Landstar - What’s a Freight Company Doing Dealing With Busses? New Orleans’ Gustav Evacuation Execution Reminds Us Of Their Katrina Problems

Implications: The Federal Government intervening in the investment world makes the monumental work done in New Orleans before and after Katrina look like small potatoes. Successful people and businesses focus on what they are good at. The devil is in the details on how it gets done, but government in action can be seen in both New Orleans’ evacuations. After the recent Gustav SNAFU compared to Texas’ Rita and now Ike, the issues within an asset-light model come to light. Too many Bosses in the chain - again.

Analysis: I don’t like governmental entities telling us how to do anything, because they don’t do much very well - except dealing with our national safety / security. It is the non-Washington crowd that gets stuff done. The Katrina mess was full of lessons. Full disclosure - we supplied trucks / trailers / personnel and assisted in getting busses, along with one of our managers losing his home during Katrina.

The referenced article shows some of the fallacies within business models. Landstar has an asset-light model, meaning they act as a facilitator for moves of freight (mostly) and also people (in this case). Landstar has numerous government contracts including military (big player) through to disaster relief  where they are moving freight - and they do that well. One key asset is their planning “systems” - which look good on paper - but it takes people and equipment to execute.

In the case of this article, Landstar had a contract to move people from New Orleans - again. How did a freight-focused group get the contract? Of course we know part of it - political connections. Should folks in the people moving business like FirstGroup America, Trailways, Coach America and the thousands of bus companies (or even American Bus Association - ABA) really be in the lead? The answer can be derived on your own, but here are some thoughts.

The Katrina mess was due to a mix of problems with FEMA through FAA  to Landstar who was to assemble busses. Why Federal Aviation Administration was administering people-moving program via ground is puzzling, but...

While they told each other and the people in New Orleans that all was in place, it was far from that. The stories are breath-taking, but the bottom line in that the other real players in the market with real busses came to the rescue despite FEMA or Landstar. One of my clients’ sent coaches at the request of local officials and ABA, but where they were sent with people on-board is another story. Getting money from the Government for that work was yet another story.

When Rita hit Texas, the local Texas authorities engaged their own plan with real bus companies - and the results were totally different (no news stories to speak of except that one with uncertified operator).

Fast-forward to Gustav this year and Landstar again unable to react in a timely manner - and the result was Louisiana Governor Jindel making the decision to use local buses with National Guard drivers in lieu of Landstar - albeit without needed planning systems. While Landstar said again that they “learned lessons,” the lawsuits will be coming.

The asset-light model looks look on paper, but one must still focus on what they are good at - AND lets remember that expecting the Federal Government to really do anything in business is “Risky Business!”