Austin Ventures bought YRC Logistics at a bargain price of $38.7 million in August 2010. Joey Carnes, the former CEO of BAX, was named chairman and CEO. Carnes was reunited with his colleague, John Carr, who became the MIQ president and COO after being with the organization for the past several years. Carnes and Carr have worked in tandem for over 20 years going back to their days at Fritz, a major freight forwarder and customs broker acquired by UPS in 2001.
Rejoining Carnes and Carr was David Griffith. Griffith, a former BAX employee, is senior vice president of logistics. The other key operating team member is Michael Collins, senior vice president of global operations. Collins’ work record traces back over 20 years including a stint at Hellmann Worldwide Logistics. In addition, the experienced executive leadership is rounded out by Stasiulis, CFO, Bentzinger, CIO, and Schultz, general counsel and CAO.
The team at MIQ has focused on three service lines. Gone are asset based dedicated contract carriage and a series of low margin pool distribution centers inherited with the USF takeover in 2005. The Carnes/Carr group has concentrated on the more profitable lines of non-asset based global services, domestic transportation management and selective value-added warehousing and distribution.
Global Services
Global Services include freight forwarding, customs brokerage, global trade management and value-added services. The business strategy emphasizes targeting mid-sized customers where there is often a single controller/contact, and at the same time, has demonstrated the ability to meet the demands of larger companies in areas that require speed, agility and flexibility.
Growth will be primarily organic, but acquisitions will be made where they fit. For example, MIQ just acquired The Logistics Corporation Ltd., a high-end apparel 3PL in the UK and Europe. The Logistics Corp. and MIQ have worked cooperatively for several years and the acquisition is a “tuck-in”.
In key locations, MIQ uses “partnering” agents. For example, in China, MIQ partners with JHJ International Transportation Co. JHJ has 57 locations in China and 1,500 employees. MIQ and JHJ have been partners for six years and have 14 years remaining on their exclusive contract. While MIQ has a significant company-owned network of offices, its strategy, in countries where it doesn’t have offices, is to align with one of the top three local independent logistics providers that have not been “caught up” in the industry consolidation.
The other major piece of MIQ’s global strategy is to maximize profitability by cross-selling capabilities to existing customers. Freight forwarding services are a particularly good source of leads for value-added warehousing and distribution.
With good reason, MIQ’s Latin American operations are headquartered in Peru. MIQ has long-standing project logistics and mining support operations in the Andes Mountain region for Chinalco, MBM (a Barrick Gold subsidiary), Compañia Minera Antamina and others. For these companies, MIQ charters ocean vessels, transports to jobsites and handles permitting and other logistics functions. Air, ocean and truck movements are managed through a project-specific purchase management system that has won awards for its innovation. MIQ’s project logistics operations are in key geographic locations worldwide.
Transportation Services
In domestic transportation services, MIQ operates as a technology-driven and execution-based transportation manager, freight broker and domestic freight forwarder. Purchasing scale and IT advantages are important offerings for mid-market customers and larger accounts help to expand the total base and density.
Basic services under multi-year (typically 3-5 year) contracts include:
- Carrier Management/Development
- Order Management
- Shipment Planning
- Shipment Execution
- Freight Bill Audit, Payment and Reporting
The IT platform used most is PowerTMS which has a MercuryGate core. MIQ has a handful of accounts on i2.
Of MIQ’s 100+ transportation management customers, 45% are outsourced relationships involving in-house or on-site MIQ operatives providing value-added transportation management services. Another 50% use MIQ for technology, carrier management and freight audit and bill payment. The remaining 5% utilize hosted technology. Claims management is also provided as requested.
Contracts are structured as management based, cost plus (open book) or on a buy-sell (closed book) basis.
A major accomplishment of modern systems-based transportation management is the ability to enforce better routing compliance from vendors. Having control of the network allows MIQ to significantly improve mode conversion, end-to-end matching and equipment space optimization. The process saves time by creating visibility and mandates for carrier selection, reducing replenishment times, lowering overall costs and streamlining communication.
Distribution Services
MIQ’s third service line is value-added warehousing and distribution (VAWD). MIQ has become more selective about this business and provides only contracted services.
For example, for a customer of over 10 years, MIQ operates two large cross dock/flow through distribution operations in Irwindale, CA and Jersey City, NJ. Inbound volumes exceed 200 containers/trailers a day. Outbound loads to regional distribution centers are consolidated to 70-75% of inbound due to improved trailer space utilization. For a major consumer electronics firm, MIQ operates warehouses of over 1.5 million square feet. The sales effort in VAWD is to expand with other large supply chain accounts. Warehouse management systems currently used are Manhattan, RedPrairie and proprietary.
MIQ has received a host of performance awards from its customers. Here is a partial list:
Customer Recognition Awards
