Truck shortage lifts transportation firms’ revenue

05/04/2006 12:00:00 AM
Jim Offner

(May 4) A glance at the employee roster of Cincinnati-based Total Quality Logistics Inc. may shed some light on at least one company that has cashed in on the current trucking crisis.

TQL, which started in 1997 with only two employees, just passed the 450 mark in late April.

“On any given day, we have over 300 people who are just working the phones, finding trucks and working hard to get loads covered,” said Kerry Byrne, executive vice president of the brokerage, which says it works with more than 23,000 carriers and sets up about 130,000 truckloads a year.

Company revenues have leaped by more than 90% in each of the past two years. In fact, since 2002, TQL has logged annual sales of $32 million, $52 million, $101 million and $191 million.

“We added 170 new people last year, and we’ve hired more than 100 so far this year,” Byrne said. “It’s simply the opportunity in the marketplace. We’re confident in our business model, and we continue to add quality individuals to fuel our growth. There’s nothing magical.”

Indeed, Byrne said, the current crisis — a product of sky-high fuel prices and a shrinking base of truck drivers — has relatively little to do with the company’s success. But he does say the current market has a role.

“At some level, yes, I’d say the opportunities for third-party logistics providers have become better as a result of some of the issues that are facing the transportation companies out there,” he said.

It’s becoming clear that logistics is where the profits are these days.

But there are costs, as well.

Broadline foodservice distributor Sysco Corp. said May 1 it had a 16% slippage in quarterly profits, compared to a year earlier.

Houston-based Sysco said its sales were up 9.4%, but costs rose $10.5 million over the same period in 2005.

Eden Prairie, Minn.-based C.H. Robinson Inc., meanwhile, reported April 26 that its first-quarter profit rose 39%, helped by a 27% jump in gross profits from its truck division.

The company’s trucking operation reported earnings of $195.1 million, thanks to higher rates and increases in truckload and less-than-truckload volume. C.H. Robinson’s total transportation gross profits rose 28%, to about $223 million.



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