FUZ Global Logistics (FGL), a Georgia LLC, is a US-based transportation company, with four subsidiary business units FUZ Freight Forwarding, FUZ Cartage Services, FUZ Linehaul Services, and FUZ Contract Logistics (FFF, FCS, FLH and FCL respectively) supporting its specific strategic requirements. The FUZ family of companies has been designed to simultaneously serve the interest of the community of global supply chain customers as well as a select group of stakeholder/shareholders. Client support for transportation service providers has always been dependent on value-based service at market competitive rates and will justifiably be at the center of the FGL value proposition. However, the way FGL will accomplish this is unprecedented, and is fully developed as the subject of this Business Plan.
Enterprise shareholders of FGL have two complementary interests in play as well: accelerated gross revenue growth at higher than industry standard EBITDA percentages; and transportation business strategies that align with equity-based market growth opportunities. This will be an essential aspect of valuation assessment by parties attracted to acquiring FGL (i.e., Private Equity or Strategic Buyers). FUZ Global Logistics checks all these boxes. It was built from white board sessions and decades of industry experience for the purpose of executing the overarching vision by recognizing and each and every one of the supporting strategic objectives. FGL is truly the fusion of great ideas with the people who have the will and know-how to bring them to reality across the global supply chain. FUZ Global Logistics is in every sense the convergence of vision and execution.
As a full-service supply chain solutions provider, FFF will emphasize specific areas of vertical market expertise by providing tailored logistics solutions for: Heavy-weight Machinery, Green Technologies, e-Commerce, and Portable Liftgate Ocean Container applications.
The founding branch is located in Brunswick, GA with satellite agent locations throughout the South Atlantic coastal ports of Jacksonville, FL, Savannah, GA and Charleston, SC. Early organic growth strategies will build on current base activities of PACKZ (Steve’s former forwarding entity), while adding commercial opportunities in Heavyweight Machinery and Portable Liftgate. Green Technology prospects will contribute to the market mix during the first year, with e-Commerce US service centers planned for launch in year two.
Start-up and growth will be accomplished in two phases. Initially, we will operate FFF as a ‘traditional’ forwarding company, making use of third-party vendor services as needed in line with existing client requirements. However, none of us maintain our interest in the project on this basis alone. The intent will be for FFF to immediately and systematically begin its evolution through a series of unprecedented Phase II initiatives. Our vision is nothing less than to completely change the way freight forwarding is done. As such, FGL will look like this:
Market coverage and expansion will be accomplished through a unique approach to organizational structure that emphasizes sales and growth. This will be realized through the formation of four subordinated business units that provide coordinated, best-in-class, cost-effective support for the enterprise. All desk level work processes will be automated to the fullest extent possible, and in any case the workflow between the 4 IBU’s and with FGL Corporate Services will be fully integrated. Terry will spearhead these key initiatives. Remaining transactional desk level work will be near-shored to our Columbia affiliate taking advantage of lower cost per EE-hour. These scalable efficiency-generating and cost-saving steps will drive the level of EBITDA as a percentage of gross revenue to industry-leading levels (one of the key factors in the eventual FGL valuation calculations).
1) FFF is built on the premise that it will be the most attractive home in the industry for top salespeople, and as a co-related point of emphasis, will provide best-in-class operational support for all client commitments. This will be accomplished by providing:
Sales
- Employment at industry-leading full commission percentages with full benefits packages.
- Totally open sales markets – no exclusive, protected territories. Mandatory use of the common, inhouse CRM is the only guideline; if they’re not a current client or prospect, any salesperson, anywhere, can pursue/claim them.
- Best in class operational and inside sales support to ensure client commitments are consistently met (see below for details – Centralized Operations Centers).
- Equity stake in FFF proportional to share of GP contribution to the equity pool.
Centralized Operations Centers
- No branch locations – this is the second substantive element to driving higher-than-industry-standard EBITDA as a percentage of gross revenue (cost-effectiveness of desk level work processes being the other – see above).
- All cross-dock and/or warehouse related services provided by sister companies FUZ Cartage Services (FCS – for standard cross-dock) and FUZ Contract Logistics (FCL – for value-added services within 4 walls).
- All 3rd party transportation services provided by sister companies supporting first/final mile (FCS), middle mile (FLH) and warehouse services within four walls (FCL)
- The Centralized Operations- Inside Sales Support Centers (2) will be located on the east and west coasts (specific locations determined on the basis of cost and available, experienced talent).
- Centralizing all operational and inside sales support staff into two geographic locations will allow for economies of scale while providing a wide range in areas of expertise (not consistently available in splintered Branch-based Models). Each center will include: Top Client Service Group, Inside Sales Support, Vertical Specialized Experience, Desk Level Operational Experience across all Transportation Modes and Geographic Regions.
- Fully automated and integrated desk level work processes will support client-focused, cost-effective workflow.
2) FUZ Cartage Services (FCL) is an independent business unit and profit center existing for the sole purpose of providing for the full scope of FFF’s first/final mile requirements at industry competitive rates. (See Section 2.3 of the full Business Plan – FCS Organization Structure.)
3) FUZ Linehaul Services (FLH) is an independent business unit and profit center existing for the sole purpose of providing for the full scope of FFF’s middle mile requirements at industry competitive rates. (See Section 2.4 of the full Business Plan – FLH Organization Structure.)
4) FUZ Contract Logistics (FCL) is an independent business unit and profit center existing for the sole purpose of providing for the full scope of FFF’s warehouse service requirements ‘within four walls’ at industry competitive rates. (See Section 2.5 of the full Business Plan – FCL Organization Structure.)
The three-to-five-year plan will have positioned the business across the US Domestic and International Agent markets that will generate $250 million in gross revenue at the time of anticipated transaction to Private Equity majority ownership. More importantly, EBITDA as a percentage of gross revenue will trend in the 12-15% range due to industry-leading advances made in its low overhead cost model (forecasted as $35M).
The strategic growth and configuration of the enterprise will from the outset be tailored as an attractive target for Private Equity acquisition (Phase IV). Group 1 investors (see below: section 5.1 of full B.P.) would maintain a 20% minority interest while divesting 80% for an amount in the range of $225-275M. The minority interest would be held (3-5 years) for a potential second Private Equity acquisition (PE 2 - Phase V) benefiting from the financial sponsor’s support of an acquisitive international growth strategy to complement ongoing organic growth. Based on PE 2 Phase growth forecasts, the minority interest (20%) related to the second transaction should generate a higher return than the first.
The two operating founders will remain active in executive roles throughout Phase IV and V, guiding the strategic growth of the enterprise. Th Founders anticipated additional investors (Class A) would fund the modest start-up budget, with a second round of Class B & C investor support as the enterprise builds infrastructure in advance of the e-Commerce transition of business in year 2. FTCP involvement as the primary financial sponsor for the project would supersede the initial investor strategy.
A Board of Directors consisting of early investors plus hand-picked industry experts will be formed during the first quarter. It is essential for the BOD to help design, guide and support a strategic plan that will remain both aligned with the vision of the founders, and ensure enough flexibility to adapt to shifting market conditions. We would expect to have Steve and Terry joined on the Board by key members of Investor Group 1. Hound Express (MX) will be offered one Board seat in connection with the alliance and support for their e-Commerce business in the US (envisioned for early 2024 – see section 4.2).