Coyote Logistics: Excellence in Optimization
“We bring in new employees in groups of 12 to 16 and I participate as much as I can in their training,” says Jeff Silver. “I try to get to know them. We have a database, but it’s better for me to get a sense of who they are, and it’s good for them to hear our story directly from me. Our people are really the critical piece of this. Our employees are on the phone with their customers carriers every day, interacting all different ways. The experience that anyone has when they interact with Coyote is really what dictates the future success of the company.”
Jeff Silver thought he left the trucking business for good in 1999. American Backhaulers, the company he’d help grow into the country’s second-largest third-party logistics company, had just been sold and Silver planned to retire at the ripe age of 37. Fortunately, after a seven-year hiatus—during which he collected an MBA, spent some time studying optimization logistics and parented his seven kids—he decided to jump back in.
“I looked for something else to do, but I never found another industry that had the same growth potential,” he explains, noting that an estimated $130 billion worth of “potentially outsourceable” transportation occurs in the U.S. every day. Huge amounts of freight moves across the country on a daily basis, many of it at far less than peak efficiency simply because trucks with excess capacity struggle to link up with the companies that need their services. “The basics of what we do is trying to find ways to put those two together,” says Silver.
That simple concept is at the heart of what is actually a very complicated logistics industry. Companies like Coyote use complex algorithms to manage on-land shipping and distribution for their customers—and this is the first of several areas in which Coyote excels. “I designed the software that runs our business on a day-to-day basis and I’ve been doing this my whole life,” explains Silver. “Most of our competitors have had IT people design their software, which means that it’s never optimized for what they do.”
While proprietary software provided an edge, it was Silver’s commitment to service that distinguished it from competitors early on. In 2006, when Coyote was launched, there were thousands of regional companies across the country but only one large business—C.H. Robinson, the company that had bought American Backhaulers. “The attitude across the industry was that you had to take the easy loads and give those that were problematic back to the customer or take care of them the next day,” explains Silver. “We took a different strategy.”
Silver tasked his team with moving every load the company committed to, regardless of difficulty. Often, the strategy meant spending more or working harder; but ultimately, it paid off. “The market was looking for another competitor,” he recounts. “When we came in and started delivering service that was in the high 90s when people were used to the low 80s, people converted right away.”
Behind this service edge is an ultra-committed work force, adds Silver, who makes a point of recruiting “people who have shown passion in all sorts of things” during their college lives. “We hire a very different type of person than most of our competitors,” he says. “We find that kids who played college sports usually have a tremendous work ethic. They are competitive, but in a cooperative way; and they know that if you lose today, you have to come back and do it again tomorrow. We care a lot more about what you did in college than we do about your GPA.”
The company also doesn’t rest on its laurels, instead continuing to reinforce its service mantra and refine its technology. It now employs a mobile app called Coyote Go, which helps the company track its drivers’ locations and supply them with dispatch information, improving efficiency by reducing the need for expensive and inefficient phone communication.
Such efforts have paid off over the past three years, with Coyote racking up a 139.7 percent growth rate compared to its industry average of 11.4 percent.
“Growth has been great,” says Silver. “There is a continued need in this difficult economy to find better solutions than what [have] been out there. Once someone tries us and we perform, it’s a done deal for us.” —Jennifer Pellet