Freight technology vendor and third party logistics provider (3PL) GlobalTranz Enterprises Inc. has named its chief financial officer, Renee Krug, as its new CEO and says it plans to continue along its recent path of creating aggressive growth through both corporate acquisitions and new product launches in a market being roiled by tech startups with venture capital funding.
In turn, the firm's current CEO, Bob Farrell, will become executive chairman beginning Jan. 1, and Vice President of Finance Lara Stell will rise to replace Krug as CFO, the company said Dec. 14. Prior to being named CFO of GlobalTranz, Krug was CFO of Clear Channel Outdoor and VP of finance at Swift Transportation, following earlier roles she had held at Honeywell.
Phoenix-based GlobalTranz has made waves in recent months by crafting seven acquisitions since the start of 2017 and has combined that with organic growth to become the 10th-largest freight brokerage in the U.S., on track for $1.5 billion of revenue in 2018.
In June, the company gained additional leverage to continue that growth pattern when it was itself acquired by private equity firm The Jordan Co. L.P. GlobalTranz had previously been held by Providence Strategic Growth (PSG), the growth equity affiliate of Providence Equity Partners, Susquehanna Growth Equity, Volition Capital, Savano Capital Partners, and other investors.
Under its new ownership, GlobalTranz joins stablemates Load Delivered Logistics, Logistical Labs, and other transport and logistics firms in Jordan's catalog. The company says it distinguishes itself as a technology-driven firm specializing in less than truckload (LTL), full truckload, third-party logistics, and expedited shipping services.
"The ownership change brought the capital to the table that we need in order to continue to invest," Farrell said in an interview this week. "We think of ourselves as a technology company that happens to move freight, and we will continue to increase in sophistication for our shipper customers who are using logistics, supply chain, and transportation as a way to differentiate themselves in the market."
GlobalTranz plans to keep its foot on the growth pedal in 2019 by continuing its record of mergers and acquisitions and by releasing a new technology platform in the first quarter, Krug said in the interview.
Much of the company's growth is driven by its approach to automating business processes, both on customer-facing platforms such as sales and on back-end stacks such as financial and invoice resolution, she said. "For example, if a carrier invoice comes in via electronic data interchange (EDI), that can trigger billing and payments to be made without human intervention, which increases speed and reduces errors," Krug said.
One of the fastest growing sectors at GlobalTranz is the firm's managed transportation business, which can optimize freight solutions for customers who are coping with an increasingly complex consumer landscape, she said. "As transportation has become more expensive, the pressure on an e-commerce company to deliver goods faster can also grow," Krug said. "And if that's not your core competency, it's better to partner with a service provider like us, which lets the company focus on their own products."
In addition to cultivating those sources of internal growth, GlobalTranz will increasingly flex its large scale in the marketplace, as increasing numbers of competitors enter the fragmented brokerage sector, said Farrell. "There are a couple of software startups out there with extensive digital freight matching platforms that have gotten large market caps and evaluations," he said. "But they still don't have the scale. We've done more loads than Convoy or Uber Freight or any of the other new entries because they don't have the network of carriers that can provide more capacity and better rates."
Those startups have been spending their money on marketing instead of profitability as they try to increase market share, Farrell said. But in the meantime, legacy brokers such as GlobalTranz—as well as names like Transplace, Echo Global, and C.H. Robinson—have been developing ever-more sophisticated solutions for customers seeking an edge in their transportation and shipping operations, he said.
Indeed, the newcomers are certainly well-funded, with Convoy sitting on a recent $185 million investment round and Uber Freight relying on the support of its ride-sharing parent company. But restocked with new ownership and leadership of its own, GlobalTranz intends to maintain its scale and rank by continuing to follow the successful playbook that has pushed it near the top of its sector, its leaders say.