Room for new IT kid

Room for new IT kid    While a cadre of veteran software developers already exists, the diversity of data management and information technology requirements in the freight forwarding industry continues to demonstrate that there's always room for one more.
   Kansas City, Mo.-based Catapult International is definitely one of those new IT kids, but is rapidly proving its growth potential within this highly specialized business.
   Like many good ideas, the company was born in 2006 out of frustration. Founder and Chief Executive Officer Matt Motsick, who had been a transportation manager for a shipper of photo albums and scrap book supplies, couldn't stand how long it took to get freight rate quotes from forwarders.
   'I would put out a request to four or five of our forwarders for a rate and it would take one to three days for them to get back to me,' he said.
   And like most transportation managers, he was under tremendous pressure to keep cargo moving in and out the distribution center. 'We had product on the dock that needed to go. If we waited one or two days for rates, the freight would quickly pile up,' Motsick said.
   The reason why many forwarders can't give instant rate quotations is because they have to call around to their liner carriers for the rates. Thus a cascade of delays in the delivery of rate quotes to shipper transportation managers occurs.

Matt Motsick founder and chief executive officer, Catapult International
'Control of pricing and rates is still the Holy Grail of managing this business.'

   In 2006, Motsick contacted Brian Luttrell, a former college roommate and banker, to analyze the inherent problems associated with rate quote delivery. 'That's when we put our heads together and came up with a plan for Web-based software to efficiently manage this process,' said Luttrell, now Catapult's chief operating officer.
   The timing, technologically speaking, for starting Catapult couldn't have been better. IT had evolved to a point of being offered to customers in the form of 'software as a service' (SaaS), meaning the technology was available for use online without the expense and hassle of physically adding new computer equipment and software. This was a perfect model for forwarders who are generally hesitant to buy new systems that may require them to tear up existing operations platforms.
   Still, for Catapult to get started, it needed to secure a partner for tariff data. Motsick and Luttrell approached San Francisco-based Pacific Coast Tariff Bureau (PCTB), which at the time was selling off its operations after the death of its founder, Jim Olsson. During their discussions, PCTB was instead acquired by Ontario-based Descartes Systems Group.
   What could have been viewed as a major loss, suddenly opened the door of opportunity to Catapult.
   'We knew what we wanted to do but didn't have the technical expertise behind it,' Luttrell said. The Descartes acquisition in late 2007 'allowed us to cherry pick the best people from PCTB and keep them in San Francisco.'
   Motsick said the transition for these new hires was smooth. 'They know contract management in finite detail,' he added. Catapult also hired experienced contract and pricing managers from APL and MOL in the Bay Area.
   Once programming for the system started, the company quickly realized it should also offer the option to include rates for managing over-the-road and air freight transport. Forwarders provide Catapult their transportation provider rates for entry in the system. 'Many companies have three to four systems to manage these modes individually,' Motsick said.
   Forwarders using Catapult are able within minutes to provide their customers with ocean freight rate quotes by trade lane and specific sailing schedules. The all-in rates include the latest surcharges, which Catapult monitors on a daily basis.
   The system's on-screen presentation is easily customized by the user for the desired look and feel. 'The forwarder can even e-mail the rate quote to the customer showing its company logo,' Motsick said.
   Catapult's founders admit the recession of late 2008 through 2009 was extremely difficult for the startup, but optimism prevailed. 'We always knew we had something important, and I believe our tenacity got us through it,' Luttrell said, adding that the company didn't lay off any staff during the economic downturn.
   Business has since picked up for Catapult with the expectation to increase its customer base threefold annually going forward. Some of its biggest forwarder/non-vessel-operating common carrier users so far are Econocaribe Consolidators, Hellmann Worldwide, FedEx Trade Networks, and Crane Worldwide. The company has also picked up some shippers who use Catapult to manage and monitor their rates.
   'Control of pricing and rates is still the Holy Grail of managing this business,' Motsick said. 'Whether it's the shipper or forwarder, each needs to know what they're spending and get rates back quickly.'
   Yet competing head on with the IT giants of the shipping industry isn't easy. 'We're the David and they're the Goliath, but we're getting some brand name clients,' he said.
   In some cases, established IT players have looked to partner with Catapult, either because they have insufficient automated rate quotation tools or lack them altogether. Catapult's program is flexible enough to integrate with most existing IT platforms and software.
   Catapult has also expanded internationally during the past two years, opening sales and support offices in Xiamen, China, to cover Asia and in Amsterdam for the European market.
      'We're going to expand in Europe in the second quarter, particularly in Germany and the Benelux countries ' working with both forwarders and shippers,' Motsick said. 'We've found a huge need for everyone anywhere to combine all their rates into one system.'
   Confidence in Catapult's capabilities allowed the company in December to close on its first round of institutional financing in the amount of $2 million. The company's capital infusion was led by Five Elms Capital. The newly available capital will 'allow us to continue providing a flexible rate management tool while further developing our software offering,' Motsick said. ' Chris Gillis