Milestone Equipment Holdings: A Customer-Centric Approach Driving Growth and Success
The Blackstone Group did its homework before completing its acquisition of Milestone Equipment Holdings in 2012. The Chicago-based private equity firm, which now owns 80 percent of Milestone Equipment, talked to many of its new addition’s major customers, all of which had the same positive experience to report.
“We characterize ourselves as an `open architecture’ company – we tailor our services and leasing products toward our specific customers equipment logistics needs, and work with them primarily on an executive level, where our executives are directly involved with all of our customers,” says Robert Thull, Milestone Equipment’s CEO. “We are proud that most of our customers want to reach out to us first to give us the opportunity to meet their needs.”
Thull notes the company helped one of its largest customers identify and correct where it was being overcharged on repair services on their own fleet that Milestone had no interest in. “We make sure we create value for our customers and not just profit for our company,” he adds. “Our customers frequently give us opportunities they do not give to our competition because of the way we’ve created value and partnered with them in the past.”
One of Milestone’s unique products of which the company is most proud is ECO-MODAL®. ECO-MODAL® manages a customer’s own fleet of surplus trailers containers or chassis and redeploys the equipment to other Milestone customers. “We monetize one customer’s idle fleet capacity by managing the transfer to another one of our customers. ECO-MODAL® helps one customer achieve capacity for seasonal and cyclical demand,” Thull says. “This helps the other customer deploy and make money with idle assets with another company they may not have any relationship with, and Milestone guarantees a successful transfer of the assets for all parties involved.
“We do this on a short-term basis as well as a long-term basis where we will even purchase the surplus capacity for lease to another one of our customers.”
Milestone Equipment’s attention to customers’ needs, as well as a track record of growth and financial stability, made it a more than worthy investment for its new ownership. “We have the lowest overhead in the industry,” Thull adds. “We don’t have a complex structure or very much of a marketing or advertising budget – we just roll up our sleeves and offer value to our customers.”
Since Thull founded the company in 1995, Milestone Equipment has grown from having no assets to being the largest lessor of domestic containers and piggyback trailers in North America and the fifth-largest full-service highway trailer lessor in the United States. The company operates more than 40,000 owned and managed transportation assets.
Milestone’s services include leasing, financing, operating and maintaining rental equipment and managing lease terminations of equipment portfolios.
New Opportunities
Milestone Equipment’s low overhead costs, flat management structure and conservative fiscal approach have allowed it to make significant investments in fleet assets at a time when many transportation companies have left the industry altogether.
“We’ve seen the entire transportation world become much more disciplined and focused on margin enhancement; everyone is very cautious about expanding their capacity,” Thull says. “During all this fiscal uncertainty, our strategy has been to be contrarian and invest heavily in fleets when prices are their most attractive. We see more opportunities in uncertain times.”
Blackstone Group’s acquisition of Milestone Equipment will allow it to grow even further. The company plans to invest $50 million into new assets this year. “Blackstone gives us greater opportunities for future growth,” he adds. “We look forward to being a participant in the future growth of the highway and intermodal markets.”