Intermodal industry veteran Ted Prince seems to have the tiger by the tail.
Prince sees rail transport as conquering a final frontier for long-haul shipment of perishables, and he is putting decades of experience to work as part of a team successfully advancing that concept through a company he co-founded four years ago.
Deploying a growing fleet already numbering more than 730 state-of-the-industry 53-foot-long refrigerated containers, Tiger Cool Express LLC is on track to gain further business as factors such as required electronic logs for truckers take full effect, according to Prince, the Overland Park, Kansas-based firm’s executive vice president and chief operating officer. Prince shares how the Tiger Cool Express notion has become reality and offers thoughts on temperature-controlled logistics challenges, plus some personal insights, in an exclusive interview with AJOT.
How, since its founding four years ago, has Tiger Cool Express succeeded in furnishing a reliable, cost-effective alternative to trucking for movement of temperature-controlled cargos?
When we [fellow intermodal industry veteran Tom Finkbiner and I] developed the business plan, we really felt the last frontier for intermodal was perishables – specifically produce – because it was a long length of haul, and that’s traditionally where intermodal has succeeded.
Our strategy with produce was to follow the sun. Originally, we thought, for example, that we might be able to compete in Florida up into the Northeast and Midwest, but, as fuel got cheaper and truck rates hit new lows, that was not a sufficiently long length of haul to overcome the extended drayage. But we believe that will change as the effects of ELDs [mandated electronic logging devices in trucks] and [driver] demographics take place.
It took about three years to raise the money, and the business plan went through multiple iterations. When we were talking with private equity people, we explained that our competitors would be the owner-operators – like Jerry Reed in “Smokey and the Bandit” – and 30 years later he’s overweight, can’t pass the DOT [U.S. Department of Transportation] physical, driving the same truck and it’s broke down, and his dog died – and that crystallized our vision for them.
We believe impacts of ELDs will asymmetrically affect our segment because we are competing on a transcon [transcontinental] basis, and a truck can’t do five days legally with a single driver.
We’re excited because we really believe our concept is a game-changer, because, with ELDs, [legal] transcon by truck becomes seven days. Now, with intermodal, we’re faster than truck. We’ve never had that advantage in intermodal. This is really an exciting time for us.
With truck, the most valuable asset is the driver, whereas our most valuable asset is the container, and containers are pretty easy to redeploy. We can follow the sun because we don’t have any domiciled drivers.
What led you to develop and carry out the concept for Tiger Cool Express, applying your decades of intermodal expertise with such companies as SeaCo Ltd., Consolidated Chassis Management LLC, Kansas City Southern, “K” Line America and Conrail, as well as education at The Wharton School of the University of Pennsylvania?
I also have an engineering degree in transportation from Penn.
My career has kind of been like Zelig. I’ve been present during a lot of major transformations in the industry. The question to me was: What’s next, what’s left? And it’s long-haul perishables.
The big issue we had was trailers or containers? It really took a vote of confidence with our investors and our lessor to go out and get 53-foot domestic containers, because it’s a brand-new piece of equipment, there’s no secondary market, whereas we could’ve gotten second-hand trailers pretty cheaply.
We looked at containers as the only logical way to do this, especially in a long-haul environment. If 40 to 50 percent of your expense is related to rail, and double-stack [containers] is significantly more economical than trailer, it doesn’t take a lot to figure out containers are the way to go.
What roles do technology and environmental sustainability play for Tiger Cool Express?
Sustainability is clearly part of our value proposition. We have state-of-the-art equipment that exceeds the California Air Resources Board [CARB] requirements.
Our units are equipped with GPS and telematics. We can control and monitor the reefer [refrigerated container] remotely. We know where the container is, which has been sort of enlightening with our dray partners.
We also believe we gained an advantage because, in making enterprise software decisions, we were fortunate to be starting with a blank sheet of paper. We didn’t have any legacy technology. Our TMS [transportation management system] is really two separate TMS solutions that are both best-in-class.
We use a system from GTG [Technology Group] to handle all our interface with stakeholders, execution and accounting. We use SmartSCM for costing, pricing and planning tools. We have no hardware in our office other than a router, because they all live in the cloud.
How has Tiger Cool Express recently further enhanced its executive team?
Tom [Finkbiner], our initial CEO, was instrumental in growing the business up to our present $70 million run rate [annual revenue] but was at a point in his life to pass along the baton.
Tom is still the board chairman, but in September, we brought on Steve Van Kirk [former president of Swift Intermodal] as the new CEO. He has experience running large, complex organizations and is extremely customer-focused.
We’re at the point now where we need to grow and to scale, so bringing on Steve was the logical next step.
What do you see as the biggest challenges temperature-controlled logistics will face over the next 10 years or so, and how can industry respond?
With temperature-controlled logistics, there are a lot of questions related to how the product gets from the field to the consumer, including questions about e-commerce and the last mile.
There is some question, too, about where the field will be. California has gone through four years of drought, and produce is 50 percent water, so you need a reliable supply of water. That’s a geopolitical issue worldwide. You see Mexico and Central America becoming big sources for produce. And you have the issue of climate change and whether growing areas will be impacted. So it’s important to be flexible.
Then you have the Food Safety Modernization Act. We’re fortunate to have a consultant who has spent his career in the food safety business. How FSMA impacts transportation and particularly intermodal is unclear. It certainly requires sophisticated telematics to monitor the cold chain end-to-end and whether there are deviations or problems. Food safety is a really big issue.
Within intermodal, there’s a question about capacity and service. Perishables are a live load and unload operation. It’s not the business model of drop and hook. So, if the railroad tells us the load is going to be available at 6 in the morning, we’re making a delivery appointment for 8 a.m. the same day, and, if it’s not available until 9 a.m., it may take two days before the receiver can schedule another appointment. So the requirements on service are higher.
And then there’s the impact of ELDs on drayage capacity, which I think is going to be very significant. If you don’t have good drayage carriers lined up, you’re going to be in big trouble.
I’m not afraid of standing in the face of common wisdom, but there’s this feeling that the Federal Motor Carrier Safety Administration isn’t going to enforce ELDs until next year. They may not take the driver out of service, but drivers who get pulled over may have a $700 fine and points on their CSA [Compliance, Safety, Accountability] record. Therefore, the ability to hire and retain draymen is critical. There’s going to be a real challenge in the cold supply chain.
How have you managed, in addition to your impressive corporate credentials, to find time for leadership roles in the U.S. Department of Transportation’s Maritime Transportation System National Advisory Council, Intermodal Association of North America, Foundation for Intermodal Research and Education, and Intermodal Transportation Institute at the University of Denver, to name a few?
I’m pretty old now , so, when I got into this, intermodal was a sentence, not an assignment. It was like Devil’s Island or Dante’s Inferno. Nobody went into intermodal and ever came out.
Intermodal was a very close-knit community, and you were taught that there was a common responsibility. It was a team sport, because you needed all your stakeholders.
My parents taught me the tradition of social responsibility, that, if you’re not satisfied and you want to make a difference, you have to participate, you have to speak up.
To get away from all things work-related, what do you enjoy doing?
I’ve done quite a lot of writing, and I like to read spy novels and history.
Also, I have a son with special needs, so my wife, who is a special ed teacher, and I have been involved as advocates for the special needs community. I was on a special ed advisory council and in the past been involved with Special Olympics and the Autism Society of America.
Now that he’s older, I’m less involved, but we see a tsunami of these kids who are aging out of the free and appropriate public education they receive under the Americans with Disabilities Act, and a lot of these young adults have no place to go. It’s terrifying.