***SPECIAL: Inside MSM Transportation

by Canadian Shipper

Bringing together the best from the carrier and broker side of the business, MSM Managing Partner Mike McCarron outlines his plans for future growth and diversification.

CT&L: Last summer MSM’s score for customer service surpassed that of all other carriers across all modes in a random survey of shippers. That’s an impressive achievement considering you were up against much larger competitors. In your view what is required for a carrier to provide leading-edge customer service in today’s market place?

McCarron: It really boils down to people and the company culture and training you provide for them to foster their understanding of how a transportation company can provide a competitive advantage to its customers. This has to be a managed process. We have very strict systems and procedures that we believe will deliver superior customer service. We have an extensive customer service manual, our people spend a lot of time cross-training with other departments and time with the sales reps. We’ve also identified what we believe is important in delivering top customer service and our people are measured monthly on those parameters and their bonus plan is based on it. We try to eliminate the need for customer service calls by going after the root cause. For example, we found that one of the largest reasons for customer service calls to occur is bad information right at the beginning, whether that is bad customs broker information or a wrong street address. So we spend time at the front end to make sure the accounts are set up properly and we reward our employees based on the quality of that information. If the information goes into our system accurately we have a much better chance of properly delivering the service, which means we have less service calls to deal with and our people can focus on true problems that arise. We are also very proactive. If there is a problem we aim to get to the customer and outline options before he needs to call us.

CT&L: You’ve also requalified for the prestigious 50-Best Managed Companies Award, which looks beyond service levels to reward companies that provide a high level of service in a highly profitable matter. How are you ensuring those two sometimes-divergent factors remain in tune at MSM?

McCarron: We’ve won and /or requalified for the 50 Best Managed Companies Award six years in a row. Part of our success has to do with the fact we have a very unique LTL service. We are not a broker and we are not a trucking company. We are right in the middle because we use our trucks as well as the trucks of other companies in our network. And we look at each deal individually, involving both the management team and the operations staff. We also keep a close eye on our costs. We employ pretty sophisticated cost accounting systems to examine what it would cost us to provide a particular service. We also use technology as best we can to provide value-added services that don’t hurt our bottom line.

CT&L: Last year you were looking to enter new U.S. markets. Have those plans come to fruition?

McCarron: Actually we ended up heavily involved on a vertical integration strategy which basically sees us now in several businesses that we were not in two years ago: a dedicated trucking business; a consulting business; tandem trailer storage solutions rental, and a cartage and distribution services company we purchased to provide local cartage as well as consolidation and deconsolidation for U.S. customers. We have been giving employees sweat equity positions in these operations and letting them lead the development. Essentially, we are trying to leverage the MSM name in areas we see as having higher margins than trucking. The U.S. expansion plans are still there, however. We are doing very aggressive marketing right now for our LA office and we are attracting up to 30 new customers a month.

CT&L: Carriers are facing many challenges today, ranging from border security to much higher insurance costs. What can shippers do to help carriers meet these challenges?

McCarron: We are looking for shippers that want to be partners and recognize the fact that true cost savings are going to occur not by cutting rates but by working together to eliminate waste in the system. That requires open and honest communication and the quality of information necessary to make the right decisions. At the end of the day I believe shippers that don’t work with their carriers in such a manner are wasting money.

CT&L: Your foray into consulting seems particularly interesting. What prompted that move?

McCarron: All the calls we have been getting for advice. We believe one of the last and greatest areas in which companies can change and improve their business to gain a competitive edge is in the transportation side. If used properly, transportation can be a very strategic weapon. The focus is on the traffic management side of things; helping customers weed through their transportation situation, seeing if they are getting the value they want and seeing if there are ways to improve it. For example, if someone is using a U.S. common carrier that is taking 10 days to get the freight to market and there are carriers that can haul it in three for the same amount of money, the customer using the three-day service has a tremendous advantage.

CT&L: It has certainly been a busy year for MSM with a lot of new projects on the table. As these projects evolve, what kind of company should your customers expect to be dealing?

McCarron: We believe we are a very unique company. We’ve taken the best of the trucking business and the best of the brokerage business and melded it into one. And as our new projects mature we are going to become an even more diversified group of transportation companies.

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