Calling its home, Hartford, Connecticut, the gateway to New England, Park Trucking Company seeks to offer delivery services to inbound carriers with multi-stop loads destined for the Northeast.
A lot of carriers moving truckloads into New England from the West and Midwest would rather make a single delivery and get back under an outbound load instead of spending two days or more delivering partial loads before picking up their return, says David Rothstein, immediate past president of Park Trucking. He says that delivery in New England east or north of Hartford is time consuming in addition to running extra miles to reach outbound freight, most of which originates in the New York metro area or in Pennsylvania. Extra time and empty miles for westbound freight that doesn't pay all that well to begin with raises the cost of lanes into New England almost past the level many carriers are willing to tolerate, Rothstein says.
Park Trucking is a survivor from the days of economic regulation of trucking, one of a handful of truck lines that can trace its founding to the days when operating authority often was more valuable than rolling stock. It was founded in 1945 by Rothstein's brother, Harold, as a distribution carrier specializing in pool distribution for candy manufacturers and other shippers whose products needed protective service. Today, the company is operated by Lance Rothstein, president and son of David Rothstein, Ed Michaels, vice-president, Herb Bailey, vice-president — sales, and Joseph Arnson, operations manager.
Classic cross-dock distribution
The company operates a fleet of 30 tractors, 50 trailers — 35 of them refrigerated, and two straight trucks from a warehouse terminal in East Hartford. In addition, Park Trucking has a small terminal in South Kearny, New Jersey. The distribution radius covers all of New England and the Middle Atlantic states as far south as Baltimore and Washington and as far west as Harrisburg, Pennsylvania. In classic distribution carrier fashion, almost all freight is handled across the company dock in East Hartford. Although some freight could deliver directly from shipper to receiver, Park moves it across the terminal dock to ensure the highest probability of full loads for every outbound truck.
What has changed from the early days is the way freight gets to the dock. Once, full truckloads came to Connecticut by common carrier. Those loads were broken into smaller lots for consolidation with freight from other shippers. Instead of receiving inbound loads, Park Trucking now hauls the bulk of its own inbound loads. Roughly 70% of the freight that crosses the dock moves to Hartford on Park's own fleet. There it is mixed with other freight for final delivery. The freight consolidation program usually results in overnight delivery, but some shipments may be held up two or three days as multiple shipments for a single receiver are gathered. The company has 100,000 sq ft of dry warehouse space, 30,000 sq ft of air-conditioned space, and 15,000 sq ft of refrigerated space.
Refrigerated and air-conditioned storage space is used exclusively for Park's freight operations. Space in the dry warehouse is available for rental to the public or for contract warehousing.
Ready-made delivery solution
Park Trucking provides a ready-made delivery solution to truckload carriers who want to reduce waiting and extra mileage in the congested Northeast, Bailey says. The problem in New England for truckload carriers is double mileage, he says. Going on to Boston or points north is especially time consuming, especially if the load requires two or three stops. “When multiple drops are required, we offer the opportunity to unload in Hartford and get back under load in less than half the usual time,” Bailey says. “One drop in Boston may not be too bad, but two in Boston and one in Portland, Maine, can eat up all of two days. We solve that problem with resident drivers in the remote parts of our distribution area and shuttling loaded trailers to them at night. Those trailers may come back to Hartford loaded with candy from a couple of manufacturers north of Boston, or they come back empty, because we need the equipment for the next night's shuttle work.”
One of the big differences between Park Trucking and most truckload carriers is the way rates are structured. Truckload carriers get paid by the mile; Park builds its rates around the amount of time required for delivery. Nearly all shipments deliver from shipper to receiver overnight, crossing the Hartford dock in the process. “We couldn't possibly rate freight by the mile,” Bailey says. “They key to profitable business is to fill every outbound trailer with multiple shipments from several shippers, hopefully all bound to a single receiver.”
Not every route goes to a single receiver. In the Boston metro area, Park trucks carry an average of 16 to 18 stops. In western Massachusetts, the number of stops per route is fewer — usually six to eight per truck. These deliveries are to small and medium sized wholesalers. The big grocery distribution centers, such as those in Portland, Maine, or Brattleboro, Vermont, provide the opportunity for full loads comprised of multiple shipments. A full load for one of these receivers may include goods from as many as 20 shippers, says Arnson. These shipments average 1,500 pounds each.
