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July 9 2018

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July 9 2018 | The Journal of Commerce 39 www.joc.com Surface Transportation are the original third-party logistics disruptors. Tampa-based BlueGrace is part of the tech-based logistics commu- nity that has grown rapidly over the past 10 years. The 3PL has been on the Inc. 5000 list of fastest-growing companies five times, including last year, ranked at 3,744. Harris founded BlueGrace as a technology company in 2007. Previously, he was a franchisee with freight forwarder United Shipping Solutions and worked at LTL truck- ing companies Southeastern Freight Lines and Yellow Transportation. In 2012, BlueGrace ranked 20th on the Inc. 5000 list, with a three- year growth rate exceeding 7,000 percent. Last year, BlueGrace grew at a three-year rate of 79 percent, with $188.1 million in revenue in 2016, according to Inc. That year, BlueGrace got a $255 million infusion of cash from private equity firm Warburg CHICAGO DRAWS LOGISTICS business like Hollywood draws actors or a lamp draws moths. The city's importance as a logistics hub predates even Mrs. O'Leary's cow, blamed, rightly or wrongly, for starting the fire of 1871. As the United States and its people moved west, Chicago became the crux in America's railroad backbone. Today, Chicago still is the most important rail center in North America, but it's also a high-tech logistics hothouse. "There's just such a surplus of talent there, at a time when we're looking for a lot of talent," Bob- by Harris, president and CEO of BlueGrace Logistics, said shortly after BlueGrace opened an office in downtown Chicago in May. "The market we're seeing now will be around for quite some time. We need to add a lot of capacity and a lot of professionals," he said. Chi- cago "is a rich source of talent and resources, whether it's truckload capacity or sales reps." Third-party logistics providers (3PLs) such as BlueGrace will need re- sources to guide shippers through the tightest, costliest freight market since the early 2000s. Harris's advice to shippers: "Whatever you think you're doing really well, think another step." At this point, "everyone knows capacity is tight," Harris told The Journal of Commerce. "The question is how long will it be this way? My belief is that it's going to be a tight market in truckload and less-than- truckload (LTL) into late 2019." Since the mid-2000s, Chicago has experienced a logistics explo- sion, with non-asset, 3PL, and tech- nology companies large and small opening shop and tapping a young, tech-savvy workforce. Coyote Logistics, now part of UPS, and Echo Global Logistics were both founded in 2006 and now are billion-dollar-plus 3PLs. Along with several other Chicago 3PLs, they Pincus. The investment helped the 3PL expand in its core LTL trucking market and buy back franchised Blue- Grace operations. "We brought back virtually most of our franchises with the exception of a few," Harris said. "We're 95 percent direct-owned now." In Chicago, BlueGrace's new office is in the Chicago Board of Trade Building, a landmark sky- scraper. Eighty new hires will staff the office, which will open on July 9. "We expect to make continuous investment [in the office], and we're bullish on it. There's a reason some of the biggest and most successful logistics firms are in Chicago." One reason is some of the biggest and most successful users of logistics services are there, too. McDonald's in June opened a new $250 million, 550,000-square-foot headquarters building in Chicago's West Loop. Online grocer Peapod in June opened its new headquarters at 300 S. Riverside Plaza in the West Loop, next to the Chicago River, relocating all of its corporate employees from the northern suburb of Skokie, Illinois. Facebook and Google both plan to add more than 100,000 square feet to their Chicago offices and hundreds of workers, according to Built in Chicago, an online commu- nity for technology entrepreneurs, and the Chicago Tribune. The tech giants compete with logistics companies for the same base of young, educated, technology workers. In Chicago, "We'll have new hires out of college, and we'll get supply chain professionals with experience," Harris said. They'll need that experience, he suggested, in the year to come. Harris foresees further tighten- ing of surface transportation capaci- ty. "We're entering produce season," he said. "We're looking at hurricane season. We don't see anything that's going to relieve capacity in the next calendar year." JOC email: bill.cassidy@ihsmarkit.com twitter: @willbcassidy Chicago "is a rich source of talent and resources, whether it's truckload capacity or sales reps." NOTE: The JOC Inland Distribution Conference will be held in Chicago, Oct. 22-24. For more information and to register, visit https://events.joc.com/inland-2018. Trucking | Rail | Intermodal | Air & Expedited | Distribution Chicago's magnetism The nation's largest inland hub also is playing center stage in the development of high-tech logistics By William B. Cassidy BlueGrace opened a new office in Chicago's landmark Board of Trade Building. Shutterstock.com

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