Greatwide Logistics Services, a Dallas-based provider of non-asset-based transportation and third-party logistics, has entered into a five-year agreement to manage the owner-operator
based transportation services of Tyson Foods, among the world's largest processors and marketers of chicken, beef, and pork.
In this new relationship, Greatwide will provide transportation services to Tyson by engaging an estimated 300 owner-operators and their equipment to operate between Tyson production facilities, distribution centers and customer locations across the country. The agreement does not affect Tyson's private fleet of 1,000 company trucks or its relationship with third-party trucking companies.
The agreement with Greatwide is the result Tyson's efforts to build upon its successful owner-operator strategy, which the company developed to meet increasing needs for transportation during what has become an extended period of driver shortages.
"As a major national shipper, we have been looking to team up with an outside company to enhance the effectiveness of our established owner-operator program," said Larry Keene, director of Transportation at Tyson Foods. "We believe Greatwide's experience in dedicated transport, logistics and the food industry, as well as its strong reputation for owner-operator recruiting, retention and relationships will help us address our company's increasing transportation needs."
According to supply chain consultant Richard D. Armstrong of Armstrong and Associates, "Shippers are waking up to the reality they need to find ways to create new sources of reliable truckload capacity given the large driver shortage that is forecasted to get much larger over time. This will pose challenges to private fleet operators and one-way truckload shippers alike. The Greatwide-Tyson deal is a fresh, new and different way to address this undeniable reality."
Greatwide expects the vast majority of owner-operators who currently lease to Tyson, as well as the workers who support them, to make the transition to Greatwide. This transition is expected to be completed by the end of January 2007.
"We look forward to having many of the owner-operators and agents who have been serving Tyson become part of the Greatwide family," said Ray Greer, president and CEO of Greatwide Logistics Services. "This new relationship with Tyson demonstrates something we at Greatwide have always believed: The owner-operator solution is often a superior solution to traditional dedicated contract carriage solutions.
"Tyson has understood for some time that owner-operators play a key role in their logistics network, due to both the variable expense structure and added operating flexibility," he said. "We are finding that to be true as other shippers come to understand there is an alternative to a fixed-cost dedicated contract solution. The dedicated industry is at an inflection point, overall, due to the increasingly large driver shortage in this country. I think we will look back and see that the increasing role of owner-operators and this agreement will have been a watershed event in that regard."