Company Report: Greatwide Logistics
Greatwide Logistics Merging four lines while maintaining best-in-class distinction is what Greatwide Logistics company is all about...

Sometimes when you open your shopping bags, you find that the shoes you bought don't really match the pants, and the shirts are a bit too tight.

Finding a way to make the outfit work is what Greatwide Logistics Services of Dallas, Texas, is trying to do after a major shopping trip.

The history of the company can be traced to 2000, when Fenway Partners acquired Transportation Industries, LP, to form Greatwide Logistics Services. Since then, the company has continued with an aggressive acquisitions strategy, making it one of the leading providers of truckload transportation and warehouse/distribution services.
With Greatwide's relatively dramatic growth has come the need to find a way to coordinate and integrate these many companies and their respective services (lines) under one roof.

As Dick Metzler, Greatwide's chief commercial officer, notes, "Do they naturally and easily fit together? No. Job number one for us is to make each line the best-in-class when it comes to its services in its relative core competency. The next step, and one that we're nudging pieces into alignment as opposed to slamming things together, is to find ways to integrate the lines."

Providing Point Services ÷

In order to understand the unique challenge that Metzler and Greatwide face as they seek to integrate its lines, it is first important to take a look at how the company operates.
After its formation, Greatwide steadily expanded its operations through a series of acquisitions. These acquisitions include companies such as May Trucking, Inc.; American Trans-Freight; Stewart Stiles; and Cargo-Master, Inc. In total, ten companies were combined to form the company's current incarnation.

Today, the company has 90 facilities in 48 states with nearly 4 million sq. ft. of warehouse distribution space. Its fleet of operator owned trucks is 5,500 strong, includes more than 4,500 trailers, and serves a broad range of clients. In all, Greatwide's annual revenues exceed $1 billion. In 2005, drivers for Greatwide logged more than 400 million miles, handled 801,191 loads with a 99.97 on-time delivery rate and safety record of .31 accidents per million miles.

According to Metzler, the company has sought to expand its capabilities to provide logistics solutions at various points in the supply chain with each acquisition. "We believe shippers, and by that I mean logistics or supply chain managers, are looking more for point solutions to their logistics operations than they are end-to-end shipping logistics."

Basically, there are a number of points within any supply chain, especially if it's international in scale. Metzler argues that it would be difficult to impossible for one company to offer the best services at all of these points. Therefore, Greatwide has selected four points (Metzler refers to them as lines when delineating the company's services) within a normal supply chain where the company can excel and be considered the best-in-class for each point (or line).

Shippers, he says, are looking for ways to select the best point service providers and integrate them within their supply chain. For example, says Metzler, warehousing is an important point within any supply chain. A shipper may handle it via one of three methods.

The first is to do it in-house, which means supply its own warehousing by owning and managing the infrastructure. The second is to outsource it to a best-in-class service provider. The third would be to outsource to a company that bundles warehousing in with a long list of services.

Further, the idea of one company providing end-to-end transport is more a myth than a reality, says Metzler. He sites a supply chain stretching from Asia into the U.S. where it would not be unusual for there to be upwards of 28 handoffs. No single logistics provider is the best at all of those, he says, so Greatwide wants to sell its point solution services to shippers that will then plug the company into its system.

"If you think of a retailer, there is the trucker who picks the items up at the factory in China and then delivers them to the port where another person consolidates the shipment for air or sea transport," he says. "Then there is a person to make sure the items clear customs and de-consolidate the shipment. Then there is warehousing and shipping to stores It is this complexity that allows guys like us to add value. There are time zones, currencies, financial interfaces, different transport vehicles, resulting in a horizontal list of skills and processes that cut across all of the logistics providers for any executive seeking to coordinate this aspect of his business."

With its acquisitions, Greatwide is able to offer shippers four lines of services under four subsidiaries.

The first is Dedicated Transport, which provides "closed loop" transportation services to major retail clients that includes Wal-Mart (the company's largest customer according to Metzler), Target, Pepsico, Nordstrom, Sysco, and others.

What this means, says Metzler, is the company operates the same trucks on the same days on the same routes for the same customer. For Wal-Mart, Greatwide embeds its people at Wal-Mart's distribution centers, employing trucks that are owned and operated by independent contractors and garaged at Wal-Mart's terminal. "Products are taken from the distribution center to stores everyday," he says.

The second is Truckload Management, which is nearly the opposite of Dedicated Transport. Trucks are hired to carry a particular product on a particular route for a particular time, but it is essentially a one shot, on-demand service.

The third is Truckload Brokerage, which is essentially a travel agent for freight, says Metzler. The company matches carriers to shippers. "We are able to find capacity that a shipper could not do on their own," he says.

Distribution Logistics is the fourth line, which refers warehousing. Metzler says Greatwide is a supra-regional provider, which means they focus on a particular region. Currently, Greatwide provides warehousing in Arizona, Nevada and California, but is working to expand the line's base into a national platform, says Metzler.

Each of the four subsidiaries is managed by a president who is responsible for its respective line. The Greatwide management team provides the lines with strategy, support, marketing, sales, finance, risk coverage, and human resources capabilities.

Coordinating and Integrating the Lines÷

Currently, the four lines operate with relative independence and are tasked with becoming, if not already, the best-in-class by focusing on its core competency.
However, as the company moves forward Metzler says they want to find natural points of intersection between the four lines as a means to integrate them. "We want to do this through the company's own organic growth to productize and formalize all four lines," he says.

For example, as the Truckload Brokerage line seeks to match an increased need for capacity within a certain lane (route) with a carrier, it can look to coordinate with the Dedicated Transport line. In this sense, the brokerage line is purchasing capacity for its client from the dedicated trucking line.

The crux of the matter, says Metzler, is that they don't want to force this kind of coordination. The risk of doing so would be to pull each line from its core competency potentially placing its best-in-class status in jeopardy. As he says noted, "we are nudging as opposed to slamming things together."

This nudging also applies to a second element of coordination and integration, which is how change is absorbed by the employees at each line. Because Greatwide has grown through acquisition, change can be problematic for its employees. "They are comfortable with what they were doing," he says.

The key to bringing change, says Metzler, is through good program and process management, and taking a "soft and patient approach."

With outward facing issues-ones the customer could see-he says the company is very circumspect. The company does not want to move to quickly or forcefully lest it risk upsetting its applecart.

Changes that are more inward-or process oriented- are pursued more assertively by the company. That said, Greatwide still wants to be very cognizant of, and sensitive to how change affects the people that work for them.

In total, the company's growth and how that expansion is coordinated and integrated to form a whole, is an ongoing challenge, but one that Metzler believes is well worth the effort. After all, by being a provider of supply chain point solutions Greatwide is itself a distinct entity within a larger organism.

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