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Analysis: Holifield had envisioned different LaserShip/OnTrac, so he stepped away

It may never be known exactly why Mark Holifield stepped down as CEO of regional parcel delivery carrier LaserShip/OnTrac. What can be deduced from Holifield’s departure, announced Tuesday, is the reasons that brought him to the company in late 2021 were no longer as compelling in March 2023.

It’s unlikely Holifield was forced out of his role as CEO and as a board member, according to those familiar with the situation. If the company was that dissatisfied, it would have pulled what one anonymous source called a “C.H. Robinson,” a reference to the brokerage giant (NASDAQ: CHRW) that abruptly fired CEO Bob Biesterfeld at the beginning of the year and then launched a search — which is ongoing — for his successor.

In Holifield’s place steps Mike Duffy, CEO of truck and trailer parts distribution giant FleetPride, whose chairman, private equity executive Will Manuel, also runs LaserShip/OnTrac. Duffy has scant experience working with parcel shippers. Holifield had some background in the space while running The Home Depot Inc.’s (NYSE: HD) global supply chain for 15 years, but it was not his focus either.

What likely changed Holifield’s view from the top was the view of the ground. Like other parcel delivery carriers, LaserShip/OnTrac experienced phenomenal growth during the pandemic and in the months following its peak. The company at the time harbored strong desires about being a third national delivery carrier. It still harbors those desires today. 

Holifield was hired to promote growth — and that he did. Through 2022, the company opened and expanded four automated sort centers, launched 25 branches and began coast-to-coast service, with Texas next to go live likely by midyear at the latest. 

But volumes have dropped off, and the macroenvironment isn’t anywhere near as favorable as it once was. As slowing volumes may dictate the need for a different leader at the helm, Holifield, whose place in supply chain lore had long ago been cemented, may have approached Manuel with the suggestion that a different CEO may 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 ShipMatrix Inc., a consultancy.

LaserShip boasts a large footprint in the eastern half of the United States, while OnTrac features a West Coast network that covers all of California and extends as far east as Colorado. It is currently as near to having a national footprint as any company still classified as a regional delivery carrier.

In 2022, the firm spent $100 million to build a sortation hub outside of Philadelphia in southern New Jersey, and to expand facilities in Columbus, Ohio; Charlotte, North Carolina; and Nashville, Tennessee.

Duffy is considered a brilliant and accomplished executive whose skill sets in cost control and efficiency may be best suited for the next phase of the carrier’s evolution. He has impressed virtually every parcel delivery expert he has come in contact with so far, said Rob Martinez, founder and co-CEO of Shipware LLC, a parcel consultancy.

At FleetPride, Duffy has overseen over 25 acquisitions, a potentially valuable skill set should Manuel look to build out through acquisition and help consolidate what has become a very fragmented parcel delivery market. Manuel may want Duffy to move fast to position LaserShip/OnTrac to take share among UPS Inc. (NYSE: UPS) shippers concerned about capacity availability ahead of a possible Teamsters union strike this summer.

Before joining FleetPride, Duffy served as CEO of C&S Wholesale Grocers, the nation’s largest wholesale grocery distributor and 11th-largest privately held company based on revenue. He also held various high-level supply chain roles at prominent brands like Procter & Gamble Co. and Cardinal Health Inc.