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Landstar Presentation
- 4. 5 Year Revenue (in millions)
- 11. Total Available Truck Capacity Providers Contract Carriers Landstar BCO’s 300,000 Estimated # Of Trucks 2005 2004 2006 2007 as of fiscal year end Landstar Capacity 2008
- 12. 2008 Fiscal Year End Landstar Trailer Capacity *300,000+ Trailing units from Third Party Providers 2008 Fiscal Year End
- 15. Undeveloped Frequency Per 1000 Shipments Cargo Claim Ratio Undeveloped Frequency Per 1,000 Shipments
- 17. DOT Recordable Accidents Per Million Miles Traveled Per Million Miles Traveled
- 19. Information Sharing L.E.A.D.S. ® (Landstar Electronic Administrative Dispatch System) LCN (Landstar Communications Network) EDI (Electronic Data Interchange) I.V.R. (Interactive Voice Response System) a.k.a. LYNN
Hinweis der Redaktion
- Good Morning John, thank you for meeting with me today, I really appreciate the opportunity to be here to discuss Landstar and the services that we offer to our customers. John as you know, Landstar hasn’t done any business direct with Real Products, but we have done about a half a million dollars per year of Real Products business over the past couple of years with your 3 rd party providers, and we do really appreciate that business. We’ve been primarily supplying your 3 rd party provider with Landstar truckload capacity to support the Real Products business. On the phone, you mentioned that Real Products had a National Transportation spend of about $10 million, all of which was in North America. You also mentioned, that this spend was mostly truckload, with some limited LTL and limited Intermodal service, and some outside warehousing, but that you had nothing going International or expedited. I wasn’t really sure how much you knew about Landstar so I thought that we would go through a little presentation that would help you understand who we are, what we do, how we operate and the services that we provide to our customers. I’ll give you an overview of all Landstar services, but we will focus primarily on your truckload, Intermodal, LTL and warehousing needs.
- John, Landstar is a publicly held corporation, our stock is traded on the NASDAC, and we’re a very financially sound corporation which is very important when you are selecting a transportation provider. We have about 1,300 employees, and our corporate offices are in Jacksonville, FL. We also have operational centers in Rockford, IL and Detroit, MI. These facilities have systems that run parallel to each other, so in the event of an emergency (hurricane, etc.) we never have a disruption of service to our agents, our BCO’s or our customers. Our business model may be somewhat different than other transportation providers that you work with, in that we are an agent based company that provides transportation solutions through the use of about 8,500 dedicated Landstar BCO’s and over 25,000 contracted outside capacity providers. You’ll hear me mention “BCO’s” several times throughout the presentation today. BCO stands for Business Capacity Owner and is an Owner-Operator who is permanently leased to Landstar, operating exclusively for Landstar and operating under our authority and insurance, and we’ll talk more about that process later. As I mentioned, our capacity also comes from about 25,000 contracted outside capacity providers, including motor carriers, railroads, ocean lines and airlines. And we believe that this outside capacity provides an additional 300,000 pieces of equipment that we can make available to you through the use of our blended capacity. And we’ll also talk more about that later as well.
- John, we provide all of the multi-modal solutions including blended truckload capacity, intermodal/rail, and Ocean Forwarding along with container drayage. And by using our blended capacity solution, Landstar could become your 3 rd party provider and you would still have access to all of our Landstar BCO’s, as well as our outside truckload capacity providers. We also offer both ground and air Expedited Services, and we will do anything from a small package to chartering a plane for you. We provide 3 rd party Tailored Logistics Solutions, including Transportation Management Services through our agent family and our NLM and A3I companies. We can also provide Technology Solutions through our Landstar Supply Chain Group and our Oracle based (SaaS) Software as a Service solutions. In addition we provide Warehousing Solutions to our customers through the Landstar Warehousing Group which I’ll discuss later. I think you’ll see as I go through my presentation, that Landstar can offer Real Products a complete line of transportation and logistics solutions.
