Traditionally, in the logistics space, service providers offer their shipper customers just one or two transport offerings. Very few providers, asset or non-asset, have a one-stop-shop solution.
Role types, resources, systems and processes become fundamentally different across different sectors of the industry and can be hard to obtain. For example, an asset-based carrier requires a different set of equipment, employees and systems from those a brokerage needs. Similarly, freight forwarders face different requirements and challenges than their inland transport counterparts.
These differences, at times, become the reason many companies elect to stay in their own space, rather than offer new services themselves.
“There has only been a handful of asset-based companies that have really been able to successfully pull off building a brokerage in-house,” said Justin Hall, CEO and president at Primo. “I would argue that those with the most success had to purchase an existing 3PL in order to obtain the competence and technology needed to offer those new services to their customers – not to mention the DNA of a true brokerage culture.”
Primo, a Colombia-based freight and logistics solutions company, is a dba of Logistics Freight Solutions based in Miami, founded by Andres Lopera in 2010.
The company is looking to change logistics industry norms by partnering with companies in the industry to teach them how to provide new services to their customers.
This isn’t just a matter of trying to provide more for your customers. For some companies, this diversification is needed for survival, he added.
“Many in the logistics industry essentially have a hammer in their toolbox, and now everything [that comes their way] has to be a nail. If you’re an asset-based company or an international freight forwarder and you want to start offering multimodal services, Primo wants to help,” Hall said. “We want to build them the full toolbox.”
Where Primo is trying to stand alone in the market is by offering these ‘brokerage in a box’ capabilities to shippers as well. Primo believes certain shipper industries require logistics to be a core competence, and they should even offer these solutions ‘for profit’ to their halo of suppliers and customers. Hall says freight doesn’t have to just be a “cost center” for shippers. He believes more companies should operate with a growth mindset by partnering with Primo and convert freight into a “profit center,” just as Amazon has done successfully.
The goal is to offer a menu-style onboarding experience for all those that choose to partner with North America-focused Primo, which can be anyone from freight forwarders to carriers to retailers. Hall’s goal is to leverage Primo’s experts to help others in the industry learn and grow alongside them.
“The largest and most formidable 3PLs are not trying to run around and teach everyone their secret sauce, why cannibalize their own book of business? Instead, we want to create an opportunity where asset-based carriers, freight forwarders, shippers – anyone – can all come to us and say, ‘build me a custom white-label solution for brokerage-as-a-service,’” he said. “We will do just that, we’ll give them a bespoke team, tech and transport package and deliver it within a matter of weeks.”
Primo prides itself on its flexibility.
“From a TMS perspective, we will configure it to have all the modules required to fit the unique needs of their business. And even if they want north of 10 modes of transport capacity, we will build them a highly qualified network of carriers and negotiate the rates,” said Hall.
He added that Primo happily accommodates customers who are seeking only part of what it offers, as opposed to everything.
While Primo does offer this menu-style services selection, the company can also operate in a traditional 3PL fashion by offering direct services to shippers as needed, such as simply offering rates and capacity.
“Unlike larger 3PLs with strict financial performance requirements, I have the ability to play differently, and I am willing to open the books and build cost plus or gain share models with my partners,” he said.
Hall takes pride in Primo’s full pricing transparency so all parties know exactly what they are making in the end. He stated that options are flexible and could include operating through revenue shares, transaction fees, per head fees, etc.
“All of this gives us the opportunity to achieve win-win outcomes because all of our cards are face up — we’re literally playing poker with face-up cards,” he said. “This is not normal 3PL behavior — most of the time margins are ‘closed-book.’”
Marketing with Primo is also flexible. Upon partnering with Primo, companies can decide between two options: fully marketing the services under their own name, powered by Primo, or co-branding it with Primo. Co-branding, from Hall’s perspective, can at times create a higher level of credibility — depending on the experience level of the customer. But in the end, it is 100% up to the customer in regard to brand marketing.
Hall added that Primo can stand up white-label websites, portals and email systems to help with marketing.
In an economy where a successful supply chain is the backbone of any successful business, and a market where expenses are becoming increasingly expensive, Hall believes that now is the best time for companies to start thinking about bringing more services in-house.
“Rather than a shipper just partnering with a 3PL and asking them to do it all for them, I am looking to develop these brokerage muscles in-house so they can self-sustain,” Hall said.
He stated that throughout the partnership, the team at Primo works as though they are the customer’s employees to co-create and execute growth opportunities that are tailored to the customer. He added that all he wants is for carriers, forwarders and shippers to combat margin compression or other market headwinds with a new source of revenue via brokerage.
“When we go into this, [Primo] is all in. We are going to help you build a world-class team, technology and transportation capacity that you can then bring to your customer base or your supplier base with pride,” Hall said.
It’s time to make Primo your new favorite cousin, he added.
