Transportation Impact delivers rapid growth
Photo by Brian Dobler
The adjoining picture makes it very clear: Keith Byrd and Travis Burt don’t take themselves too seriously. These guys started their logistics consulting business in a 200-square-foot storage closet in Emerald Isle’s South Swell Surf Shop, which is co-owned by Byrd. But there’s nothing simplistic about their success story, which stems from decades of experience moving stuff from warehouse to front door. Transportation Impact LLC helps more than 600 clients trim spending on shipping parcels and loads of products ranging from computers to golf clubs. Based in the Carteret County beach town, the consulting business has ranked among Inc. magazine’s 5,000 fastest-growing U.S. companies for the last five years. It is on pace to post revenue of $31 million this year.
Partners Byrd and Burt, both 54, credit much of their success to lessons learned during a combined 43 years at Atlanta-based delivery giant United Parcel Service. Byrd started as a driver, while Burt joined as a part-time warehouse worker. Before the entrepreneurial bug bit in 2008, Byrd’s last post was at the company’s headquarters, while Burt was a senior regional manager based in Greenville.
“Our wives and family members thought we were crazy for leaving good-paying jobs,” Byrd says. What was crazier was their assumption that UPS wouldn’t care about their new venture. Their business proposition, after all, aims to reduce the delivery company’s take by showing shippers ways to save money.
“Others told us that the company would come after us, but we thought, ‘No, we don’t move packages, and we haven’t done anything wrong.’ But UPS did sue us.” After several months, the duo settled by agreeing not to sell their service in the Carolinas for two years.
“It made us get out of our comfort zone and knock on doors,” Byrd says. It took time to get the business moving, as the founders have not taken private-equity investment and added only one other partner, Doug Starcke, who runs an affiliated business, First Flight Solutions. “We ate beanies and weenies for a while,” Byrd says. They initially targeted prospects in Southeast towns where they could avoid hotel expenses by spending the night with relatives or friends.
Their concept impresses chief financial officers befuddled by transportation invoices. Transportation Impact gets paid a percentage of savings secured for customers, who must spend at least $200,000 annually on shipping charges. Not charging an upfront fee helps the company get in the door, notes John Chaffee, CEO of the NCEast Alliance economic-development group in Greenville.
“Our clients are great at what they do, but they don’t know the ins and outs of the language and surcharges that UPS and FedEx use,” Byrd says. “We know that secret sauce.”
Battling UPS and FedEx on rates isn’t easy. “The lack of competition in the U.S. domestic small-parcel market continues to plague shippers, especially as e-commerce drives shipping volumes to record levels,” wrote John Haber, CEO of Spend Management Experts, an Atlanta-based rival of Transportation Impact, in a November blog. Published rates have increased 4.9% annually since 2010. When adding other changes in pricing, many businesses are spending twice as much on shipping as they did eight years ago, he says.
Byrd marvels at UPS’ ability to raise prices 5% or 6% a year, every year, without fail. “What other business can do that?” he asks. Still, with little to differentiate their services, FedEx and UPS increasingly compete on price. “That is a problem for them, because CFOs used to hesitate more before switching services.” Then there is the looming threat of Amazon, which is building its own massive delivery network with a plan of reducing its reliance on other companies.
Transportation Impact is broadening its services to become what Byrd calls a business intelligence company. The intent is to provide customers with more details such as monitoring which marketing programs are most profitable.
In 2015, the company expanded to assist clients who hire trucking firms. Rather than choosing from more than 1,000 U.S. trucking companies — a more fragmented industry than parcel delivery — businesses negotiate better rates with Transportation Impact’s assistance, Byrd says.
The company expects trucking-related revenue to surpass small-parcel consulting within a few years.
Transportation Impact’s ability to grow in a secluded area impressed Small Business of the Year judges. Having a thriving tech company at the beach is an anomaly, Chaffee says. The owners expected recruitment to be a challenge, but it turned out a lot of people want to work at the coast. Creating a “laid-back, beachy” corporate culture is stressed at the company, where many workers wear flip-flops and shorts, and half-day Fridays allow for more surf time, Byrd says.
In 2016, they completed a headquarters building that includes a fine-dining restaurant, Caribsea, on the third floor and the Torpedo Lounge, a rooftop bar. “When you ride by their building, it’s like we have a Fortune 500 company in our small town,” says Donna Hammonds, executive director of the Swansboro Area Chamber of Commerce.