West Coast. We no longer can look at our business from a regional viewpoint. We have to view out business from a global perspective. This alliance really helps us do that.”

No matter where freight is going, the Reliance Network can add value to shippers’ supply chain “through the flexible and personal service of regional carriers who, together, can provide world-class coverage across the continent,” Hammel says.

Averitt’s Pierce says early returns from shippers are bullish. "If customer reaction so far is any indication, we're very optimistic. There's certainly a buzz about the Reliance Network amongst our customer base. They're telling us they're excited they no longer have to choose between the benefits of working with a regional carrier – flexibility, better transit times, less handling of shipments – and the shipment visibility and seamlessness of a national carrier. Now, as the saying goes, they can 'have their cake and eat it too.'

The Reliance Network carriers are promising these benefits:

A single-source provider with 100% coverage of the United States, Canada and Mexico.
More consistent transit times.
Convenience of working with their trusted local transportation specialist to manage all of their door-to-door shipping needs rather than managing multiple carriers.
Seamless coverage through hundreds of service centers across the continent.
Expertise and exceptional customer service from more than 15,000 team members.
Reliable transportation resources and efficient equipment, including more than 25,000 trucks and trailers.
Complete, real-time shipment visibility from origin to final destination.
Secure data management.
Accurate administrative processes with full service PRO number tracking, tracing and invoicing capabilities

“The Reliance Network is a fantastic opportunity for customers across the continent to use companies they already know and trust to expand their transportation reach,” predicts Lakeville Motor Express President Pete Martin.

There is a trend among shippers to reduce their number of core carriers, Jindel says. “If I’m a Pitt Ohio customer and I have shipments from Pittsburgh to Tennessee, right now what do I do? I used to have to call a competing carrier. This way I can let Pitt Ohio pick it up and it gets delivered from Averitt.”