Local logistics firm consolidates operations at new address

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It's a matter of logistics.|ret||ret||tab|

Springfield-based Mihlfeld & Associates Inc., an 8-year-old "contingency-based logistics consultant," and its sister company, Global Transportation Systems Inc., a non asset-based transportation service, will consolidate operations under one roof in late December, said Doug Hesterly, director of finance and administration for Mihlfeld.|ret||ret||tab|

The companies will exchange approximately 13,000 square feet of space they occupy at 1351 N. Belcrest Ave. and 2055 S. Stewart Ave. for 18,600 square feet at 2841 E. Division St., said Bruce Chilton, director of operations for Mihlfeld.|ret||ret||tab|

Mihlfield employs 48 in data entry, sales, account management, analysis and administration. Mihlfeld has a long-term lease for its new offices with Marshall Mihlfeld, the owner of the companies and the building, Hesterly said. |ret||ret||tab|

He would not disclose the purchase price, but he said renovations will run about $600,000. The general contractor for the project is Plaster & Associates and JPS Associates Inc. is the architect.|ret||ret||tab|

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Hitching a ride|ret||ret||tab|

Owing to the large revenues Mihlfeld takes in and processes from its clients for carrier payments, its working capital is significantly less than what it receives each year. |ret||ret||tab|

"The gross revenue for Mihlfeld will be roughly $140 million this year, but it's a very low margin business," Hesterly said. "The money that we'll actually keep to run our company off of will be about $7 million."|ret||ret||tab|

Based on doing a three-month sample study of invoices to determine a client's previous costs and carriers used, Mihlfeld makes a bid to save that firm money on logistical and transportation costs. "We guarantee our clients that we will save them 5 percent," Chilton said. |ret||ret||tab|

The margins for GTSI are different. It will receive about $4 million in gross revenue and operate on about $2 million, Hesterly said.|ret||ret||tab|

Through conducting inner negotiations and preliminary analyses, and making vendor selections per routes, GTSI functions as the negotiating arm for both companies, said Jeff Ellis, general manager for GTSI. "We broker everything except for lightweight air and parcel." |ret||ret||tab|

Working with about 700 carriers, GTSI arranges for domestic and international carriers to move loads of 100 pounds or greater, Ellis said. Its employees handle concerns in three areas: transportation issues, contract implementation and overall analysis. |ret||ret||tab|

Together the two entities serve about 125 clients throughout the Midwest and eastern seaboard with business concentrations in areas like Chicago, Atlanta and Dallas, Chilton said.|ret||ret||tab|

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Cutting costs|ret||ret||tab|

Mihlfeld's four years of work with Ranger Boats in Flippin, Ark., was that firm's first experience with a logistics company, said Rick Hurst, director of purchasing for Ranger. He said savings have been better than 5 percent.|ret||ret||tab|

Jerry Monahan, controller for John Henry Foster, a St. Louis-based industrial distributor of hydraulic and pneumatic products, said his firm knew Mihlfeld's success rate with UPS was less than with other carriers, but they still wielded a "heavier hand than we've ever been able to." |ret||ret||tab|

Monahan estimated his firm's logistical savings to be between $20,000 and $30,000 annually.|ret||ret||tab|

Mihlfeld has provided a "value-added service" to La-Co Industries Inc., said Doug Bogdal, the firm's finance director. Elk Grove, Ill.-based La-Co manufactures specialty marking products sold to other industries. |ret||ret||tab|

"We were pretty scattered; we really weren't getting much purchasing power in that we were using a laundry list of carriers," Bogdal said. While declining to release a figure, he said there has been "considerable" cost reduction relative to carrier use. |ret||ret||tab|

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Forecasting the future|ret||ret||tab|

Mihlfeld has grown its bottom line by up to 20 percent, Chilton said. |ret||ret||tab|

"We've had annual growth to that level. I think if you're being realistic, (we will) probably (have) a 10 percent growth pattern over the next fiscal year," Chilton said.|ret||ret||tab|

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