Picking up the pieces from a trucker's demise
BY TIMES-DISPATCH
Rick Holden is director of operations for Riverside Logistics of Richmond. The company is a middleman that finds truck, rail and air carriers for shippers; it got caught in the shutdown of Consolidated Freightways Corp.
(CINDY BLANCHARD)
Sep 19, 2002 - Rick Holden aimed to find the medical supplies stuck somewhere out West.
Twenty cartons of Virginia-made surgical trays had been transported to Oregon by Consolidated Freightways Corp. But when Consolidated shut down on Labor Day, Holden knew he'd have to do some sleuthing.
His company, Riverside Logistics of Richmond, is a middleman that finds truck, rail and air carriers for shippers. It hired Consolidated to move the surgical trays for the medical supply company, which asked not to be identified.
Holden, like other transportation brokers, was caught in the wake of the demise of Consolidated, the nation's third-biggest trucker.
Early this month, the Vancouver, Wash.-based company announced it was going out of business, firing 15,500 workers and closing its 350 terminals, including one in South Richmond.
Consolidated has sought Chapter 11 bankruptcy protection. David Papa, the Richmond terminal manager, said this week that Consolidated has moved about half of the stranded freight nationwide.
"We're struggling here because we're a big in-bound facility," with more goods coming in than going out, Papa said.
Large retailers such as Home Depot and Wal-Mart have found other trucking companies to retrieve their goods.
"They drop off empty semis, and then come back the next day and pull it out," Papa said.
Three major carriers - Yellow Corp., Roadway Corp. and Arkansas Best Corp. - have led the pack, according to Papa and others.
A fourth player, Richmond-based Overnite Transportation Co., also appears to be getting a healthy chunk of Consolidated's business.
"When all is said and done, Overnite should get 10 [percent] to 15 percent" of Consolidated's business, Overnite spokesman Ira Rosenfeld said.
Based on Consolidated's past revenue figures, an industry expert said, Overnite could pick up about $150 million of new revenue.
Overnite is a subsidiary of Union Pacific Corp.
"It's a nice shot in the arm," Rosenfeld said.
Trucking stocks have risen on such news. Roadway, for instance, climbed about 20 percent in the week after Consolidated's bankruptcy filing.
The increased tonnage should help third-quarter results for companies that provide service in the "less than truck- load" sector, said Tom Albrecht, trucking analyst at BB&T Capital Markets in Richmond.
Such companies deliver freight for a number of customers from the same truck trailer. It can be a low-margin business, filled with labor and logistical problems.
Consolidated's demise "is just a big reminder for shippers to know the financial health of their carriers," Albrecht said.
Such cautions came too late for some.
At Atlanta-based Home Depot Inc., spokesman Don Harrison said the freight recovery was "slower than we originally anticipated."
Although Consolidated carried only 5 percent of Home Depot's goods, that's still a lot of saws and sinks.
"We directed all of our stores to special order anything they needed to keep the customers happy," Harrison said.
Back at Riverside Logistics, Holden managed to reach someone at Consolidated's Portland, Ore., terminal who helped spring the stranded surgical supplies.
"I got it out of there yesterday," Holden said Tuesday. "That took about 18 days."
Papa, the local manager for Consolidated, was working hard to clear out his terminal at 3605 N. Hopkins Road. He was using a small group of supervisors and a few of the fired drivers.
"It's a struggle to keep up with the phone," Papa said. "We're getting a heck of a lot more calls about 'where's my freight' and 'what's going on.'"
Papa hoped to get corporate approval to keep his skeleton staff working until his warehouse was empty.
He said he'll turn out the lights Oct. 4.
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