Despite an overall economic slowdown in the U.S., Tom Sanderson, CEO of Clicklogistics, believes his company is poised to grow substantially this year. On the heels of a successful spin-off from parent company Cardinal Logistics Management and more funding from its financial backer GTCR Golder Rauer Fund VII, Sanderson believes his company could grow some 40% to 50% this year from it current revenues of $100 million.
By 2002, Sanderson says he is confident that growth rate could be even larger.
While the trucking industry is predicted to grow about 3% annually between 2000 and 2008, the logistics market is expected to grow 15% to 20% a year over the same period. Also, Sanderson believes that his company’s focus on small- to mid-sized shippers is where much of that logistics growth will take place over the next few years.
“Ever since the 1980s, we’ve seen steady progress in logistics efficiency, largely because Fortune 500 shippers with centralized logistics operations could afford new technologies to make them more efficient,” he said. “We may be headed towards greater logistics savings once we get affordable logistics software and technology down to the mid-sized and small shipper level.”
Clicklogistics is focusing on shippers with between $1 million to $100 million worth of freight management business as prime potential customers for its suite of Transportation Management Software (TMS) and other logistics services. The key to winning that business, he said, is using the Internet to drive down not only the cost of data communications between those shippers and their carriers, but also reducing the cost of acquiring TMS systems.
“Now we have software and technology that such shippers can tap into and use without having to install on site,” Sanderson explained. “Typically, when you buy such systems off the shelf, they can cost between $500,000 and $1 million, along with months of installation and training time. With us, all you need is a Web browser and you can be up and running in days.
Sanderson adds that the user can mix and match from our menu of services, and there are no up-front licensing fees that have to be paid, taking investment risk out and increasing payback on that investment.
Sanderson believes Clicklogistics’ systems and set-up will enable mid-sized and small shippers to save money in the way they manage their logistics operations, rather than by reducing the price they pay for trucking and other transportation services.
“All the negotiating on [trucking] rates that can be done has largely been done,” he said. “Yet there are still a lot of opportunities for savings in logistics. There is still a lot of money lost through random buying of transportation services, as well as money that can be saved be eliminating manual processes such as the faxing and phoning in or freight bills, etc. Moving to electronic automation will move that information more efficiently with better visibility.”