Transportation: The Upside To Leasing
With nearly 1,000 customers, Continental Floral Greens is turning to truck leasing for a little help.
August 23, 2010
Back on New Year's Day in 1954, families first turned on their TV sets to usher in a new era: color television. As viewers watched that first coast-to-coast color broadcast - telecasting the Tournament of Roses parade on NBC - it set the stage for modern TV.
During that same year, Larson and Nuria Everett were seeing beautiful colors of their own, including the color green. In San Antonio, the couple founded Continental Floral Greens. It was a business designed to be a gateway for Latin American greenery to the U.S. floral market. Today, the company is still going strong, and like color TV, it has evolved into a high-tech business that had more than $45 million in revenue in 2009. The company has since expanded to include international operations.
After 50-plus years, Continental Floral Greens remains a family affair. The 86-year-old founder is still active and serving as an advisor. Sons Jerome and Jim now operate the 250-plus employee company. A third generation also participates - Jerome's son, Jeff, is the sales manager for the company, while his daughter, Kim is the manager of the floral division: Best Blooms. Managing the growing operation in California is Jim's daughter, Jennifer, and nephew, Seth.
While the company was founded with the greenery from Latin America in the mid-1950s, expansion has since taken place. Two company farms in Mexico make up 30 percent of the company's business. There is also a flower growing area and distribution warehouse near Mexico City.
Continental Floral also has a 300-acre farm in Deland, Fla., a 100-acre plot in Floresville, Texas, and another 100-acre tract in Watsonville, Calif. All are producing greenery - mainly leatherleaf, Latin greens and tree ferns. The farms are a combination of open hammock fields and greenhouses covered by shade cloth.
The company's production farms are supplemented with distribution houses in New Freedom, Pa., and Belfair, Wash. Belfair is a major player in the production of Christmas greens, which are brought in by independent harvesters.
For its floral business, the company purchased its Best Blooms division in the mid-90s. Best Blooms specializes in the importation of Mexican flowers. To complete the company's lineup of flowers, it imports 70 percent of its product from outside sources. The company also carries more than 350 varieties of floral containers and supplies, which includes vases, baskets, foam and other goods to support fresh cut products. "It makes Continental a one-stop shop for all things floral," says Jim Everett.
Most of the floral products and greens come into the company's warehouse, where shipments are sorted, packaged and readied for delivery. Greens and flowers go to wholesalers; arrangements go to grocery stores.
"To make deliveries to wholesalers and grocery stores, we need an efficient transportation system in place," says Denny Anderson, the company's transportation manager. "We have more than 950 customers, and one key to our success is having our own fleet of tractors and refrigerated trailers to handle deliveries. We feel it gives us a competitive advantage, plus the tractor/trailers feature our logos and the Peterbilt trucks showcase the quality of our company.
"Our drivers have routes, so they get to know the customers. And we have the day-to-day flexibility to improve our customer service with our vehicles. Our business is built on quality, reliability and customer service. Our customers know, because we control our own destiny with our trucks, that no one can get them fresher greens and flowers than Continental Floral Greens."
Utilizing 16 fuel-efficient Peterbilt Model 387 tractors with 70-inch double-bunk sleepers on a full-service lease with Rush Truck Leasing in San Antonio, the local PacLease franchise, Continental Floral Greens' trucking operation is as fine-tuned as its greenery business.
Operating trucks might seem like an extra chore - it's not a core competency and arguably better outsourced to shippers. But Anderson says leasing trucks from PacLease has made things easy and cost effective.
"They take on much of the burden of running a fleet of trucks, which allows us to concentrate on what we do best - deliver quality flowers and greens," he says. "By leasing, PacLease handles all the maintenance on the trucks so we never have to worry about their working condition, or passing DOT inspections. Plus, they provide emergency roadside service and substitute vehicles. This ensures we can always make our deliveries on time."
Streamlining deliveries is made even more efficient because Continental Floral runs team drivers - each vehicle logs close to 190,000 miles a year.
"All told, we put on about 2.7 million miles per year and run through 44 states," Anderson says. "So our trucks are on the move day and night. As one driver takes the wheel, the other is in the bunk resting or sleeping."
With each round trip, a Continental Floral rig will make up to 50 stops, which includes a stop at one of the company's farms or distribution houses to backhaul greenery for sorting in San Antonio. During busy holidays like Christmas, Valentine's Day and Mother's Day, the company utilizes rental trucks from Rush Truck Leasing.
Continental Floral uses PacLease's PacTrac system, which provides communication, telematics and GPS. PacTrac automatically transmits trip records to PacLease, which then handles all fuel tax reporting for the company.
The system also monitors and provides driver performance records. "We have a great core of drivers and no turnover problem," Anderson says. "We view PacTrac as a tool to help our drivers perform even better. PacTrac records the speed and rpm readings, as well as the drivers' fuel efficiency. We're putting into place a quarterly bonus based on exceeding our company's goal for fuel efficiency. The drivers are pretty excited."
So too is management on the performance of their new Peterbilts. With PacLease's help, the company spec'd out the Peterbilt 387s with fuel-saving components. "We call our fleet the green machines," Anderson says. "They save us money in fuel costs - the trucks, which are still being broken in, are on pace to improve our fuel economy from 6.3 mpg to 7.3. Projected out, that's a $180,000-bottom-line savings to our business."
Doug Siefkes is a business writer in the Seattle area. He can be reached at email@example.com.