Freight Consolidators: Alaska's Transportation Leaders
They ship everything from soup to construction supplies, linking Alaska
to the Lower 48 and beyond.
By Patricia Jones
Although Alaska is rich in raw natural resources, the Last Frontier lacks by
its own means many products and supplies needed to support the state’s various
industries. That, combined with Alaska’s remote location, thousands of miles
from other states in the Union, has helped to create a specialized, highly
competitive freight consolidation industry within the state.
Whether it’s construction companies requiring fabrication materials, retail
stores shopping for new merchandise, oil or mining companies needing specialized
equipment or military personnel moving to or from the state–all are major
markets for Alaska’s freight consolidators.
“We handle a little bit of everything … soup to nuts, all kinds of cargo,” said
Nick Lohman, general manager for Alaska Traffic Consultants Inc., a
Seattle-based company that started consolidating construction materials for a
Fairbanks-based construction firm back in 1956.
Then, owners of Burgess Construction asked Seattle resident Bill Stanley to act
as a freight consolidator–gathering together shipments from suppliers in the
Lower 48 and assembling a cost-efficient load to be delivered via ocean-going
vessels.
That friendship-based service evolved into a formal company that provides
personalized freight consolidation and shipping service to the construction,
natural resource, retail and military sectors in Alaska, Lohman said.
Bringing Shipments Together
“We may have a customer who wants to consolidate 20 shipments from 20 different
places, and not pay for each individual shipment, so we bring all 20 together,”
Lohman said. “Then you’ve got one big shipment that’s more economic.”
While the bulk of that business goes to Anchorage or Fairbanks-based companies,
Alaska Traffic Consultants does handle freight consolidation services for
summertime barge deliveries to remote villages.
“In recent years, there’s not been so much of a dramatic drop in the winter
months, but we still see a seasonal increase from March or April through
November–it’s much heavier than the rest of the year,” Lohman said.
From the Seattle consolidation warehouse, freight bound for Alaska is loaded
either on the ocean-going steamships or the slower barges.
“We’re one of the few companies that uses all the different carriers,” Lohman
said. “Depending on the customer, there are different needs for transit times.”
While Alaska Traffic Consultants does provide southbound shipping service from
Alaska to Seattle, it amounts to very little of the company’s workload. “It’s
pretty dramatic for us–98 percent of what we do is northbound,” Lohman said.
Each customer brings to Alaska Traffic Consultants a unique set of consolidation
and shipping needs, Lohman said. Hence, the company has stayed small–16
employees, including two based in Anchorage–in order to address those individual
requests.
“It’s worked for us for 46 years, operating this way,” Lohman said. “The bigger
you get, you have to put in a system to handle all the different things and
instructions for people. That’s when you start making mistakes and that’s when
people can get upset.”
Alaska Traffic Consultants occasionally contracts final deliveries to customers
with other trucking and freight consolidation companies, Lohman said, when such
partnerships make sense.
“When it works for the customer, for the physical handling of the freight, we
might use agents contracted for delivery,” he said. “That is more common for
certain types of specialized freight … say for deliveries up to the North
Slope.”
Construction Projects Impact Business
Like other businesses in Alaska, freight consolidators are dramatically affected
by large projects. For example, business picked up this spring at the Fairbanks
office of Pacific Alaska Forwarders, thanks to the start up of construction on
the National Missile Defense Project at Fort Greeley.
“The volume in actual tonnage has increased the last two or three weeks,” said
Joan E. Johnson, sales manager, in mid-May. “There’s been a lot of conversation
about it–everyone is gearing up for it.”
Other construction projects that have reflected an increase in business for
Pacific Alaska Forwarders include construction of a new hospital at Fort
Wainwright, a new courthouse, police station and parking garage in downtown
Fairbanks and an addition to the University of Alaska museum. In recent years,
construction of the Healy Clean Coal Project and the Fort Knox Gold Mine also
contributed to an increase in business for the freight consolidator, Johnson
said.
“Another strong area is the oilfield industry,” she added. “Even though we don’t
have a direct contact with the oil companies, they are important to our
community. We’re busy when they are busy and strong with exploration, because
their suppliers are our customers. “When that business is down, it impacts us.”
Business has been so good for Pacific Alaska Forwarders that the company built a
new terminal in Fairbanks, moving into the 9,000-square-foot facility off of
Peger Road last September.
The new terminal boasts a 20-door cross dock transfer area, in which trucks can
be unloaded from one door into the warehouse floor where crews consolidate
supplies for customers and reload the complete package for final delivery.
Pacific Alaska Forwarders operates terminals in Anchorage, Soldotna/Kenai and
Seattle, as well as Fairbanks, employing more than 100 workers, Johnson said.
