VOL. 127 | NO. 84 | Monday, April 30, 2012
Memphis Small Business Spotlight
SPECIAL EMPHASIS: Logistics
TransOne Expands Just One Year After Opening
By JONATHAN DEVIN
New opportunities are arising for intermodal companies as America’s post-recession rail industry gets back on track.
Alex Blankenship is president of TransOne LLC, a West Memphis-based company that provides intermodal transportation services in the Mid-South, as well as maintenance and repair.
(Photo: Lance Murphey)
One such company, TransOne in West Memphis, celebrated its first anniversary April 20 by lining up plans to expand its trucking fleet.
“In the last year intermodal volumes are climbing back up as the economy improves,” said Alex Blankenship, president and owner of TransOne. “In some weird way it created the opportunity that allowed us to start as TransOne. Any time you have a problem it’s also an opportunity.”
Blankenship worked for other intermodal companies for the previous 20 years and built his company on existing relationships with truck drivers and clients.
“It’s a long sales cycle and it’s a relationship-driven business, so that 20 years of being in the industry helped me,” Blankenship said. “It would have been hard to start this without any knowledge or relationships.”
He said that the rise in fuel prices on top of the 2008 recession caused many of the small to mid-sized regional intermodal companies to weaken or close, leaving gaps in 2010 and 2011 as the market slowly came back to life.
“There’s a market correction that happens when you have excess (businesses in the industry),” Blankenship said. “When things level out, some of the smaller guys don’t make it. Hopefully you have better market share on the other side.”
TransOne offers three services – operating a container storage yard; providing trucking containers to and from intermodal yards and distributors; and repairing and maintaining equipment.
Domestic and international goods shipped in containers by rail are offloaded to TransOne’s container yard for storage until they are needed by distributors or they are driven directly to the distributors on arrival.
The empty containers are then stored in the yard to await another shipment going the opposite direction.
When rail or trucking equipment breaks down or needs service, TransOne steps in to fix it.
The selling point for TransOne clients, said Blankenship, is proximity to a major railroad.
“It would have been hard to start this without any knowledge or relationships.”
–Alex Blankenship, President and owner of TransOne
“It’s about real estate – location, location, location,” he said. “Any time that you’re talking about transportation, the closer you can get to a major rail terminal, and the amount of time you can reduce between the terminal and a storage facility, you save the shipper money. “
TransOne leases 92 acres at the terminal yard of the Union Pacific Corp. railroad in neighboring Marion.
Union Pacific is one of five Class 1 railroads operating in the Memphis area, and several years ago the company invested about $75 million in the Marion terminal.
Coupled with West Memphis’ position at the intersection of Interstates 40 and 55 – two of the busiest in the U.S. – and it’s easy to see that TransOne has indeed found the right location.
Blankenship first approached container lines and trucking companies that needed overflow capacity, and found that there was business to spare.
Container volume by rail had decreased some 20 percent during the recession, but manufacturing, particularly international manufacturing, was beginning to rise.
Blankenship also got business from regional distributors who were getting interested in relatively short rail runs of only 300-500 miles, which would normally have been run by truck before fuel prices sky-rocketed.
TransOne looks for both domestic and international clients in case the manufacturing market swings again. The company has no specialty but rather transports products for any industry. Still, Blankenship said clothes, food products, electronics and household items are par for the course.
TransOne employs 30 staffers and 30 truck owner/operators, and Blankenship said he hopes those numbers continue to grow.
“It’s not a high-margin business, but we do a substantial amount of container volume for smaller to mid-size intermodal companies in the region,” he said. “We look to increase our fleet size in the next year by about 20 percent.”
TransOne serves a radius of 150 miles around Memphis. Future expansion will involve setting up in another major city, perhaps Atlanta, and securing the same size radius rather than expanding its footprint in Memphis.
“You could take this model and expand it out to other geographic locations over time,” Blankenship said, mentioning Charleston, S.C., and Dallas as other possibilities.
In the meantime, he’s got a birthday cake to eat as the company celebrates one year in business.
“Being a startup company, this is a significant milestone in an industry of this size,” Blankenship said. “We’ve made it through the first year of operations with a healthy cash flow and we’ve positioned ourselves to take advantage of the years to come.”