Date: Jan 01, 2013
Magazine:
January 2013 - New Seed Variety Issue

THE BEGINNING: Ken Lund, vice president of operations for Allen Lund Company and son of the namesake founder, calls the history of the firm the “perfect American dream story.”  Allen Lund started in the business by driving a truck hauling perishables before working his way into a desk job, and then establishing his own company.  “He had been handling traffic out of the Los Angeles office for another company but he wanted to go out on his own, even with six kids to feed.  When he started, they were doing 25 loads a month.  Today we have 350 employees and 35 offices.”

To get started on his own, Ken said his father bought a shell of company from another truck broker.  He turned those 25 loads a month into a 100 loads virtually overnight.

STEADY GROWTH:  The Allen Lund Company added its first satellite office in 1978 in Atlanta, Ga.  For most of the firm’s 37-year history, growth has been deliberate.  “We opened about an office a year,” said Ken.  “The strategy has always been to open an office, get it to be profitable and then move on to the next venture.”

The company tends to promote from within and so the rate of office openings has something to do with “finding the right guy for the right area.  It’s more about who the people are than where they are located.”

UNIQUE PARTNERSHIP ARRANGEMENT:  All of the offices work together but they are separate entities in one way.  The manager of each office shares in the profits, which is why Ken said it is the people that drive the new office openings.  As the company has expanded, the rate of office openings has also accelerated.  “We are in a big expansion mode right now,” he said in late November.  ‘We’ve opened five offices in five months.”

PLENTY OF BUSINESS:  Occasionally it has happened that two offices are fairly close together, but that does not deter the firm from opening a new office if the right person is available.  “If you have the right people it doesn’t matter where you are.  There might be a little bit of stepping on each other toes but there is plenty of business to go around no matter where you go,” Ken said.

In fact, as a point of reference, the firm’s vice president of operations noted that his firm, which does $300 million a year in bookings, owns only 1 percent of the total transportation business.  Recent office openings have included Alamosa, Col., Savannah, Ga., and Joplin, Miss.  Lund said when they find the right person, the firm wants to open offices in Philadelphia, Salt Lake City and Boise.

COMPANY PHILOSPHY’  “We believe in the customer first, the company second and the individual office third,” he said.  “That’s easy to say, but we live it.  People tell us our offices work very well together and we are proud of that.”

PRODUCT MIX:  When Allen Lund first started he was operating in a regulated environment handling mostly perishables, including doing quite a bit of business in cotton.  In the unregulated world of today, the company’s product mix is more varied, but Ken said, “we still specialize in produce and ag products.  Measured by revenue they account for more than 50 percent of our business.”  But the firm handles an incredible mix of products.  Almost anything you can think of from building materials to food to Coca-Cola to hauling high grade fertilizer made from bat droppings.  “We like to stay in food and fiber.  We have been averaging 10-15 percent growth over the last several years.”

Lund said the firm has doubled in size in the last five years and its five-year strategic plan calls for another doubling in that time period.

SCOPE OF THE BUSINESS:  “Even people in the produce business don’t have a clue about how complex our business is.  There are 500,000 truck companies in the United States.  There are 2.75 million Class A trucks, which means that the average trucking company has five trucks.  The vast majority of companies we work with have less than 10 trucks.  In produce, they are even smaller.  We deal with 20,000 carriers per year.  Each week we sign up 175 new trucking companies.”

He added:  “Our main function is to provide access to those truckers for our customers.”

SERVICES PROVIDED:  While the average shipper or receiver is just looking for a load, Ken said a successful third party logistics company like his firm has to be much more than a truck broker.  “We are really a financial institution to the carrier.  We give truckers $1.5 million a week in advances.”

The Lund Company pays the truckers in 14 days, even though most produce companies don’t pay them for 29 days.

He said the firm also takes great pride in serving as an educational conduit for the truckers.  “We have great knowledge about the product, which is very important especially for produce.  Every day we are telling the driver what to look for and how to handle the various commodities.”

TECHNOLOGY TAKES A BACK SEAT:  The Lund Company has the latest computer software to keep up with the business, but Ken said the most important piece of equipment it has is still the phone.  “My dad always loved gadgets and the latest technology.  I remember growing up we were the first ones to have a CB radio in our car.  We have been computerized since 1980 and we write our own programs.  And recently we have added new technology so that our system is based on the Oracle database.”

But with that said, Ken added that it is the company’s policy to talk to their customers and the truckers.  “Some people want to use text messaging and emails, and we’ll do that but you learn a lot more when you actually talk to the drivers.  If you text him and ask if he’s going to make a particular deadline, all you are going to get back is ‘Yes.’  But there is a lot more to that ‘Yes’ that you are going to hear if you are talking to the guy.  Is it, ‘Yes, absolutely I’ll be there.’  Or is it, ‘Yes, I think I can make it, but I’m not feeling real good and I may need to stop along the way.’  Those are two different answers.”

A FAMILY AFFAIR: Allen Lund still comes into the office every day when he is in town and is still a hands-on president and CEO.  But he also spends time on his ranch in Utah and has turned over day-to-day management to his three sons.  As vice president of operations, Ken is in charge of the IT department, marketing and the relationships with the carriers.  His two brothers, David and Eddie, have split the satellite offices in half and each manages their share of those operations.  “My brother-in-law is the CFO and my three sisters are on the board of directors.”

 

“My dad has always said be good to the drivers.  They lead a tough life.  We follow that philosophy and it is a fundamental that we teach to all of our new employees.  It is probably why we can get trucks when they are very tight.”

—Ken Lund, vice president of operations.

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