The freight healers who slash companies' transport costs
Published 25/03/2010 | 05:00
IN the summer of 2008, newly-formed Transport Matters wrote to a prospective client offering to help them cut their freight costs. Two weeks ago, the company replied to the two-year-old email -- "can you come in and talk to us?"
The story shows how much the world has changed since Transport Matters was set up almost two years ago with the aim of helping businesses get their goods from A to B more efficiently. "A few years back people were too busy to care about value for money," says Greg Fields, one half of Transport Matters' founding duo. "The attitude was, I want that shipped to Japan and if it costs €5,000, it costs €5,000."
That world view meant Fields and business parent Derek Ryan found it tough to get a foot in the door when their four-man business was in its infancy, since their target clients were often more concerned about the topline than the bottom line.
Two years on, the recession has made all kinds of cost-cuts sexy and Transport Matters has helped more than 40 companies shave between 10pc and 20pc off their transport costs. Last year's total was 25 companies, and Fields says Transport Matters is on track for 40 this year.
Fields and Ryan are quick to point out that their company's evolution is down to more than just the economy moving in a helpful direction.
When the duo set up the firm in 2008, having sold their traditional freight business to Doyle Shipping, they thought the wisdom of what they were doing would be self-evident. It wasn't.
"People just didn't understand what we were trying to do," admits Fields. "We'd knock on the door and say 'we're here to save you money and if we do save you money we want a cut' -- they'd ring back and ask us if we could ship a container to New York."
Ryan says it took six "very difficult" months for the pair to establish their business model and convince clients there was value to having independent consultants run the rule over the transport costs on a no-savings no-fee basis.
"As far as we're aware, no one else has ever done this in Ireland, so we really had to go out there and create a market and explain to people why they need someone like us," he adds.
Transport Matters also had to get on to the radars of companies who might use their services, no mean feat when the company was working off a marketing budget of almost zero.
To that end the duo, and two former colleagues from the offloaded freight business, were quick to make links with Enterprise Ireland, multinationals' agency the IDA, employers' body Ibec and exporters' group the IEA.
"We'd target those kinds of agencies as much as we'd target manufacturing companies, because the agencies can give you a foot in the door," says Ryan.
Transport Matters is also a big fan of testimonials as a means of cultivating new business -- the walls of its Booterstown office are adorned with framed letters from big-brand clients like Bulmers and Bewleys and smaller SMEs -- which make a powerful impact on would-be customers.
Almost two years in, Transport Matters now has the benefit of demonstrating that its service works. Ryan says the company identifies savings in "eight out of 10" clients it looks at, with those savings typically coming in at "between 10pc and 20pc".
Clients who go ahead with Transport Matters' plan pay a fee of 10pc of the savings in year one; clients who don't find savings or who don't implement the recommendations pay nothing. The fledgling consultancy has worked with clients which spend €300,000 on transport a year right up to those who spend more than €10m.
"For someone spending €500,000, if we can save them €50,000 a year, they pay us €5,000 in year one and save €45,000, and then the full €50,000-a-year saving is theirs forever," says Ryan.
With an argument like that, Ryan says he's confident the firm "won't run out of clients any time soon", particularly since it's worked with many subsidiaries of major companies which may recommend their services to other group ventures.
Transport Matters is also considering targeting UK firms -- "getting something shipped from Liverpool to China is the same thing as getting something shipped from Cork to China", says Ryan.
In addition, a non-compete clause on the 120 regular clients from the duo's old freight business expires later this year.
"Even when the economy picks up again I think there'll still be a demand for our services," says Ryan.
"I don't think that people are ever going to go back to not caring how much things cost."