What Is The Weakest Link in the Supply Chain?

“What is the biggest challenge in drayage today? The highly fragmented drayage marketplace,” Ken Kellaway, president and CEO at RoadOne Intermodal Logistics, said at the Pulse of the Ports conference last week. There has been significant infrastructure investment made in the supply chain over the last few years to enhance everything from terminals at the ports to rail to intermodal. However, the highly fragmented drayage market is causing major issues in the supply chain that Kellaway says will inhibit growth.

“We have watched everyone speak about multi-billion dollar market caps and big infrastructure investment in terminals, vessels and rail,” said Kellaway. “In the middle of all of this is the weakest link in the supply chain when there is not one company in the United States that does more than half-a-billion dollars in drayage today. That is a big staggering issue.”

RoadOne Intermodal is one of the largest drayage businesses in the country—and Kellaway says that should be an example of the fragmentation in the market. It is an illustration of the lack of capitalization in these companies. “We have a little more that $250 million in revenue, and we a number one or two in the country,” he explained. “That scares me, not because we aren’t a great company but because from a capital standpoint, we are so much smaller than everyone else around us in the marketplace.”