Supply chain stability
The logistics industry is not an exception to many other sectors that have set out on a journey towards automation and the increased integration of the latest software and technological advancements into their work. While one might argue that this is the natural direction the business world needs to take, the people factor should not be undervalued, but instead nourished and harmonised with technology to ensure effective, sustainable supply chain management. This is the position advocated by Koch Logistics – a third-party logistics provider, whose activities since 1992 have placed it at the forefront of the service expansion and growth in this sector.
Operating as a division of Stan Koch & Sons Trucking, the Minnesota-based company aspires to provide an end-to-end offering to its domestic and international clients, including less than truckload shipping (LTL), full truckload shipping (FTL), air/ expedited services, intermodal freight transport and container drayage, as well as warehousing and distribution services. In 2007, the business amplified its international activity with the launch of Koch Maritime, providing full container load (FCL) and less than container load (LCL) shipping.
“In order to keep our service levels high and costs down, we are constantly looking for ways to seamlessly integrate new technological components with the customer service and creative problem solving we are known for and find critical to preserve,” explains Koch Logistics’ Vice President and General Manager, Darren Nelson. “We spend a lot on new technology, as speed and accuracy are of utmost importance in our business. Ultimately, however, in logistics, it is not a matter of if something will go wrong but rather when. In those instances, you need to ensure that you have the right symbiosis between people, processes, and tools to be able to mitigate and resolve these issues in a proactive manner. That is why we dedicate a lot of time and resources to developing that technology alongside our people, who really are the biggest strength of our organisation.”
Darren distinguishes three levels of customer interaction for the company. “The first one is what we call the ‘transactional bucket’. This type of service generally does not presuppose a strategic relationship with the customer. Instead, we bid for specific transactions and compete with other companies to provide daily services with the criteria for winning usually being a very simple price or speed equation. This process was how our company began and will always be a part of our offerings but we have evolved to where a much larger and more strategic part of our business is segmented as our integrated logistics platform and this is really our core competency now. Here, we partner with the customers and we are responsible for managing and executing some defined portion of their supply chain, truly acting as an extension or bolt-on department of the company itself. This segment has experienced the most growth over the past ten years and will continue to be the focal point for our future growth and expansion plans. Project management is our third level of client engagement and has many synergies and similarities with our integrated logistics platform with the main difference being that the projects usually have a defined timeline and once they are completed, our engagement with the client on that specific project is over until they retain our services again for the next project.”
Reverse logistics also occupies a significant place in Koch Logistics’ philosophy and daily activities, hence the company’s commitment to working closely with its customers in the development of feasible logistics plans that will deliver their desired outcome in the most efficient and cost-effective manner. “To provide you with a concrete example of our working methods, I would refer to a client we had recently, who had come to us with a defined distribution plan for a large rollout of their product to over 1000 locations throughout the US. It included multiple shipping points and reverse logistics at the delivery locations, as we were not only going to drop off new items, but also take old ones away to recycle or dispose of. On paper, the proposed plan made perfect sense, but when our teams vetted it from a practical execution standpoint, it had many pitfalls, risks and dangers associated with it that ultimately made the plan too risky to implement. Therefore, we worked alongside the client to adjust the plan and make it more practical and efficient. It was a difficult process, but we enjoyed the challenge, and at the end of the day we were able to make the adjustments and the project went off almost flawlessly.”
Darren outlines some of the practices that make up the company’s working process.
When singling out staff as instrumental to continuous success, he also recognises the need for adroit workforce management, stressing the importance of developing employees’ skills and keeping them happy and motivated. “We have to be an attractive employer and offer good career opportunities for both our current and incoming staff members. With unemployment rates in the US at an extremely low level, it is even more crucial to train and retain our workforce.
“Another intention of ours is to reach out to more people with our story. Almost all of our growth throughout the years has been either organic or on a referral basis and we would like to share our achievements with the wider public. We launched a full-time marketing department about two years ago and we are planning to intensify our efforts on this side of the business as part of our growth plans,” Darren discusses what the coming years might be holding in store for Koch Logistics.
“Controlled growth is what we are aiming at. We will continue to add value to our clients’ operations, look how to best automate some of our processes, and take care of our people,” he lists as the company’s top priorities. “We have the advantage of being a mid-size company, who is big enough to have the resources and the capabilities to go head-to-head with some of the largest providers in our field, but who is also small enough to be flexible and handle complex projects that are better suited for more nimble organisations. Maintaining and nurturing this balance will be decisive to our future success.”
Third-party logistics provider
Part of Stan Koch & Sons Trucking
Blends automated solutions with personal touch to serve its clients