UNDER THE RADAR - Derek Ryan, Transport Matters
IRISH EXPORTERS pay €85 billion a year to get their goods to market, a logistical exercise which typically accounts for between 3 and 5 per cent of a company's overheads. But how much of that could be saved?
Anywhere between 10 and 20 per cent, says Derek Ryan, co-founder of shipping and transport cost consultants Transport Matters, and one of four shareholders who sold their previous business, Freight Solutions, to the Doyle Group in 2007.
“Our average saving across the 35 businesses we’ve dealt with since May 2008 has been 15 per cent,” he says. “When an exporter is paying too much for freight, it really eats into its competitiveness.”
The difference between the old company and the new one is that Freight Solutions was a freight forwarder that dealt with everything from choosing a shipping line to arranging customs clearance, while Transport Matters is a consultancy only.
“As far as we’re aware we’re the only consultants of our kind in Ireland. We work on a no-foal-no-fee basis; we charge 10 per cent of the annual savings we generate, so the reassuring fact is that our clients can’t lose but they can gain.”
Occasionally, he says, Transport Matters comes across a company where everything is set up cost-effectively, but this is “very rare”.
“In that case we pass on the good news in our analysis to the customer free of charge. When it ain’t broken, we don’t try to fix it.”
Ryan set up Transport Matters with long-time business partner Greg Fields (40) in May 2008.
They are the major shareholders, with 42.5 per cent of the business each.
Some of their clients have in-house freight operations, though the majority use third parties, usually freight forwarders.
As this is a business Ryan and Fields know well, this is usually where they start – and it is often where they find the most impressive savings.
“We work with clients who spend €10 million-plus on their freight, and with others who spend €500,000 a year. Their freight forwarders provide a valuable service for which they add commission, the details of which aren’t always clear. Then there are sometimes changes that can be made in terms of the shipping lines they use or the haulage costs.”
He says each case is different. “We had a case where the client was using 45ft containers, which cost €1,000 each and are supplied by only three companies, rather than the 40ft alternative, which costs only €500 and is supplied by 20 companies. Sure, they needed more containers, but the savings were substantial.
“Similarly, another client involved in national distribution was only three-quarters filling its trailers, thinking they were maxed at 18 tons instead of at 24 tons. By maxing out, they were able to reduce the number of trailers they used by 25 per cent.”
Transport Matters is only 18 months old, with turnover heading towards €400,000 and, according to Ryan, very few costs.
Like everyone else, exporters and other freight users are under pressure to cut costs, so is he anticipating rapid growth?
“This type of consultancy is a totally new model to the shipping and freight business, which tends to work by word of mouth, reputation and the personal touch rather than marketing campaigns.”
With Transport Matters, his quality of life has also improved.
“We didn’t have time to enjoy our families while we were building Freight Solutions,” he recalls.
“I put the kids to bed on a Sunday night and hardly saw them until the following Saturday morning. I certainly wouldn’t want to go back to that.”
petercluskey@ireland.com
ON THE RECORD
Name:Derek Ryan
Company:Transport Matters
transportmatters.ie
Job:Co-founder and director
Age:35
Background:Graduated from Dublin Institute of Technology in 1996 with a BSc in Marketing and began working in sales with a large Irish freight forwarder and liner agent. Co-founded Freight Solutions in 2002 with business partner Greg Fields and two other investors, and sold to the Doyle Group in 2007, when turnover was €9 million.
Remained as a director in an earn-out agreement. In May 2008, set up transport cost consultancy Transport Matters with Fields and the same investors.
Challenges:"Because this type of consultancy is new, the challenge for us is to convince potential clients that freight and transport overheads warrant independent cost-reduction review as much as energy, telecommunications or any other cost."
Inspired by:"My three fellow directors, Greg Fields, Michael Twomey and Gary Prendiville. Individually, they've forgotten more about business than I'll ever know, so they're a huge motivator for me.
Most important thing learned so far:"Persistence is the key. The more seeds you plant, the more plants you'll see.
