Warehousing, trucking build LTL system
Dec 1, 2005 12:00 PM, By Gary Macklin
“The words relate closely: servants provide service,” says Jim Ristow, president of Ristow Trucking and Hammond Cold Storage of Hammond, Wisconsin. “All of us in trucking and warehousing say we are in the service business. For that to be completely true, we must be willing to be servants to our customers.”
Working from that premise, Ristow has built his two companies specifically to meet the needs of his customers, allowing customer requirements to determine the direction of company growth. Knowledge of what customers want has come firsthand. Ristow says he spent 20 years as an owner-operator before founding the company that became Ristow Trucking in 1986. In the earliest stages of operation, Ristow made weekly turns to California hauling frozen soup west and returning with produce. Additional capacity came from other leased operators. Not until 1988 did the company buy its second truck.
Then, as now, Ristow Trucking concentrated on perishable LTL service. “We could easily see that the revenue from truckload rates would not be sufficient to support a small operator,” he says. “Not only does LTL service generate more revenue, it is more stable than truckload once a business relationship is established. We've found that LTL service is much more personal than truckloads, with the business built around relationships as much as economics.”
In one sense, the business that is now Ristow Trucking grew out of a recurring haul for a single customer — Now Foods. That company sold out, and the buyer eventually discontinued the operation, leaving it with a building for sale. At the same time, Ristow Trucking had grown to the point that it needed a location other than Ristow's home for operations.
Load consolidation space
“We needed a building that would allow us to collect inbound freight, sort it into outbound shipments, and build those shipments into consolidated loads,” Ristow says. “The old Now Foods building filled that need — barely. It had space to handle 550 pallets. We bought the facility in 1991. In 1999, we began a project to expand by more than three times, raising the handling capacity to 1,700 pallets with one-third of the space in a cooler and two-thirds for frozen product. We expanded dock capacity from two doors to seven doors. The expansion helped, but we filled it in two years and faced the need to expand again by 2002.”
Not only did the company need to expand, but it also needed to consolidate operations. Before its recent move to Hammond, Ristow operations were spread among three locations with cold storage and the fleet maintenance shop in Shakopee, Minnesota, a small community southwest of Minneapolis. Headquarters and administrative offices for Ristow Trucking were 60 miles away across the state line in Somerset, Wisconsin.
“As we looked at our needs, we determined that the most important thing was to have total control of the warehouse instead of working with a third party that might not have the same goals as ours,” says Chuck Nogle, general manager for both Ristow Trucking and Hammond Cold Storage. “Our assessment of the situation suggested that growth would come from an integration of efforts, so it became important to put trucking and warehousing under the same roof.”
Still separate companies
The result is one roof, but still two corporate charters. Ristow Trucking is corporately separate from Hammond Cold Storage, joined officially only in the owner of both organizations — Jim Ristow. Moving the cold storage business from Minnesota to Wisconsin made the most sense, because real estate values in Minnesota are extremely high. In addition, Wisconsin is a more business-friendly environment, especially with regard to taxes, Ristow says.
Setting up operations in Wisconsin involved little or no bureaucratic effort. Hammond Cold Storage is a new entity designed to operate as a Wisconsin corporation. Ristow Trucking has always been a Wisconsin-based organization, Nogle says.
The actual location in Hammond resulted from the availability of property owned by St Croix Electric Cooperative in the 40-acre Hammond-St Croix Business Center on the edge of town. The electric cooperative has an operations center on the site. It was seeking a large tenant for the remaining property when Ristow started looking for a new home for his businesses. The business center was zoned for manufacturing, and St Croix Electric was looking for a business that would need buildings large enough to create a large tax base, be a high-volume user of electricity, and offer jobs that would support primary wage earners.
Two buildings on 22 acres
The new location for Hammond Cold Storage and Ristow Trucking is 22 acres purchased from St Croix Electric with the support of the St Croix Economic Development Corporation. Ristow found the location attractive because it had easy access to interstate highways, and the cooperative offered a relatively low purchase price for the property. The acquisition is backed by a Department of Agriculture loan guarantee for which a number of competitive conditions must be met. To qualify for such a loan, the borrower must locate in a rural area and bring new industry to the location. The business must have local ownership and offer jobs at higher than minimum wage. Hammond Cold Storage and Ristow Trucking qualified on all counts.
Improvements to the property include the refrigerated warehouse for Hammond Cold Storage and a new maintenance center for Ristow Trucking. The 129,000-sq ft warehouse building has 100,000 sq ft of storage space plus offices for both companies as well as administrative areas for the warehouse. Storage space is divided into four separate rooms with variable refrigeration ranging from below zero frozen to chilled, fresh. In addition to primary storage, the building has eight blast freezers that can hold 24 pallets each. Racking in the storage rooms can accommodate up to 14,000 total pallets. The 50 ft by 400 ft refrigerated dock has 18 doors and is held at 34° F. The building is cooled by 10 ammonia compressors selected because ammonia is a more efficient, economical refrigerant for a large building.
