Mike Regan Sounds Off (page 2)

-- Logistics Management, 11/1/2005

Page 2 of 6

Of course. I went home and completely surprised my wife who thought I was on my way to New York to Irving’s headquarters to accept this great job. We had a child, another one on the way, and here I am turning down a great job offer—what’s wrong with this picture? She was floored. But I learned latter that Irving Trust was going out of business and the guy who was going to hire me had left a week later. So I always considered that as divine intervention.

When did TranzAct emerge?

Right about that time I was approached by Don Kehoe, who was a subcontractor for the Bank of America doing pre-audit. Don said he would like to start a freight payment company. That was right about the time that Bank of America had a consulting group go through their freight payment product and determined it wasn’t such a great product. The consultants said there was no market for it and that the bank should get out of the business. But Don and I knew we could do something better.

So, we started TranzAct and incorporated it on Dec.18, 1983, and our first day of business was Feb 1, 1984. Don brought me in went in as an Executive Vice President and I took significantly less than I was making at the Bank of America, which was about 25 percent of what I was going to be making at Irving Trust. But my wife was supportive of me and my father just smiled. We were featured in a Fortune magazine article in 1992, and the irony of it is that the article came out the week my Dad died. He never saw the article.

What was the mission of TranzAct when you launched and how has that mission changed in the past 20 years?

I could give you a fancy explanation, but I won’t. From day one, we set out to help customers reduce their freight costs. That’s what we’re in business to do. Over the past 20 years what’s changed is not so much the mission of the business but the tools and technology we use to fulfill that mission.

Who makes a good customer?

We say that we’re not for everyone; we’re just for “you.” The “you” in that statement is the person who’s motivated to save money and do a great job for their company. I’m sad to say that that doesn’t include everybody out there. A lot of folks in this business are RIP—or retired in place—and are failing to inform their companies of the transportation issues their facing.

When you meet with shippers who are not RIP, what state are you finding their logistics operations?

I can say that we’re seeing a heightened sense of awareness about the importance of logistics, transportation, and supply chain issues. If you take a look at your (LM’s) Masters of Logistics Survey, freight expenses as a percentage of cost of goods sold went from 2.6 percent to 3 percent. My numbers came in and said that that is a 14-15 percent increase in costs. We see no sign that the forces that have been responsible for those increases are going to stop in 2006.

So, you’re looking at double digit increases in ’04, ’05, and ’06, and you’re seeing that happen in an environment where transportation and logistics staffs have been pared to the bone and many of the functions that were done in-house have been outsourced to third parties. Today, when we see logistics professionals come out to market, they’re looking for options. They saying, ‘Help me understand what I can do differently in order to manage my costs more effectively.’ Continued...

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