Speed Global Services History

Although Carmelo Savarino didn't know it when he immigrated to Buffalo, New York from Sicily, Italy in 1913, Western New York had established itself as a major transportation hub as soon as the Erie Canal was completed in 1825, connecting the Great Lakes with the ports of New York. But the day Savarino began using the extra room in his grocery truck to pick up and deliver goods for other businesses in the Italian section of Buffalo, he became a part of that heritage, one that now relied on highways, trucks, container ships and cargo planes rather than canals and barges.

 

After World War II, when his oldest son, Joseph, returned from war and his younger son, Vincent, was already working in the family business, Carmelo abandoned his grocery store forever to found Carmelo Savarino & Sons Trucking in 1948. "Vincent and Joseph started working for my grandfather as soon as they were old enough," says Carmelo's grandson and current president, Carl Savarino. "They didn't go to college; my father didn't even finish high school. But they were hard workers and built a great reputation in Western New York.

"Initially, they covered Buffalo and Niagara Falls, about a 25-mile radius, with two 'straight' trucks, my father's and my uncle's," says Carl. "They shipped general commodities - commercial and industrial freight - to serve a primarily industrial region." At that time Western New York had a concentration of heavy industry: furniture and chemical as well as steel and automotive to supply the big manufacturers in Detroit.

Business expanded and in 1949 Carmelo changed the name to Speed Motor Express (SME). By 1952 he had retired and left the business to his sons, Vincent and Joseph. "The business was still very small," says Carl. "It was just the two of them, serving as owners and drivers."
Small as it was, SME was beginning to forge a key relationship with General Motors that would eventually account for a large part of SME's business. "General Motors did a lot of its manufacturing in Western New York," says Carl. "We worked with them in the early days."

The 1960s were a period of growth as the company diversified its customer base and began handling customers such as El. DuPont, Scott's Lawn Care, Moore Business Forms and Sherwin Williams Paints. As the company grew and staff was added, Joseph took responsibility for administrative, financial and sales details while Vincent looked after operations, equipment and maintenance.

Joseph and Vincent both had families by now and in 1969 Joseph's son, Carl, began working for the company full time. "I've been around the trucks all my life," Carl recalls. "Loading and unloading trucks took a lot more manpower in those days. Moving freight from one truck to another was done by hand with Johnson bars and two-wheelers. Today, everything is palletized, shrink-wrapped and moved with lift trucks. Manual labor in those days was a lot more manual and involved a lot more labor."

In 1972 the company greatly expanded beyond Buffalo and Niagara Falls to encompass all of western New York, including Rochester and Jamestown, as well as Erie, Pennsylvania. "At that point we had about ten employees," Carl recalls. "In the late 1970s, revenue was about $500,000. We were operating four trucks and I drove the fifth." Then, in 1982, Speed reached a company milestone, grossing more than $1 million in revenue. "Believe me," Carl laughs, "it was celebration time in the Savarino family."

While deregulation of the trucking industry in the 1980s removed a lot of bureaucracy and eased operations, it also exposed SME to a new wave of competition as newcomers flooded the trucking business. The Savarino family took on the challenge by becoming more competitive and diversified. "We were more established than the new guys and we saw where the market was going," says Carl. Soon Speed Motor Services had expanded its operations into New England, and along the East Coast into New York City, Philadelphia and south to the Carolinas.

The company officially passed into the hands of the third generation in 1987 with the retirement of both Joseph and Vincent. Carl took over as president. He still honors the legacy of his father and uncle and of the grandfather he was too young to remember. "They were gentlemen, good providers, loved their families and were very hard-working," Carl says. "They drove trucks, and their values were solid. I'm very proud to be Joseph's son." Carl regrets that Joseph, who passed away suddenly in 1989, never saw the business grow into the international logistic company it is today. Vincent, however, lived until 2006 and looked with both pride and amazement at what his father's small business has accomplished since its inception.

In 1994 General Motors was looking for warehousing to support its manufacturing business in western New York. SME jumped at the opportunity, purchasing an 180,000-square-foot facility. "That was a significant milestone in our long relationship with GM as well as the beginning of our warehousing business," says Carl. "We began warehousing goods for many different companies. Today we have more than 600,000 square feet of warehousing space in two Buffalo locations."

Even as the company grew and prospered, new challenges emerged. The attacks and aftermath of 9/11 adversely affected the entire trucking industry, in some ways reversing the advantages of deregulation. This was especially true for transportation companies like Speed Motor Express that were doing cross-border business. "After 9/11 the government closed the border for a number of days, so that was our first challenge," says Carl. "Then they instituted new security requirements, which caused changes in operations at the border. Clearance was taking more time." But over the years, Carl notes, the U.S. and Canadian governments have been working together to make the border as transparent as possible to commerce while still maintaining a high level of security. "They've started pre-border screening and are implementing other ways of making cross-border business a little more efficient."

Another challenge was globalization, which drained thousands of manufacturing jobs from the Northeast long before the rest of the country felt its sting, reducing the need for commercial trucking services in the region. Carl had to rethink the company's business model. Ironically, he found that globalization itself offered an opportunity and, therefore, expanded into domestic and international airfreight. "We had to diversify and change the nature of our business," Carl explains, "not only nationally, but also internationally and globally."

As a result, in 2000 the company entered the airfreight business. "It's like being a travel agent for cargo," Carl said. "When a customer wants to get something from New York to Los Angeles in a day or two, we pick up the goods, take them to the airport, buy the space on the airplane, and ship the cargo out to California." From there the company was able to make the natural leap into international business with international freight forwarding.

In 2005 SME solidified its international business by purchasing a local company called G&W International Freight Forwarding. "That acquisition put us in the global arena," said Carl. "At that point we changed our name from Speed Motor Express to Speed Global Services (SGS), which better reflects the type of business we are today."

Challenges remain for SGS, which still counts trucking as a large part of its business. High fuel prices are particularly painful, considering that the 60 power units and 140 trailers in SGS's current fleet may get only six miles to the gallon. "It's tough, I tell you," says Carl. "I'm sure the trucks will become more efficient, but you still need horsepower to haul these big loads." Meanwhile, computer technologies, cell phones, bar coding, scanning and GPS have brought money-saving efficiencies to the business.

A decline in the quality of the available labor force is yet another challenge. "Young people are different today than when I was coming up," Carl says. "They go to college and are attracted to sexier jobs in biotechnology, pharmaceutical sales and even finance. They're not as interested in the commercial industries that involve physical labor. And yet a big need exists for personnel with technical training for all kinds of good paying jobs in the logistics field." In addition to word-of-mouth, Carl recruits employees through local schools and universities, industry associations and job fairs.

Looking forward, Speed Global Services perceives Canada as a frontier with tremendous growth potential for the company. "In the next five years we'll continue to pursue growth in the Canadian market," says Carl. "After all, we're right on the border. Toronto is the biggest city in Canada and its only 90 miles away."

Today SGS's success in international freight forwarding, U.S. Customs services and North American distribution have offset what amounts to a significant decline in the company's automotive business. "That part of our business has receded quite a bit over the years," Carl admits. "We're probably doing five percent of our business in automotive now. At its peak it was 40 to 45 percent."

Despite everything, Carl Savarino remains an optimist. Sales in excess of $30 million a year affirm the company's direction. "The price of oil will definitely change the way we do business in the future," he says. "But while manufacturing is now global with most of it coming from Asia, distribution to the end user is still a local business. That is why we feel Speed Global Services is correctly positioned and located exactly where it should be, right at the transportation hub of North America, exactly where my grandfather started it back in 1913."