This is how the change reads:
FROM: Mike Smid cc: AGO Officers, REX Dept. Heads
SUBJECT: Change of Operations
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Our brand promise is to give our customers the personalized service they need to make their transportation solutions simple, smart and effective. In today’s marketplace, carriers continue to raise the bar to provide speed and reliability in order to support the supply chain. To be an effective solutions provider, and grow our business, we must provide competitive transit times and reliability to our customers.
In March 2006, we embarked upon the most significant network evolution in our history. The construction of an efficient one-touch network was accomplished in the Atlantic and Central states with five new flow centers and four gateway facilities. In September, an additional flow center was created in Sacramento to connect California to the Pacific Northwest. The next phase continues this evolution, stretching our boundries to allow us to compete.
Our new network is generating some impressive early results:
Flow-center lanes have grown by more than 6% year-to-date while the remainder of the company experienced a slight decline in revenue.
Network speed through the flow centers has improved by more than 10%.
On-time service has surpassed 93% on flow-center lanes. This is particularly impressive when considering standards were reduced by one or two days on most flow-center lanes.
We are faster and more reliable than at any other time in our history.
The next step (Phase 3) of the network evolution is scheduled for March 2007. The change of operations documents were sent to the International Brotherhood of Teamsters outlining details for the impacted locations. The 2007 change of operations will more than double the size and coverage of the flow-center network. Today 18% of our total business moves through a flow center. Following the implementation of Phase 3, more than 40% of our business will move through the new network structure.
Phase 3 of the network evolution will include three new flow centers, three new gateway operations and expanded roles for the current flow centers.
New Flow Centers
Memphis, TN flow center connecting Texas, Arkansas and Oklahoma with Illinois, Ohio, and Indiana with 2-day and 3-day service.
Springfield, MO flow center connecting Illinois, Iowa, Nebraska, Wisconsin, Minnesota, Ohio, Michigan and Eastern New York with Missouri, Kansas, Oklahoma, Arkansas and Texas with both 2 and 3-day service.
South Bend, IN flow center connecting Minnesota, Wisconsin, Ohio, Nebraska, Michigan, Illinois, Iowa and the North East with 2-day and 3-day service.
Expansion of Current Flow Centers
Winston-Salem, NC flow center expanding operations to connect New England and the Northeast with Florida, Alabama, Louisiana, Mississippi and Texas with 3-day service.
Cincinnati, OH flow center expanding operations to and from Philadelphia, PA, Peoria, IL, Jackson, TN, and Kansas City, MO with 2-day service to the flow center area.
Akron, OH flow center expanding operations to and from Madison, WI, Crystal Lake IL, and Kalamazoo, MI with 2-day service to the flow center area.
Harrisburg, PA flow center expanding operations to connect New England and the North East with key metro operations throughout the south and south west in three days.
Buffalo, NY flow center expanding operations to connect New England with Minneapolis in three days.
New Gateway Operations
Kansas City, KS; Meridian, MS; and South Bend IN gateway operations will provide both east to west AND west to east direct service to and from key metro operations on the west coast. The addition of the west to east transload operation connects key west coast metro operations directly to the east coast and Midwest through the gateway operations to improve service and reduce cycle time.
Our customers challenged us to bring real value to the marketplace. To meet the challenge, we began to make fundamental changes to our network in 2006. The changes planned for 2007 will bring more speed, reliability and precision to our customers for every shipment every day.