- This slide will give you an idea of Landstar’s revenue growth over the past 5 years. The blue represents revenue from Landstar’s core business and the orange represents revenue from Landstar’s management of disaster relief. If you look at 2005, you will see about $275 million of disaster relief revenue associated with Hurricane Katrina and the 2005 hurricane season. You can also see the impact of our disaster efforts in subsequent years. When you eliminate that disaster relief related revenue, you’ll see that Landstar has enjoyed a good steady growth of our core business, finishing 2008 with revenue of about $2.64 billion. Our 2009 revenue hasn’t been released yet, but it will show the impact of the downturn in the economy in 2009. I have included a copy of our 3 rd quarter 2009 financials and also a copy of our 2008 annual report in the back of this presentation for your review.
- This slide represents some of Landstar’s top customers. I think you can see that we have a good mix of customers, and that when you see customers like Federal Express, United Parcel Service and Ford Motors on a customer list, you know that we have the ability to pick-up and deliver on time and communicate well with our customers. I also know that when you look at the customer on this list, you’ll probably sense we are a very cost competitive transportation and logistics provider.
- John, I know that you mentioned that you are doing some outside warehousing. The Landstar Warehousing Group provides Warehousing Services through our network of 128 Warehouse Capacity Providers (WCO’s) who are providing in excess of 80 million square feet of warehouse space throughout North America. Landstar Warehousing also provides a world class Warehouse Management System (WMS) and the beauty of our WMS is that it allows you complete inventory visibility and control, no matter where you are warehousing with Landstar and it’s all on one system. Our WMS also provides all types of management level reports …. and we have standardized operating procedures through the Landstar Warehouse network. So, when you get ready to do more warehousing, I’d ask that you give us an opportunity to fully present Landstar’s warehousing capabilities, and to also price your warehousing needs.
- John, you mentioned during our phone conversation that you were doing some very limited intermodal. That’s a service that Landstar can offer to Real Products. We have a long history as an intermodal marketing company. We have contracts with all Class 1 railroads and all smaller Shortline railroads that do Intermodal. We also have over 3,500 approved draymen under contract with Landstar. We maintain senior level contacts with all of our service providers, and have the ability to provide you with many routing and service options. Landstar’s been recognized many times by Logistics Management as an IMC Industry Leader. John, we would like the opportunity to review your intermodal lanes and to provide you with pricing for all of your Intermodal business.
- With Landstar LTL.com, Landstar can offer you an innovative web based solution to help manage your LTL van shipments. This can either be a Landstar agent managed solution, or you can manage yourself at each of your Real Products shipping locations. Landstar LTL.com gives you the ability to select your own LTL carrier or use any one of the 15 Landstar LTL carriers at Landstar pre-negotiated rates…….... or just mix and match to meet your requirements. You can make carrier selections by service area, cost or delivery time……you selects what works best and is most cost competitive. Our Landstar LTL.com has “click And ship” functionality which includes “track and trace” along with “freight bill auditing” …. which is done before your shipment moves to help manage your ultimate LTL freight costs. Landstar LTL.com service areas include all of the United States and in and out of Canada.
- Our Landstar flatbed LTL offering is a Landstar agent managed service. It can provide Real Products with competitive flatbed LTL rates, and excellent service times. Our Landstar flatbed LTL’s all deliver on the same equipment that makes the pick-up ……. which results in fewer claims and much more reliable service. At the present time, the Landstar Flatbed LTL service area includes all of the United States, but not Canada.
- John, we take qualification of BCO capacity and 3 rd party capacity very serious at Landstar. On the 3 rd party capacity side, we validate the carrier’s active authority and satisfactory DOT rating, or if the carrier is not rated, we evaluate the DOT reportable accident history and Safety Evaluation Assessment as reported on SAFESTAT. We also verify liability insurance and cargo coverage with insurance providers that are rated B+ or better with the A. M. Best Company. We execute a Landstar Transportation Brokerage Agreement with the provider that establishes responsibilities, liabilities, and insurance requirements. And most important, we have software that allows us to do a daily re-verification of all 3 rd party capacity providers’ qualification requirements with Federal Motor Carrier Safety Administration (FMCSA) data on that carrier. So we are reviewing each of these carriers daily. On the Landstar dedicated BCO capacity side , we do extensive background screening, including a criminal background check and work history verification. We require that the driver be at least 23 years old with a minimum of 1 year verifiable over the road experience in the past 3 years. All Landstar BCO’s are required to have a Class A CDL with a Hazmat endorsement and most important, a safe driving record. I know that the Hazmat endorsement requirement is important to Real Products with some of the product you’re shipping to your customers.
