Logistics Outsourcing on the Home Front

It's usually overseas companies benefiting from outsourcing Latest News about Outsourcing work to lower-cost markets, but at least one Syracuse, N.Y., firm is also reaping rewards from the trend.

"As companies become more and more lean and focus on their core competencies, they look to companies like ours to help them manage their supply chain," says Gar Grannell, president of Mohawk Global Logistics, a customs and transportation logistics firm. "The outsourcing of the logistics function grows 10 percent to 20 percent a year worldwide. We're a direct benefactor of that growth."

In the past six years, Mohawk, founded in 1970, grew from about 30 employees to 55. It opened branch offices in Rochester and Albany -- both in New York -- and saw revenues grow an average of 20 percent to 30 percent annually, Grannell says.

He declined to comment on specific revenue numbers.
Offering Expertise

Companies large and small are shedding internal transportation planning. The shipping world is becoming more complex and requires more expertise as rules and regulations mount.

"There's new emphasis on compliance in import and export," Grannell says. "And since 9/11, security Barracuda Spam Filter – Free Evaluation Unit, of course, is the hot button and rightfully so. There [are] all kinds of new programs coming out that are meant to help secure the supply chain coming into the United States.

"We're on top of all those changes. We can help keep our clients in compliance because of that."
Multiple Services

Mohawk Global Logistics handles the planning and arrangements for its clients' domestic and international transportation needs. It also helps its customers' goods clear customs.

The company began more than 36 years ago, focusing mostly on customs work. Its founder, Michael McSherry, is still involved in the firm as chairman.

As Mohawk grew, it began developing more expertise in shipping logistics. In 1985, the revenue was split evenly between customs work and logistics, Grannell says.

Now, about 80 percent comes from the shipping side and 20 percent emanates from customs.
Location, Location, Location

One reason for the company's overall success is the emphasis it places on building relationships with the shipping communities in its markets, Grannell says.

In Syracuse, for example, Mohawk's office is in the same building as the U.S. customs agents and is just a few hundred yards from the airport.

The fact that the firm is based in upstate New York is also an advantage. Most of its competitors are located in larger cities, such as New York, Boston or Miami.

"Because of the many complexities involved in our business, there is a great deal of personal attention you have to apply to the conversation," Grannell says. "It's a model that's based on local expertise.

"It's a lot more difficult for [our competitors] to hop in a car and come talk to a client. We do it on a regular basis."

Grannell joined the company in 1990 as a senior account executive and rose through the ranks until becoming president two years ago.
The Basics

Mohawk employs 10 in Rochester, five in Albany and 40 in Syracuse. It has 15,000 square feet of total space in Syracuse, 10,000 in Rochester and 1,500 in Albany.

The expansion Mohawk began in 2000 came after it tried to serve other markets from its Syracuse headquarters, Grannell says.

"We found that the model that worked here really is a model we needed to use in those markets," he says. "We had to be there. We had to be embedded in those markets and be a part of the community."
Getting Domestic

The firm also entered the domestic arena two years ago, when it began handling logistics for shipments within the United States. Until then, when customers asked about domestic work, Mohawk referred the business to other companies -- often direct competitors.

The firm previously focused on international shipments. The domestic work accounted for less than 10 percent of the company's business last year, but could make up as much as 30 percent this year, Grannell says.

While Mohawk Global Logistics has benefited from a favorable market for its services, Grannell gives much of the credit for growth to his staff.

"As much as we can talk about potential in the marketplace, you still have to have people who can capitalize on it," he says.