Echo Global Logistics Leverages its People, Technology, and BNKe
Solutions for Growth
Chicago, Illinois USA
September 23, 2010
By
Evan Armstrong

Key Personnel:
Doug Waggoner – CEO, Echo Global Logistics
Scott Boyer – Senior VP of Sales, Echo Global Logistics
Mike Mobley – Senior VP of Operations, Echo Global Logistics
Nick Hannigan – Director of Operations, Echo Global Logistics
Marc Van Hoff – Team Lead Shared Services, Echo Global Logistics
Heather Mills – Marketing Coordinator, Echo Global Logistics
Jamie Petrzelka – Senior Business Developer, Echo Global Logistics
Umang Sharma – Senior Manager Operations, BNKe Solutions

Echo Global Logistics Company Overview

Founded in 2005, Echo Global Logistics, Inc. (Echo) has grown its business rapidly. Headquartered in Chicago, IL with 10 regional offices throughout the U.S., Echo’s gross revenues grew over 660% from 2006 to 2009 through multiple acquisitions and strong organic growth. Echo’s staff of over 900 employees and agents, provides non-asset based domestic transportation management services with considerable user-friendly technology and customer responsive operations. In 2009, its gross revenue was $260 million, net revenue was $56 million, and it managed 643,000 shipments.

Approximately 60% of its revenue is from managing less-than-truckload (LTL) transportation and 40% is from managing other modes of transportation including full truckload.

Echo splits its operation into two main divisions: “Transactional” is its spot market division and “Enterprise” is its contract customer division. Gross revenues are split 60% Transactional and 40% Enterprise. Echo had over 15,500 Transactional customers and 137 Enterprise customers at the end of Q2 2010. In addition, Echo splits its operations into sales/customer contact load generators and has a staff of approximately 50 carrier capacity procurement/contracting specialists which serve both Transactional and Enterprise division customers. It has a carrier capacity base of over 22,000 potential carriers to transport shipments.

Echo has approximately 50 people in I.T. and developed its own web-based proprietary transportation management system (TMS) dubbed Evolved Transportation Manager (“ETM”). ETM provides a very efficient online order entry and management, transportation execution, shipment visibility and reporting functionality. ETM supports multiple modes and provides customers with real-time shipment pricing information. The system has over 125 standard reports. Echo’s basic daily transportation management process is shown in the chart below.

Echo Global Logistics Daily Transportation Management Operations

BNKe Solutions Supports Business Growth

Growing operations require trained personnel. In 2010, Echo has been hiring and training approximately 30 people per month. In addition to growing its own staff, Echo took a nontraditional approach to supporting its rapid growth early on by enlisting the services of BNKe Solutions in February 2006.

BNKe Solutions (BNKe) dedicated staff of 50 in Kolkata (Calcutta), India provides Echo with seamless back office support. Its personnel perform the following back office support functions:

  • Acquire tracking and tracing shipment statuses from carriers lacking EDI (electronic data interchange) capabilities. BNKe’s staff updates Echo’s ETM transportation management system with an average of just over 200 shipment statuses per person per day.
  • Secure carrier documents and proofs of deliveries (PODs) allowing Echo to bill its customers faster.
  • Consolidate LTL shipments into truckloads reducing Echo’s purchased transportation costs.
  • Provide trained logistics personnel to support special projects and TMS rate table updates.

According to Echo’s CEO Doug Waggoner, “BNKe provides us with very scalable and flexible back office support, has solid carrier relationship skills, and has significantly decreased our back office expense.”

In addition to supporting Echo’s back office functions, BNKe has worked with Echo using a six-sigma “lean” approach to reengineer many processes to take out waste. Two examples of these process reengineering efforts supplied by Echo are: 1. The process for carrier POD requests was reengineered and has had a significant impact on improving Echo’s accounts receivable ageing, and 2. BNKe has developed proprietary ways to secure carrier shipment status information allowing Echo to increase its quality in providing customers with up-to-date shipment visibility information. BNKe has been such a valuable provider, that Echo just contracted with it to provide support services for an additional five years.

Summary

Growing over 660% from 2006 through 2009, Echo Global Logistics has been extremely successful in achieving very significant growth over and above the U.S. domestic transportation management market segment average. Its mix of focused people, user-friendly technology, and a strong outsourced partnership with BNKe Solutions has been key. We anticipate that this approach will continue to prove successful as Echo moves into other service lines and geographies.

 

Sources: A&A Primary Research, http://www.echo.com/

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