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Sunteck - Mastering the Agent Model

Boca Raton, Florida USA

March 18, 2009

By

Richard Armstrong

 

Key Personnel:

Harry Wachtel, CEO

Mike Williams, COO

Mark Weiss, EVP

David Less, CIO

Warren Cohen, VP Distribution & Logistics

Russ Dixon, Director Marketing & Communications
 

Established in 1997, Sunteck Transport Group has grown to $32 million in net revenues making it a Top 25 domestic transportation services manager. Turnover/Gross Revenues now top $180 million and in 2008 net revenues and turnover increased by over 50%.

Sunteck’s accelerated growth has been driven by its mastery of the “agent model”.  Its agents are independent businesses integrated into a branch office network.  Sunteck now has 50 agents located throughout the United States.  In addition, it has 240 owner-operator tractors for controlled trucking capacity.  Sunteck’s executive management group relies on its 11 member agent leadership board to ensure continuity of strategy and communication between branch offices and headquarters in Boca Raton, Florida.  Sunteck’s agents are exclusive representatives and typically operate under multi-year contracts.

Figure 1:  Sunteck's Revenue 1999 - 2008 ($ Thousands)

 

Sunteck and its agents divide basic transportation services and responsibilities.  Agents handle “front office” operational aspects including sales, customer service, rating, freight coordination, truck dispatch, and tracking and tracing.  Sunteck provides, in addition to its growing brand name, the “back office” functions, which include accounting, a qualified capacity network and a solid information system and technology platform.

 

It’s no surprise that an organization that relies heavily on the entrepreneurial spirit of its agents was founded by a true entrepreneur, Harry Wachtel.  Wachtel moved from a primarily less-than-truckload freight broker, Pioneer, to Sunteck.  In 2000, Sunteck was merged with AutoInfo, Inc., a public company. 

Wachtel’s vision was to build Sunteck with a top tier agent program.

 

Wachtel has led Sunteck to double digit growth each year from 2000 through 2008.  With Wachtel from the start, Bill Wunderlich, CFO, and Mark Weiss, EVP, have been instrumental in defining Sunteck’s reputation for an excellent agent program.  In 2006, the company reached a size where it needed more high quality and specialized managers, and Wachtel began to add them.  Mike Williams was added as COO.  Williams, with a background as an attorney, had been in trucking/brokerage for seven years.  David Less, with 22 years of diversified experience, was added as CIO.  Warren Cohen, a retail distribution and special handling expert, was added in 2007.  John Cordle took over as general manager of business services.  Cordle has a military background and is responsible for day-to-day business operations at the company’s headquarters.  Russ Dixon, a veteran of CEVA, GATX and Ryder/PIE, took over marketing and public relations, and Linda Clark, most recently with Arnold Transportation, became director of agent recruiting. 

 

At this point, Wachtel has built a core group which can generate significant expansion for several years without addition.

 

Functional Capabilities

Sunteck’s agents operate freight brokerage offices.  All of the agents broker dry van truckloads.  Ninety percent of them handle refrigerated truckloads.  A group of other services provided is shown in Table 1.

 

Table 1:  Sunteck's Transportation Services

 Flat Bed

 Logistics/Distribution

 Less-Than-Truckload

 Warehousing

 Intermodal

 Air/Ocean

 Expedited

 Over Dimension

 

Through its agent network expansion, Sunteck continues to bring new specializations to the organization.  Five agents have warehouses and more value-added services are being offered.

 

A high quality 3PL set of value-added services is offered through the logistics and distribution section headed by Warren Cohen.

 

Cohen’s customers are primarily retailers.  The core service is pool distribution with specialized delivery.  Last mile and white glove deliveries are handled by a network of local couriers often with lift gate truck deliveries.  For Royal Pet Supplies, for example, Sunteck deliveries include large aquariums and other difficult to handle items.  Deliveries are made to final customers and stores.  Another specialized customer is Ulta Cosmetics.

 

Royal Pet and Ulta chose Sunteck to shorten distribution cycles from their distribution centers to retail outlets while having a completely visible chain of custody through the outbound distribution process.

 

Each retailer had several challenges to overcome when streamlining its distribution models.  Both retailers delivered to points well over 600 miles from their distribution centers and were missing time critical appointments.  In addition, there were serious chain of custody issues.  Many deliveries required more “white glove” attention.  The retailers badly needed a more detailed account of the entire process.  Distribution center managers were also looking for ways to provide a more balanced pick schedule to minimize mistakes and lower costs.

 

The retailers formed partnerships with Sunteck in 2008 based on Cohen’s years of experience, intensive communication approach, and knowledge and experience with last mile providers.

 

Sunteck has a network of strategically located last mile centers to receive inbound freight securely while improving on-time performance to more that 99% and eliminating loss prevention issues.  Customers utilize a “just in time” inventory model which saves retailers storage space and results in precise delivery times at known costs.  Sunteck provides a high level of white glove handling which has reduced damages.

 

Sunteck’s web-based technology solution accepts advanced shipping notification (ASN) files, provides real time proof of deliveries and enables clients to run a wide array of reports without any additional cost or expensive IT integration.  Sunteck provides customers the flexibility to adjust to seasonal fluctuations.  Sunteck runs reverse logistics programs to handle product returns.

 

Another key piece to domestic transportation management at Sunteck is its Freight Agent Tracking System ("FATS").  FATS allows each agent to keep track of customers, loads, price/service quotes and carriers.  Reports are available for commissions, loads handled, dispatcher productivity and shippers/consignees.  FATS has a “load board” which lists all loads posted by Sunteck agents.  Loads are handled using Rand McNally miles.

 

Sunteck customers cover a wide variety of verticals and industries.  Table 2 gives a sample list of customers, past and present.

 

Table 2:  Sunteck's Customers

Albertsons

Hasbro Royal Pet Supplies
Coca-Cola ITW Zip-Pak RR DONNELLEY
DANNON Leggett & Platt Sara Lee
Energizer Limited Brands SERVICE AMERICA
Everlast Fitness MARS Snackfood US SIEMENS
Firestone Nestlé U.S. FOODSERVICE
GE Healthcare Publix Super Markets U.S. Dept. of Defense
H&R Block REXAM Ulta Cosmetics
H.L. Hildebrand & Sons Inc. RICOH Whirlpool

Sunteck’s motto is “Achieve Excellence” in everything you do.  While 2009 will be a challenging year for logistics service providers, Wachtel is striving for continued growth.  He and his team are working hard and perfecting their agent model to get there.

 

 

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