Total Quality Logistics – Masters of the Freight Brokerage/Sales Market
Cincinnati, Ohio USA Site Visit
January 11, 2011
Ken Oaks, President and CEO
Kerry Byrne, Executive Vice President
Mike Zins, CFO
George Rewick, CIO
Total Quality Logistics (TQL) is a third-party logistics provider (3PL) primarily serving the produce, food, and general commodities industries with truckload (TL) services. TQL considers itself a sales organization in the logistics industry. Founded in 1997, the firm has grown from three employees in 1997 to over 1,000 in 2010. Gross revenue for 2010 will exceed $750 million, a growth of more than 45% from 2009.
TQL’s commitment to customer satisfaction and its owner, CEO Ken Oaks, drive the organization. Its founding partners worked 24/7 for the first year building a customer base, primarily of produce shippers, by handling “problem loads” – loads that needed to be covered after normal business hours or over the weekend. The company still prides itself on its ability to execute with little or no lead time and in difficult market conditions.
Market differentiation strategy starts with the recruitment and training of the inside sales force (Logistics Account Executives or LAEs). Currently, 75% of TQL’s workforce is made up of LAEs and LAE trainees. The key incentive for TQL team members is a compensation system based on a percentage of each load handled and the growth of the relationship. LAEs “own” their accounts and are heavily motivated to provide their customers with premium service.
TQL will handle more than 400,000 loads in 2010, covering all 48 states in the continental US as well as Canada and Mexico. A large concentration of the freight involves CA, TX, FL and OH due to TQL’s roots in produce and corporate location (Cincinnati, OH). The load breakdown for TQL is as follows: 45% refrigerated, 40% dry van, and 15% flatbed. TQL does business with over 2,500 shippers a week.
To keep the inside sales force staffed for growth, TQL recruits and trains continuously. Trainees are hired at approximately $35,000 a year and given six months of classroom and floor training. The company makes a significant investment in its training programs and considers them a key competitive advantage.
The sales organization at TQL reports to three executive sales directors and a vice president of sales who in turn report to Executive Vice President Kerry Byrne. Non-sales, support personnel report to CIO George Rewick or CFO Mike Zins.
Rewick manages a staff of 50 IT personnel. A large part of this group is dedicated to the company’s proprietary IT system “TQL Load Manager”. The company has been successful in introducing a number of technology solutions through Load Manager that benefit both its customers and carriers. An example of this would be “Lane Watcher”, which provides email load alerts to carriers who have developed a profile in the system.
In the last two years, TQL has opened branch offices in Chicago, Tampa, Charlotte and Charleston. Offices in Denver and Columbus are scheduled to open during the first quarter of 2011.
TQL is a great example of American entrepreneurial success. Ken Oaks fits the model of the modern manager adapting and changing to keep his team on the cutting edge.
Sources: A&A Primary Research, http://www.tql.com/