Written by Bella I.
Within the logistics industry, and particularly for freight brokers or third-party logistics companies, having a high customer concentration can pose major risks to a company’s overall growth rate and revenue. Essentially, customer concentration is a measure of the distribution of revenue within a company’s customer base. While this can yield large amounts of consistent revenue, a small mishap, a change in the economy, or decrease in frequency or size of shipments can result in significant losses for the company. In simple terms, you’re putting all your eggs in one basket, and though you may profit at a rapid rate initially, potential for total loss and risk of loss increases the larger the percentage of the customer base that any individual customer occupies. So, this begs the question, how do we reduce the risk and maintain relationships with our larger customers? The most critical thing a company can do is maintain the relationships; within the logistics industry this means always making sure that the customers shipments are pushed through on time and with no damage. It also means delivering analytics and reports so that the customer knows what to expect for their shipping in the future.
A common argument in favor of higher customer concentration becomes quality versus quantity; this same concept is transferrable to the company, in that they must give their most highly concentrated customers the highest standard of quality. This can become tricky to balance because if all your efforts are going into a few customers then others may feel neglected, in logistics it is always important to offer a high quality service to everyone. Maintenance of customers and the assets which they hold is essential to prevent downward pricing pressure from the customer, which would in turn negatively impact revenue potential. In determining the distribution within an investment portfolio, having one or several key customers can allow for individualized time and customer-specific approaches, which is essential for keeping the customer.
In summary, high customer concentration can prove to be both advantageous and disadvantageous to the overall success and margins of a company. However, avoidance of pitfalls often associated with higher customer concentrations is founded on building and maintaining positive, mutualistic relationships between customer and company. Ultimately, choosing to have high or low customer concentration is entirely a personal decision, and should be tailored to meet the specific investment and financial decisions of the company.
Late last year we ran several ads stating that Becker Logistics is growing and that we were looking to bring on new people to work at Becker Logistics. You can view the first of these ads by clicking here. In these ads, we also said that we were planning on opening four new offices in 2019, which was quite a substantial goal considering that at the time we only had five offices. Well, we are happy to say that we have reached the goal that we set forward of opening 4 new offices this year, which brings us to a total of 9 offices.
The first office that we opened this year was the Irving, Texas office. Irving is located in the Dallas/Fort Worth area, it is a booming town full of culture and, more importantly, is the 2nd largest logistics hub in the nation, which is why we chose it as the location of our 6th office. Our Irving office is managed by Lance Roberts who has many years of experience in the logistics industry and was a perfect fit to run this branch. The branch officially opened on January 1st, 2019 in a temporary office space until it was moved to a permeant location on April 1st, 2019. The office has been running great and is exceeding the expectations that were put in place for it. They have hit important KPIs and branch manager Lance Roberts has since been nominated to chair the TIA Food Safety Advisory Committee. We look forward to seeing where the team is able to bring the branch; we think it will be somewhere great.
April 8, 2019
Glendale Heights, IL
It was announced in this week’s issue of Transport Topics that Becker Logistics is included in the ‘Transport Topics top freight brokers’. We are honored to be included on this list and we are looking forward to rising through the ranks in the coming years. This news is great for everyone looking for a solution to their shipping issues because they will now know that Becker Logistics is ranked amongst the best. Becker Logistics was ranked at #71 with a 2018 net revenue of $13.2 million and a 2018 gross revenue of $80.5 million. You can see all of the details by viewing the article online here.
The entire organization is thrilled to have won the award and are excited to continue growing and having an impact on the industry. “This is great, I am so glad that we were recognized for this award,” said Becker Logistics employee Cindy Coleman. “We put in hard work so it is great to be recognized for it with something like this.”
Becker Logistics is a transportation management company founded in 1997 that matches customers with top-quality freight carriers in the United States, Canada, and Mexico. We have a large, dependable network of quality truck and rail carriers.
To reach out to Becker Logistics to get more information you can email Marketing@BeckerLogistics.com or call (800) Go Becker to have a chat.