CLDA Magazine - Fall 2016 1 - Page 23

F E AT U R E MacKrell: I want to talk about some- thing else that’s top of mind for ship- pers and carriers, the current low pricing of fuel. Is this a positive or a negative? Surber: Strangely enough, the answer is “both.” You have to look closely at what’s melded into your base rate. It’s much cleaner for all parties involved to keep surcharges, of any nature, separate from base rates. If you have transparency it’s much easier to talk to your clients about their rate structure. You can educate them about what you’re up against. A shipper could say, “I need a reverse fuel surcharge since gas prices have gone down.” You need to know if that’s possible. You need to be able to draw a line between your base rate and your other charges so you know the role fuel costs play in that rate. If you’re fortunate enough to have started relationships when fuel was $4 a gallon and your fuel charges were baked into that rate, then you need to celebrate this sce- nario with your contract partners. Not does so creates an unsustain- able reality. When fuel prices bounce back, expectations will exceed what the market can bear. It’s important to “normalize” expectations now. MacKrell: Jim, Eastern Connection recently joined the trend towards taking advantage of cross-border opportunities by becoming part of Dicom. Tell us how this gives us a look into the future of our industry. Berluti: We believe there are big opportunities for cross-border ship- ments as a result of the acquisition and now being part of the Dicom Transportation Group. Eastern Connection’s location was an asset here, as it’s on the border of Quebec. It was in a perfect position to take advantage of the growing potential of cross-border trade between the Northeast and Canada. We have been building that cross-border network since our acquisition by Dicom Transportation Group in September 2015. I believe those opportunities will attract other companies that are looking for ways to drive up yield and increase profitability. MacKrell: Speaking of acquisitions, I’d like to talk about the influx of interest by private equity firms in this sector. What are your thought on that? Is it positive or negative? Surber: It’s an opportunity for all of us. However, a direct relationship with a VC may not be for everyone. Take a look at your strategy, value proposition and succession plan. What are your ultimate goals? Is it to cash out and move on? Or to build 23 a business that you and your family will keep for generations? Priority is a family business. We like steady sustainable growth for the long- run. For us, being too opportunis- tic means watering down our Value Proposition. We’re not interested in doing that. This is still a cottage industry. VC capitol is good for it. Companies that take advantage of those opportuni- ties are paving the way for everyone in our industry. Many of the enti- ties are being acquired by the same firms and creating regional networks through these synergies. Shippers realize that we offer a true alterna- tive to the “duopoly.” Supply exceeds demand and these regional carriers are reaching out to us. Who better to partner with than a room full of proven entrepreneurs in the last mile space? We are doers. VCs love that. In a market in which demand exceeds supply, there exists a wealth of opportunity. Like everything else that’s coming over the horizon, it’s going to be a matter of picking the right course, the right partners and the business model that’s right for you. Customized Logistics and Delivery Association | Fall 2016