The separate maintenance building has four 120 ft drive-through maintenance bays and a truck wash. In addition to maintaining the Ristow fleet, the shop will provide light repair and refrigeration service for local trucking interests and carriers serving Hammond Cold Storage. “We plan to provide preventive maintenance inspections and oil changes for outside carriers,” Ristow says. “In addition, the warehouse building will include a cafeteria for our employees and for drivers making stops at Hammond. We want to make life as easy as possible for the drivers who come to Hammond Cold Storage.
“For that reason, we will do all receiving with our own personnel — no lumpers. We've found that one of the best ways to succeed in business is to do the things that no one else wants to do.”
Obviously, Hammond Cold Storage requires more trucking service than Ristow Trucking can provide with its fleet of 35 company tractors and five owner-operators. In fact, most inbound truckloads arrive on third-party carriers. Perhaps as much as one-third of inbound requirements can be handled by Ristow Trucking, especially LTL shipments. Inbound truckloads on Ristow Trucking provide a little more than half of company traffic as a tactic for getting equipment back to Hammond for the next outbound LTL route, Nogle says. Some of those inbound truckloads are actually consolidated LTL loads picked up in New Jersey for final delivery in small lots in Oregon. In addition to truckloads handled by the highway fleet, the company has four city tractors — soon to bolstered by 10 more — to provide local truckload service for the warehouse.
If cold storage customers wish, Ristow Brokerage can arrange for outbound truckload service. Ristow Trucking is organized specifically to handle LTL loads outbound from the warehouse. The company serves the entire continental United States, but typically uses its own fleet for service in areas east of Denver. It provides regular service into the Northeast and to Texas with the company fleet. “In the end, customers have no reason for concern whether or not shipments move on the Ristow fleet or with a dedicated carrier,” Nogle says. “All LTL shipments are under our control, regardless of the name on the side of the truck.”
No minimum size limit
Outbound loads make an average of eight to 12 stops and cover 2,500 to 3,200 miles. Route duration is computed based on taking 30 minutes to deliver a single pallet with each additional pallet taking another 15 minutes. Travel time between stops is figured on an average of 40 miles per hour. Ristow Trucking will deliver shipments of any size. “We have a long history of making a stop in a parking lot to deliver a single carton of samples to a salesman,” Ristow says. “We have no problem keeping up with single-carton shipments because we make sure the driver knows exactly where to find the item in the load. We do not have a size minimum, but we do have a financial minimum. The customer pays the same as if the shipment weighs 500 lb.”
Making all the stops requires almost a week. An average route leaves Hammond on Saturday for deliveries primarily to foodservice distributors Monday through Wednesday mornings with the truck getting back home late Thursday or early Friday. Not only will Ristow Trucking deliver any size shipment, but the company will also handle any refrigerated product ranging from meat, cheese, and dairy products to frozen foods. To accomplish this, almost the entire fleet of highway trailers is equipped for multi-temperature operation.
“We're not talking about just putting a bulkhead in the trailer and hoping for the best,” Ristow says. “We use folding bulkheads from Randall Manufacturing and Carrier Transicold Genesis 1000 multi-temp refrigeration units. With that equipment, we can freeze one compartment while heating the other if necessary. We put our first multi-temps in service in 1999.”
Built like grocery trailers
With multi-temp refrigeration systems that have remote evaporators mounted about three feet inside the rear door, trailers at Ristow Trucking are more like grocery distribution equipment than highway truckload vans. In the first place, the Great Dane Super Seal trailers are 50-ft long instead of the 53-ft length commonly found in truckload fleets. “We can get just as much freight in a 50-ft trailer on pallets as we can put in a 53,” Ristow says. “Not pulling that extra three feet around makes it easier to run with the right weight distribution and to meet bridge requirements. Drivers also like the shorter trailers better. We specify three extra feet of slider rail for the suspension to help drivers improve trailer turning radius.”
Perhaps unexpected for multi-temperature trailers, Ristow's equipment has no side doors, nor do they have air distribution chutes on the ceiling. “If we need extra air distribution in a single temp load, we just run both evaporators,” Ristow says. “We also specify flat grocery floors for the trailers. Air circulation under the load is not a problem because all freight loads on pallets. The flat floors are more durable than grooved floors and are easier to keep clean.”
To make sure that drivers want to work at Ristow Trucking, the company runs a tractor fleet built to the liking of owner-operators. Peterbilt Model 379 longnose conventional tractors are powered by Caterpillar C15 engines rated at 475 horsepower with 1,850 ft-lb torque driving through 18-speed transmissions. In addition, drivers are home weekly. “We want this to be a good place to work,” Ristow says. “We hire people who can and will do the job and give them the right tools to succeed, and we make sure that they have the time for a personal life as well.”
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