Craig Roeder explains how this logistics services provider is creating value for both manufacturers and suppliers.

Before Craig Roeder started logistics services company ProTrans, he was told he needed a business plan. “I jokingly said that I only had what was in between my ears, but I gave it a shot,” he said. He sat down with a piece of paper and a pencil and wrote down some goals, one of which was to hit the $20 million mark by year five. The company reached that goal a year early and will achieve $125 million in revenue in 2007.

ProTrans entered the logistics scene in 1993 and put a spin on traditional LTL (less than truck load) services. Typically, suppliers send partial truck loads to their customers (manufacturers) or wait until they have enough goods to constitute a full load. ProTrans, understanding that time is money, offers customers another option: a shared consolidation network.

Craig Roeder

“Basically, we consolidate goods from multiple suppliers onto a single truck,” said Roeder, president of the Indianapolis, Ind.-based company. “Through partnerships with local and regional LTL carriers and 29 consolidation centers across North America, we accelerate the flow of goods from the supplier to the manufacturer.”

The company originally concentrated on delivering goods from the Midwest to manufacturers based in Mexico, but has since expanded to serve all industrial regions of the US, Canada, and beyond.

A different path
In 1996, ProTrans experienced an awakening. It hired a technology company to write industry-specific software, but $600,000 and a year later, the company still didn’t have a viable system up and running. “At that point, we decided to take our IT inhouse,” said Roeder. “We figured the best way to design the appropriate software was to get our customers involved.”

In the process of creating a software system, the company asked its top 10 customers how ProTrans saved them money. “I would have said that we reduced our customers’ transportation costs, but all 10 accounts said that their greatest savings was from a reduction in inventory, which came about from the accelerated movement of goods.”

Roeder realized that a giant opportunity was staring ProTrans in the face and took the company down a different path. In 2000, he held a customer focus group, and everyone involved requested to have a consignment inventory warehouse located close to their manufacturing plant(s). “They wanted access to the raw materials without owning another property,” said Roeder, explaining that many customers need every square inch of available space for the manufacturing process. “Most of the companies we work with have high levels of demand, so moving the inventory out of the plant and converting that space for production is of greater value to them.”

Today, in addition to providing shared consolidation network services, ProTrans has 12 supplier “malls” along the Mexican border and three in the US that hold consignment inventory for customers, who can request deliveries as often as needed. In fact, ProTrans feeds materials to a certain manufacturer every two hours, 24 hours a day, seven days a week. “With these supplier malls in place, the inventory cycle for our customers has greatly increased,” said Roeder.

“In essence, we have vertically integrated the supply chain. We handle the entire process from the supplier to the manufacturer, including transportation, border processing, customs brokerage, inventory storage, and final delivery.”

Global expansion
Originally, ProTrans was attracted to Mexico mainly for the length of haul. “Let’s say you are a US manufacturer, and you have a supplier in Mexico. In all likelihood, you can receive shipments in seven or fewer days via truck. But if your supplier is in China, for instance, and you don’t want to pay the high cost of air fare, you are looking at six weeks or more,” said Roeder, adding that more US companies are taking advantage of low labor costs in Mexico, as well.

Roeder considers ProTrans’ core competency to be helping customers achieve greater efficiency, and in today’s global economy, that means exploring expansion into other markets—namely Europe and Central and South America. “Most of our customers have international suppliers as well as their North American suppliers.”

In recent months, ProTrans has begun providing overseas logistics services for a few select customers to test the waters—literally. Although ProTrans would probably use a combination of air and ocean transportation, most customers aren’t willing to pay air fare. “As long as providing international logistics services proves to be financially viable, we will move forward.”

Searching for skills
Its first year in business, ProTrans had a staff of two, and it wasn’t long before Roeder began recruiting from college campuses. “If you define the perfect employee, he or she would have six to eight years of experience; intelligence; dedication; computer skills; and good verbal, written, and oral communications skills. But often, when you find that person, he or she is happily moving up the ranks with another employer. We decided that we needed all of those qualities but one: experience,” he said.

Today, ProTrans interviews college students with a GPA of 3.0 or above. “With that, we already know that the candidate is intelligent and has good communication skills. Plus, anyone graduating today has computer skills, so all we are looking for in our interviews is personality.”

Once on board, ProTrans trains new hires in every department, from the loading dock to accounts payable to customer service. According to Roeder, doing so helps employees better understand the organization and accelerates the learning process.

When hiring mainly college graduates, some turnover is almost guaranteed, but the key to retention, said Roeder, is providing opportunities for employees to learn and advance. As the company has tripled in size over the last six years and now has 600 employees, Roeder said there is no shortage of advancement opportunities. “Oftentimes, the position someone will be filling two or three years from now doesn’t even exist today because the company is growing 20% to 30% annually.”