Lafevers puts Cordele Intermodal Services on track, offering link with Port of Savannah

As president and chief executive officer of Cordele Intermodal Services Inc., Jonathan Lafevers leads one of the fastest-growing U.S. inland ports – a privately funded facility that he believes offers an ideal pivot point for shippers. Matching respective loads of importers and exporters moving between Middle Georgia and the Port of Savannah, Lafevers’ business is based on 40 acres less than a mile from Interstate 75 and about 170 miles inland from Georgia Ports Authority docks via short lines Heart of Georgia Railroad and Georgia Central Railway. In an interview with the American Journal of Transportation, Lafevers shares his experiences getting and keeping CIS on track – a pursuit he’s glad still allows him weekend time with his wife and 2-year-old daughter. How has Cordele Intermodal Services developed into a paradigm of a successful inland port? A lot of it has been hard work, but, candidly, a lot of it has been a little bit of luck, too. The way we approached this thing initially – and the way in which we were going to pursue the operation and market it – has evolved and changed over the years. I think what we have established – given the truck capacities and other factors such as the cost associated with draying containers into the Port of Savannah – is definitely having carved out a niche here for agricultural exporters that like to load containers heavy. That, in turn, basically gives us something to use as an anchor point and the tool that we go out and market to importers with. So we come to the guys and we say, ‘Look, we have a company that’s using MSC [Mediterranean Shipping Co.], as an example, and they’re moving 50 containers a week. We see that you, Mr. Importer, are using 50 MSC containers a week, so we can now offer you a quote-unquote backhaul rate.’ We’re out here doing the reconnaissance to match importers and exporters and doing everything we can to funnel that traffic through the rail ramp. What role has the relationship between CIS and the Georgia Ports Authority played in this success? It’s almost immeasurable. It’s been significant. We had our signing ceremony with those guys in July 2013. At that point, we’d been in operation about two years. We had that ceremony, and Gov. [Nathan] Deal was present and [GPA Executive Director] Curtis Foltz was present, and all the C-level guys at GPA were here, and I think for a lot of companies that participate in the supply chain, it was validation that CIS and the business model was one that worked and now had basically the endorsement of an entity that’s obviously well-respected globally in the logistics and supply chain field. That was a watershed moment for us. The relationship that we have with the GPA is definitely a business relationship and a partnership, but we also have a lot of true friendships that have grown out of that. So it’s a relationship that’s been very successful and that we enjoy and one that I think they enjoy. The mutual success has been something we’ve now gotten a little taste of, and I think the future is very bright.

How do you see CIS – and U.S. inland ports in general – advancing in years to come? Well, the wild card has been thrown out this year with oil prices dropping below $50 a barrel. When you saw fuel prices getting [high] to where they were, a lot of the short-haul rail stuff made a lot more sense when you priced it against an all-truck move. But I think the other things that have come down now – and we’ve all known the truck capacity crunch was coming – factor into really the success and viability of inland ports. I think the other side of that is there’s also a lot of governmental legislation coming down that’s going to affect supply chain, and that has to do with hours of service for truckers, the age of the truck fleet, having to have clean emissions and things like that. So there are a lot of things that a lot of these mom-and-pop dray carriers have to do today basically to survive that, as a lot of these new legislations come out, they’re going to have to abide by. It changes the game for them, and we feel that, for a lot of them, it’s going to become unsustainable. So these inland port concepts really become, hopefully, the anchor point the supply chain utilizes to grow capacity back into some of these lanes that we feel is going to be compromised by new legislation and different things. Have you already started to see impact in relation to the reversal of driver restart rule requirements that came in December with the signing of federal appropriations legislation? That was big. It [the requirement of two overnight rest periods from 1 a.m. to 5 a.m. in the 34-hour restart and limited to use the restart just once per seven days] really, really hurt the truck industry, so we were glad to see it go back to what it was. But I think that, with the electronic logs coming, that’s going to be something else that we feel like we’ve got an idea what that’s going to do, but it’s going to be interesting to see how that all plays out. I believe that you and your father [Brad Lafevers] engaged in a dozen years of research and market analysis before incorporating CIS in 2010, so could you fill us in on why so much work was done in advance and what it was like working with your father in this endeavor? Working with Dad [now adviser to and still primary shareholder of CIS] is always fun. It can be a rollercoaster. Any time you work with family, it definitely can put additional strains on just the standard business relationship, but he and I have a very close bond, and it’s been something that’s been very rewarding, for he and I to have teamed up to be a part in building this entity. Going back to a dozen years of research, a lot of the thoughts around how we might get this thing going revolved around federal grants and different things like that. And so we felt like there had to be some really good marketing data and feasibility studies done so that we could take and present to lawmakers to show them, ‘Hey, this is something that’s got viability. This could be good for the state.’ I think the length of that time was extended over even what we expected it to be what with the recession coming in ’09. We were, at that point, four or five years into the due diligence and kind of kicking the can around: Is this going to work? How could it work and why could it work? Who would the market be? But then, with the hemorrhaging of the U.S. economy, all of the things you’re measuring against get flipped on their head overnight. A lot of the things that we felt like were known truths and things we were going to use as a foundation to build different models – that stuff all went away. Obviously, there was no federal grant money and there was no state money. All the government entities were struggling to even stay within budget. So things like this had to be put on the back burner. For us, it really kind of came to that point where we said, ‘Look, we feel strongly enough that this is viable. We can privately do some things on the financial side and can go out to lending institutions and raise some money.’ So that’s basically what my dad and I did. We went out and put our money where our mouth was and took the big risk, the big plunge. We leveraged some debt and basically built the terminal as it began with just a little spit of track, a gravel parking lot and some fence. That gave us the starting point to go out and tell people, ‘This is real. It exists. It’s viable. It’s operational.’ And then, from there, we started building it block by block. That really has been the way we’ve done this, because to date, other than the track expansion that’s going on today, there has been no state or federal money poured into this thing. We’ve gotten a lot of support from different state entities, the economic development folks here in Crisp County, et cetera, but right when it came down to where the money is going to come from, it’s been fully privately funded. How has your education, with an undergraduate degree in logistics from Georgia Southern University and master’s in marketing from Texas A&M University, as well as three years each as a sales representative with GE Transportation’s rail management software unit and as director of commercial relations with short-line operator Atlantic Western Transportation, parent of Heart of Georgia Railroad, prepared you for your current role? It’s been pretty interesting. A lot of people will go to school and get a degree in something that they never really participate in in their professional life. The logistics undergrad program that I was in was pretty well thought of, and a lot of those guys who were running that program came from the University of Tennessee, so it was a tremendous experience there. They gave us a lot of perspective on the logistics industry because they’d all participated at a pretty high level. My time at A&M was another really good learning experience. The experiences and the types of companies that we got to work for doing marketing research plans and things like that were very eye-opening. My educational time was very well spent, a good investment; I’m still paying those loans off. AT GE Transportation, I was selling operating systems to short-line railroads, so the Heart of Georgia was actually a customer of mine. From there, I was able to develop a pretty good sense for the rail industry, especially the short-line business, and develop a little bit of an IT [information technology] background. That’s been a big part of what we do at CIS. We really try to embrace technology with our systems and various hardware components. That’s something I’ve always been a big proponent of. Being down here and working for Dad at Atlantic Western was good. It gave me an opportunity to learn more about the Heart of Georgia, the way the line operates and what some different opportunities might be. That was a big part of the due diligence we did those dozen or so years leading up to getting CIS off the ground. We still try to learn something every day, but, for the most part, my background has played in very well to what I’m doing today. Assuming you occasionally get a bit of spare time, how do you most like to spend those precious hours? My wife [Heather] and I’ve got a 2-year-old daughter, Hillary. Hillary occupies most of my free time on the weekends, but, when given the opportunity, I like to go chase fish in the blue water and golf and generally be lazy occasionally. That’s pretty much it: Fish, golf, sports, messing around with cars, all the kind of obligatory things guys like to do. Heather and Hillary are my partners in crime on the weekends, with coloring books and puzzles and all that good stuff.