A&A Meridian IQ Site Visit 10-2005

Meridian IQ – Looks Like a Winner

Overland Park, Kansas USA

September 19, 2005

Richard Armstrong

Key Personnel:

Jim Ritchie, President and Chief Executive Officer

Valerie Bonebrake, Executive Vice President and Chief Logistics Officer

Greg Reid, Senior Vice President and CMO

Paul Smith, Vice President of Global Marketing

Mike Brown, Vice President of Strategic Market Planning and Research

Traci Greer, Vice President of Marketing Logistics

Mike Venegoni, Vice President of Global Business Development

Meridian IQ started life as a dot-com, took a right turn, built a base as a supply chain and transportation specialist, got some traction and then got lucky. The luck came when its parent, Yellow Roadway bought USF corp.

USF Logistics was a floundering, $260 million company in search of a leader. It had strong tactical logistical services in pool distribution, dedicated contract carriage and dedicated warehousing. It had profitable Canadian operations and five locations in Mexico. It was really good at tactical logistics functions. Using i2 technology, it had qualified as a tier 1 transportation manager. In its contract warehouses it used Manhattan’s PKMS. But all its tactical capabilities had never been integrated. Cross-selling had barely been added to the vocabulary.

Jim Ritchie’s smaller Meridian IQ ($210 million) was built to be a strategic transportation supply chain manager. With help from other Ryder graduates like Valerie Bonebrake, Ritchie’s team built its TM operation around a web-based system, Power TMS.

Power TMS is an Internet-based TMS that covers global track and trace, routing and carrier management. PTMS has optimization built in. There has not been an outage for PTMS in over a year and response times are in seconds. PTMS replaces the traditional paper routing guide system with a modern vendor control system. It has 10,000 users and handles 11,000 shipments per week. In addition to PTMS, Meridian has expanded the use of Manhattan WMS capability it acquired from USFL.

There was limited involvement in brokerage and transportation management with USFL. (These functions were only 7% of USFL’s revenue.) Otherwise, the two companies were complementary fits. USFL added dedicated contract carriage, dedicated warehousing and a large pool distribution operation. These functions were 16%, 14% and 41% of USFL revenues in 2003. USFL also brought i2 capabilities as a TM alternative in case Meridian prospects preferred it. Meridian provided the supply chain management umbrella so badly needed by USFL.

Customers have been quick to grasp the synergies of the combination. Cross-selling is proceeding rapidly and successfully. Since there was limited overlap in customer lists, the integrated service results have been good. More opportunities as lead logistics providers and supply chain managers are in process.

A major advantage for Meridian IQ is the desire of its parent for growth. Yellow Roadway is now a $9 billion company with 800 salesmen and levels of lead generating capability. Bill Zollars, chairman of Yellow Roadway, expects Meridian to become a multi-billion dollar global logistics player. In addition to USFL, the company has recently purchased a China-based forwarder and taken 50% ownership in another. GPS Logistics and JHJ International Transportation add 1,400 employees and 82 offices in Asia. Five offices in Britain and The Netherlands have also been added.

Meridian now has over 20 salesmen, a large number for a 3PL. Its direct sales effort will be strong and it will not just sit back and wait for the RFPs to come in.

It looks to us like Meridian IQ has a strong offering going forward, especially for medium-size operations.

...Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP, Meridian IQ, YellowRoadway, Yellow Freight, Roadway, USF Logistics, Jim Ritchey, Valerie Bonebrake, Ryder, TMS, Yellow Roadway, Manhattan, Manhattan Pkms, transportation supply chain manager, supply chain managers, carrier management, brokerage, WMS, dedicated contract carriage, pool distribution, dedicated warehousing, global logistics providers, RFP...