Estimated reading time: 3 minutes, 5 seconds

Trucking and freight industry is getting ready for new opportunities and future market. Contracts are already trickling from outside these industries. 

K-Ratio which is a subsidiary of K and L Freight Management based in Chicago is an example of companies in the freight and logistics industry which is taking advantage of this. The firm was created to serve the needs of clients by reducing the risks for carriers in a market known for its volatility. It achieves this by working as a commodity advisor which prepares the shippers, carriers and the third party logistics companies for management of risks on opportunities in the market. It also aims at offering transactional brokerage services.

About K-Ratio

K-Ratio is a subsidiary of K and L Freight Management Company which was founded in 1997 by Russ Gallemore as a small expedited freight forwarder. K-Ratio offers new services at K and L which were not there in its portfolio before. These services include:

  • Air cargo services
  • Brokerage services
  • Proprietary truck fleet services

As a full-service risk management company, K-Ratio offers solutions for shipper customers, carriers and 3PLs by implementing aligned strategies to reduce the volatility of price associated with freight movement over the road. The company has a team of finance, logistics experts and mathematics that offer analysis, advisory, and execution services which meet the current objectives of the business and aids remove uncertainty.

Recent K-Ratio hires

Since the inception of K-Ratio in November 2018, it has quickly attracted top talent from diverse backgrounds including investment bankers, PhDs in mechanical engineering, top Chief Information Officers and leading NASA scientists. Below are some top talents that have been hired by K-Ratio in just a few months after its inception.

  • Kevin Malover (Strategic advisor): Employee #3 and Chief Information Officer (CIO) for Orbitz and Chief Technology Officer for President Obama’s campaign in 2008.
  • Christopher Poole(Chief Financial Officer): Former vice president at Raymond James’ Diversified Industrial Investment Banking group. He advised the company on mergers and acquisitions, debt and equity offerings and other financial services for both public and private firms.
  • Roy Johanson(Senior Quant Advisor): Has a PhD in mechanical engineering from the University of Michigan.

According to Patrick Draut, the Senior Vice President of Business Intelligence for K&L Freight Management tasked with assembling an all-star team for K-Ratio, many people get surprised when the freight market is discussed in detail with regard to the aim of the company and future of the market. While people in the logistics industry understand the potential future of this sector, those outside have some doubt about it. Entrepreneurs, speculators, and disruptors however are presented with a dream space.

Freight Trucking Futures Market in the US

Trucking is one of the largest industries currently in the US with a revenue of $726 billion. Over 1600 third-party logistics firms (3PLs) each earn more than $10 million in the brokerage of freight which makes it a total of $16 billion. However, shippers and carriers are highly susceptible to volatility. Furthermore, factors such as the construction of roads, shortages of drivers, oil prices, government regulations, etc can affect supply and demand economics of this industry. With frequent variability in freight rates which can take place in a weekly or even daily basis, many contracts end up being canceled by the parties or “spot rates” may be renegotiated. This accounts to loss of millions of dollars annually.

Despite the challenges, Trucking Freight Futures Market is expected to facilitate sales of approximately 40 million transportation contracts yearly. It is also expected to cover trucking contracts on 40 billion miles of roadway and exchange will cover 7 of the highest volume freight lanes in the US. These aspects show the potential of the industry and the opportunities it presents in the future.

Last modified on Tuesday, 23 April 2019
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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

Find his portfolio here and his personal bio here

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