Moot's question raises an important point. He said, "If FedEx sold off Custom Critical, who would know? Who would care, except those that were directly involved."
The entire expediting industry is but a tiny sliver of the trucking industry. How many commercial vehicles are on the road? 3 million, maybe? One percent of 3 million is 30,000. No matter how wide a definition you use for expediting, you'd have hard time pointing to 30,000 units.
In FedEx's annual report, Custom Critical merits only a footnote. The revenues from Custom Critical are grouped with other small FedEx activities into a category called "other." Custom Critical does not even get it's own footnote. It gets grouped in with others. Custom Critical is that small in the grand scheme of things.
So is Panther, so was Conway, so are all the others.
Already, Panther is making noise about being the largest expediter out there. If I were writing their marketing materials, I'd be doing the exact same thing. In terms of power units, and with the Conway acquisition, and if Conway contractors stay with Panther, Panther can indeed make the case that they are the largest.
I'm sure the higher-ups there, and perhaps a number of drivers will take great satisfaction and pride in that. If I were in that company's founders' shoes, it would be an important milestone for me too. It's an all-American growth story that can be legitimately told.
Growth through aquisition is a time-honored corporate strategy. Sometimes it works. Sometimes it does not. FedEx has refined that strategy to an art form. So have numerous other transportation companies. Whether it will work out well for Panther and Panther's contractors, only time will tell.
As a FedEx Custom Critical contractor, I'm not worried about losing loads to Panther. If the loads are lost because Panther reduced the price, we would not want them anyway. Diane and I are positioned to compete not on price but on quality. We don't run freight for cheap shippers. Period. With that philosophy, Diane and I have done very well. Regardles of what company buys the other, or which company we run with, we expect our philosophy to keep us in the green for many years to come.
In Panther's announcement letter, I was pleased to see them touting their "Elite Services team."
http://www.pantherii.com/breakingnews.asp
Quote:
"In addition to traditional ground expedite service for industrial manufacturers, Panther offers single-source specialty solutions for
complex supply chain management through our Elite Services team, including:
• Flatbed transit service
• Validated Cold Chain Relocation, refrigerated, and temperature controlled transportation
• Exclusive Air Charter service
• Blanket Wrap, Lift Gate, Air Ride, and other special handling requirements for time critical shipments"
End Quote.
In other words, Panther is going after White Glove business. That's good news for Diane and me in a couple ways. If it ever comes to that, it gives us another place to go with our highly-specialized and fully-equipped truck and "elite" (Panther's words) skills. It also gives FedEx another reason and greater incentive to keep Diane and I happy as contractors.
Further, it validates a belief Diane and I formed early on in our expediting industry research. That is, the more specialized your truck and driver capabilities are, the more in demand you and your truck will be.
There is a philosophy out there that running a minimially-equipped, low cost truck that hauls "industrial" (Panther's word) freight is the way to go because there will always be loads for you. It's a time-honored philosophy practiced by thousands of drivers.
Panther's "elite" language tells me that when the next recession or industry over-expansion comes, it will be the "elite" trucks carriers hang on to and the general freight trucks they will let go or let die on the vine.
I like the additional incentive Panther is giving FedEx to treat us White Glove drivers right. I like how the industry's largest carrier is validating a business philosophy Diane and I formed before we even hauled our first load. But most of all, I like how industry information will now be easier to obtain.
Panther is in the process of going public. They already have a preliminary prospectus on public record. As a public company, they will be disclosing their numbers on an ongoing basis.
It will be much easier to learn just how much an expediting company is worth. Panther will disclose the Conway purchase price and terms. Because Panther is not a division of a larger company, Panther's numbers will not be buried in "other" in its quarterly and annual reports. Drivers will be able to see how much money Panther pays for their services (purchased transportation). Panther's analysis of the expediting market and risks will be published. So will Panther's analysis of competing companies in the expediting marketplace.
This is all good stuff and I am very much looking forward to reading it.
Does it bother me that Panther is now larger than FedEx Custom Critical? I must admit it did for a few moments. Then I remembered how it has always confused me when people get all worked up about their favorite sports teams.
Having grown up in Wisconsin, I am a lifetime-loyal Green Bay Packer fan (though only a casual viewer of NFL games). Espeically when your team is winning, it can be great fun. But it can become unhealthy when you cross the line from "my team is winning" to "because my team is winning and yours is not, I'm a better person than you."
While I take great pride in being a FedEx Custom Critical contractor, it does not diminish me in the slightest that my carrier of choice is now the second-largest in the industry. That's how it works when the Packers don't go to the super bowl. It's how it works when Diane and I are driving down the road.
While expediting is about ego for some, it's about business for those who succeed in it. I congratulate Panther on its milestone accomplishment andd very much looking forward to hearing all about out from the disclosure documents the company will issue.
