AFN acquires e-commerce LTL TMS tool

The Chicago-based freight broker told American Shipper it targets deeper relationships with fewer brokers, eschewing transactional business for better relationships with retailers and carriers.    Chicago-based freight broker and supply chain management company AFN Logistics on Wednesday said it has acquired Columbus, Ohio-based HA Advantage, the transportation management system (TMS) provider and less-than-truckload (LTL) division of HA Logistics.
   The move, AFN said, is intended to enhance the company’s ability to serve its retail customers, in particular, to help them adapt to the demands e-commerce is placing upon them.
   HA’s proprietary web-based, mobile-optimized TMS focuses on lowering users’ total landed costs through increased visibility, efficiency, business intelligence and control, AFN said. Several HA Advantage employees have joined the AFN team as part of the acquisition, including those in business development and account management roles.
   AFN said the acquisition consolidates its own existing strengths in LTL and with retail customers. E-commerce is requiring retailers to smaller, more frequent loads into distribution centers and through their networks to keep pace with demands. That requires LTL optimization, a capability AFN is said it is bolstering with the HA Advantage acquisition. The company helps retailers optimize their eCommerce-related LTL trucking needs and balance network-wide demand.
   “As we continue to see a strong increase in e-commerce activity, we plan to scale our LTL capabilities to take advantage of this growing market by helping our shipper customers manage their eCommerce growth more efficiently, strategically, and profitably,” AFN CEO Ryan Daube said. “The move also strengthens our managed transportation services offering.”
Brian Winshall, executive vice president of business development at AFN, told American Shipper in a recent interview his company has been focused on helping its retail customers adapt.
   “Supply chains weren’t originally set up for omnichannel and e-commerce fulfillment,” he said. “So it becomes a game of metamorphosis in order to win.”
Winshall said AFN’s value proposition in a crowded brokerage and freight management market is to go deeper and more strategic with its customers, even if the company doesn’t have as many customers as a brokerage its size might normally have.
   “We take a consultative and holistic approach,” he said. “That’s where I feel like our business is different.”
   AFN, which is family-owned, was founded in and initially started around the retail vertical. The company has largely grown organically, and has zigged while much of the top of the freight brokerage market has zagged through huge acquisitions intended to consolidate scale.
   “A lot of (brokers) see it as a race to $1 billion (in revenue),” he said. “We’re racing to add value to clients in the marketplace. If we’ve created value, then everything else comes from that and we’ll likely will grow.”
   The typical AFN customer, he said, struggles with supply chain silos within their organization, so AFN looks at holistic solutions to drive that value. The broker’s customers range from smaller shippers to Fortune 100 companies.
   “The vast majority are some sort of strategic partnership level,” he said. “They either view us as critical to a strategic value play – so it’s not about buying truckload for $25 less, it’s about taking their data and driving down network cost. When we own a piece of business, it’s much less transactional than most brokers. We approach both sides more than market, and the carrier community appreciates that. We’re giving them more consistent freight and we get treated a bit differently as well.”
   That strategic view of its customers accounts might, for example, mean than it’s unwise to use a carrier that’s $50 cheaper per load if use of that carrier causes the shipper to not meet its vendor compliance mandates.
  “That might mean a penalty of 3 percent of the invoice, which is much worse,” Winshall said. “Retailers have historically focused on ‘must arrive by’ compliance. For several large retailers, we’re part of their preferred network. We act as extension of private fleets for major retailers. For some customers we’re the only 3PL who are allowed to do direct-to-store deliveries.”
   AFN said the HA acquisition brings its staff to more than 200 employees, and it has had double-digit revenue growth the past three years. According to an analysis by the consulting firm Armstrong & Associates, AFN was the 34st largest broker in North America at the end of 2015, with revenue of nearly $200 million.