SEKO: A Global Freight Transportation and Logistics Provider…With a Difference
by Melinda Kroll
Universal Advisor, 2007 Issue No. 3

A quick visit to sekoworldwide.com reveals that SEKO, headquartered in Itasca, Illinois, is “a global freight transportation and logistics provider with a distinctive difference.” Talk about an understatement. From its unique history and impressive growth rate to its technology prowess and passion for employees and customers alike, SEKO is different. After all, how many companies can say they’re getting ready to celebrate their five-year anniversary when they were founded back in 1976?

A Brief History

SEKO-Rocket Enterprises, Inc. was founded in 1957 to perform local messenger services to the Chicago area by the entrepreneurial-minded Bernard Siegel and Norman Koppel. (The company name is derived from their last names.) In 1976, SEKO Airfreight was incorporated to facilitate SEKO’s entry into the freight forwarding space, and in 1987, Koppel made the decision to sell SEKO Airfreight, Inc. to two valued staff members, one of whom is current President and CEO Bill Wascher. “We grew the company from a network of 11 offices and $18 million in revenue to 40 offices and $115 million in 10 years,” says Bill. “We made the decision to take SEKO public, but then the IPO market fell out of favor. We then made the decision to find a strategic buyer and sold SEKO to U.S. Freightways in September 1997.”

During its five-year tenure, U.S. Freightways made a number of changes to the organization, including converting SEKO from its strategic partner model, where all offices are individually owned and operated, to company-owned stations. They also began acquiring a number of international companies.

“At one point there were nine different operating systems running the airfreight forwarding division,” says Wascher. “Integration was very poor, and from an IT standpoint, we took a few steps backwards.” It wasn’t long before customers began complaining and the wheels started falling off the proverbial bus.

U.S. Freightways began looking to sell the company. “Steven Goldberg, one of our strategic partners, asked me to consider helping him form a group to purchase SEKO,” says Wascher, who’d left the company to pursue his master’s degree so he could teach at the college level. “I thought it was a good idea and decided to move forward.” Although there were 17 active bidders, Goldberg’s group prevailed, and SEKO was born anew.

Back to the Beginning

Since Goldberg’s group assumed control of SEKO five years ago, the company has grown at an impressive rate of 25 percent per year. Wascher credits that growth to a sweeping change in culture, reinstating the company’s strategic network model, an entrepreneurial ownership model, and taking a step back to take several steps forward.

“Under the previous management, the vision and strategy were unclear, and communication was poor,” says Wascher. “People were concerned with losing their jobs, as U.S. Freightways had instituted multiple significant layoffs to try and stop the flow of red ink. U.S. Freightways favored company-owned versus locally owned offices and had created many extra layers of management. When we came in, the strategic partners trusted us to fix the corporate structure, and that trust allowed them to do what they do best — sell and move freight.”

In addition to reinstating the strategic partner model, Wascher instituted an ESOP-like structure that allows the strategic partners to share in the benefits of growth and ownership. “A lot of people ask us why we’d set it up that way,” says Wascher. “The answer’s easy: It provides more security for our strategic partners, and it’s a wise investment in our future, an opportunity to build something together.”

Wascher continues, “It’s worth noting that in our turnaround of this company, we didn’t lay off or fire one single person. It was very important to us to preserve our people, as they’re our most valuable asset.”

After reinstating the strategic partner model, SEKO’s management set about analyzing financial metrics, which led them to sell all of SEKO’s international gateways and overseas offices. “The problems were way too deep for us to solve in an acceptable time frame and given our limited resources,” says Wascher. “We felt it best to focus on our domestic strategy first, get that shored up, and then reenter the international arena in a position of strength.” Turns out, that process didn’t take long at all.

An IT Company That Specializes in Logistics

Five years later, SEKO and its global strategic network employs more than 1,000 staff at 40 U.S. locations and in more than 30 countries. Because the offices are locally owned and managed, there are no language or culture issues to hinder the supply chain; efficiency is the operative word.

Although SEKO has developed a reputation as a first-class transportation provider, devising solutions to their customers’ air, ocean, and surface freight needs 24/7, they’re just as renowned for their innovation — so much so that one customer referred to SEKO as an IT company that provides logistics services (versus a logistics company that relies upon IT).

SEKO has spent millions of dollars developing systems, software, and web tools to help their clients manage their logistics in the supply chain. One example is the Tommy 5 system, a 5-foot, self-contained PC/scanning device. The device, which is distributed to larger clients, has a Wi-Fi connection to SEKO’s system that allows customers to scan their freight to efficiently ensure SEKO has control of the freight before it leaves the customer’s dock.

“We only purchase software if it meets at least 80 percent of our needs and we can negotiate rights to the source code,” says Wascher. “Why? Because we want to be able to control our destiny. We move at a very fast pace, and we want to be able to conduct future technology developments in house. That’s why that comment about being an IT company that focuses on logistics resonated with me — because it’s accurate.”

Going Forward

SEKO is currently going through the process of upgrading certain locations and adding others. They recently opened an office in Ireland and expect to add a location in Denmark shortly.

“We have most of the world covered,” says Wascher, “except for South Africa, which should become a reality within the next couple of years.”

Wascher would like to take the company public within the next 5 to 10 years. “Our vision is to be the largest independently owned and operated transportation and logistics company in the world,” he says. How close are they to realizing that vision? “We’ve got a few years yet,” laughs Wascher, “but we’ll get there.”