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