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February 2014
Supply Chain Success
By Kathleen E. Conroy

     Matt Matthews can remember when he bought one of his very first business books, The Complete Idiot’s Guide to Starting Your Own Business by Ed Paulson, in 1996, just after graduating from college.

    “When I bought the book, I remember my wife Beth asking ‘What kind of business?’ At the time, I said, ‘I don’t know.’ Ironically, 10 years later, I was being presented with an opportunity,” he says.

     That was when Matthews learned that the major logistics company he worked for was planning to close, and the Ohio native found a reason to put that simple, yet valuable tool to use.

     At the time, Matthews was working for Piedmont Interstate, a southeastern-based third party logistics provider. He had been at their Savannah facility for exactly one year, serving as the director of distribution, when he learned the group was closing several facilities in the South, including Savannah, and eventually would be ceasing all operations.

     “The company approached me with an offer to stay on board to assist with systematically shutting down several facilities. During this time, they also provided me the opportunity to take an in-depth look at each operation and determine if I would like to take a chance and start my own company.”

     Matthews had accumulated 15 years’ experience in logistics—a key part of a supply chain that plans, implements, and controls efficient flow and storage of goods between point of origin and the point of destination—working in the freight, transportation, and/or warehousing business since his high school and college days.

     “When the opportunity was first presented to me, I said ‘No thank you.’ Although starting a business had always been a dream of mine, I was afraid of the risk to my family,” says Matthews.

     For days after his decision, Matthews says he was plagued with uncertainty. One night on their front porch, his wife Beth approached him and said, “If you want to do this, we will. We will be fine, no matter what happens.”

     “I knew then that I needed to act,” remarks Matthews. “The failure wouldn’t be in the result; the failure would be in not taking advantage of the opportunity. It only seemed natural that I try to go out on my own, doing what I had been doing almost my entire working life. Beth’s background in accounting and banking would help tremendously. We figured we would make a good team.”

     Beth joined on as CFO with Matthews as president and COO, and together they designed the company from the ground up, including the company’s name, logo and website. “To be honest, I had no idea how to start, but I did have that book I had bought,” he says with a grin.

     Elite Logistics, LLC, was incorporated in 2006 and went into full operation in May 2007 with a deal Matthews constructed with Piedmont to take over their Rock Hill facility specializing in outsourced logistics support.

     According to a recent study by the Massachusetts Institute of Technology, nearly 75 percent of manufacturers or suppliers are either using or considering using a contract logistics server, and that number is growing.

     Matthews says some of his clients use Elite Logistics to simply handle and store material. Others use Elite as their distribution facility, sequencing center or, for their customers, an invisible extension of their business. He adds that his client base consists of many different types of industrial goods, paper products, automotive components, retail goods, and even textile goods.

 

Ebb and Flow

      Although Elite had a very successful startup, after his first 18 months in business, Matthews found himself in a tough spot. The troublemaker? The economic downturn of 2008 and beyond.

     “Due to the economy—not us—we lost two valued customers and that represented 75 percent of our revenue,” he says. “That alone should have meant the end of our business.”

     “We were entrenched in what some would say was the greatest recession our generation had seen. We were hit hard,” says Matthews. “Through it all, we convinced ourselves, ‘If we can just maintain our position and be here on the backside, when things turn around, we’ll be okay.’ We downsized, renegotiated contracts, and took every remedial measure we could. Most of all, we maintained our belief. That was key.”

     Elite Logistics spiraled from 20 employees to five. “I wore all kind of hats, from driving the forklift to cleaning to pulling orders to customer service and billing,” he says. “I felt kind of like the restaurant owner who cooks, waits on tables and checks out diners. But that’s what entrepreneurs do—they do everything and anything they have to do,” says Matthews.

     Matthews also turned to networking. He was desperate to find a way to stay in business. None too soon, he met an investor who believed in his potential, and sold a stake in the business to Arwood Holdings of Charlotte in 2008.

     “Mr. Arwood believed in me—not just the business. Initially, he took some losses, but he always maintained his belief in me,” Matthews says. “In 2013, Beth and I were able to repurchase the equity, becoming full owners of Elite once more, but more importantly, making good on our intent to repay our benefactor for his faith and belief.”

     Also during the recession, as part of that networking, Matthews also began honing in on local Rock Hill and York County businesses, focusing on supplying local manufacturers with outsourced logistical support.

 

Building a Name

     Matthews maintains that staying purpose-driven has allowed Elite Logistics to be fortunate. Beginning in 2010, the company’s logistics business improved, and revenues have since grown by 300 percent. The company has added new clients, expanded operations capacity to 350,000 square feet, and added about 20 full-time positions.