- This slide will give you a good idea of the growth in capacity at Landstar over the past 5 years. We’ve enjoyed good growth on both the BCO side of the business, as well as growth in capacity from our contract carriers. We finished 2008 with 9,039 trucks supplied by BCO’s and we estimate that our outside contract carriers provide an additional 300,000 trucks to our available capacity when using our blended capacity option. Our Landstar BOC count did fall off about 5% during 2009 due to the economy and downturn of business, but we expect our available truck capacity will continue to grow as business warrants.
- John, Landstar operates one of the newest fleets of trailers on the highway today. We are operating about 10,000 van trailers, all of which are 53’ and on air. All of the Landstar van trailers are equipped with SkyBitz tracking devices so we have the ability to give you the location of any shipment that you have on a Landstar van at any time. The average age of our van capacity is about 3 years old. We can also provide you with drop trailers at your shipping locations if your volumes require drop trailers. We also have one of the largest platform fleets in the United States with over 3,500 pieces of platform equipment ranging from flatbeds and step decks to all types of Heavy Haul capacity. Landstar is one of the largest providers of heavy haul capacity in North America. So when you have the need to ship some of your large machinery, please remember Landstar and give us the opportunity to do your heavy haul shipments. In addition to the internal Landstar trailing capacity, our outside contract carriers are also provide us with over 300,000 pieces of additional trailing capacity.
- Being in transportation, I’m sure that you are familiar with the turnover in our industry. Industry average turnover for large carriers has typically been up around 100%, although they were down somewhat during 2009. Landstar’s truck turnover ratio for 2008 was 30.4% and well below the industry average. Our truck turnover for 2009 will be up somewhat from 2008, but we will continue to be well below the industry average. Low driver turnover at Landstar starts on the front end where we’re typically only qualifying 1 truck out of 20 that make application to come to Landstar as a BCO. We have a LCAPP buying program ( Landstar Contractor’s Advantage Purchasing Program) for our BCO’s which allows our BCO’s to buy the things they need to operate their business (Fuel, tires, trailers, etc.) at substantial discounts. It also allows our BCO’s to keep more of the money they make at Landstar, and helps us drive low turnover. On the 3 rd party capacity side of the business we also enjoy low turnover in our carrier base, and this is a result of the quality of business that we offer those carriers, and in a large part, because Landstar becomes the best customer for many of our small carriers, and we’re loading them throughout North America. We also know that cash is king today, and we have the ability to pay our outside carriers within 2 days, which is much quicker than they would be paid if they were hauling direct for one of our shippers. On top of that, outside carriers hauling freight for Landstar are also eligible for fuel discounts and other savings opportunities through our Landstar SavingsPlus program, which in-turn ties the carrier that much closer to Landstar. Low turnover is important to our customers, because it insures that they are seeing drivers that understand Landstar’s requirements and your requirements when they come in to pick up your shipment.
- All of the Landstar BCO’s go through a 2 day orientation process at one of our Landstar orientation centers before they haul their first Landstar shipment. The Landstar orientation process helps our new BCO understand how to survive at Landstar, how to get their loads, how to do their paperwork, how to get paid,……. it also gives them an understanding of all Landstar requirements and procedures. All of our Landstar BCO have the Hazmat endorsement on their license but we require that they go through a Hazardous Materials Orientation and a Defensive Driving Program during the orientation. We also put them through Landstar Quality Process Training during the orientation which at the BCO level addresses things like the value of picking up on time, delivering on time and good communications.
- This slide gives you a snapshot of the Landstar Cargo Claims Ratio for the past 5 years. This shows cargo claims per 1000 shipments and for 2008 and we were at .81 cargo claims per 1000 shipments. Our low cargo claims ratio goes back to our BCO orientation process, and dispatch process with our BCO’s and outside capacity providers, which include instructions on proper blocking and bracing and the importance of getting a good load count on and off of the truck. You’re welcome to compare our cargo claim ratio with the carriers that you are using today and I believe that you will see the Landstar advantage.
