Redwood Logistics acquires Eminent Global Logistics, Oracle Transportation Management consulting firm

Today Chicago-based third-party logistics provider (3PL) Redwood Logistics announced that it has acquired Eminent Global Logistics, a Pennsylvania-based software consulting firm specializing in Oracle Transportation Management (OTM). Eminent, founded in 2003 by Kathy Moore, consists of 37 subject matter experts with experience in hundreds of OTM implementations.

In a phone conversation, Redwood’s Chief Executive Officer, Mark Yeager, characterized the deal as extending Redwood’s menu of sophisticated value-add services offered to its shipper clients. Redwood already works closely with customers on MercuryGate implementation and improving their return-on-investment. Yeager said that the OTM expertise acquired in the Eminent deal would be complementary and allow Redwood to create more value for larger shippers.

“We are more than a truck,” Yeager said, “not just a traditional broker. We want to bring real value to our customers and help them get a competitive advantage. We think we can do that in a lot of ways — one of which is traditional brokerage, no doubt about it — but here we’re helping customers generate a return on a very significant investment.”

Yeager said that the risks of failed transportation management system (TMS) implementations faced by shippers were high and that the potential downside could be years of underperformance, further cost, and a fragmented organization. Another risk was cultural: organizations that suffer failed software implementations often learn the wrong lesson from the experience and become gun-shy about further investments, just when they need them most.

Eminent was able to build a successful business by seizing the opportunity presented by the limited implementation services offered by TMS providers. Software companies invest in customer success initiatives but are not willing to divert many resources away from development to implementation assistance, and they worry that being too hands-on with their customers will create a dependence that pushes costs higher after the customer account has already been acquired.

That kind of collaborative partnership is exactly what Redwood is looking for with its customers.

“The biggest thing is that most shippers don’t have those kinds of subject matter experts on staff,” Yeager explained. “It’s not something they would normally hire for — it’s a single occurrence — but you absolutely have to do it right, and you have to understand the tool and the parties you’re trying to integrate. There isn’t really a user manual with these pieces of software, and it takes a level of expertise that is in scarce supply.”

Redwood decided to buy, rather than build, its OTM consulting practice because high-level expertise in that particular software platform is in such short supply that it would have taken years to build organically.

“These Oracle experts have a unique functional knowledge of how to implement OTM and optimize it — to find that skill set, at that quantity, at that level of progression, was almost impossible,” Yeager said.

Kathy Moore has remained at the head of Eminent since she founded the business in 2003, and the hundreds of Oracle implementations the company has performed have resulted in Eminent being awarded Gold Partner status by Oracle. Eminent has “built up a great pipeline of business,” Yeager said, but the company saw the potential to accelerate growth by gaining access to the hundreds of Redwood customers who use OTM.

“We think OTM is becoming a more and more widely accepted platform in the logistics space, Oracle has a lot of positive momentum in general, and going forward more and more of our customers are going to want to look at OTM seriously,” Yeager said. “We will benefit from the growth and increased brand recognition in the marketplace.”

A high-touch OTM implementation consulting business is not nearly as scalable as Redwood’s less-than-truckload platform, its managed transportation system, or even its freight brokerage, but Yeager believes that delivering that kind of value will enhance the ‘stickiness’ of Redwood’s customer relationships.

“Creating sticky long term relationships is a much better value proposition than churning the grist through the mill,” Yeager said. “We don’t want to become a commoditized source of capacity. Even margin opportunities are much greater if we’re performing a broader role and helping our customers solve a really complex issue that they’re not able to solve on their own. We’re part of the customer’s team, instead of just being somebody at the end of the phone with a truck.”

Redwood’s mergers and acquisitions strategy continues to look to scale the company’s core businesses by building out its geographic footprint, recently buying Roar Logistics’ Phoenix division, Atlanta-based LTX Solutions, Austin-based Strive Logistics, and developing a Mexico business. Notably, Eminent’s consulting practice extends to Europe, Asia, and emerging markets. Just as importantly, Redwood is adding services that increase the stickiness of customer relationships.

“We like solving complex problems for our customers,” Yeager concluded.

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John Paul Hampstead, Associate Editor

John Paul writes about current events and economics, especially politics, finance, and commodities, and holds a Ph.D. in English literature from the University of Michigan. In previous lives John Paul studied Shakespeare in London and Buddhism in India, but now he focuses on transportation and logistics in the heart of Freight Alley--Chattanooga. He spends his free time with his wife and daughter herding cats, collecting books, and walking alongside the Tennessee River.

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