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Easton logistics firm buys Philly-area transportation service.

Byline: Brian Pedersen

The software helps companies save money by creating a detailed shipping profile to help them understand what they are spending and how they might alter their shipments to reduce costs.

MGN Logistics acquired RAF Logistics, its technology and its five employees, said Matthew Telesca, president and CEO of MGN. This marks the fourth acquisition in five years for MGN Logistics, he added. He declined to disclose the terms. The combined entity would have more than $30 million in revenue, Telesca said.

MGN Logistics is a provider of information technology solutions for the freight management and transportation industry. RAF Logistics is a parcel management, invoice auditing and payment company.

MGN Logistics began collaborating with RAF Logistics several years ago, Telesca said, using its software to help freight customers who also shipped smaller parcels.

The software from RAF Logistics re-rates contracts with FedEx, DHL, and UPS, essentially giving customers all the details that go into their pricing profiles for shipments, he said.

With its profile in hand, a customer could make some money-saving changes such as converting shipments and reducing the size of the box or the weight of the packaging, he added.

"For the average shipper that sends out packages daily, it's incredibly difficult and complex without certain tools to understand the shipping profile," Telesca said.

The software also captures important data in the auditing process. As an example, UPS and FedEx bills customers when they create shipping labels, but the creation of the label doesn't mean the package was boxed and shipped, he added.

"All of this is captured in the auditing process by their [RAF's] software," Telesca said. "When you have thousands of shipments a week, it is nearly impossible to manually track them and know what proper transit time is on that shipment. It is very difficult to track on any large scale."

RAF Logistics built the technology and had operated as a vendor for MGN Logistics, which would contract work out to RAF for customers that wanted to ship small parcels.

Parcels are small, individual packages handled by carriers such as UPS and FedEx. Freight shipments are larger groups of packages, typically sent on pallets.

"In many cases, we were providing that free of charge," Telesca said. "For us, it was a value-added service."

However, it was not a revenue-generating stream, so the acquisition allowed MGN Logistics to bring that expertise in-house and the company is in the process of integrating the two companies' systems.

Any company that ships freight, such as MGN's customers, is likely also to ship small parcels.

"We can now offer those clients a freight solution as well as a parcel solution," Telesca said.

The acquisition will help reduce costs, savings that MGN Logistics can pass on to its customers, he said.

Eventually, customers can work in a single system with all transportation data in a single platform. Other solutions the RAF software offers include management reporting and carrier performance monitoring.View the full article from Lehigh Valley Business at Copyright 2018 BridgeTower Media. All Rights Reserved.

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Publication:Lehigh Valley Business
Date:Oct 31, 2018
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