Thursday, September 23, 2004
Keep on trucking
Technology matches haulers, products
By John Eckberg Enquirer staff writer
![[photo]](tlq.jpg)
Kenneth Oaks (left) is president and Ryan Legg CEO of Total Quality Logistics Inc., founded in 1997 and being honored today as best small business in the region by the Greater Cincinnati Chamber of Commerce.
The Enquirer/MEGGAN BOOKER
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MILFORD - Ken Oaks and Ryan Legg had no idea when they teamed up to create Total Quality Logistics Inc. in 1997 that at the end of the company's rookie year, it would post revenue of $1 million.
And how could they have known that seven years later, revenue would approach $90 million with a $140 million revenue target by the end of 2005?
What the two Anderson Township residents did know at the time was that reliable trucking was an oxymoron for many companies.
"People just wouldn't show up," Oaks said. "But when you called them a couple of hours before, they were always, 'Oh, nothing's wrong. The truck is on the way,' " said Legg, chief executive officer.
Back in 1992 when the two met, Oaks was a produce salesman for the Castellini Co. and Legg was director of operations at Riley Whittle Inc., a trucking company.
Oaks saw Legg as one of the few brokers who provided reliable trucking and was available 24 hours a day, and Legg knew Oaks was a produce provider who knew the growers, warehouse operators and manufacturers that relied on timely transport.
"We worked, literally, 24 hours a day, seven days a week that first year," said Legg, president of the Milford-based company, a third-party freight logistics company that employs 120 and may be providing jobs to as many 200 by this time next year. TQL makes money by negotiating a rate with the supplier, averaging 8 percent.
The company is being honored today for best small business in the region by the Greater Cincinnati Chamber of Commerce. "Outstanding growth, managing it, taking care of customers and employee satisfaction were the reasons why they won," said David L. Owens, director of programs at the chamber.
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HONOREES
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Total Quality Logistics Inc. is one of five local companies honored for excellence in 2004 by the Greater Cincinnati Chamber of Commerce, in the category of 51 to 250 employees.
Other winners:
The downtown accounting firm of Cooney Faulkner & Stevens - Small Business for companies with up to 50 employees.
C-Forward, an information technology company based in Covington - Emerging Business.
Integrity Development Corp., a training and consulting company based in West Chester - Minority Business.
The Work Resource Center, a Walnut Hills-based nonprofit that finds employment for disabled and disadvantaged people - Nonprofit.
Executives of the companies will discuss growth and other business issues at the luncheon today at 11:30 a.m. at the Clarion Hotel in Blue Ash. Call 579-3111 for more information or reservations.
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"We slept in the office," said Oaks. "We took turns taking the cell phone home on weekends."
For start-up cash, the partners took out second loans on houses and depleted savings to create a firm that marries freight from its 1,100 clients to trucks managed by more than 22,000 companies.
Today, when their staffers are not baby-sitting a cross-country load of animal toothpaste or hunting for a driver to haul carrots from California to Michigan, associates are making cold calls to find new clients.
That aggressive approach brings commission-based wages that start at $30,000 and can top out at $200,000 for the most experienced employees.
"One of our top accounts today came about because an associate looked on the bottom of a coffee cup, something we got from Sam's, and then called the company to ask if we could handle their freight needs," Legg said. "Sometimes it's as simple as that."
Technology shift
Deregulation in 1980 created more independent haulers, who found ready and willing dispatch services through third-party brokers. At the same time, cell phones found their way into most truck cabs.
"The technology was ripe to make the marketplace more efficient," said Bob Costello, chief economist for the American Trucking Association, a trade association based in Alexandria, Va., that represents 35,000 trucking companies.
"Cell phones, computers, software - prior to these technologies, communication was pay phones for the drivers, and that's pretty inefficient. Companies like TQL saw a void and became the middleman."
Companies have embraced TQL because most firms do not see hauling products as a core competency, said Jack T. Maas Jr., vice president of sales at Harrison-based JTM Food Group and a customer of TQL.
"This is the age of specialists, and the better you can be at one field you are in, the more efficient and effective you'll be," Maas said. "They've gotten pretty good at distribution."
Unlike the industry as a whole, TQL's niche is apparently recession-proof. When the economy slides and consumers stop eating at restaurants, grocery freight picks up. When the economy picks up, freight loads head back to restaurants. Total Quality Logistics benefits from both trends.
Surprise success
Even though growth has been swift, these guys still see plenty of upside.
"Trucking in the U.S. is a $300 billion market," Oaks said, citing statistics from the Transportation Intermediaries Association. That is, TQL revenues are still less than 0.03 percent of the U.S. market.
While it's a 15,000-square-foot office now, Legg and Oaks expect to grow to 25,000 square feet by this time next year. The company has a second office in Elkins, W.Va.
"We didn't even think about all this when we started," Oaks said.
"We figured the two of us would be brokering with a couple of people maybe doing the accounting. We never considered all this happening for a minute."
E-mail jeckberg@enquirer.com
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