Transervice Logistics provides customized transportation solutions, including logistics, dedicated contract carriage, fleet leasing, contract maintenance, freight brokerage and materials handling equipment leasing and maintenance. The company maintains more than 122 regional and local facilities across North America and Puerto Rico, and manages more than 24,500 pieces of equipment.
This year Transervice is celebrating 50 years in business, and Dennis Schneider, president, spoke with HDT about the changes he has seen in the industry, his company’s history and what he sees for the future.
HDT: Fifty years is a long time to be in business. What are some of the most significant industry changes you have seen during your time at Transervice?
Schneider: The company began in 1969, but I did not come on board until 1972. Still there have indeed been many changes in that time span, technology being number one. Much of the technology has been highly efficient, but there are needed investments and significant learning curves for people when you bring in new technology. People need time to familiarize themselves with it — especially people who historically have done things in a less technological way. It can be a hard transition for people who have been using a more manual approach for 30 years.
HDT: What is another big change you have seen?
Schneider: There have been significant changes in the complexity of the componentry and equipment — especially as it’s related to emissions. Some of those are very good, such as disc brakes, accident avoidance systems and lane departure systems. These things are very supportive of a safer environment and safer operation. However, there are considerable investments and learning curves that are required to make these complex components effective.
The third issue is governmental regulations and compliance standards. We are extremely focused on that, not just from a legal standpoint — which is of course appropriate — but also from an ethics standpoint as it relates to environmental issues and compliance with whatever standards exist from DOT, EPA and the various federal governmental and state agencies.
HDT: How do you respond to these changes?
Schneider: We try to stay abreast of these changes by having conversations with our various departments about new developments as it relates to manufacturing, componentry and other technologies. If it makes sense for us, we will test something in a particular application. We consider the cost-benefit ratio. Because of our interest and open mindedness, a lot of chassis manufacturers or components manufacturers will reach out to us to try their products.
HDT: Technology and equipment changes raise the issue of training and keeping staff updated on how to use new equipment. What do you think fleets need to do to keep their people properly trained?
Schneider: I can only speak from our experience about what has worked for us. Let’s talk about the drivers first. When we put new equipment in a particular operation, we will have the manufacturer do a training class with the drivers. In most cases it is our drivers, but in some cases it is the customer’s drivers. We recently put 75 tractors into one of our fleets in New Jersey and we had four two-hour training sessions early in the morning. We told them how the equipment operates, about the regen process and what the various codes meant that they were likely to see.
As it relates to training for mechanics, we have a full-time trainer in the company who conducts sessions on a continuous basis. We also have two quality assurance people who inspect all of our operations at least once annually. They are trainers as well. They will hold classes for groups of technicians where we will bring in manufacturer’s reps to either hold a class at one of our locations or, if need be, especially with refrigeration equipment, for example, we send a mechanic to reefer school for the week to get advanced training.
HDT: Let’s switch gears and talk about what you see ahead for trucking’s future.
Schneider: When it comes to technology, I am not sure where autonomous vehicles fit within the next five years, especially in the commercial arena. However, there are some rather significant entities investing a lot of money on developing autonomous vehicles, and I do not think it is just an exercise in “this may be a fun thing to pursue.” The reality is there are issues that need to be addressed in regard to autonomous vehicles and the applications into which they will fit. Also the public is going to have to be convinced that they are safe. I think that could be a bit of an issue. I have no idea how long that road is until autonomous vehicles become more prevalent, but certainly if and when they do, they will have a dramatic effect on the industry.
We also have to talk about alternative power sources, whether it is electric vehicles or something else. We are moving away from fossil fuels. That is good in terms of our dependency on other countries and the impact on the environment; although it seems we are generating all that we need domestically.
In addition, there are things we are using today that we had not even thought of five years ago. Who knows what is going to come out in the next two years, let alone five years, in terms of systems and componentry.
There also are some scary things out there, particularly concerning cyber security. I think that is going to be more and more of an issue in terms of vulnerability as a nation and for our economy. There is a lot there that is terribly concerning, but at the same time, at this point, we could not exist without technology. It has infiltrated every part of our lives and the business world.
HDT: This brings to mind data and data management. What needs to be done to manage data?
Schneider: Several years ago when I visited someone they would have had an extraordinary amount of data in terms of how voluminous it was. The question was, who was assessing it and how were they utilizing it? The answer was they weren’t; they had a lot of data, but it was not serving any purpose. It is great to have data, but if it is not subjected to analysis and made actionable, then what is the value of it?
