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Vermont Business Magazine, Nov 01, 2004 by Kelley, Kevin

Even though Vermont's geographic location can make transportation to the rest of the country timeconsuming and costly, a few locally owned companies have managed to become regional powerhouses - and in a couple of cases, national players - in the shipping industry.

These businesses have succeeded by effectively filling niches in a multibilliondollar sector dominated by giants such as FedEx and UPS. Specialization enables the local companies to respond quickly to specific market demands, while their Vermont roots help them build a secure customer base and to cultivate a reputation for high-quality, personalized services.

Land Air Express, for example, ranks as "a real Vermont success story," according to company vice president Tom Spencer. Established in the mid-1960s by Spencer's father, Frederick, the Williston-based business has grown to include 617 employees on the strength of a 25 percent expansion rate in each of the past few years.

Land Air picks up and delivers large shipments, ranging from 1,000 to 10,000 pounds, for local companies such as Rossignol, Country Home Products and Vermont Country Store. It also provides overnight services throughout New England.

With many businesses now operating in accordance with just-in-time inventory practices, reliance on air freight has increased significantly, Tom Spencer notes. Land Air Express in fact "grew up with the changes in air services in and out of Burlington," he says.

But the "Land" part of the firm's title actually accounts for a much larger share of the company's business than does the "Air" part.

Most of its shipments go by truck because ground transportation is less expensive and has become far more efficient, Spencer says.

Technological advances in tracking shipments and dispatching carriers have made a big difference, he adds.

"Companies our size don't traditionally have the kind of technology we do. In this industry now, you're either thriving or dying. The guys who are thriving are the ones who have the technology," Spencer says.

BDR Transport, headquartered in Westminster, also ships via truck. The company, known in the industry as an LTL (less than truckload) contract carrier, sends a wide variety of goods in both directions between New England and California. It maintains terminals in Westminster and at two locations in California.

Now a $7.5 million-a-year company, BDR was established in 1970 by three shoe companies in order to ship their products from New England to West Coast retailers, with the trucks carrying processed leather back to Vermont.

BDR maintains a fleet of 17 tractor trailers and employs 17 drivers for local runs and 34 for long hauls, according to company president Greg Gay.

Increases in the price of fuel are heightening expenses for all overland shippers, Gay says, noting that BDR recently instituted a 10 percent fuel surcharge. Even so, the company is doing "pretty well." But, Gay adds, business has yet to the peak reached in 2000 - when the national economy was booming and the shipping industry was still unaffected by concerns about terrorism.

At the same time, competition has diminished. During economic downturns such as the one following the attacks of September 11, 2001, the trucking industry typically experiences a wave of bankruptcies, Gay says.

There are very low barriers to entry. Pretty much anyone with a license and some capital can buy a truck and start a business," Gay says.

Abbott D Abbott II, president of Vermont Courier, offers a similar appraisal of current business conditions for shippers.

"Smaller sideline players got shaken out" during the most recent recession, Abbott observes.

His 11-year-old, Williston-based company is no sideline player in New England and adjoining markets. Vermont Courier has secured a profitable niche by providing on-demand, same-day deliveries and freight-forwarding services throughout the region, while also making pick-ups in one hour or less from most locations in Vermont, southern Quebec and northern New York. The company relies on a network of "strategically placed independent contractors" in addition to nine full-time employees of its own, Abbott says.

Because of its speed and reliability, Vermont Courier services an American Red Cross organ transplant center in Albany, NY, and the New England Organ Donor Bank in Boston. Vendors in the region who supply just-in-time inventory to the IBM plant in Essex are also among Vermont Courier's regular customers, Abbott says. His company does occasional work for FedEx as well, supplying local links that help the national carrier maintain its own on-time service standards.

"Our type of operation is pretty unique in a rural state like Vermont," Abbott says. "We've gone to great pains in satisfying customers, and we've got a strong reputation as a result."

AN Deringer, like Land Air Express, has grown from modest beginnings in Vermont to regional prominence. St Albans-based Deringer has actually attained national standing in its customs brokering field, according to marketing and sales vice president John Holzscheiter, who says the company ranks as the third or fourth biggest of its kind in the United States.