Regional Carrier Eastern Connection Ceases Operations

Eastern Connection, a regional carrier with a 35-plus-year history, shut down its operations earlier this month, the company announced, leaving shippers in the Northeast from Maine to Virginia looking for alternate capacity.

“After final shipments are completed, Eastern Connection will wind down operations and exit facilities,” the company said on its site. Regional carriers Lasership and CDL stand to benefit most from the departure.

Eastern Connection had gone through some transition in recent years. It was acquired by private equity firm Wind Point Partners through its Montreal-based Dicom Transportation Group in 2015, with estimated revenue in 2014 of $45 million. Dicom fell under the larger Ann Arbor Distribution brand in December.

“Obviously UPS and FedEx will win here, as will the U.S. Postal Service and Lasership,” said Jerry Hempstead, a parcel spend consultant, referring to a regional carrier covering the Southeast. “In my humble opinion they never were able to get their costs down when the business went from B2B to B2C. This leaves a big void.”

Hempstead added that Eastern Express lost a good deal of its business after the sale to Dicom, as many long-term accounts were tied to executives and representatives who departed afterward. “So then the ordeal becomes figuring out how to take cost out of the operation and or selling new customers but at lower prices and yields to replace the lost package count,” he said.

In addition to next-day ground from Maine to Virginia, Eastern Connection offered priority overnight, same-day delivery, international through an arrangement with FedEx unit TNT Express and warehousing/distribution services.

Rob Martinez, founder and CEO of Shipware, estimated Eastern Connection was handling about 15,000 packages a day, and pulling in about $30 million in annual sales when it folded. He said less competition “is bad news for shippers.”

“They lost significant relevance and volume over the last couple of years as they shed less profitable customers under the Dicom/Ann Arbor ownership,” Martinez said. “It’s astonishing how poorly they went about this. Employees and customers were not notified. I feel bad for the original founders of the organization who spent three and a half decades building a nice piece of business and reputation.”

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