Future of trucking company in limbo

Future of trucking company in limbo

CHAMPAIGN – Company officials are deliberating the future of Champaign trucking company JAT Transportation.

JAT, which has been based in the former Southland distribution facility, could be "rolled into" Pittsburgh-based trucking company R&R Express, an official of JAT's parent company said last week.

Paul McCreary, executive vice president of business solutions for Champaign-based Order Logistics, said Tuesday that "a small staff of (JAT) support personnel" would remain in Champaign if the move goes through.

JAT agreed in early 2006 to be acquired by Order Logistics, a company founded by McCreary, Brian Griffin and Brian Malec. All three previously worked for Roberson Transportation's Worldwide Logistics Solutions unit.

McCreary said the rollover of JAT into R&R is "part of a bigger strategy" that he could not discuss at this point.

In a telephone interview Tuesday, Richard S. Francis, the president of R&R Express, said R&R is "in negotiations" regarding the future of JAT. But with regard to JAT being rolled into R&R, Francis said he is "not sure we will have that opportunity."

Francis said that although Order Logistics agreed in January 2006 to acquire JAT, the actual acquisition is not scheduled to take place until July 2007. In the meantime, JAT remains in the hands of six partners, one of whom is Griffin.

Francis said the six partners have not come to terms over what should happen with JAT. Two of the partners would like to lease JAT's equipment to R&R; another partner would like to run the company independently. Two other partners whom he described as passive investors seem likely to support the independent operation of JAT, he said.

"We're standing by and waiting for action on their end," Francis said, referring to the six partners.

Francis, who lives in the Pittsburgh area, said he has been with R&R Express since 1983 and has been president of the company since 1996.

Although he's listed as chief executive officer of Order Logistics, Francis said, "My role has been passive and I receive no salary and wages. ... I've never signed a check."

He said he and R&R co-invested in Order Logistics, putting about $1 million into the company. He said he was disappointed when Order Logistics agreed to acquire JAT. Francis said he did not think JAT fit well into the logistics company and "took no pleasure" in the purchase of it.

JAT is listed on Order Logistics' Web site under transportation services. Also on the site is a press release hailing the completion of Order's acquisition of both JAT Transportation and GT Logistics.

Francis said that from the figures he's seen, he believes JAT has positive net worth and sufficient assets to pay off its debt to creditors and tax liabilities.

McCreary said Order Logistics continues to operate as a provider of supply chain and logistics solutions, from its base at 3358 Big Pine Trail in Champaign's Pinehurst Commons office park.

Besides transporting goods, Order Logistics helps client companies with production scheduling and provides software and consulting services to make their work more efficient.

Last year, Order Logistics acquired eBridge Solutions based in Greenville, S.C., and Creative Systems Corp. based in the Chicago suburb of Burr Ridge.

McCreary said Order's "technology side" employs "28 or 29" people in Champaign, Chicago and Greenville, S.C.

McCreary could not give a current count on JAT drivers, but said JAT employs "12 operations people" aside from drivers. Last August, McCreary reported that JAT had 55 company drivers and 70 contract drivers who are owner-operators.

How many drivers might transfer to R&R Express is unclear at this point.

"A couple fleet owners don't want to roll up into R&R Express, but any drivers or fleet owners who want to can come over," McCreary said.

Order Logistics' stock, which trades over the counter under the stock symbol ODLG, was trading for about 2 cents a share last week – its lowest point ever.

The price was as high as 20 cents a share last August, but it dropped to the 9-cent range in November and the 4-cent range in December.

After a flurry of announcements last summer – the company issued 19 press releases between June 1 and Oct. 10 – Order Logistics has been uncharacteristically quiet. No press releases have been issued in the last four months.

Sections (2):News, Business
Categories (3):News, Miscellaneous, Business