- Safety is the most important thing we do every day. Our Company has a saying and it is a way of life at Landstar and that is “that Safety always supersedes service, if we can’t do it safely, we just not going to do it”….. and that’s really our Safety culture at Landstar. We do a number of things at Landstar that are similar to what other carriers do to promote safety, such as our Safety Awards and Safety Recognition Programs. But we also do a number of things that set us apart from other transportation provider such as our a M. U. S. T. program which stands for Mutual Understanding of Safety Together, where we work with our customers to help develop best safety practices around our customer’s facilities, and to help create a better safety environment for our drivers and our customers employees around their shipping areas. We also have a Safety Thursday Conference call …. which is a Safety Conference call that has been held the 3 rd Thursday of each month for over 15 years. Participants on this call include Landstar BCO’s, agents, DOT officials, state police, customers and employees. We have a topic each month such as maybe construction zone safety in early spring, or maybe driving in Icy conditions in late fall. And the big driver that keeps our BCO’s focused on Safety is the Landstar Truck Giveaway. Each year, Landstar gives away a new tractor with a value of over $100,000 to one of our BCO’s. The main criteria to win this truck is to fill out an entry, operate all year with no accidents, no cargo claims and no moving violations, and attend a minimum of 1 safety meeting per year. If they do all of that, then the BCO is eligible to win the tractor. But the big driver that keeps our BCO’s focused on safety all year, is that for each additional safety function they participate in at Landstar during the year, they get another entry into the truck giveaway. The winner is drawn at random from all of the eligible BCO’s. ……… Our truck give away really helps keeps our BCO’s focused on safety and drives the good safety numbers that you will see on the next slide.
- This slide shows how Landstar compares with the rest of the industry. It gives you a look at all Landstar D.O.T. Accidents which are in blue, and then the Landstar Preventable D.O.T. Accidents which are in orange, and then compare with the Industry Frequency which is the black line at the top and is showing .77 per million miles.. These numbers come off of the D.O.T. SAFESTAT web site. Take a look at the website and see how we compare with your carriers. You can see from this slide how much better Landstar is doing than industry frequency rate.
- Landstar has been certified to ISO 9001 standard since 1998. We’ve been C-TPAT Certified since June 2003. We are a Partner in the American Chemistry Council’s Responsible Care Program, and also a SmartWay Transport Partner.
- Landstar spends about $25 million a year on technology. Some of this technology spend has been to help make our capacity providers more efficient by reducing deadhead and sitting time between shipments, but the big push on technology at Landstar has been on information sharing between Landstar and its agents, BCO’s and customer. We have the ability to provide you with anything that you could possible want through technology…….from a Oracle based (SaaS) Software as a Service TMS solution, down to the simplest forms of data communications. On the pure transportation side, we do all of the EDI transaction sets, we have an (I.V.R.) Interactive Voice Response System for recording check calls and other pertinent shipment data, and all of our Landstar van trailers are equipped with SkyBitz Satellite Tracking devices. We can provide you with a web based customized Track and Trace link so that you can have complete visibility of your shipment, from the time you place your order with Landstar, to final delivery. You can even get your delivery receipt from the Landstar track and trace site. But all said, we can provide anything that you could possible want through Landstar technology.
- John, this slide speaks to “Seamless Movement Throughout The World” as Landstar is truly a Worldwide Transportation and Logistics provider. I’ve customized this slide a bit to reflect Real Products North America shipping areas. And we can provide Seamless Movement for Real Products throughout all of North America . We are a bonded carrier, and have Landstar agent facilities at all of the major border crossings in North America. We provide service to all of Mexico, with our largest border crossing being in Laredo. We also maintain a Landstar company facility in Laredo and on any given day we have in over 400 Landstar trailers in Mexico. We also are providing complete service to all of Canada through our Landstar of Canada Division, and we have a fleet of Canadian based BCO’s.
- John, that’s a quick overview of Landstar, who we are, what we do, how we operate, and the transportation and logistics service that we provide to our customers. I’m really hopeful that you have a better understanding of Landstar now, and that you will give us the opportunity to price all of the Real Products transportation and logistics needs. I would like to take some time now for any questions you have, and also to ask you some questions so that I can learn more about your business and how Landstar can service you better. Thanks for having me here today.