ODFL heralds new and expanded service facilities

Earlier this week, Thomasville, N.C.-based national less-than-truckload (LTL) carrier Old Dominion Freight Line announced it is again growing its national footprint, with the addition of six new and expanded facilities going back to February 2021.

Company officials said that each of these new service centers is constructed or renovated to provide best-in-class facilities to improve operations. And they added that the company’s recent investments focused on adding doors, upgrading its fleet and service center vehicles, and hiring additional drivers will allow it to manage ongoing capacity challenges as the economy rebounds post COVID-19.

“Our record-breaking first and second quarters demonstrate that freight demand is at unprecedented levels. We expect the growth to continue as the economy rebounds, so it’s important we continue to invest in capacity,” said Chip Overbey, senior vice president of strategic development at Old Dominion Freight Line, in a statement. “With our six new and upgraded facilities, we’re targeting some of the fastest-growing regions in the U.S. to ensure shippers in these areas have access to the superior transportation service they need to meet their own customer demand.”

Old Dominion’s new service center openings are located in Benicia, Calif., Phoenixville, Pa., and Kenosha, Wis., which brings its total count to 248 service centers, and it also relocated and/or expanded three more facilities in Colorado Springs, Colo., Milford, Conn. and Warren, Ohio. What’s more, in the past 10 years, ODFL has spent $1.7 billion in expanding its service center network, which is the equivalent of a 50% increase in door count during that period.

Specifics regarding these ODFL facilities are comprised of the following:

the 20-door Benicia facility will expand coverage in-between its San Francisco and Sacramento service centers. The new facility will allow Old Dominion to better service its wine country customers in Napa, Sonoma, and the surrounding area, eliminating three major daily bridge crossings for trucks coming from the San Francisco area;
the 55-door Phoenixville facility opened in response to rapidly growing freight volume across Pennsylvania. The service center covers an area between its Philadelphia facility and other Old Dominion service centers in the middle of the state, simplifying a region that was previously serviced out of four different centers across Pennsylvania, New Jersey, and Delaware. Its 40-mile service area is expected to grow, and its prime location between major Pennsylvania Routes 76, 422, and 100 – as well as its extra land with space for 30 more doors – positions it well to tackle increasing customer demand;
Old Dominion opened the 103-door Kenosha facility as southeastern Wisconsin – Kenosha and Racine counties in particular – saw major business growth. The Company once serviced the area out of its Milwaukee service center but needed a facility closer to its growing number of distribution, manufacturing, packing, and pharmaceutical customers. The service center’s location is just two miles from I-94, and its available space for an additional 51 doors will allow it to grow alongside the burgeoning business community;
Colorado Springs, Colo. – Old Dominion’s third Colorado service center covers the mountainous region south of Denver. The facility’s proximity to I-25 allows drivers quick and easy access to the area’s numerous manufacturers. The location is primed for growth with plenty of room to expand – up to 22 additional doors. Four new employees joined the Old Dominion family when the 11-acre facility opened;
Milford, Conn., – The Milford facility allows Old Dominion to offer superior service to customers along coastal Connecticut, covering additional areas including New Haven, Bridgeport, Norwalk, and Greenwich. The service center, near I-95, has 49 doors across more than six acres of land; and
Warren, Ohio – The newly expanded Warren, Ohio facility – increased from two acres to 15 acres, with an additional nine employees – allows it to grow its Youngstown/eastern Ohio customer base and add service for western Pennsylvania shippers. The 60-door facility has room for an additional 24 doors in the future, and its location near the Ohio Turnpike and SR 76 allows for convenient access to customers’ locations.

ODFL Senior VP of Operations Dave Bates told LM that the company is wide open with its real estate investments.

“We have always been at the forefront of doing that and have never really taken the foot off the gas, knowing that we want to keep expanding our network to be able to build our service center capacity and our door capacity,” he said. “The challenge we are running into now is that in select markets, where it is harder to find commercial real estate, and if you do find something, it often seems like someone does not want a trucking company near them so they kind of push back. We are facing that challenge as well.”

Bates explained that most of ODFL’s decisions as they relate to where and when to open up a service center are based on metrics included in what it calls a door pressure report, which measures the [number] of shipments pushing across each dock door over a period of time.

“As we see those numbers escalating in certain markets, that triggers the movement for some type of expansion or spin-off of a certain service center in that market,” he said. “That is how we gauge what we have done over the years, however, with things as tight as they have been with finding real estate, we have had property come available, or even a vacant service center come available, and we may not be ready today to expand in that market, but we might in the next four-to-five years so we will jump on something just to be able to have that resource when we need it.”  

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June Class 8 lorry preliminary internet jobs stay in related gross sales space

Preliminary July North American Class 8 net truck orders were flattish compared to June and saw annual gains in July, according to recent data respectively issued by freight transportation consultancy FTR and ACT Research, a provider of data and analysis for trucks and other commercial vehicles.  

FTR reported that preliminary July North American Class 8 net orders—at 26,500 units—fell 1% compared to June, and rose 25% annually. The firm also noted that over the last 12 months, total Class 8 net orders came in at 394,000 units.

With June and July Class 8 net orders in similar territory, FTR explained that it reflects how the sector is in what it called a holding pattern at the bottom of this ordering cycle. And it added that ordering for 2022 has commenced at most OEMs but remains delayed some due to cost uncertainty and the possibility of enduring supply chain bottlenecks.

“July ordering was similar to June in that OEMs took a limited number of orders for delivery in 2022,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “Fleets need a significant number of new trucks right now and they perceive this need will continue throughout next year. However, OEMs are having difficulty establishing reasonable 2022 pricing, with commodity and other costs elevated. It is uncertain if current higher production costs are transitory or will persist into 2022. Also complicating the situation is that shortages of semiconductors have limited Class 8 production. It is estimated that supply of trucks is falling approximately 25% behind market demand. We are running out of time for OEMs to catch up. Most of the unproduced orders will roll into the first quarter of 2022. If those months are already booked solid, it creates even more headaches for the industry. Things won’t approach any degree of normalcy for months. Until semiconductors begin flowing into the OEMs in sufficient qualities, we will be playing catch up.”

ACT data: July preliminary Class 8 net orders—at 25,800—almost exactly matched June’s 25,809, according to ACT.

“In 2018, there was an explosion of orders across the industry, as dealers raced to get their places in rapidly growing out-year backlog queues,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement.  “Underlying drivers of commercial vehicle demand are considerably hotter than they were three summers back, with 6-plus percent GDP growth, capacity constraints across multiple shipping modes, at/near-record trucking freight rates, surging carrier profits and record used equipment valuations providing deep support for Class 8 demand,” He added, “While conditions are in place to sell-out 2022 backlogs in a very short time horizon, the industry appears to be approaching order distribution much differently this year. That being said, while order rates remain below the backlog-filling volumes of Q4 and Q1, the 3- and 6-month seasonally-adjusted annualized rates remain well above the industry’s ability to produce.”

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