The Magic and Valuable Insights on Expanding into the LTL Market
Authored by SMC³ on July 12, 2022
The SMC3 Connections 2022 supply chain event kicked off with a bit of magic. That is, professional basketball legend and business titan Earvin “Magic” Johnson delivered the keynote address, regaling the attendees with his inspirational, rags to riches story and insight on how to win—on the court and in business.
“I grew up poor, but I didn’t have poor dreams,” Johnson told the crowd gathered at the Intercontinental Hotel in San Diego for the first day of the event.
Off the court, the former five-time NBA champion and three-time MVP with the Los Angeles Lakers, is now the Chairman and Chief Executive Officer at Magic Johnson Enterprises. He has invested in a wide range of businesses including professional sports teams, movie theaters, financial services, infrastructure, restaurants and retail, and is driven by a mission to do good and do well at the same time.
“My greatest achievement is not the basketball championships. Cookie and I have sent over 10,000 minorities to college who had the grades to get in, but not the financial means. That’s my greatest achievement,” Johnson said.
As for how to succeed in business and weather a myriad of ongoing supply chain challenges, Johnson had this advice. “We’re all under pressure. We eat pressure for breakfast. Embrace change. You guys are working overtime to get us everything we need,” Johnson said. “Stay resilient, stay strong, stay believing.”
Following another session with a panel of experts in the LTL landscape—from Yellow Corporation, Estes Express and FragilePAK—Connections attendees heard from industry keynote speaker David Jackson, Chief Executive Officer of Knight-Swift Transportation Holdings. Knight-Swift is one of the largest transportation companies in the U.S. that has acquired two LTL transportation companies in recent years and staked an unusual claim in this segment of the transportation industry.
Moderator Bill Cassidy, senior editor at the Journal of Commerce, kicked off the conversation with a pointed question to Jackson. “Why LTL? Why now?
“Truckload was the heartbeat of our business, but there’s a lot of volatility these days,” said Jackson. “We are fascinated by the LTL market and want to take advantage of the synergies that exist.”
Knight-Swift acquired AAA Cooper Transportation and Midwest Motor Express Inc. (MME) in recent years to add LTL transportation to its roster of offerings. When Knight-Swift works with its LTL brands, the focus is on preserving the brand, optimizing the network, helping the company improve, and serving the interests of the families that own the companies and their employees, Jackson said.
“The brand continues, but behind the scenes there are efficiencies that improve operating ratios,” said Jackson. “Every month they do a little bit better sequentially.”
“When we announced the deal with AAA Cooper, one of our customers wanted to do something with them. We made the introduction, which led to a bid award and a meaningful amount of business today,” Jackson added.
The LTL market is much more stable than the truckload market, which is experiencing much unpredictability today. For truckload providers thinking of venturing into the LTL market, Jackson offers this advice.
“LTL is a difficult business to get into. It’s very technology dependent,” said Jackson. “Efficiency always wins. Find new, better, more efficient ways to do things and you’ll see opportunity.”
As for thriving in the current state of the economy, Jackson offers that “we have to be on roller skates and be ready.” While household income has gone up, the increases are being eclipsed by inflation. The only way to solve for two problems at the exact same time is increasing productivity, Jackson said.
“If you can find a way with the same number of employees to produce 20-30% more income, business owners can increase what they do and pay to individuals…which can keep inflation at bay.”
Jackson also noted that the U.S. fared better than many other countries during the COVID-19 pandemic by quickly adapting to digital platforms like Teams and Zoom for business continuity. “We got added productivity when others in different countries didn’t,” he said.
Amid all the supply chain instability, there are wonderful opportunities for the future, Jackson said. But he emphasized the opportunities will only come from being focused on discovering efficiencies and improving productivity.
Other day one sessions at SMC³ Connections included a global economic update, a U.S. financial update and breakout sessions covering a variety of timely industry topics.
The three-day Connections supply chain event produced annually by SMC³ provides the ideal environment for qualitative, valuable networking and industry education. Carriers, shippers, logistics service providers and technology providers consistently attend the summer’s premier collaborative supply chain intelligence event for its unrivaled networking opportunities, top-tier presenters, and timely content to finish 2022 strong.
To learn more about SMC³ supply chain conferences, visit http://www.smc3.com/supply-chain-education.htm.