• ITVI.USA
    15,308.520
    72.710
    0.5%
  • OTRI.USA
    25.860
    0.050
    0.2%
  • OTVI.USA
    15,298.190
    65.480
    0.4%
  • TLT.USA
    2.690
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.910
    0.010
    0.3%
  • TSTOPVRPM.CHIATL
    2.990
    -0.170
    -5.4%
  • TSTOPVRPM.DALLAX
    1.530
    0.090
    6.3%
  • TSTOPVRPM.LAXDAL
    2.790
    -0.030
    -1.1%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.020
    -0.9%
  • TSTOPVRPM.LAXSEA
    3.270
    -0.130
    -3.8%
  • WAIT.USA
    127.000
    0.000
    0%
  • ITVI.USA
    15,308.520
    72.710
    0.5%
  • OTRI.USA
    25.860
    0.050
    0.2%
  • OTVI.USA
    15,298.190
    65.480
    0.4%
  • TLT.USA
    2.690
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.910
    0.010
    0.3%
  • TSTOPVRPM.CHIATL
    2.990
    -0.170
    -5.4%
  • TSTOPVRPM.DALLAX
    1.530
    0.090
    6.3%
  • TSTOPVRPM.LAXDAL
    2.790
    -0.030
    -1.1%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.020
    -0.9%
  • TSTOPVRPM.LAXSEA
    3.270
    -0.130
    -3.8%
  • WAIT.USA
    127.000
    0.000
    0%
FreightWaves LIVE: Events PodcastNewsTop Stories

EFS keynote: Revamped Roadrunner worth $10M personal investment, Leto says

Keynoting FreightWaves’ Enterprise Fleet Summit, GlobalTranz, Emerge founder explains why Roadrunner can turn things around

Even for a successful dice-roller like Andrew Leto, founder of freight brokers GlobalTranz and Emerge, it took guts to contribute $10 million of his personal capital to a $50 million private placement for downtrodden transport firm Roadrunner (NASDAQ:RRTS). 

Once a darling of growth-minded investors, Roadrunner spent the latter half of the past decade disgorging most of the 34 companies it had acquired during the prior 10 years. The chickens of Roadrunner’s failed growth strategy came home to roost in early 2017 when it was forced to restate three years of financial results. It was subsequently delisted from the New York Stock Exchange.

Leto’s faith, he said during his Wednesday keynote at FreightWaves’ virtual Enterprise Fleet Summit, is that Roadrunner has returned to its less-than-truckload roots and is poised to capitalize on what he called the strongest pricing environment in the segment’s long history. Shippers are being slapped with 10% to 15% rate increases, Leto said during an interview with FreightWaves President George Abernathy. What Leto didn’t say was that shippers could, or would, push back on those hikes.

“There has never been a better time to get into the LTL business,” Leto told Abernathy.

Roadrunner had long been an asset-light provider, where it effectively controlled its capacity but didn’t have drivers or equipment on its payroll. In what will be the company’s mantra, Leto said that Roadrunner is “not a trucking company. It is technology that moves trucks.”

Roadrunner has not benefited from those rate hikes as much as other LTL players, Leto said. Part of the reason is that shippers in the past have been burned by the company’s failure to consistently hit its published time-in-transit commitments. If the public promise is delivery in seven days, hit it in seven days, not eight, he said. 

Leto, who will join Downers Grove, Illinois-based Roadrunner’s board, hinted that the company could carve out a solid niche by underpricing the competition for deliveries that might not have to be expedited. As part of the turnaround plan, Roadrunner hired David Ross, a longtime industry analyst at Stifel Financial, to become executive vice president and a partner.

Leto and Roadrunner will now face the challenge of persuading shippers and brokers that the company can deliver on the road and in the marketplace. The prior incarnation, he said, was “an example of what not to do.” Now, he said, the revamped Roadrunner needs to show what it can do.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

Leave a Reply

Your email address will not be published. Required fields are marked *