US 1 Logistics
Co-owner Don Lucchesi likens US 1 Logistics to a three-legged stool. There’s the agents who dispatch shipments, the owner-operators who drive the trucks and US 1 Logistics itself. “If you take any one of those legs away you’re going to fall over,” Lucchesi says.
US 1 Logistics specializes in handling all the back-office functions that tie together its nationwide transportation network and independent agents and owner-operators, which allows its independent truck and sales agents, and owner-operators to focus on providing shippers with safe, reliable and cost competitive transportation and logistics services. “We’re in the transportation business but we’re also in the small business business,” Lucchesi says.
The company and its owners, Lucchesi and Mike Cavanaugh, are celebrating 10 years in business in 2015. The relationship between Lucchesi and Cavanaugh predates US 1 Logistic’s formation in early 2005. Both men worked together at the same transportation company, Landstar, until Lucchesi began mulling retirement.
But before he bid the industry farewell, Lucchesi met with Mike Kibler, president of US 1 Industries, a privately held firm, to talk about starting a new transportation company that would better connect each of US 1 Industries’ subsidiary carrier networks. Those discussions ultimately led to the creation of US 1 Logistics, a subsidiary of US 1 Industries. US 1 Industries is an investment company headed by President David Antonson and CFO Harold Antonson that specializes in trucking and logistics.
US 1 Logistics generated $12 million in revenue during 2006, its first full year, but has since grown to more than $70 million annually today. US 1 Logistics’ reach touches the entire country but its agents are located primarily in the Midwest and Southeast. They are spread among approximately 30 sites in Illinois, New Jersey, Ohio, Texas, Florida, Georgia, Kentucky, South Carolina, Virginia, California, Oregon, Arizona and Alabama.
US 1 Logistics provides operational support for US 1 Industries’ other transportation subsidiaries, including: America 1 Logistics, Freedom 1 Logistics, Longbow Transportation and Logistics, Transport Leasing Systems, Whiteriver Transportation, Homeland 1 Logistics, Centrans Truck Lines and Lionhart. Each brand has a slightly different niche.
Lionhart, for example, specializes in flatbed freight while Longbow shuttles trailers to large warehouses, and Transport Leasing Systems hauls in-van less-than-truckload carpet. US 1 Logistics acts as the flagship company for US 1 Network and coordinates those subsidiaries by managing the administrative duties such as safety and compliance procedures, insurance and billing.
Each of those subsidiaries are agent-based. Instead of having its own employees managing terminals, US 1 Logistics relies on independent agents who are compensated on a commission. Further, all of the trucks operating in the network are operated by individuals and fleet owners who lease the trucks to US 1 Logistics. In return, US 1 Logistics provides the insurance and safety compliance for the owner-operators but avoids having to maintain its own fleet. “The driver has to meet certain standards and the truck has to meet certain standards in order to operate in our purview,” Lucchesi explains. Today, US 1 Logistics has agreements with 475 owner-operators.
The affiliate organization allows US 1 Logistics, its agents and owner-operators to each focus on what they do best. Many of the company’s owner-operators were previously stand-alone trucking companies that struggled to maintain a profit as insurance became more expensive and government agencies enforced stricter safety and compliance standards. The need for a strong administrative organization to back their operations made US 1 Logistics an ideal partner for those carriers.
US 1 Logistics’ services go beyond the mundane back office work. The company strives to strengthen its agents and carrier partners through its buying power and relationships with banks and industry experts. Cavanaugh tells of one agent that had its own operating authority but was going through a difficult period. The agent had a strong sales and marketing presence, but struggled financially. US 1 Logistics connected the agent with financial experts and counseled the company on how to adjust its operations to improve its bottom line. The process took several years, but Cavanaugh says that agent is now profitable.
Through US 1 Logistics’ buying programs, owner-operators can save. “They get economies of scale by teaming with us,” Lucchesi says.
All of the company’s programs are designed to support whatever help agents and owner-operators may need. “We tell our folks here they have to think of the agent and the owner-operator as our customers,” Cavanaugh explains.
As US 1 Logistics has expanded its operations and taken on more agents and owner-operators, the company works to ensure its new partners match its philosophies. “It’s managed growth,” Lucchesi says. “We try to recruit agents that fit our value system and fit what we want to do from a transportation standpoint.” The company prizes people who are hard working, honest and knowledgeable and wants agents who are willing to work exclusively with US 1 Logistics, Lucchesi adds.
“We look at each agent as an individual in a particular segment of a business and we try to be generous in helping that agent grow his business,” Lucchesi says. “The one thing that we tout is our flexibility. We’re not a cookie-cutter type of company. We look at each opportunity individually to see what makes the most success for us and our agents.”
Although US 1 Logistics continues to expand its network, Lucchesi says it has not gotten so large that it is at risk of losing touch with its agents. US 1 Logistics strives to support its partners like a family, and when agents run into trouble or come across an opportunity, they are willing to notify US 1 Logistics. “Personally, I like the fact that they’re comfortable to do that with us,” Cavanaugh adds.
That approach extends to US 1 Logistics’ drivers. Turnover is costly for any company, but especially in the logistics industry where there is an ongoing driver shortage. US 1 Logistics tries to entice owner-operators to stick around by offering free plates to anyone who stays with the network for more than a year – a potential $2,000 savings. Other programs help drivers finance the purchase of their trucks or give them fuel discounts.
US 1 Logistics is working to expand its purchasing program to cover trucks, trailers and accessories. “We have relationships with selected suppliers that we can get better pricing because of our size than the individual owner-operator can get on his own,” Lucchesi says.
In offering such a high level of support, US 1 Logistics wants confidence it has the best drivers on the road. The company conducts extensive background checks on every driver, including a review of their motor vehicle record, roadside inspection performance and criminal background, and runs the applicants’ names through E-Verify to determine their eligibility to work. “There’s a lot of processes that a driver or an agent has to go through before they can get qualified with us,” Lucchesi says.
Those reviews continue even after the agent or owner-operator is accepted into the network. US 1 Logistics collects monthly maintenance reports and electronic logs from vehicles to make sure they are operating in compliance with the company’s procedures and safety standards. Onboard recorders from Rand McNally track the position of trucks, provide drivers with directions and monitor safety.
Additionally, US 1 Logistics holds regular training meetings with its drivers and agents at each terminal.
“Overall, we’re seeing steady improvements in our CSA [compliance, safety and accountability] scores,” Cavanaugh says.