It needs to be clarified why Mark Holifield resigned as CEO of the regional parcel delivery company LaserShip/OnTrac. According to his departure announcement on Tuesday, the reasons that drew Holifield to the company in late 2021 were less compelling in March 2023.
According to those familiar with the situation, Holifield was unlikely to be forced out of his CEO and board member roles. If the company were that dissatisfied, it would have done what one anonymous source referred to as a “C.H. Robinson,” referring to the brokerage giant (NASDAQ: CHRW), which abruptly fired CEO Bob Biesterfeld at the beginning of the year and then launched an ongoing search for his replacement.
In Holifield’s place comes Mike Duffy, CEO of FleetPride, a truck and trailer parts distribution giant whose chairman, private equity executive Will Manuel, also runs LaserShip/OnTrac. Duffy needs to gain experience with parcel shippers. Holifield had some experience in the industry while leading The Home Depot Inc.’s (NYSE: HD) global supply chain for 15 years, but it was not his primary focus.
The view of the ground changed Holifield’s perspective from the top. LaserShip/OnTrac, like other parcel delivery companies, experienced phenomenal growth during the pandemic and in the months following its peak. At the time, the company was ambitious to become a third-national delivery carrier. Those desires are still present today.
Holifield was hired to promote growth, which he accomplished. By 2022, the company will have opened and expanded four automated sort centers, opened 25 branches, and begun coast-to-coast service, with Texas likely to follow suit by midyear.
However, volumes have decreased, and the macroenvironment is no longer as favorable as it once was. As slowing volumes may necessitate a change in leadership, Holifield, whose place in supply chain lore had long been established, may have approached Manuel with the suggestion that a different CEO might be a better fit at this time.
“The opportunities for the company are not as strong today as they were two years ago,” said Satish Jindel, president and CEO of consultancy ShipMatrix Inc.
LaserShip has a strong presence in the country’s eastern half, whereas OnTrac has a West Coast network that covers all of California and extends as far east as Colorado. It currently has the closest national footprint of any company that is still classified as a regional delivery carrier.
In 2022, the company will spend $100 million to build a sortation hub in southern New Jersey outside of Philadelphia and expand facilities in Columbus, Ohio, Charlotte, North Carolina, and Nashville, Tennessee.
Duffy is regarded as a brilliant and accomplished executive whose cost-cutting and efficiency skills may be best suited for the carrier’s next phase of evolution. According to Rob Martinez, founder and co-CEO of Shipware LLC, a parcel consultancy, he has impressed nearly every parcel delivery expert he has met.
Duffy oversaw over 25 acquisitions at FleetPride, a valuable skill set should Manuel look to expand through acquisition and help consolidate what has become a very fragmented parcel delivery market. Manuel may want Duffy to act quickly for LaserShip/OnTrac to gain market share among UPS Inc. (NYSE: UPS) shippers concerned about capacity availability ahead of a possible Teamsters union strike this summer.
Duffy was the CEO of C&S Wholesale Grocers, the nation’s largest wholesale grocery distributor, and the 11th-largest privately held company in terms of revenue, before joining FleetPride. He has also held high-level supply chain positions at well-known companies such as Procter & Gamble Co. and Cardinal Health Inc.
