ODFL heralds new service centers as growth drivers

Thomasville, N.C.-based national less-than-truckload (LTL) carrier Old Dominion Freight Line (ODFL) recently announced that it will recognize capacity gains in six United States-based service centers over the first half of this year.

ODFL said that these new service centers were established in response to business growth and client demand, with the new facilities based in Mobile, Ala., Pompano Beach, Fla., Houston, Texas, Otay Mesa (San Diego), Calif., Texarkana, Ark., and Anaheim, Calif.

“Our 2018 results confirm that strategically opening new and renovating existing service centers to accommodate customer demand is helping to grow our business,” said Terry Hutchins, ODFL Vice President of Real Estate, in a statement. “We will continue that strategy of searching for new sites to increase capacity and grow our network to continue to deliver premium service that exceeds customers’ expectations. “We search for locations in growing markets where we have access to quality workers to expand our network capacity. Expanding our network allows us to immediately accommodate customer needs, and is critical to maintaining our award-winning low claims ratio and guaranteed on-time delivery

ODFL added that its service centers are strategically placed and built with best-in-class technology, and reduce shipping time, increase daily volume, and enhance delivery flexibility. It also noted that ODFL’s real estate team strategically selects locations to anticipate future growth and heightened customer demand.

Looking ahead, ODFL said it plans to increase the number of its service centers and capacity over the course of 2019.

On the company’s fourth quarter earnings call last month, ODFL Executive Chairman David Congdon said that ODFL topped $1 billion in revenue for the third straight quarter, coupled with a sub-80 operating ratio. He added that ODFL set new company records for annual revenue and profitability.

These results, said, Congdon, “reflect the consistent execution of our growth strategy. We believe our ongoing ability to win market share is based on a value proposition of providing superior service at a fair price to shippers, while also continuously investing in our service center capacity to support our long-term growth.”

ODFL CEO Greg Gantt said on the call that driving additional volumes through the existing service center network improves network density and the resulting operating leverage allows ODFL to improve its existing service center's efficiency, which positively impacts the company's overall operating ratio.

“Given our confidence in winning additional market share, we intend to expand our service center operations beyond the existing network of 235 service centers,” he said. “Our fleet, we were able to add seven service centers during 2018, and we plan to open another 10-or-so service centers in 2019 depending on the timing of construction projects. We believe these additional service centers as well as the expansion of some existing facilities will increase the overall average capacity within our network to ensure that it is not a limiting factor to volume growth for the next few years.”