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.
People familiar with the situation say Holifield likely wasn’t 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.
New Leadership: Mike Duffy
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, just as Holifield had when he joined the company. 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, which aligned with Holifield’s vision for a more competitive LaserShip/OnTrac. Those desires for evolution are still present today.
Holifield took on the role to promote growth and successfully achieved it. By 2022, the company will have opened and expanded four automated sort centers, launched 25 branches, and begun coast-to-coast service, with Texas likely to follow suit by midyear. Holifield’s efforts contributed significantly to transforming LaserShip/OnTrac into a more robust competitor in the parcel delivery market.
Decline in Volumes and Leadership Shift
However, volumes have decreased, and the macroenvironment is no longer as favorable as it once was for LaserShip/OnTrac. As slowing volumes could necessitate a leadership change, Holifield, already a prominent figure in supply chain history, may have suggested to Manuel that a different CEO would be a more suitable 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 boasts a robust presence in the eastern part of the country, whereas OnTrac has a stronghold on the West Coast network that spans all of California and extends as far east as Colorado. This dual presence currently provides the closest national footprint of any company still classified as a regional delivery carrier.
In 2022, the company plans to invest $100 million to construct a sortation hub in southern New Jersey outside of Philadelphia and enhance facilities in Columbus, Ohio, Charlotte, North Carolina, and Nashville, Tennessee. This commitment to expansion highlights the ongoing evolution of LaserShip/OnTrac, as they adapt to changing market conditions.
Duffy’s Strengths and Future Strategy
Many regard Duffy as a brilliant and accomplished executive, with cost-cutting and efficiency skills that may be ideal for LaserShip/OnTrac’s next phase of evolution. According to Rob Martinez, founder and co-CEO of Shipware LLC, a parcel consultancy, Duffy has impressed nearly every parcel delivery expert he has encountered.
Duffy oversaw over 25 acquisitions at FleetPride, a valuable skill set that could help LaserShip/OnTrac expand through acquisition and 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.
Before joining FleetPride, 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. He has also held high-level supply chain positions at well-known companies such as Procter & Gamble Co. and Cardinal Health Inc. With his extensive experience in logistics and operational efficiency, Duffy is poised to lead LaserShip/OnTrac into a new era of growth and competitiveness.
