Focus on service
“Taking over as a CEO who needs to make significant investments,
does have a higher risk for failure, especially for a while,” Uremovich
says. “So it’s not for people who are risk averse, but it’s also an opportunity to achieve something. In my opinion, you can never go wrong
under those circumstances by focusing on the customer, because somebody out there better pay attention to those people.”
Uremovich’s final growth strategy was to drive Pacer toward
becoming a world-class intermodal and logistics service. He says that
customers are more interested in reliability than price, so demonstrating service consistency is vital as is providing a one-stop shop that
offers customers the flexibility to select the most effective mode of
transportation.
For example, customers often need to contract with multiple firms,
transporting freight from ships to railroad containers to trucks, which
increases costs and decreases reliability. Under Uremovich’s unified
service model, customers can switch between rail and trucks, while
still keeping their entire shipment of goods in the care of one provider.
Uremovich also renegotiated many of the company’s rail contracts,
using his years of industry experience and relationships, to create
more favorable terms that will benefit customers and improve margins.
“A number of things changed in the industry around the 2004 to
2005 time frame, and now there are really only two rail providers,”
he says. “So the terms and conditions in those contracts are vital
in determining a firm’s competitiveness in the transportation
industry.”
Uremovich also insists that the firm’s senior executives visit customers, and he personally conducts new business pipeline reviews
with the company’s sales staff, so he can keep tabs on what’s important to customers and be involved in landing the top four or five
prospects on the list. Now that division leaders operate under a unified vision, sales staff cross-sell services to clients, which has
increased growth and revenue.
So far, his solutions seem to be on target. While 2007 operating
income was below 2006 levels, it was above all other years since the
IPO and revenue increased over 2006 by 4.3 percent to $1.9 billion.
“We really were a creature of private equity,” Uremovich says. “Our results were never bad, but I couldn’t see a way that we could sustain
long-term growth, given our structure. When funding is used to make
acquisitions and create exit strategies for investors, it works in the
short term, but play that out 25 or 30 years and it stops working. As
companies become more mature, you really have to address the long-term strategic issues to sustain growth.”
HOW TO REACH: Pacer International Inc., www.pacer.com
