April 01--Scott McDevitt likes to call his company the area's best-kept secret. It does third-party logistics for shippers, manufacturers and distributors, mostly. McDevitt cut his teeth in the trucking business back in the late 1980s, and he saw early on the way that technology could be used to gain efficiencies and cost savings in the shipping process. After six years working for Roadway Express, a trucking company, he decided he was ready to fulfill a childhood dream and start his own company. And in 1994, Translogistics was born. Twenty years later, the company does $15 million in revenue a year, and McDevitt is putting together a marketing team to move the company to the next level. And he's done it while adhering to his Christian values, which he says add to the trust he receives from customers and employees. McDevitt, 50, talked at length recently about his work and his company.
Business Weekly: How do you get paid for your services?
Scott McDevitt: It's all on margin. We'll go into a company, and say their transportation spend is $1 million. We look at everything -- invoices, contracts, how they ship -- and we'll say, "OK, if you go through us you're going to be spending, say, $900,000. A 10 percent savings." (We go back to all their carriers and vendors, and) we negotiated (their original amount down to) $750,000 or $800,000. So then we add our margin onto there. They're spending $900,000 instead of $1 million, and we're making money on the margin from what we negotiated with the carriers.
BW: Did you come into starting this company with that mindset? Did you see the opportunity there?
McDevitt: I saw the opportunity. I was working for a trucking company, Roadway Express. Third-party logistics were just starting to come about in the early '90s. I was in the industry, and I started observing and seeing. I felt this was really a good thing. A lot of the shippers at the time didn't know transportation in depth, and I thought they really could use an advocate that could help them, especially with claims and things like that.
BW: You started a business right out of college. What was that?
McDevitt: Yes. In order for me to pay my way through college, I worked in Wildwood on the boardwalk at a candy store called The Nut Hut. I started working there making fudge and chocolate-covered candies and all of that. So then going into my senior year I said (to the owners), "What do you say after I graduate we go down to Cocoa Beach, and we open up a business down there in the wintertime, and you have The Nut Hut here. And I'll just take a piece of the business for the place in Florida, and I'll work for you up here?" Well, in 1986, when I graduated, that's the year that the space shuttle blew up, and Cocoa Beach is right next to Cape Canaveral. It was a depression down there. People were getting laid off like crazy. And nobody knew what saltwater taffy was, and nobody knew what fudge was. Needless to say, it didn't work out. We went back to New Jersey licking our wounds.
BW: What did you learn from that?
McDevitt: First, you really have to know your market.
BW: Everybody likes saltwater taffy and fudge.
McDevitt: Yeah how can you not like fudge? They were calling it brownies. "That much money for a piece of cake?" They had no clue. So know your market. And educate the consumer. Because you can have the best idea in the world, but if you can't educate them on what this can do, it's not going to be any good anyway. The other thing that I learned is if you don't make any money you don't eat. I lost a lot of weight that year.
BW: So what's next here?
McDevitt: We're to the place where we clearly have a very good message, we have a great product -- our software is a huge differentiator. When we show our software now literally people's jaws drop. I mean it's amazing. And I saw another company that is a competitor of ours, that is literally 10 times bigger than us.
BW: Who shall remain nameless .
McDevitt: Yes. They put all of their money into marketing and sales, and what they have underneath is just nothing. Now I just need to invest in the sales and marketing and get the word out there, and it's going to grow.
BW: So that's what's next.
McDevitt: That's what's next: to get our name out there.
BW: So you need to spread the gospel.
McDevitt: Yes, that's what it comes down to now.
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