On the rebound from 9-11 slowdown, Tax-Airfreight makes a new statement
By David Niles, of SBT
Milwaukee-based Tax-Airfreight Inc. intends to solidify its position in the trucking market via a new marketing campaign that goes beyond its name.
The company, founded 26 years ago this month to handle air freight for Harnischfeger Corp. (now Joy Global Inc.), is adding a new tagline to its trucks and to its marketing materials that states "Not just air-freight - All freight."
"We're well known in the industry, but we're seen as an air freight carrier, with the implication that we must be expensive for carrying surface loads," said Gregory Groth, president and CEO of the company, on Howell Avenue near Gen. Billy Mitchell International Airport.
The company expanded from air-freight delivery to include less-than-truckload surface deliveries in the 1980s, but it kept its air-freight-related name, commonly used as Tax-Air.
"Our name recognition and our logo recognition has been very important to our customers," Groth said, noting a study showing the blue and white trucks with an eagle to be one of the most recognized trucks on the highway.
So, instead of changing the business name, Groth decided to add the "not just air freight" tagline. Decals with the wording started to go on Tax-Air trucks at the end of August.
All this is happening as Groth sees continued consolidation in the industry -- an industry that suffered tremendously after the Sept. 11 terrorists attacks. Nationwide, more than 7,000 trucking companies with 10 or more vehicles went out of business between 2001 and 2002, according to the American Trucking Association.
Business is better now -- Tax-Airfreight posted profits in the first two quarters of this year, with an 11% growth in business over 2002. But it's still incredibly competitive. "With the way the economy has been, the pie got smaller," Groth said. "But we're trying to take the positive approach. And we can see confidence out there."
While the company reduced costs when economists starting using the word "recession" early in 2001, Tax-Air also started laying the groundwork for an expanded business operation. It has since created and filled three positions: chief financial officer, Brad Lamers; vice president of operations, Larry Haase; and vice president of sales and marketing, John Muenzer. The duties of those three positions had been handled by other staff members.
The company has about 400 full- and part-time employees and 146 pieces of power equipment -- tractors and trucks -- and more than 200 trailers "to give us better pick-up and delivery capabilities," Groth said.
Those people and that equipment serve more than 2,000 cities in the upper Midwest from terminals in Milwaukee, Madison, Manitowoc, Neenah, Minneapolis/St. Paul and Chicago. The company is also authorized to retrieve international freight from air and ocean carriers on behalf of a customer and hold it "in-bond" pending clearance by U.S. Customs.
Groth, who grew up in the Bay view neighborhood of Milwaukee but who now lives in Franklin, got his start in the business working on a dock at Novo Air Freight in the 1970s. After becoming a manager he was transferred to Neenah where he opened and operated that area's first air freight forwarder.
His experiences with Novo helped form what Tax-Air is today.
"Novo had offices throughout the country, but not everywhere," he said. "So they would use agents - companies like today's Tax-Air -- to help with deliveries and pickups. Some of those agents were good, but some were terrible."
As a regional agent, "I want Tax-Air to be one of the good ones," he said. And to Groth, that means being proactive with customers. "When we have a problem, I'm going to call the forwarder before he calls me," Groth said. "And I'm going to be ready to tell him, 'Here's what we're going to do about it.'"
Those kind of calls are made when problems happen. More often, they don't occur. "Our goal is, if we say we're going to deliver it the next day, we'll fight internally to make that happen," Groth said. "We elevate that intensity to the rest of what we do here."
The payoff for customers is that The Gap, for example, had 99% of its deliveries through Tax-Air on time last year and 99.21% on time so far this year.
Groth's expectations and fostering a can-do culture are complemented with the company's use of technology to help ensure on-time delivery. The shipping system relies on electronic transmissions of pick-up orders, bills of lading, tracing and invoices; barcoding; real-time status updates on the company's Web site; imaging technology; two-way radio use; and the impending use of the Global Positioning System.
While Groth is striving to exceed customer expectations, he also has been working to meet government expectations. The 9-11 terrorist attacks didn't only bring a slowdown in business, they also ushered in a new era of security,
"The Transportation Security Administration came in here, literally breaching our facility and saying, 'I'm here and I'm not supposed to be.'"
It's not so easy to get onto the gated and video-monitored property these days. Groth said Tax-Air "spent tens of thousands of dollars upgrading security measures in all areas of operations. From fending in our entire yard, complete with motorized gate, to installing keypads and securing plans for digital security cameras at every door."
And Tax-Air's safety and compliance manager LuAnn Doyle has taken on the additional task of making sure drivers are trained in security measures.
The threat to the trucking industry is especially strong, Doyle says, because "commercial trucking makes this country run." The American Trucking Association says 68% of freight shipped in the US is handled by the trucking industry.
"There are hundreds of thousands of drivers who have been in this business for years, and now we are asking them to change everything they do about their job," she said.
Haulers of hazardous materials and foodstuffs are particularly vulnerable, she added.
Doyle handles Tax-Air's hazardous materials training, which employees are reschooled in every two years rather than the federally required every three years. "Our goal is to ensure that everyone involved will be well versed in the correct protocol if a disaster occurs," she said. "These days you can't be too prepared."
The company has extended its safety training to some of its customers to further ensure a good record. "I never want to have my name in the paper where we didn't do enough to prevent a situation; that's a real hot-button issue for me," said Groth.
When he and two others, including current vice president Rick Sabatini, started the company, "I thought we'd be in business a year or two," Groth said. "But here we are."
Oct. 17, 2003 Small Business Times, Milwaukee