Heavy northbound volume
More than half of Park Trucking's volume moves north and east from Hartford. Roughly 40% of all freight is destined for Boston and the commercial zone surrounding it. Another 20% of freight outbound from Hartford moves to receivers in Vermont and New Hampshire. Although based in Hartford, only 30% of the freight is delivered in Connecticut. The New York/New Jersey area accounts for the fewest deliveries with only 10% of the total.
This division of the freight results in two distinct operating patterns. Drivers with deliveries in Hartford and in Springfield, Massachusetts, only 30 miles north, make up the company's peddle fleet, are members of the Teamsters union, and are paid by the hour. Drivers on longer routes are paid by the mile plus pay for the time they spend during delivery.
The operation cycle calls for Park personnel to receive inbound freight and set up outbound loads during the day. Loading begins after 6 pm five days a week. The warehouse crew numbers five on the day shift and three working nights. Depending on daily volume, the night crew loads 10 to 20 trucks with an average payload of 30,000 to 40,000 pounds. The warehouse is open throughout the week plus half a day on Saturday. The company is closed Sundays.
Unconventional fleet sourcing
Park Trucking steps outside the conventional realm in sourcing its fleet. In addition to his position with the company, Michaels owns Airways Truck Rental, the NationaLease franchise in Windsor Locks, Connecticut, a small suburb of Hartford near Bradley International Airport. The leasing company maintains 325 trucks in its fleet.
About half the Park fleet is in that number. However, the entire fleet is sourced from Airways in one way or another. Trucks not leased directly from Airways are purchased from the leasing company at the end of their first lease term.
A typical lease term at Airways is five years. Most Park trucks purchased following a lease are three to four years old. Buying used lease trucks for a fleet that runs vehicles only 50,000 to 60,000 miles a year makes perfect sense, Michaels says. At the end of a lease, Park can purchase equipment with full knowledge of its previous application and maintenance history. Cost of ownership is almost two-thirds less with a used lease truck costing roughly $25,000 compared to $70,000 or more for a new tractor. Maintenance practices never change throughout the life of the vehicle. Airways maintaines the vehicles under lease and continues to perform all but the simplest maintenance when owned by Park Trucking.
Lower price justifies maintenance
The cost per mile for running a used truck is a little higher, Michaels says, but the lower purchase price more than pays for the slightly increased maintenance. The basic maintenance costs for older vehicles involve items such new clutches, alternators, batteries, and water pumps. Although tires must be purchased, they are considered a normal operational cost, not an increased maintenance cost.
After a 10-year total vehicle life in which the truck has logged 650,000 to 700,000 miles, Park can sell the vehicle for roughly 10% of the original purchase price. With that cost scenario, Park can own well-maintained vehicles for $4,000 to $5,000 a year plus interest expense, Michaels says. Other advantages to running used trucks in their short-haul application include lower insurance premiums, which usually cost less for an older tractor. This is made possible by using higher deductibles, and lower collision premiums based on the lower value of the asset, he says.
Drivers are not living in the trucks for weeks on end as they do in the big truckload fleets, so they don't object to running used trucks, Michaels says. In general, Park Trucking meets driver expectations by providing them with a tractor with air-conditioning, air suspension, and plenty of horsepower for the terrain in New England.
Trucks built for resale
With good specifications and extended warranties in place, Park Trucking can keep its used trucks five to six years, running them a total of 800,000 to 1.2 million miles without incurring substantial maintenance costs. “We know that the trucks are built for a long life from the beginning,” Michaels says. “In the lease fleet, we write specifications with resale in mind as much as we design trucks for specific jobs. As a lessor with a fleet of 325 trucks, we want to ensure that our trucks are attractive to buyers at the end of the lease term. For instance, we put air suspension under our tractors as a matter of course, because they have higher resale value than a truck with spring suspension.”
A typical lease truck purchased by Park Trucking is a single-drive International daycab tractor or a tandem-drive Volvo. Single axle tractors are powered by Cummins M11 engines rated at 330 horsepower. Tandem tractors use N14 engines rated for 370/430 hp. The tandems use a 38,000-lb drive axle on air suspension, and have 10-speed Eaton transmissions and air-conditioning as standard equipment.
Trailers are a mixed bag at Park Trucking. Many trailers have been purchased used after a first life of six to eight years. When the company buys new trailers, it expects to keep them for a minimum of 10 years. Most of the newer trailer equipment, in lengths of 45 or 48 ft, is used, coming from private fleets or other leasing companies. Airways does not lease trailers.