Company Report: Megatrux Inc: The next generation
Megatrux Inc: The next generation Applying lessons learned from their mother and company founder, the Brothers Pelle are driving Megatrux Inc into the future.

President KC Pelle and the folks at Megatrux Inc are in no way shy about the ability of the company to deliver the goods, whatever they may be, and wherever they may be going. "You name it," says the slogan, "Megatrux Inc can move it."
Pelle touts the lessons learned by both he and his brother, the company's operational executive vice president, under the tutelage of their mother and company founder Karen Pelle.
"My brother and I take great pride in the undeniable fact that we have been trained and educated from the bottom up, working every single labor, clerical, operations and management aspect of our family's four asset and non-asset based companies. We were born on the docks," KC kids. At least, Exec thinks he was kidding.
KC has no trouble whatsoever bestowing the credit for the company's success upon his mother. As company CEO, Karen has served on the board of directors for the Transportation Intermediaries Association (TIA) for more than 15 years.
"The key to our success today and industry wide brand today is no doubt the tremendous foundation Karen laid for all of us. Mom was a pioneer and she earned an enormous amount of respect and recognition in a very male-dominated world in the late 80s and early 90s when brokerages started taking off," KC says.
"Karen always brought the little company that could, mom and pop feeling of the business to all of our customers and, as a result, a considerably large portion of our shipping customers today have been with us for more than 20 years. As a group of companies, not one individual customer takes more than three percent of our overall business. We try not to get too far from our roots. We want to offer that small company type of dedication, combined with our big company resources and real-time enterprise technologies," he says.

Services
Based in Rancho Cucamonga, CA Megatrux is a Top 50 Global 3PL provider offering a full range of multi-modal freight management services ranging from procurement and international value adds to transportation and reverse call center logistics. The Megatrux companies have numerous domestic and international licenses under their umbrella.
Interestingly, the company has never had a sales department. "We have tremendous branding - our logo has been our name," says KC. "We've never had a sales or marketing department and we hardly have what you would call an aggressive business development team. Everything about who Megatrux is and how we have ultimately become a top 3PL has been through nothing more than word of mouth and our highest standards of customer service."
And, Karen Pella's boys seem quick to adapt and certainly understand the need to formalize sales and marketing as the company moves forward and competes against formidable billion dollar companies for larger logistical contracts. Megatrux has decided to sign with a Fortune 500 advertising and marketing firm and recently spent millions updating its enterprise technologies. That means only one thing - competitors should probably start worrying.
"We've grown into a Top 50 3PL and we haven't put our best foot forward in terms of trying to solicit business," says KC, which is quite a feat for a company with US$200 million in gross revenue for 2007. "As a company we are no doubt growing, but more importantly, by getting to our customers' freight at point of origin overseas, we are digging deeper into their supply chains offering creative consolidations and inbound distribution programs that produce tremendous cost savings and coordinated simplicity."
KC - who also sits on the TIA board and is chairman of the association's air freight committee - says the company embraces every mode of transportation North America offers. "We offer full NAFTA documentation and transport across the borders and, as a major 3PL, we offer a laundry list of services to go with it. Our job as a 3PL is very simple: Create cost servings and make all processes and/or transactions as seamless and easy as possible for our customer," he says.
Megatrux Transportation Inc, the MEGA motor carrier company, owns and operates more than 220 trucks in its over the road and regional fleets. All Megatrux equipment is purchased new and is equipped with Skybitz GLS trailer trackers, Peoplenet in-cab two-way mobile communications, digital touch screen displays, cell phones and AIRGO automatic tire inflation systems.
The Megatrux Companies have more than 70 employees who are provided continual training about the supply chain industry. The company moved into a new 200,000-square foot distribution center in 2006 that includes 35,000 square feet of office space. There are 52 48-inch flat screens tracking real-time performance indicators and each executive has a CCTV-type network that mines the MEGA server data to monitor their areas of responsibility.
"This corporate headquarters was a complete build to suit from dirt to carpet, and is not only our MEGA cornerstone, this facility put our words to action, legitimizing our sales pitch into a visible working reality," says Pelle.
Additionally, the Megatrux Companies have a 700,000-square foot import and retail warehousing space with full state-of-the-art distribution operations.

Expansion plans
As the company continues to grow, Pelle says it is now looking westward - as in across the Pacific Ocean to China. He says Megatrux already handles approximately 15,000 containers per year from China and adds that the company will "launch a major campaign in the next month or two, going after the global sector aggressively, listing our supply chain licenses and our value added services."
Pelle says MEGA should soon be solidifying a joint venture partnership with a major Chinese state owned enterprise corporation for full access to the mainland. "We're hoping to supply major supply chain solutions to China. We've built a foundation with all we offer in North America," says Pelle, adding that markets in India, Dubai, Africa and Europe are already being explored. "We definitely feel that not only does MEGA have a proven and profitable business model, we also feel that we have a good international plan in place.
Key to any expansion is the ability to track worldwide operations in real time and Pelle says the company has synced all of its technology with operations, as well as added a partnership with Savi Networks for worldwide GRPS solutions. So, whether a container is crossing the world's oceans or is hitched up for a cross-country haul, Megatrux and the company's clients know precisely where that shipment is at any given time. "In the end, what MEGA provides is a single chain of custody, purely visible, real-time freight management service. Just like the largest companies out there, we have operating systems that perform together as a whole platform capable of integrating with any enterprise data base that is out there," Pelle says.

Issues and obstacles
Pelle says the economy, in its current state, is destroying motor carriers and that regionalization is both inevitable and necessary.
"There's no doubt that a lot of the cross-country (hauling) is gone. You will see more and more bankruptcies, especially for small fleets of four and five trucks. They cannot absorb these types of costs and pass them on. It's purely survival at this point and if you don't understand every single cost of doing business, then you're going out of business," KC says.
Megatrux has remained largely unaffected by the downturn. "We continue to grow, though not at the pace of the last couple of years. It comes down to building loyalty and relationships," he says.
One ancillary economic impact Pelle says "nobody saw coming by any rationale or matrix" is a shortage of containers in the US. He says that, although rail service has experienced resurgence, that mode "will be at full capacity really quickly because it's going to cost billions of dollars to add rails."
"There is still going to be over the road trucking in some form. There's going to be a major place for an asset-based company and, from a supply trade standpoint, that's what MEGA brings to the table. It's really hard to build rails into some of those newer ports," Pelle points out.
As a member of the TIA Board, Pelle is completely behind the fight for implementation of the Customs Trade Partnership Against Terrorism (C-TPAT) program initiated by US Customs. To this point, domestic carriers, property brokers and warehousemen have been excluded. "TIA is an unbelievable influential association that we believe in tenfold," Pelle says.

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