CTSI Hot News

CTSI Maps Out Growth Strategy

Memphis Business Journal

Despite a down economy, CTSI, formally known as Continental Traffic Service, Inc., has been adding clients in preparation for a market rebound.

So far this year, CTSI has picked up new business, giving supply chain software solutions, data management and transportation services to companies such as Albany International Corp., Walt Disney Co., Freescale Semiconductor, Inc., Haldex, Hansen Beverage Co., Merck & Co., Inc., Nokia Siemens Networks, Nortek, Inc., Pitney Bowes, Inc., Samsung, Technicolor, Inc., Tekni-Plex and YRC Domestic Freight Forwarding.

"When the economy takes a downturn, many firms turn to the service providers for solutions to either desired cost reductions or cutbacks in people or resources," says CTSI executive vice president Cliff Lynch. "We’ve found that the outsourcing market in general, such as warehousing and supply chain software, tends to get a little better during rough times."

In the depths of this recession, many major carriers were down 25%-30% in total number of shipments as recently as first quarter 2009.

However, in July, CTSI started seeing a 4%-5% increase in shipments among its clients.

"In the last couple of months, we've seen a lot of clients who were hunkering down and not making any decisions saying, 'OK. We’ve survived this,' "Ken Hazen president at CTSI, says. "They’re starting to look for ways to be aggressive and are planning for post-recession business."

Many companies that have downsized recently will turn to companies like CTSI to help offset a lightened employee count.

CTSI has more projects and new business than it has had in five years. Its revenues have been in the $18 million-$20 million range over the past few years, but management believes it is on a path to possibly triple in size over the next five years.

"While our competitors were laying low the past year and trying to weather the economy, we decided to go after as much business as possible right now," Hazen says.

CTSI has worked hard to add more clients whose volumes are down during the economic slowdown.

"As they grow, we'll grow," Hazen says. "As clients pick up 10% or 15%, that's a pretty big bump as the economy picks back up."

CTSI has gotten more inquiries about its services from smaller companies as well.

"A lot of the interest is by small companies because they tend to get hit the hardest," Lynch says. "We are probably dealing with smaller companies in some cases, but they're companies we believe their volume will pick up."

Some of its current clients have increased volumes during this period, such as computer industry companies Intel Corp. and Technicolor.

Technicolor used CTSI's event management system to better manage its DVD and CD distribution, allowing the company to track all its modes and carriers. The system also lets Technicolor monitor pre- and post-shipment activity.

One of CTSI's keys to success has been its focus on Transportation Management Software.

Its main competitors in that area, Oracle Corp. and RedPrairie Corp., are strong, but they sell a large umbrella of services at one time.

By contrast, CTSI allows customers to buy a separate module, such as a claims software or event management software, making it easy for customers to pick the right amount of software for their operations or to make quick changes as necessary.

"With most of the large software companies, making a change is like making a right turn on a battleship," Hazen says. "We're like a little PT boat. We're nimble and we have ease of implementation."

Attributed to Andy Ashby, Memphis Business Journal