In addition, the company also offers a consolidation warehouse in Chicago,
enabling East Coast suppliers to ship to that Midwest location, before final
consolidation at Seattle. That additional location actually speeds the shipping
process, said Wes Renfrew, Fairbanks terminal manager for Pacific Alaska
Forwarders.
While the company does use some of the barge lines operating between Seattle and
Alaska’s coastal communities, most of the freight is shipped via the faster,
ocean-going ships, Johnson said.
“CSX and TOTE focus on the full load customers, moving 40,000 pounds at one
time,” she said. “Some of our customers may have businesses that order only 100
pounds at a time, or 1,500 pounds or 20,000 pounds.
“We need to put those orders together to save the Alaskan customer money and to
get their product here in an expedited timeframe,” she added.
That basic service created the company back in 1961, Johnson said. “Products had
to get to Alaska by water carriers.”
Consolidated Freightways, a worldwide shipping company with 20,000 employees
under the corporate banner, also operates terminals in Fairbanks and Anchorage.
Northbound Exceeds Southbound Freight
“We have three times as much freight north as we do shipping south,” said Dave
Wasson, general clerk in the Fairbanks office. “The military is our biggest
customer.”
Much of that service to the military involves personnel household moves, he
added.
Consolidated Freightways operates a northbound terminal in Tacoma, and ships
southbound freight to a separate warehouse in Seattle. “That provides for a
smoother flow of goods,” Wasson said.
Consolidated Freightways was one of the first Lower 48 trucking companies to
open offices in Alaska, Wasson said, a corporate move made in the 1950s.
Another Alaska-based freight consolidator business providing both barge and
ocean-going shipping service to and from Alaska is Span-Alaska Consolidators
Inc. Started in 1978 by Ran Landry, the company now operates terminals in
Anchorage, Fairbanks, Juneau, Kenai and Kent, Wash.
Span-Alaska also offers bi-weekly service to Kodiak and weekly service to Dutch
Harbor, according to Mary Stech, account manager.
“We have a little bit of everything–retail, construction, small business, big
business,” she said. “We provide the same type of service no matter what they
are moving.”
Like other freight consolidators in Alaska, the majority of business involves
goods and products being shipped to the state, rather than items being exported.
“For 99 trailers that we have going north, we’ll have one going south,” she
said. “To fill southbound shipments, Alaska does not really have the
manufacturers. All we’ve got going up here is UAF, the Army and our natural
resources, so most everything is northbound.”
Up to 95 percent of the company’s clients opt for the faster steamships, said
company president Mike Landry. And most of Span-Alaska customers use LTL–less
than a truckload–rates and shipping service.
Typical shipments include Harley-Davidson motorcycles, glossy newspaper
advertising inserts for local retailers and rolls of flooring and carpeting,
according to Fairbanks terminal manager Cornelius Sims. Span-Alaska also has
shipped wild game antlers and mounts for individuals, frequently for
out-of-state hunters sending their trophies Outside.
Span-Alaska, still a family owned and operated company, employs 115 workers in
its five terminals, said Landry. “We have wonderful people who work for
Span-Alaska–we’re fortunate to have those people,” he said.
Those employees, combined with a company emphasis on customer service, are part
of the package that Span-Alaska touts as its assets in a highly-competitive
freight consolidation market.
“We believe that we differentiate ourselves on the service level,” Landry said.
“We’re all using the same ships, so the way we can differentiate ourselves is
what we do with the freight before it goes on the ship, and after it comes off
the ship.”
He views the industry as “highly competitive,” made up of a handful of companies
focused solely on Alaska, augmented by Lower 48 trucking companies that have
operations in the state.
“We’re all fighting for the same business,” Landry said. “There are fewer
players in the freeze and chill market, but other than that, everybody is vying
for the business.
“Everyone has competitive prices, but it’s the service levels that make the
difference between success and failure,” he added.
Others in the industry agreed with Landry, describing the freight consolidation
business in Alaska as hotly competitive.
“It’s very competitive, although the number of players has whittled down over
the years,” Lohman said, at Alaska Traffic Consultants.
In addition to companies specializing in freight consolidators, motor
carriers–also known as trucking companies–have entered into the arena, he added,
further splitting the pie.
Steady retail shipments combined with large projects continue to drive the
market for freight consolidators. And the addition of new, large retailers in
the state just increases the amount of business available for freight
consolidators.
“Look at what we have in Fairbanks–two Fred Meyer stores, a Sam’s Club, Home
Depot, Kmart–many more stores than the population calls for,” said Wasson, at
Consolidated Freightways. “You would think they would be going out of business,
but they’re thriving, and so are we.
“Having good customers and repeat customers is the key,” he added.
