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PHOTO CREDIT GIX
When sitting down at a restaurant in central Nebraska to eat a meal made from quality ingredients and produce, do you wonder about the journey of those products from beginning to end? Where did they grow or where were they processed, boxed, shipped or how far did the products travel? When they were unloaded and inventoried, how did the restaurant then portion them and make the meal you are about to devour?
Driving down the interstate seeing semi-trucks that transport goods, all of the behind-the-scenes action that takes place to get the trucks filled with products and on the road for delivery to the consumers is often unrealized.
GIX Logistics of Grand Island is one of the many companies that provide a freight brokerage service which enables producers, carriers and customers to work in tandem to make this process happen.
We visited GIX and saw how this process works. It was clear this business is not only an asset to central Nebraska, but to the individual trucking professionals. They have been able to support many local carriers by combining truckloads and capacity for customers.
The energy and buzz of productivity in the call center is apparent. Learning more about GIX, it became clear that this business is certainly worthy of the O4B Entrepreneur Extraordinaire distinction.
The Company >>>
GIX is an off-shoot of the already successful Grand Island Express that has been owned and operated by the Pirnie family since the late 60s. Originally, the business was a moving and storage company. As interstate transport became more common, they shifted to hauling products and consumable goods for companies. The company grew and is one of the better-known Nebraska trucking lines. In the mid-2000s, it became clear that the company had to readjust yet again and create a freight brokering division in order to meet the demands of the industry and their current and potential customers.
With the help of a business consultant, they realized in order to be competitive brokering freight they had to separate themselves from their fleet in order to not compete against themselves. Working with this consultant was key to the development of GIX. Tom’s son and GIX Co-Owner, Jim Pirnie said his dad has always found value in having an outside perspective review the business practices. This has allowed the company to implement strategies for success.
“The conditions with trucking have gotten a lot tighter and more restrictive. With those restrictions, we knew we weren’t going to grow our fleet anymore unless some unique opportunities came along,” said Pirnie. “So that is when I went out and did some research and found our current consultant. He has implemented a lot of new strategy and changes into our organization that has been very successful. We meet yearly and a lot of what we do is over the phone.”
Pirnie originally worked summers for the company. He went to Wayne State and majored in business management. After graduating in 1999, his father gave him the option of following the leads he had in college or working for the family business.
Pirnie had worked with a consultant to set up a two-and-a-half-year training program in Arizona with Knight Transportation, one of the most profitable trucking companies in the country. GI Express wasn’t a competitor, so the arrangement for the training program was amicable. While there, he learned about the different segments of their business: safety, operations, recruiting, accounts receivable, accounts payable, rating, shop and others. At the end of the training period, it was time to return to the family business.
The Process >>>
The target customer for GIX is the small-to-medium sized food shipper. This includes dry, frozen, fresh, meat, canned goods, frozen dinners or even pizza. Seventy to eighty percent of customers fit this profile. Other customers include manufacturing and a small portion of large equipment companies.
The shift in the business happened since, at one point, many companies thought it might be easier to have their own transportation department, but what they found is that there are fewer drivers. They often buy the trucks and equipment, but then because this isn’t the focus of their business, they end up finding that shipping becomes more of a cost for them without knowing how to implement the efficiencies. It then becomes a negative on the profit and loss statement. Trucking freight brokerages are successful because they are doing it in a cost effective way.
Industry technology has made it possible for GIX to use an online portal system as well as specialized software to identify and group shipments together for customers via carriers in their database. The rates they are able to give are competitive and have allowed GIX to be a leader among mid-sized brokers.
The Difference >>>
The transportation industry is very competitive. There are currently about 22,000 other brokers in the U.S. GIX Logistics is able to stand out because they have a unique perspective compared to their competition. Currently, they stand in the upper-third of the industry, just below some of the larger players.
“Our biggest thing is that we make sure we are doing exactly what we tell people we are going to do. That is our big push,” said GIX Manager, Mike Young. “There is a significant ability for people to be shady, unreliable or unsavory in our industry. There is a lot of identity theft and breaking the law that can happen and it makes some customers gun-shy of about doing business with a brokerage.
"We normally have one shot to show a customer we are going to do what the sales guy told them what we would do. As long as we do, that account and relationship continues to grow. If we don’t, it is very difficult to go back and try to fix that relationship. Our people are very focused on making sure they are coming through for the customer no matter the cost.”
It is important to note that sometimes it means GIX has to take a hit financially in order to give the customer a workable option. For example, if the load quote to the customer is $1,000 but the only viable carrier option is $1,200, GIX will take the $200 loss in order to appease the customer, which is why they have been able to cover so many loads. There are times they are willing to lose money on a load in order to initiate the relationship with a customer or continue the current relationship they have with the customer.
The Area >>>
GIX knows one of the attributing factors to their success is being located in central Nebraska. Not only does the geographical location benefit them, but the quality of people and lifestyle available has proven to be valuable.
Cost of doing business compared to a metropolitan area is certainly an attraction to them. Cost of living is such in central Nebraska that it has allowed GIX the freedom to make big decisions. Quality of employees and regional work ethic are high caliber and reliable.
Tom Pirnie has been involved in the community as he has served on various boards. The executive team is in touch with what is happening in central Nebraska as well as in the industry. They do this through associations and trade journals.
Being located in downtown Grand Island has been ideal for GIX. The area is up and coming and starting to buzz with excitement as community efforts to revitalize the district are underway. GIX has seen a multitude of new business neighbors recently. They have also been able to take advantage of incentives for business growth such as LB840 and Tax Increment Financing.
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