Updated: October 30, 2012 6:04AM
Technology is turning the old-school system of trucking goods from Point A to Point B into a sophisticated process that relies on interactive and real-time web capabilities.
Chicago — the national transportation hub — has become the focal point of a battle among start-up and mainline truck brokers, known as third-party logistics companies, to ship freight at the lowest cost on the quickest routes.
Technology lets truckers use mobile apps and geolocation devices to plan the quickest routes, and to find the nearest rest stops, lowest-price fuel stations and freight pickups on-the-go.
The fierce competition is killing small, independent companies, but opening a sweet spot for Chicago-area up-and-coming players such as AFN, Command Transportation, Coyote Logistics, Echo Global, Hub Group, JBS Logistics, Load Delivered Logistics and Total Quality Logistics. Even the largest logistics company, C.H. Robinson of Eden Prairie, Minn., is growing because the demand for less-costly brokered freight hauling outpaces the supply of trucks.
Though all of the companies boast that they are hiring job-hungry college graduates at a rapid pace, Load Delivered boasts a management team consisting solely of people younger than 30 and a plan to grow on its own rather than by acquiring other companies.
“We think our ‘Gen Y’ leadership gives us a strong advantage,” said CEO and co-founder Robert Nathan, referring to the Generation Y age group in their 20s who make up the fastest-growing segment of today’s workforce. Nathan’s founding partner is Jon Michelon, an early investor in what is now Command Transportation and great-grandson of Continental Coffee Company founder Jacob Cohn.
“Gen Y’s strength is multi-tasking, and that’s a key part of today’s automated and real-time solutions,” Nathan said.
The people driving, loading and managing the trucks are also increasingly Generation Y themselves — Millennials taking over from retiring Baby Boomers, Nathan said.
Load Delivered will hire 50 people this year and expects to hire another 70 in 2013. The company aims to nearly double its current workforce next year, to a total of 160.
The other companies are hiring at a fast clip, too, with Coyote Logistics hiring “several hundred” this year on top of its current 600-employee workforce in Chicago and Total Quality Logistics adding 50 to its 90-employee West Loop workforce. C.H. Robinson added 70 jobs this year to its 1,400 workers in the Chicago area.
Load Delivered recruits most of its hires fresh out of college so it can train them in its system, and makes an effort to hire women and people who’ve played on high-school or college sports teams.
“If someone has learned to take direction from a coach, he or she will have a better ability to listen to managers and learn how to be strong businessmen or women,” said Nathan, whose great-great grandfather, Julius Kramer, started what became The Pullman Couch Company, formed in 1906 in Chicago.
The company’s latest app is being spearheaded by a 21-year-old intern — Marcus Ampon of Highland Park, a senior at Indiana University in Bloomington majoring in financial management.
Ampon became one of the company’s in-house IT technicians after he started setting up computer networking systems. His initiative won him a spot in Load Delivered’s incubator program, where he is working at the LogisticalApps division.
The division is one of two that Load Delivered’s incubator program launched to appeal to Gen Y workers.
LogisticalApps develops mobile apps so transportation managers at the warehouse can use hand-held devices to talk with drivers, manage paperwork and use social-networking tools to talk with customers and colleagues.
The up-and-coming brokers aren’t taking customers away from C.H. Robinson because the need for their services has grown two to three times the value of the nation’s output of goods and services, known as gross domestic product, and they stand to pluck twice more marketshare in the next decade, said Nate Brochmann, an equity research analyst at William Blair & Co. in Chicago.
That’s because companies from Walmart to high-end department stores are keeping inventory lean and relying on the outsourced brokers to deliver their goods over increasingly complex routes, Brochmann said.
“Initially, the companies didn’t trust brokers — who don’t own their own trucks — to get their loads moved,” he said. “But the brokers, using technology, can now offer more services like taking loads off rail and onto trucks and helping plan distribution strategy.”
The truck brokerage’s hiring growth got a boost earlier this year when the City Colleges of Chicago said it will build a transportation, distribution and logistics center at Olive-Harvey College to prepare students for careers in ground, air and rail transportation and the routing and back-end operations that go with it.
The 200,000-square-foot center, a $42.2 million project, is expected to open in Spring 2015.