New “First Party” logistics management service hits market by Haversack Logistics

There is a new, distinctive player offering a better mousetrap in the $161 billion third party logistics market. Or “first party” logistics, as Haversack Logistics is calling itself.

Today shippers gain a new alternative with the launch of “first party” solutions provider Haversack Logistics, Davidson, N.C.  Powered by a unique combination of advanced “in the cloud” transportation management, optimization, data connectivity and business intelligence technologies, Haversack says it offers expert personnel working side-by-side with the shipper's in-house staff to plan, optimize and execute freight transportation and logistics operations against lowest-cost, highest-service standards.

For years, shippers have been limited to two principal strategies for managing logistics and transportation: keep the function in-house and cobble together various legacy and off-the-shelf systems to manage it, or outsource to a third-party logistics (3PL) firm and be captive to the 3PL's standardized, inflexible systems, processes and ever-rising costs.

Haversack President Christopher Nadeau says his “1PL” creates a whole new ballgame for shippers.

Nadeau had careers at Con-way Freight (and XPO Logistics) after his 26-year military career. Then he began working in logistics, representing shippers.

“Flipping sides, I saw how pricing worked and the business models of the carriers,” he told LM. “I saw this incredible gap between what shippers are paying and what’s fair and what the market cost is. I saw an enormous opportunity and that was the beginning of Haversack Logistics.

Nadeau claims that “every time we’ve gone up against a 3PL, we’ve beaten them and for good reason—we pay for ourselves. “When your model is that good, others can’t compete.”

Nadeau says the typical response from shippers after explaining how Haversack works is: “This isn’t even a fair fight. Where were you guys been six months ago?”

Haversack says it is offering the following market advantages:

• Partnering with leading technology providers MercuryGate and project44;
• Deploying innovative operating platform exclusively for in-house logistics management teams; and a
• Unique 1PL service delivery model, cloud-based software provides alternative to outsourcing

“We partner with our customer's internal team to help them fully understand their logistics spend and opportunities, then support them with the tools and training to drive out costs, drive-up performance and retain the savings,” Nadeau said. “Our sole focus is enabling our customer to take ownership of their logistics, and through advanced technology tools, best-practice processes, real-time analytics and support, gain true competitive advantage—without outsourcing.”

In a traditional 3PL, the shipper hands over all data and responsibility to the 3PL.  The 3PL assesses the client's logistics spend, designs a plan, optimizes it, negotiates and secures rates with carriers, and then operationally executes the plan.  For this the 3PL gets a fee that can be as much as 16 percent of the spend managed.   That's the up-charge, the juice for the 3PL.

Haversack’s Nadeau says he has discovered a better way.

Under the Haversack business model, its specialists first perform an assessment with the client regarding current-state volumes and costs for freight transportation and warehousing. A preliminary plan is developed. That identifies cost savings and performance improvement opportunities through strategic sourcing, route and load optimization, labor management and lean continuous improvement practices.

Once the client gives the OK, a specific instance of Haversack's “in the cloud” software platform is configured for that client. Pricing and routing data is confirmed. Carrier integrations are verified.  Key performance indicators are set, and the client's team trained on operating features and analytics.

Nadeau said Haversack's revenues are earned solely through savings generated for the customer. 

“We are an invested partner in improving their P&L, so if the operational execution of our plan doesn't generate the projected savings, we don't earn our fees,” he said. “Our model sells itself because the client sees the value every day, how cost per mile or cost per hundredweight goes down. They have complete visibility to the costs of operating on our platform.”

Nadeau says that proprietary research before launch found an underserved market: organizations that want to bring the control and functional execution of transportation and logistics back in house (or keep it in-house), and build up their internal capabilities, instead of outsourcing.

Meeting this demand required a flexible, agile partner with proven logistics knowledge, tactical operating experience and process expertise, he said. Speed is also essential with powerful, easy-to-use software that could be quickly implemented—in 30 days or less.   “With our technology partners and engagement process, that's the sweet spot we're after,” he said.

“We are the anti 3PL,” says Nadeau, who along with Chief Operating Officer Wade Rogers, left operating management positions in the LTL industry to found Haversack Logistics. “What gets us in the door is the ability to show true savings.”

Haversack said it selected MercuryGate and project44 as technology providers for their proven capabilities of their software and services, and each company’s innovative approach to collaboration and real-time information exchange.

With MercuryGate, Haversack becomes one of the first solution providers to resell this industry-leading TMS software.  Haversack holds the subscription license and as it on-boards customers to the TMS, they are individually configured with their own “private label” version on the platform.  As a certified MercuryGate reseller with a complete understanding of the TMS solution, Haversack's customers also benefit from expert professional services that help derive the greatest value from the technology.

“MercuryGate is pleased to support our customer, Haversack Logistics, as they offer a new business model to the transportation and logistics industry,” said Monica Wooden, CEO and Co-Founder, MercuryGate International. “Our years of experience with shippers in many industry verticals will enable Haversack to offer proven technology solutions to their customers.”

With project44, which is accessed through a global integration into MercuryGate’s TMS interface, Haversack is leveraging p44’s network of API (application programming interfaces) connections with capacity providers to create a smarter, more productive shipping experience for their customers. project44 has been selected as the industry’s top API provider to facilitate the real-time exchange of normalized pricing information, shipment status, electronic documents and other data. 

Unlike legacy systems, such as EDI or rate bureaus, the technology provider delivers a single, one-to-many integration point. This drastically reduces set-up time and costs, allowing Haversack and their customers to beat their competitors to market by an impressive margin.

“This kind of modern technology collaboration enables an unprecedented level of visibility, productivity and cost savings,” said Tommy Barnes, President of project44.

The goal, says Nadeau, is high transparency, real-time visibility and 100 percent control over LTL and truckload transportation costs and execution.  “By teaming with the customer's staff and enabling them to efficiently take advantage of advanced technologies and sophisticated business intelligence, we collectively drive—and are jointly accountable for-performance quality, savings and process improvement,” he said. 

“We’re going to get you great rates,” Nadeau said. “But we give our clients more—the best technology in the industry from the API and EDI side. We’re giving the most powerful TMS in the industry to their hands. We’re there 24/7 for our clients. The 1PL theory is we are vested partners, we are part of their management teams and their success, and we fight every day for that.”

One other advantage Haversack Logistics has is it’s a certified disabled veteran-owned business, recognizing Nadeau's over two decades of military service as a U.S. Army combat engineer, which included multiple tours of duty on the front lines with troops in Afghanistan, Iraq and other deployments.

He said those 26 years in the military gave him tremendous discipline and training for civilian logistics.

“I was a combat engineer and I thought all I did was blow stuff up,” Nadeau explained. “But as my military career progressed, I didn’t realize the logistics expertise I garnered from moving thousands of soldiers and material from Texas to Iraq. Discipline is essential for Logistics. You must follow standards. Once you have it down, keep doing. We plan, we do it and we check. When we identify things that aren’t working, we change it immediately.”

Nadeau’s military experience taught him, “Yesterday’s solution will become today’s problem if you are not constantly looking at what you’re doing.”

For more information or to set up a product demonstration and initial value assessment, visit www.gohaversack.com.