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BENTONVILLE -- With some competitors reporting losses and bankruptcies this year, and customers anticipating a slowdown next year, Frank McGuigan, chief executive officer of Transplace, said Thursday that the logistics company's strategy is to continue finding new ways to help its shippers.

"I don't want to say as a business we're recession-proof, but know when our shippers aren't earning [as much] they need us more to find efficiency in their business," McGuigan said Thursday.

Speaking at a company conference for consumer packaged-goods customers at the 21C Museum Hotel in Bentonville, McGuigan said several competitors are slowing because their revenue is tied closely to the price of freight, whereas Transplace is more insulated.

"We are hitting our sales targets and we are diversified enough to not be so leveraged in freight costs," McGuigan said. "And so it's allowing us to continue our trend of double-digit growth, which is terrific."

Transplace is a logistics provider without warehouses or trucks. Instead, the company's core business a custom software for large consumer packaged-goods shippers, including Nestle, Kellogg's, Campbell's, Coca-Cola and others, to use throughout their supply chains. It also works with customers like Target to help increase shipping speeds.

Transplace operates a truck brokerage business and intermodal business, where its employees manage rail shipments and provide trucking capacity to shippers, McGuigan said. It also operates a cross-border management business for Mexican and Canadian shipments, he said.

With its software, Transplace manages more than $9 billion of freight in North America, McGuigan said.

Looking ahead, he said the company is nearing a record sales year. While the company is not seeing the same sales growth it had between 2017 and 2018, Transplace is anticipating flat, or unchanged, results from 2018 this year.

Like the rest of the industry, global trade disputes are cutting into its earnings. Less so between Canada and Mexico, and more so with China, McGuigan said. Overall, freight tonnage is down because of an industry rush to move products earlier this year in response to tariff implementation, and because there are "less truck shipments going on," McGuigan said.

A dip in freight shipments is usually a first sign of an economic downturn, according to a new report from Convoy's economic research division. The industry went into a recession two years before the recession of 2008.

Although based in Frisco, Texas, Transplace has deep roots in Northwest Arkansas.

Founded by J.B. Hunt and five other trucking companies in 2000, Transplace was later bought by CI Capital Partners LLC of New York in 2009, and has changed private-equity ownership through the years.

It has also grown through acquisition. Most recently, the company acquired Yusen Logistics (Americas) Inc., expanding its intermodal division in October.

Earlier this year, Transplace broke ground on a $50 million building next to Interstate 49 in Rogers, which will be the company's new Northwest Arkansas offices. The company plans to move all of its Lowell employees to the new Rogers building once completed.

At the conference, McGuigan said the company hopes to have about 1,200 employees working at the Rogers offices. Currently, about 700 work in Lowell, making it Transplace's largest location.

Business on 08/23/2019

Print Headline: Logistics broker's tactic is to adapt


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