KBX Logistics™ exists because Koch Inc. asked one question about its own freight team: Why are we only doing this for Georgia-Pacific™?
Koch builds businesses around capabilities. Figure out what you’re actually good at, invest in it, lean on it hard. KBX started as Georgia-Pacific’s transportation group, and we were giving GP a real competitive advantage, so that question answered itself. The job grew from one Koch company to the entire portfolio of internal companies.
That was the first build-vs.-buy decision anyone ever made about us, and the buyers were our own sister companies.
You’ll face the same decision eventually. Freight keeps growing until the choice lands on a desk: post another job req. for a freight hire or hand the function to a specialist.
My test is core competency.
If you manufacture baseball bats, your competitive edge lives in producing baseball bats. That’s where your R&D dollars belong. That’s where your best people belong. And that’s where your management attention belongs. A transportation department built on the side gets the leftovers of all three, and it competes against providers who are doing freight as their entire business.
In practice, the call to a company like ours comes up when costs jump. Fair. That’s usually the trigger…and the market is poised to supply plenty of triggers.
The long stretch of cheap trucks is likely ending.
Carriers spent years hauling at rates that didn’t pay them. Capacity is thinning, and the shippers whose whole playbook was finding the bottom of the spot market are discovering that the bottom has moved.
Cycles will keep coming, both up & down.
What you’re actually buying in KBX is a partner that provides consistency across all of them. This year’s State of Logistics Report put it right in the title, “Forged in Disruption,” and that’s the honest read on the era: disruption is the standing condition. A partner who earns their keep in both halves of the cycle is how you stop relearning freight at every turn of the market.
Comfort with a supplier can cut both ways, and I want to be straight about that. Comfort that turns into autopilot costs you money.
The good kind is built on incentives that point the same direction and accountability that runs both ways. Hold your partner accountable, and expect them to hold you accountable right back.
In the last issue I said supply chain is a cost center inside your own company.
Your partner should treat it differently.
The good ones bring the problem to you early: you’re doing this, it’s causing that, and if we change this piece, here’s what we think will happen. Then you run the experiment. Not every idea is great. Experiments find the ones that are great without betting the network on a hunch. It’s the same experimental discovery I wrote about in the first issue, pointed at your freight.
So, build where you’re the expert, and buy where someone else is.
If baseball bats are the business, put your best people focused on the baseball bat, and put your freight with a team that answers for outcomes the way your own department would. Ours did.
Georgia-Pacific built us, and everyone else gets access to what that build produced.
From the seat: Put your best people on the thing you actually sell.
Next time: The piecemeal stack. A TMS here, a visibility tool there, a vetting vendor somewhere else, and your team paying a quiet tax to hold it all together.
Annant Patel
Chief Commercial Officer & Asset Strategy Leader
KBX Logistics