     The company now has three facilities. One warehouse features dry storage (a combination of floor and rack storage) with 16 dockside doors and four railside doors served by Norfolk Southern Railroad. A second has 10 dockside doors and six rail-served doors. And in early 2014, the company opened a third facility in Rock Hill.

     Elite Logistics is strategically located central to railroad and trucking transportation, less than 2 miles from I-77 and just 15 miles south of Charlotte. Matthews points out, “Once on I-77, connections with I-26, I-85 and I-40 can all be made within 2 hours.”

     Although located inland, Elite Logistics works with a partnership to offer drayage solutions from Norfolk, Charleston, Savannah, and Jacksonville, Fla. Matthews points out that the logistics provider has tapped into both regional business and national/global accounts.

     “First, we focused on the regional companies. For many of these clients, we serve as an inbound consolidation point and we prepare shipments that feed their local operations,” explains Matthews. “On the flip side, we are a regional or national distribution facility for many national and international companies.

     “We have a broad scope of business, but we decided a long time ago, we won’t do everything. And we stick to that, knowing what types of business will best fit into our range of expertise.”

     Matthews credits high standards along with Elite Logistics’ durable reputation as the real keys to his success. Remembering back to Piedmont Interstate’s closing, Matthews says he asked the firm’s executive team why they were offering an ownership opportunity to him.

     “They said they had always respected how I approached my job, acting as though it were my name on the door. They said they wanted to give me the opportunity to put my name on it.

     Like most entrepreneurs, Matthews takes his business very personally and wants every customer to have a successful experience.

     “If there is one comment consistently made by our clients,” he says, “it is related to the quality, knowledge and performance of our associates. Knowing we have the right people is very important and knowing our clients feel like they can trust and rely on us—that is huge.

     “There are not too many things you can take with you everywhere you go in the world, but the one thing you can take is your name. Integrity is paramount.”

 

Moving Forward

     Matthews says he hopes that Elite Logistics will exist far into the future, maybe even with the involvement his two children. His 16-year-old daughter recently began incurring the costs of driving a car, and to help fund this, just signed on as Elite Logistics’ new janitor.

     His son pines to be professional soccer player, but recently wrote a paper at school noting that, “I can always go work for my Dad at the family business,” Matthews relates with a laugh.

     Matthews sees two essential areas to the logistics group’s future success: keeping stride with technology in the supply chain field, and Charlotte-area growth as a transportation hub.

     “We are learning how to further enhance our relationships with our existing clients through the use of technology. With these enhancements, we are also able to attract the interest of a more diverse client base,” explains Matthews.

     Technological upgrades in the industry include having greater scanning capabilities, relying more on more electronic data interchange (EDI) than data entry, and syncing with client computers for speed and fewer errors.

     “Today, it is all about speed, accuracy and visibility, which is often achieved through technology,” says Matthews.

     Matthews, like hundreds of other manufacturing, trucking and warehouse companies in the Charlotte metro area, is also looking to the new 200-acre Norfolk Southern intermodal yard at Charlotte-Douglas International Airport.

     The rail yard, operational as of December 2013, has the capacity to move 200,000 cargo containers a year—projected to reach 600,000 in the future, and has parking capacity for nearly 1,400 trucks. That’s in comparison to 130,000 containers a year at the old facility just north of uptown Charlotte.

     “This new intermodal facility is state-of-the-art, and in addition to being larger and close by, will offer even better customer service,” says Matthews. “It’s a real sales advantage for us. When our customers set up a facility nearby, a logistics hub will allow for access to rail, proximity to ports, and a good highway-interstate system. Our area will allow it all—at high quality and faster turn-around.”

     Matthews is confident that the new facility, along with continued growth, will mean significant growth to his industry and for his company.

     “New business parks are being developed in this area now, bringing more opportunities to our region as well, and this is exciting,” he continues. “Atlanta has long been seen as, and will probably continue to be, the ‘logistics hub of the Southeast,’ but with the new developments in the Charlotte region, we are certainly going to see Charlotte elevated on the list of potential locations for logistics operations.”

     Still, Matthews is pinning his success to Elite Logistics’ long-time slogan, “The strongest link in the supply chain.”

     “I tell my employees all the time, ‘All you need are four walls and a forklift, and boom, you’re a warehouse.’ We have to exceed every client’s and every competitor’s expectation,” says Matthews.

     “Our true purpose is to be ‘The strongest link in the Supply Chain’ for our clients. This means going above and beyond, continuing to be the dedicated partner we promised to be. As a company, we never focus on ‘how big.’ We focus on getting better and finding new ways to grow, offering new and enhanced services to our existing clients first.”

 

Kathleen E. Conroy is a Greater Charlotte Biz freelance writer.
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