CTSI Hot News

Commercial Appeal (Memphis), Paying the frieght

Commercial Appeal
By Jane Roberts

[Excerpt]

Pardon Ken Hazen’s time zone fatigue. He's just opened an office in England and is preparing to open another in Beijing.

Hazen is president and CEO of Continental Traffic Service Inc., the Memphis-based company that carved its niche in the transportation biz by paying freight bills for some of the world's largest multinationals, including IBM, Dell and Disney.

CTSI's sales exceed $20 million a year. It is the second-largest freight billing company in the world.

Today, like every day, Hazen's 125-plus staff will scrutinize and pay about a million freight bills — 98 percent of them electronic — kicking out random "oddballs" that don't make sense to a crew so seasoned it knows -- for instance -- that Ping-Pong balls and metal bars would never have the same freight code.

The trouble is the National Motor Freight Classification book lists 30,000 product classifications, all by numeric code.

"We catch incorrect rates, miscalculated fuel surcharges and duplicate payments on a daily basis," he said.

"We help companies from the smallest mom-and-pop to Fortune 50 companies like IBM and Dell manage their supply chains without the staff, significant software or data warehousing capabilities."

With more than 15 terabytes of storage (enough to store all the books in the Library of Congress online) CTSI manages realms of shipping data for its customers, plus 10 million point-to-point rates for truck, rail, ocean liner and intermodal shipping.

"Normally, our clients save 3 to 5 percent on their total freight cost," Hazen said.

With an increasing crunch in U.S. shipping capacity, "shippers need better information," said Cliff Lynch, logistics expert at C.F. Lynch & Associates.

"It takes people and technology systems that many firms don't have. By funneling all your freight bills through CTSI, they can capture that data for you and give you the best and most current information."

With offices in Europe and Asia, Hazen's stepping up his game to help customers through the "twists and turns" of international transportation by decoding the 550 pages of import regulations in Europe alone that can waylay cargo for weeks.

"With increased emphasis on globalization, we need a clear understanding on logistics practices, culture and business rules," Hazen said.

Most third-party logistics providers in the United States will "not have the background that our office in England provides," said Hazen who purchased CTSI in 1982 when it was processing 40,000 bills a year.

By 1999, it was paying 50,000 bills a day. "We're doing 20 times the business today that we were doing then with 60 fewer employees," Hazen said.

He did it by adapting technology to pay bills electronically, which also allowed him to build online "data warehouses" on each customer.

With years of billing histories, Hazen hired computer programmers to tap into the data, building software to show clients where its shipping lanes may be overlapping or that one plant may be paying 10 times as much as another in overnight shipping costs.

"This software allows you to drill down," Hazen says, pointing to bar graphs comparing several years of overnight shipping costs, "and slice and dice the data.

"If you're having to overnight a lot of freight from one plant, maybe the distribution center is in the wrong place," he said. "We can map it and show you the results." CTSI's core business today is billing. In a few years, Hazen says it will be software.

"Our software will accept and schedule the load, eliminating a lot of time on the phone trying to find a carrier," he said.

If clients can't come to Mempis, CTSI demonstrates the software through distance computer hookups in the customers' office.

One package allows customers to check freight rates onlin