Doug Waggoner, CEO of Echo Logistics, talks about Echo's rapid growth and shares insights on growth strategies that transcend changing economic conditions.
As a non-asset based third-party logistics provider that acquires and manages transportation for its clients, Echo Logistics has to be extremely sensitive to the dynamics of a market with “slowly tightening supply and slowing increasing demand,” says Waggoner.
To be effective in this market “we have to have scale in the marketplace, a deep understanding of our carrier partners and what lanes are important to them, and the technology and algorithms that enable us to find and manage capacity for our customers. We just have to play the game smarter and execute optimally on a daily basis.”
That means helping shippers find the capacity they need at an attractive price while enabling carriers to balance their networks and reduce empty miles, he says. “We want the Echo Logistics brand to stand for taking the complications out of transportation management. If our people wake up every morning and think of ways to make transportation less complicated for everyone, including ourselves, we will be successful.”
One measure of that success is growth, and Echo Logistics has grown significantly, both organically and through acquisitions. “Acquisitions are an important part of our growth strategy, and once we have made an acquisition, we assist those operations in growing,” says Waggoner. He notes that Echo’s compound growth rate for acquired companies is around 20 percent. “We look for complementary or supplementary capabilities,” he says. “In freight management, we look for good LTL and TL brokers; with intermodal companies, we also look for a geographical presence that will be helpful to our footprint. And, of course, we always look for talent. Some of our current executives came from companies we acquired.”
Most importantly, however, is to find acquisition candidates that are a good cultural fit, Waggoner says. “We believe strongly in the power that comes from harnessing the energy of your people. We do that by having a common set of values and goals and by having everyone working as a team, heading in the same direction. When making acquisitions, we look for companies that will fit in as part of our team.”
Over the next five years, Echo will continue on its current track of expanding its geographic footprint, adding new people in sales, operations and sourcing, and continuing to make investments in technology, Waggoner says. "We currently spend $12m a year on technology and we will continue making those investments. That is what will allow us to scale our market presence and to have data and algorithms that let us understand markets in real time.”