A privately owned, asset-based less than truckload (LTL) transportation and logistics company that specializes in providing air/ocean freight and retail logistics service to the upper Midwest.
The Company has 345 employees, including 154 drivers and 56 warehouse workers, and has its headquarters in Milwaukee, with four additional terminals in the midwest
An asset intensive business, the Company operating with 54 straight trucks, 99 tractors, and 274 trailers.
The Company had approximately $3MM in operating losses and was in violation of their debt covenants due to:
–The loss of a highly profitable customer that represented more than 20% of total revenue
–Margin deterioration caused by:
•Ten percent increase in driver wages as a result of industry-wide driver shortages
•Increased use of contract drivers charging higher rates
•Inability to pass the increased costs onto customers
–Insufficient data on actual shipment costs which resulted in unprofitable routes
–Slow response to the reduction in the Company’s fixed and variable overhead as well as the loss of the significant customer and decrease in transaction volume caused by Chinese tariffs
The Company was operating pursuant to a forbearance agreement with its senior lender, as a result of their financial performance.
Fort Dearborn (“FDP”) was retained to prepare the Company’s two-year financial forecast and a 13-week cash flow forecast
FDP worked with management and developed an operating plan focused on expense reductions and price increases.
FDP was able to refinance the Company with a new lender, based on the newly developed operating plan and financial forecast.
The Company successfully executed significant cost reductions including payroll, operating leases, rent, and outside driver costs. Additionally, the Company implemented price increases that were part of the FDP profit improvement plan presented to management and the senior lender.
The Company improved its financial position and returned to positive EBITDA, providing the Company with the opportunity to refinance its line of credit facility and mortgage obligation with a new lender.