By Anthony Castrovince
Five years ago, Air Ground Xpress—which transports large-dimension and overweight packages for third-party logistics companies—made the decision to pull back. In an industry in which fast delivery to the client’s choice of location is critical, that decision was a difficult one, says Mike Snyder, executive vice president of operations.
“We never got out of the home delivery business, but we got out of the white-glove service business,” he says. “It was important to take a step back, re-evaluate, and retool. We worked with key customers to understand their needs and put together a strategic plan to relaunch a full-blown home delivery service.”
To scale back goes against the grain in a culture that prioritizes getting bigger, faster, and stronger at every turn. But being cautious and understanding limitations are key to the success Air Ground Xpress (AGX) has enjoyed for 38 years.
Five years ago, AGX temporarily stopped providing the type of white-glove delivery service in which drivers carry large items inside homes to the room of choice.
“It wasn’t sustainable, and it wasn’t profitable,” says Patrick Hobbs, executive vice president, sales and marketing at AGX. “So we backed off.”
Over the next few years, AGX re-engineered its home-delivery operations. It bought new trucks and equipment, such as automatic stair-climbers, floor coverings, and specialized dollies, to ensure workers could make deliveries without damaging property or cargo, or injuring themselves.
So when AGX brought back white-glove delivery in fall 2018, its leadership was confident it could promise excellent service at a profitable margin.
“Taking yourself out of the market and then putting yourself back in, you have to start winning customers over again,” says Snyder. “We’re letting them know we’re coming in the right way.”
Doing things the right way
The company’s history is marked by growth—not in the most rapid way, but in the right way for the company.
Founded in 1981 by Phillip Fall, AGX began offering local pickup and delivery service in the Pittsburgh area. Since then, the industry has evolved considerably.
“When we started out, drivers carried rolls of quarters to call into dispatch to get their pick-ups,” says Snyder. “Today we can download pickups and deliveries to their phones, and they don’t have to talk to us at all.”
He says the company has invested heavily in technology.
“We track deliveries in real time,” he says. “We get invoices out within 24 hours, and within 15 minutes of a delivery, you get a signed copy of your delivery order. Those things are all important for us to be a viable and sustainable company.”
Today the company has terminals in Duncansville, Pennsylvania, near the Altoona-Blair County Airport, Pittsburgh International Airport, Clarion County Airport, Morgantown Municipal Airport, and Cleveland Hopkins International Airport. AGX covers about 44,000 square miles and transports air freight from airports as far west as Chicago and far east as New York to its delivery areas. It has also expanded to two U.S. Customs-bonded freight stations in Pittsburgh and Cleveland to handle the loading and unloading of full ocean containers. These CFS stations also process in-bond import shipments for clearance through U.S. Customs and Border Protection, in addition to other customer notifications for import/export cargo movement.
“Instead of moving things on airplanes, we are moving them on sea-going vessels,” says Snyder. “As with anything else, when you do things the right way, people start asking you to do other things."
A dedicated logistics division considers further expansion of offerings, but not without due consideration and planning.
“We discussed going to Chicago for six years before we were finally comfortable enough to make it work,” Snyder says. “Too many times, companies decide they’re going to conquer the universe, and the next thing you know, the universe has swallowed them up.”
A grounded approach
Rather than worrying about conquering the world, Air Ground Xpress focuses on servicing its customers and creating a strong work environment for its 250 employees.
Managing partners/majority shareholders Snyder, Hobbs, and James Dailey, along with board members Rich Mogan, Raleigh Cain, and Kevin Mahoney, handle the daily operations of AGX, and in keeping with the company’s motto—Not too big to care!—value an open line of communication with drivers, customer service representatives, dispatch personnel, and other employees.
“Just in the short time we’ve been owners, we’ve had a lot of employees that have come in with great ideas, and we’re trying to implement some of them,” say Snyder, who in May 2019 was one of seven shareholders who bought out the two majority stakeholders.
But as with the return of white-glove delivery service, Snyder and Hobbs say they will proceed with caution.
“We take great pride in being able to stay profitable through up economies and down economies,” Hobbs says. “We see a future with continued organic growth, but it has to be the right time, right place, and right opportunity.”
Signed, sealed, delivered
Air Ground Xpress specializes in transferring cargo from Point A to Point B. But when it was time for a buyout process that passed possession of the company from founder Phillip Fall to a group of nine shareholders in 2013, AGX needed a bank to handle the transfer.
Huntington figuratively carried the freight.
“They saw a unique opportunity to help, and they have been with us and supporting us ever since,” says Hobbs.
In addition to providing capital loans and credit cards and handling deposit accounts for AGX, Huntington helped the company shift to more technology-based banking applications.
“They’ve helped us cut down on our expenses and improve our use of time,” says Snyder. “Huntington was an integral part of us automating our invoice approval process to make it more cost-effective.”