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Cherry Hill, NJ
Logistics Firm Reveals What Fuels its Growth as its Competitors Run Off the Road
Whether it’s A case of beer from Anheuser-Busch or merchandise from Wal-Mart, chances are before it got to the store, it was riding in a truck operated by Vineland-based logistics firm NFI.

The 77-year-old NFI operates nearly 10,000 vehicles and 15 million square feet of warehouse space at 50 locations nationwide, including nine in New Jersey. About 1,000 of its global work force of 5,000 are in the state, according to acompany fact sheet. By all indications, NFI — ranked No. 15 on the NJBIZ list of top 100 private companies — has dodged the recession. The company’s eight divisions are on pace to increase its 2008 revenue, which was nearly $750 million, by 5 percent to 10 percent, said Sidney Brown, its chief executive.

Brown represents the third generation of the family owned business, which was founded by his grandfather. Brown runs the company with brothers Ike and Jeffrey, who are vice chairmen; his father, Bernard, is the group chairman.

Earlier this year, the group’s eight divisions came together under the common brand of NFI, with a new campaign, logo and Web site “to more effectively convey the wide range of services” provided, including transportation, logistics, warehousing, intermodal, commercial real estate and development, according to the site.

Sidney Brown broadly attributed NFI’s growth in the current recession to an aggressive business approach and an emphasis on customer service, but pointed specifically to two major drivers: it has picked up new customers deserted by smaller trucking and logistics firms that folded in the recession, and its strategy of maintaining a younger fleet that’s fuel efficient and less prone to breakdowns appeals to its clients. Vehicles in NFI’s fleet are equipped with advanced satellite tracking and communication devices to enable round-the-clock cargo monitoring; many of its rivals don’t offer this, Sidney Brown said.

Phillip Rulli, vice president-Northeast region at Warrenville, Ill.-based vehicle maker Navistar, said NFI has bought 300 trucks from his company so far this year, and reckoned the firm is on track to continue such purchases to reach or cross pre-recession levels of 2006. “NFI is looking to have a banner year,” Rulli said, “while the entire industry is down about 40 percent this year.” He oversees Navistar’s markets from Maine to Maryland from his Cherry Hill office. “We have been trying to do more business with NFI because they are growing rapidly, versus others that are either downsizing or going out of business,” Rulli said. Another big attraction in NFI for Navistar is that it replaces its vehicles every four years, instead of the six to eight years it held on to them in earlier years, he added.

A typical day-cab truck, excluding the trailer, costs about $80,000, and can carry loads of up to 80,000 pounds on short-haul runs of up to 350 miles a day (South Jersey to Boston, for example), Rulli said. The bigger, 18-wheeler sleeper tractors cost about $100,000 each; they also carry up to 80,000 pounds each, but can cover longer distances, like from New Jersey to Chicago or Los Angeles, he added.

NFI has been able to continue with its fleet modernization and renewal program despite the current freeze in the credit markets, because it has “a strong balance sheet,” Sidney Brown said. “The capital required to run the business is a pretty big entry barrier,” he said. “We maintain a healthy debt-equity ratio, so in times of recession, we have the wherewithal to pay cash if we don’t get credit.”

In addition to maintaining a young fleet, NFI also has adapted itself to the changing times by providing clients turnkey-like dedicated freight services, Rulli said. For many years, NFI provided long-haul contract freight services, he said, but in recent years, it has repositioned itself to become a dedicated private trucking company for each client, taking over the entire range of transportation services, including providing drivers, he added. “They are very savvy businesspeople, and are always looking to provide new services and new business,” Rulli said. While its strategy of maintaining a young fleet with advanced communication devices means high upfront capital costs, “in the long term it is worth it,” he said. Additionally, newer, fuel-efficient vehicles also bring savings in operating costs that can be passed on to clients, and help in offering competitive pricing.

Sidney Brown said his firm prides itself also for efforts to run an environmentally friendly fleet. “We are conscientious of the carbon footprint of our activities,” he said. “We reduced almost 150 tons of carbon dioxide in 2008, just based on the increase in the fuel efficiency of our trucks.”

E-mail to shankar_p@njbiz.com

About NFI

NFI is a fully-integrated North American supply chain solutions provider headquartered in Camden, New Jersey. Privately held by the Brown family since 1932, the company generates more than $3.5 billion in annual revenue and employs over 16,800 associates. NFI owns and operates more than 70 million square feet of warehouse space alongside a dedicated fleet of 4,900 tractors and 13,700 trailers. In 2024, the company will operate the first 100% zero-emission drayage fleet, leading the transition to zero-emission goods movement in the United States. NFI’s relentless innovation and unparalleled service deliver logistics solutions that transform the way business gets done. The company’s business lines include dedicated transportation, warehousing and distribution, eCommerce fulfillment, brokerage, transportation management, port drayage, intermodal, global logistics, and industrial real estate. For more information about NFI, visit www.nfiindustries.com or call 1-877-NFI-3777.