Roadrunner Transportation Services opens new NY-NJ terminal for outbound LTL capacity
June 09, 2011
Non asset-based third-party logistics services provider Roadrunner Transportation Services (RRTS) said this week it has opened a new terminal in the metropolitan New York Area, which will provide outbound less-than-truckload (LTL) service.
Company officials said that this new terminal will provide New York and New Jersey customers areas outbound LTL services to Illinois down through Texas and every state west of the Mississippi River.
In an interview with LM, Scott Dobak, Roadrunner’s president of its LTL segment, said that customer demand was the primary driver in the opening of this new terminal.
“We are growing, and customers have been wanting to know when we were going to expand our domestic footprint into new territories and areas of the country,” said Dobak. “Outbound capacity out of the northeast is something they have been really pushing us on, and this is really our first step in making that happen.”
And by expanding into the northeast Dobak said RRTS will now have the ability to use independent contractors to run these lanes. By opening up the Northeast on an outbound basis allows RRTS to run independent contractor capacity into the Northeast with a commitment to move freight back out of that area.
With a larger domestic footprint, some of RRTS’ larger customers now will be able to use the company on an outbound basis that RRTS was not servicing before.
“Up to this point, we have been able to go out and grow our customer base to improve our quality and value,” said Dobak. “Now we are taking those same principles with our northeast operation, which we think will provide our customers with a very competitive offering, not only from a transit time and quality standpoint but also from a cost standpoint.”
For its pickup and delivery operation out of this new terminal, RRTS will collaborate with an agent in Northern New Jersey whom will handle pickup and delivery operations for the five boroughs of New York, including Manhattan to points south as far as Dayton, New Jersey, and parts of central New Jersey on a daily basis.
And all linehaul capacity will be handled by independent contractors running on dedicated schedules between the metropolitan New York area and Chicago on a nightly basis.
“From a capacity standpoint, we are already seeing improvements with this on a daily basis,” said Dobak. “We are off to a very good start and have a strong competitive advantage with our business model. We have shown that we are able to grow in new markets and don’t see why the east coast will be anything different and with the expanded footprint we can provide customers with more services and more value.”
Stifel Nicolaus analyst David Ross wrote in a research note that this new terminal should help lane balance for its linehaul operations, specifically for some independent contractors who currently run into the Northeast for Roadrunner with only backhaul freight on the way out.
“This should give the independent contractors headhaul freight in each direction,” wrote Ross. “By using an agent to enter the Northeast market, Roadrunner should not see any significant margin compression associated with the below-average density at the outset.”
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