Pat Gillihan, a freight brokerage industry veteran from XPO Logistics (NYSE: XPO) and Covered Logistics and Transportation, joined Chicago-based brokerage Transportation One as its chief revenue officer, the company announced October 23.
Transportation One's core business is full truckload temperature-controlled freight; the nine year-old company posted trailing 12-month revenues of $65 million. Until this point, founder and chief executive officer Jamie Teets was directly responsible for all revenue-generating activities, leveraging his relationships with shippers to bootstrap the company.
Now Transportation One's balance sheet is healthy enough for it to invest in building its own technology as the brokerage outgrows its legacy transportation management system (TMS), Teets explained. At the same time, Transportation One is ready to accelerate its growth.
"The rocketship is rumbling on the ground; we're trying to get this baby to take off," Teets said.
Gillihan has experience building and operating freight brokerages at scale. Gillihan was a co-founder and partner at Covered Logistics and Transportation, which he helped launch in 2006. In 2013, that brokerage sold to XPO for $11 million, according to Pitchbook data. Gillihan said that Covered was essentially "the first domino to fall" in Brad Jacobs' new roll-up, and that he got a "blue chip education" at XPO.
Subsequently, Gillihan took on a number of roles at XPO, eventually rising to manage a five- location, $400 million P & L as Midwest Director of Brokerage.
"This hire lets me focus on the business rather than being in it – building relationships and designing the foundation so Pat can scale it from a top line revenue standpoint," Teets said.
Gillihan said that the immediate opportunities are with Transportation One's existing customers, which collectively spend $4.5 billion on freight annually. Transportation One is regularly ranked in the top three brokers and top 10 capacity providers by its customers, and wants to leverage its industry-leading service levels to deepen those relationships and grow wallet share.
"We want to de-commoditize our relationships through scorecarding to create advisory partnerships," Gillihan said.
Transportation One's brokers will get that done, Gillihan said, by standardizing processes and laying a foundation for future growth.
"We want to be very disciplined to a structure and process-driven," Gillihan said. "The more you have that in place, the less management you need and the more the floor will be self-governed."
Teets explained that Transportation One's customers often value service more than price and that by providing his customers the data to accurately score the service the company provides, T1 should be able to grow its accounts.
Gillihan also offered some color on Transportation One's plans for its own transportation management system.
"We are building a homegrown, proprietary TMS, which is worth noting as customers have higher expectations for data transmission with APIs being much more prominent," Gillihan said. "Shippers' expectations are increasing in terms of timeliness and accuracy of data. For us, the technology is about incremental productivity gains, removing manual processes, and operating with exceptions only. We expect the first release or minimum viable product to be out in mid-2020."
"Technology is important," Teets said, "but people and culture are really what's going to allow us to thrive. People have to believe in what we're doing and who we are."
Teets and Gillihan said that Transportation One has no plans to raise outside capital and instead seeks to differentiate itself through service and transparency.
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