We collect data in many avenues and corridors within the business. I, like many executives, may want to look at something to get a sense of the exceptions or outliers. Where are we in regard to PM performance or tire maintenance compliance or quality assurance inspections? I may want to see the data in a consolidated format because it gives me a good feel of how we are performing overall. If I want to dig deeper, then I have the ability to do so.
But in operating positions people need more granularity, and so they have to have that available if they want to assess productivity within their facility. In some cases you are assessing compliance, and it is not practical to review every one of the data points. In that case you perform an audit in which you pick 10% of that data to review. If you see something that is concerning, then you go back and you reassess and dig a little deeper. The data is there and it can be collated effectively. We are getting better and better in terms of dashboards and things that we generate internally, but the depth and the breadth and its granularity have to be practical and pragmatic.
HDT: Let’s talk a little about Transervice, its history and its operating model.
Schneider: The company began in 1969 with three individuals and it essentially provided full-service leasing. For the first couple of years we served soft drink companies. The first account was NY 7Up, and then RC Cola in Texas was added, and after that the Coca Cola Bottling out of New York. In the first few years we offered full-service leasing where we financed and maintained the equipment. From our inception the business model has been on a dedicated basis — meaning on-site at the customer’s location.
HDT: Transervice operates with a unique business model. Can you explain what it is?
Schneider: Our model is full transparency. How many companies in any field, let alone in our industry, share with the prospect all the components of the cost structure? The customers receive operating statements on the items that are important to them. We make it as detailed and granular as the customer wants. Included in each of those statements is our fee — our profit.
We also offer a gain-sharing opportunity, and when we are in discussions with prospects, I tell them not to automatically presume they are going to get money back. What we are guaranteeing is our charge; the customer is given a maximum guaranteed cost. The cost is the cost. If we earn less, the customer owes us nothing; we just earn less. But if we earn more, then we are going to share that excess profit with the customer. We have a number of customers who get money back. The customer is protected in any downside situation and benefits when there is an upside.
HDT: Some of Transervice’s operations are unionized and some are not. Can you talk about the challenges that presents?
Schneider: If you are not going to be forthright, then you are not going to be successful in dealing with labor organizations. As it relates to the differences between a unionized and non-unionized operation, the central point is that you are managing people and the processes they are involved in. It does not matter whether it is union or non-union — even though there are influences which could affect that — you are still managing people. The essence of the business is the same, and we are not going to use different systems, we are not going to maintain equipment differently, we aren’t going to route differently. In one case you have a collective bargaining agreement and the terms that constitute that agreement, which includes work rules, and wages and benefits. But if it is a non-union operation there still are work rules, wages and benefits.
HDT: Transervice has been in business for 50 years. What lessons can other business learn from your success?
Schneider: We are very good at managing people and managing process. We are not infallible, but because we are good operators and we know how to manage people and process, we perform very, very well for our customers.
You also need a strong culture with talented, dedicated people. We have many long-tenured people in our organization, but we also have some folks who have been with us less than 12 months because we have added a new piece of business. Everyone, no matter how long they have been here, has to be customer-focused. Your reason for being has to be your customers and your organization has to be geared that way. You need to be adaptive to your customers’ needs. The fact that we operate on premise (at the customer’s location) means we are close in a literal sense but also in a metaphorical sense. We become rather intertwined with our customer’s business and that nurtures closeness.
HDT: To finish off our interview, let’s talk about your background. How did you end up at Transervice?
Schneider: I was a schoolteacher for three years. As a schoolteacher I had the summers off and I worked in one or two areas of the leasing company my father-in-law worked for. I met the president of Transervice, who approached me about coming to work for him. This was in August of 1972. I had just gotten a fellowship from the National Science Foundation to study curriculum development, which was something I was extremely interested in doing. I was 23 at the time and I made the decision to join Transervice at an entry-level position without a plan about this is where I will be long term. I just thought I would enjoy the dynamics.
The irony is my parents did not own a car. I did not come from an automotive background. I educated myself, read manuals and put together models so I could gain knowledge of how the fundamentals worked.
I had a series of promotions, and then in 1981, Pittston bought Transervice. At that point I was a vice president of the company. Myself and two other gentlemen were essentially running the company. We maintained the Brinks vehicles nationwide; Brinks was then owned by Pittston. In June of 1985, myself and those two other individuals acquired Transervice Lease Corp. Transervice Logistics Inc. did not exist yet. We took the business private. My two partners retired several years ago, and I and the organization have been running the company ever since.