Win-Win Deals and Clear Differentiation: Dick Metzler’s Playbook from a Career in Logistics

I have worked under Dick Metzler at two different companies: the man knows this industry from every seat. He has been a key player at FedEx, DHL, XPO, APL Logistics, LSO, and more, has been CEO multiple times, and has led turnarounds, mergers and acquisitions, and growth initiatives across logistics and last mile. Today he is a buy-side advisor through his company Logistics Partners, matchmaking between buyers and sellers of logistics companies, co-investing, and joining boards. He sits on the boards of AMSAI, Western Peak Logistics, 88 Partners, Diverse Logistics, TSS, and IGPS. I have called him the most connected man in logistics. Here are the takeaways.

What Fred Smith got right

Fred Smith passed away this year, and Dick attended the celebration of his life on August 11th in Memphis. What came back to him was the heart of the old Federal Express: PSP. People, Service, Profits, in that order. Smith led by example, built great teams, and “dreamed in Technicolor and Dolby sound,” always looking around the next corner to answer: why FedEx instead of someone else? He also knew when to hold them and when to fold them. Going global was brilliant, the COSMOS barcode tracking system was right, and the 1989 Flying Tigers acquisition gave FedEx landing rights across Asia. But he folded too, on ZapMail and the 1980s European acquisitions. And Dick credits one more: acquiring RPS, the roadway parcel service that became FedEx Ground. “I don’t know if FedEx would be around,” he said, “if it weren’t for that.”

The product launches that still pay

Dick got thrown into the deep end early, including a new-products task force at a company he says did not launch products well. Two of those launches are still paying: raising the FedEx weight limit from 70 to 150 pounds, worth billions of dollars in revenue to this day, and Standard Overnight, a lower-cost next-day-by-3 p.m. product that filled the midday trough and deflected UPS for a couple of years. Smith’s answer to dilution worries became a Fredism: “Would you rather dilute yourself, or would you rather somebody else do it for you?” The pitch did not go smoothly. Dick and his colleague Mike Glenn got thrown out of the room for being “parochial marketing guys.” Dick built the operating plan with his cross-functional task force, came back months later, and asked to test three markets. It worked, then rolled nationwide. He also launched FedEx’s first home delivery service, the precursor to FedEx Ground, from an idea sketched on a wet cocktail napkin with Jay Walker in a Memphis bar.

The differentiation test

Dick has a simple test for any carrier. Fill in the blank: “Mr. Shipper, you should stop using [competitor] and start using us today, in spite of all the hassle, costs, brain damage, and risk to your personal career, because…” If there is no good answer, it is going to be a long day of selling. His point: parcels have become a commodity because nobody has a compelling fill-in-the-blank, so price becomes the only reason to switch. One aggressive move he would respect: a true automatic money-back guarantee, where a late delivery zeroes out on the invoice with no claim filed. He gives it almost no chance of happening, which is exactly his point. The cost gap behind it is stark: an average UPS package-car driver salary around $170,000 against $30,000 to $40,000 at FedEx Ground and Amazon.

Turnarounds are harder than growth

Dick has run strong companies and distressed ones, and he says distressed is definitively harder: far fewer options and levers, far less time, and instead of customers and drivers, you are dealing with bankers, lawyers, and accountants. He calls himself a growth equity guy and will take growth over a turnaround any day. LSO was the case study: a B2B company with a bad balance sheet, a 60-percent-gross-margin express business that was declining, and a 20-percent-margin residential business that was growing. On his first ride-along, Dick says, “I could see the ground from where I was sitting.” The Dallas hub was “a big shed” sorting packages on pallets on the floor, and the technology was ancient. The fix: switch from company drivers to contractors, shamelessly plagiarizing the FedEx Ground model, rebuild the hub, and replace the tech with no balance sheet to fund it. Done in 2018, they went to market with B2C e-commerce in 2019 on three points: same or better service; double-digit savings, with no stadiums to sponsor and no corporate jets; and the emotional hook, which one shipper put bluntly as wanting an alternative “to keep the other two bastards honest.”

The DHL lesson: never advertise a bad product

Before LSO, Dick ran marketing for DHL in the Americas after its Airborne acquisition, the attempt to build a US ground network against FedEx and UPS. Service was bad across the board: missed pickups, unanswered phones, horrific billing. He ran focus groups nationwide looking for an honest angle. The winner, from a cold winter night in Chicago: “Competition, bad for them, great for you.” DHL could not claim to be cheaper or better, but it could claim to be the alternative the market needed. The campaign had a $150 million budget, $50 million for TV and $100 million to rebrand everything yellow and red. The marketing kicked butt. Volume flowed in immediately, then flowed right back out, because the service was not there to back it up. His line on it: “The best way to go bankrupt is advertise a bad product.”

CEOs should open doors, then hand off

Dick’s first job at FedEx was sales rep in Pittsburgh, where his first sales call ended with the owner telling him his son had been a FedEx courier, and FedEx had fired him. That sales DNA stayed with him into the CEO chair. At LSO, the sales team could not reach VP and director-level buyers, so he played the CEO card on LinkedIn: he was not asking for anything except advice. Slightly less than half the time, it worked. He would take the first or second call, then hand it off: prime the pump and train the team in breaking down doors. But it is situational. Where a strong sales machine exists, a CEO should stay out of the way. For turnaround hires, he wants team players, workhorses over show ponies, and customer-driven people. Business is hard enough when everyone rows together, he says. It is impossible when they do not.

What makes a deal catch fire

In 2023, Dick led the acquisition of Diverse Logistics, a $60 million-a-year white-glove, big-and-bulky home delivery company. He found a proprietary deal through his network that no banker was shopping. He was upfront with the sellers: “We are not going to be the high price offer.” The pitch was industry knowledge and the second bite of the apple. He co-invested alongside Argosy Private Equity (“they wrote the paycheck and I wrote the little check”), built a 100-day plan, and took two items himself: find an acquisition with warehouses, and find a head of sales with a real Rolodex. The company is on track for about $110 million in revenue this year. Deals fall apart, he says, when they are not win-win, when trust breaks down (“it’s almost like being married”), or when diligence surfaces a surprise that forces a retrade. Deals catch fire on the opposite: win-win terms, trust, and no surprises.

What is next: boards, buying, and AI

Dick’s energy is going three places: his existing boards, two exiting this year; new acquisitions through Logistics Partners, hunting slightly below typical private equity size; and possibly another CEO role. His wife calls him a logistics masochist. He admits he makes more money not being a CEO. But as he puts it, it is moth to the flame. If you are thinking about buying or selling a logistics company, Dick is easy to reach: logistics-partners.co, rmetzler@logistics-partners.co, and he gave out his cell on the show, 510-719-8380.

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This post is based on the Logistics Remix episode “The Most Connected Man in Logistics” with Richard “Dick” Metzler, Buy-Side Advisor at Logistics Partners. The views are the guest’s and the host’s own.