Problem: KLAW Industries was a logistically intensive business. We needed to transport raw glass from recycling facilities to our factory and deliver finished Pantheon (glass powder) to concrete plants.

Initially, we outsourced transportation to third-party trucking companies, but quickly encountered two major problems:

1) High Costs: Both raw glass and finished Pantheon required specialized trailers, making transportation significantly more expensive than conventional trucking.

2) Unreliable Service: Our customers depended on timely deliveries to keep major construction projects moving. After a third-party carrier failed to make a critical delivery, we realized we needed direct control over our logistics.

Solution:

Bring trucking in-house!

The challenge was acquiring the equipment and expertise without tying up the company's limited capital.

My cofounder and I secured county funding for our CDL training and Department of Energy funding to purchase a truck and trailer. This allowed us to establish our own trucking operation without taking on debt, giving us direct control over transportation costs, scheduling, and customer deliveries.

Although challenging to implement, bringing trucking in-house proved to be an excellent business decision. It improved customer satisfaction and retention while increasing profit margins by reducing our dependence on expensive third-party carriers.

Steps Taken

1) Evaluate In-House Trucking- Assessed the costs and operational challenges of outsourcing transportation compared with operating our own truck. The thing that was hard to put a number on was the competitive edge controlling our logistics gave us with our customers and effected our on time. Truthfully we undervalued it when intially evealuating the decision.

2) Obtain Commercial Driver's License- Identified and secured county funding to cover CDL training, allowing me and my co-founder to become a licensed commercial driver without the company bearing the $10,000 training expense ($5,000 each).

3) Secure Funding for Equipment- Obtained funding through the U.S. Department of Energy to help purchase the truck and trailer needed to bring transportation in-house. In exchange, we put the departments logo on the trailer.

4) Acquire Specialized Equipment- Sourced the truck and specialized trailers required to transport incoming recycled glass and deliver finished Pantheon to customers.

5) Establish In-House Trucking Operations- Brought transportation under our direct control, allowing us to coordinate pickups and deliveries around factory production and customer schedules rather than relying entirely on third-party carriers.