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Why I started a logistics company – by CEO Chris Bingham

Why I started a logistics company – by CEO Chris Bingham

Reposted from Chris’ personal blog at www.chrisbingham.org

Some of my friends have started tech companies. I will admit, those guys have started far more sexy businesses than mine. My feeling is that success is sexy. Most of you who know me, know that I don’t define success as making money but rather as making impact.

So, I get the question a lot – “Why did you start a logistics company?” My immediate response is usually, something along the lines of – “Some guys were given the ability to dunk a basketball and others with the ability to pack boxes. I obviously drew the short straw…”

There is a real three part answer, though:

1. It was time for me to seize the power that I have to create the improvements in our society that I want to make. I was tired of complaining about the things that I can’t change rather than pursuing the power that I do have. I believe that business is the major driver behind most major change in our society. The business opportunity that was at my fingertips at the time that I was ready to move out on my own was logistics – in particular, order fulfillment and kitting work.

2. Logistics is an industry ripe for innovation and a better way of doing things. It’s an old school industry with a lot of room for improvement. Additionally, with the United States becoming less industrialized and the world becoming more “flat,” the necessity for movement of goods around the world is becoming even more important. When products are made in China, they come back to the US for distribution. Many products may not be made in the US anymore, but they are touched by numerous Americans’ hands before they arrive at your home or office. The average US citizen knows very little about how all of this happens, especially when it involves international shipping. Ultimately, you don’t care how the product gets on Target’s shelves, you just want it to be there and look pretty when you arrive at the store. If a company no longer makes their own products, why should they have an enormous building just to warehouse products made in China? It makes a lot more sense for them to outsource the warehousing and logistics portion of their business too. After all, their core competency was probably on either the manufacturing or marketing side of the business anyway – one of which probably happens in another country at this point.

3. Lastly, and most important to me – a logistics business allows me to make impact. Most of the jobs available in logistics are relatively low skilled – similar to those of the manufacturing industry which America has lost so much of over the past 10-15 years. Providing jobs to the community is one of the most important and impacting opportunities for a small business, and the major reason why business is the foundation for an improved community.

According to a study by Armstrong and Associates, logistics saw 18.9% growth in 2010 and is expected to grow another 11% in 2011 (depicted below). A recent Fortune Magazine article discussed that one of the hottest areas of job growth over the next few years is in supply chain management. MIT recently released a whitepaper discussing the shortage of talent in supply chain management.

The Fortune article refers to the perception that the field is seen as “non-sexy.” I agree, but what I’m striving for with Riley Life Logistics is success through positive impact.

Figure 1. U.S. 3PL Market 1996-2011E (US$ Billions)

Courtesy of Armstrong & Associates

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