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Coyote Logistics’s Software Moves Trucks of Heineken for Less

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When Heineken wanted a new company to haul its brew in the U.S. last year, it hired a Chicago upstart that didn’t own a single tractor-trailer. What Coyote Logistics offered instead was the undivided attention of founder Jeff Silver, a 48- year-old trucking industry veteran who promised to get the beer from ports to distribution centers less expensively than the competition would. Although the Dutch brewer was his biggest client yet, Silver was confident he could deliver. “It’s really as simple as doing what you say you are going to,” he says.

oday the beermaker’s shipments are among 1,850 tractor-trailer loads that Coyote schedules each day. The 720-employee company, founded in 2006, uses software to match shipments with a network of 19,000 contracted carriers. Silver, who holds a master’s in logistics from the Massachusetts Institute of Technology, designed the system with fellow MIT graduate and Chief Strategy Officer Chris Pickett. In addition to arranging pickups and deliveries, the software also handles the complexity of setting rates offered to truckers, which fluctuate according to how many carriers are available, the distance to be traveled, the size and type of cargo, and other conditions. The automation lets Silver divide his workforce into two groups -- one that finds and logs shipments and another that locates truckers. As a result, Coyote arranges for 15 to 20 truckloads a day per worker, instead of the more typical six to eight loads found in most logistics companies, where one person handles an entire transaction, says Evan Armstrong, president of Stoughton (Wisc.)-based Armstrong & Associates, a supply- chain research-and-consulting firm.

Backed by private-equity firm Warburg Pincus, Coyote has shaken the industry by snatching business from less-efficient, smaller players in a fragmented market. Only about 20 logistics companies have more than $200 million in revenue, says Armstrong, and only three have more than $1 billion: C.H. Robinson Worldwide, the Hub Group, and Landstar System. “They have built a fairly disruptive business model,” he says of Coyote. The company now has 2,500 clients. Silver says revenue reached $320 million last year and he expects more than $500 million this year. About 60 percent of Coyote’s business comes from food and beverage companies, which pay from $1 to $4 a mile, plus roughly 50 cents a mile for fuel. The market has also been growing by an average of 8 percent a year since 2000, Armstrong says, to $37 billion this year.

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