Why So Many Freight Brokerages Have Offices In Colombia

One of the best-kept secrets in the U.S. logistics industry is the fact that many freight brokerages have staff in Colombia. Anything from a late-night track-and-trace call to compliance and collections might be handled by a young college graduate in Cartagena rather than Chicago.

At the Transportation Intermediaries Association's Capital Ideas Conference and Exhibition in Orlando last week, FreightWaves met Robert Cadena, an ex-broker who runs nearshore services provider Lean Staffing Solutions. Lean Staffing Solutions outfits and operates satellite branches of U.S. freight brokerages in Cartagena, Barranquilla, Bogotá, and soon Medellín.

"It started as a cost-savings opportunity," Cadena explained, "but when you meet the talent – bilingual college graduates – the talent is really great. These guys are intelligent and eager to learn. In Colombia there aren't a lot of job opportunities."

After 11 years in freight brokerage, Cadena sold his interest to his business partner, then developed a less-than-truckload logistics business and sold it to an asset-based carrier.

"In 2011, I started coming up with the idea of opening satellite offices for U.S. logistics companies in Colombia," Cadena said. "We started on-boarding companies, beginning with entry-level positions in track-and-trace, collections, and night and weekend dispatch. Then it evolved into other things like safety, billing, carrier sales and some revenue-generating positions."

Since 2015, Cadena says, Lean Staffing has blown up, growing 1,400 percent. Today the company manages more than 650 employees for approximately 70 freight brokerages, including well-known brands like Nolan Transportation Group and Arrive Logistics. Cadena said that another 100 workers are currently undergoing training.

"The model works because we maintain the company's culture and atmosphere in the satellite office in Colombia," Cadena said, adding that "95 percent of our customers come to Colombia, meet their employees, train them and tell them what's expected. We help run the operation, and it's a true partnership."

Lean Staffing's employees work in dedicated teams at branded offices with the same logos on the wall and the same ‘go, go, go' culture as the American brokerages they work for. Each of Lean Staffing's customers has its own suite, and the Colombian satellite office connects to the brokerage's systems via separate virtual private networks.

There are essentially two major pain points that Cadena says his company is solving. The first is the cost of administrative, non-revenue generating positions at third-party logistics providers (3PLs). Lean Staffing can generate cost savings of 40 percent on a given position. Cadena said that the flat rate per employee that his company charges its customers includes his management team, quality assurance, the cost of its buildings and human resources processes like training.

The other issue Lean Staffing tries to solve is the talent problem. As far as hourly call center jobs go, the positions in the transportation and logistics industry are difficult – employees are managing complex processes, dealing with sometimes difficult customers, and there's no script. In the United States, freight brokerages have found it difficult to find high-quality, reliable talent for those sorts of jobs, especially during periods of low unemployment. In Colombia, by contrast, ambitious young people are excited to learn a new industry, work for an American company and have a well-paying job with full benefits. So far this year, Lean Staffing has a retention rate above 97 percent.

"The lack of opportunity in Colombia opens up a big window," Cadena said. "I want to take care of our people and let them live the dream that I was able to when I came to this country. They can get a piece of that, grow a career and have a good salary."

Lean Staffing is expanding its offerings to software development; the new office in Medellín –  considered Colombia's Silicon Valley – will have teams of engineers and developers programming customer-facing portals tying into U.S. brokerages' transportation management systems.

"You can hire programmers anywhere, but programmers who know logistics is the difference," Cadena said. "Our developer teams go through the same logistics course, the whole process as our operations teams. They have to understand what they're building."

Cadena finished our conversation by advising any 3PL looking to nearshore some operations to do their due diligence on the company, find out its story and how it got started.

"Potential customers ask me, ‘so what's my first step?' Come to Colombia, see the office and the operation, meet the employees and sit down with them," Cadena said.

Image sourced from Pixabay

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