Interview with Luke Kupersmith – transportation and logistics business

As CEO and co-founder of Source Consulting , Luke Kupersmith has exemplified strong leadership skills for the past eight years to facilitate a successful business. Source Consulting, a privately owned logistics consulting and solution provider, has become one of the leading transportation and logistics consulting companies in the country, earning a spot on Inc. Magazine’s “500 Fastest Growing Companies” list in 2011. Kupersmith has led the formation and development of two now-successful companies. Previous to his entrepreneurial ventures he gained experience working as a financial advisor for small businesses and wealthy individuals.


Cristian: Hi Luke and welcome to Today we are going to talk about shipping cost reduction services, something that a lot of businesses could benefit from. Source Consulting started back in 2004, what exactly do you do?

Luke: We provide cost reduction services and transportation technology for high-volume shippers that help optimize the distribution process.  Our contingency-based cost reduction services include auditing shipping bills and helping companies improve their shipping rates—if we help companies save, we get paid.  Our transportation software technologies enable clients to more cost-effectively manage their shipments.


Cristian: I’m not sure how this goes in the US, but in Europe you kind of take the pricing of shipping companies as “just the way they are.”  Is there in fact place for negotiation and improvement?

Luke: Absolutely. This is true globally.  In just about every marketplace where there are multiple vendor options, there is opportunity to negotiate price with vendors… and that very much includes the shipping industry. As with many service providers, carriers have a profit margin built into their pricing – everything is negotiable.


Cristian: How exactly does Source Consulting optimize costs? What are the main areas of service?

Luke: We optimize costs first by cost reduction and secondly by efficiency, which usually also translates to cost reduction. When any vendor or service provider bills you, you expect to be billed accurately, which is not always the case with shipping carriers. Our freight audit services review every shipping bill for incorrectly assessed fees and get the items credited back to the customer’s account. Additionally, we are able to analyze a company’s shipping rates and illuminate all opportunities to negotiated better rates. When we identify room for improvement, our services will help procure the savings opportunity.

Exponential efficiency is drawn from our cloud-based technology offerings, Intelliship and HALO. Intelliship is a shipping and manifesting software that helps companies ensure every shipment is routed with the lowest cost carrier and service level that will get it there on time. HALO enables users to access all shipping information in one central location — this way, shipping managers and employees in different departments don’t have to chase information.


Cristian: What is the typical savings that a company shipping nationwide in the US might experience over a year?

Luke: How much a company saves largely depends on the service. Parcel audit customers commonly save 1%-6% and our negotiation services commonly save clients anywhere from 7% to as much as 40%. Savings derived from our transportation software varies tremendously. The impact of our software comes as a result of several benefits, including: faster decision-making, less man-hours wasted, better customer retention, and much more. Savings that result from having the utility of great software can be substantial.


Cristian: Which exactly are the companies in your target? From what volume up are companies using Source Consulting having benefits?

Luke: We are agnostic to industry — if a company ships in significant volume, they are an ideal candidate for us to help. We typically work with companies spending on shipping upwards of half a million per year up to multi-millions.  We do have some smaller customers – everyone needs help, from big to small!


Cristian: Any notable happy customers?

Luke: Yes, lots! We have many customers who act as references and are glad to volunteer those references upon request.


Cristian: How did you start in 2004? What were the first steps?

Luke: I started Source Consulting back in 2004 while working on my first business venture, an online clothing distributor of blank t-shirts and screen-printing services called, with two other guys. Due to the amount we were spending on shipping out the shirts, we saw the need for high volume shipping cost reduction solutions and the idea for Source Consulting was born.

Our original service offering was limited to solely rate negotiation and analysis. We didn’t offer any technologies or other cost reduction services. The company was born out of knowledge that there are many companies out there that are paying more than they needed to pay on shipping services; we had the ability to help them reduce those costs.

Our first step was identifying local companies that we knew shipped a lot— being in Southern California, there are tons— and then we picked up the phone and began to get conversations started — I was our first salesperson. The ball got rolling from there and Source Consulting continued to grow. There’s an endless amount of opportunity in this business because there is an endless number of companies that have need for reduced shipping costs.


Cristian: And did it change over the years? How did the economy affect the shipping business?

Luke: Our business has definitely evolved. We have added several additional solutions into our comprehensive service offering, largely as a result of identifying additional needs of customers we work for and talk to. Our ability to offer more value has improved by having a more complete offering for our clients.

The economic recession has definitely impacted many companies by reducing their shipping volume or in the worst case putting them out of business.  For us, the struggling economy has actually benefited our business in certain ways because companies became increasingly concerned in reducing costs and minimizing overhead expenses. Since a number of our services are offered based upon a contingent share of savings, its not that our services were more relevant, there have just been more companies looking for cost reduction— for Source Consulting it was the right place at the right time. With the economy recovering, it doesn’t in any way diminish our relevance — businesses still need to reduce costs.


Cristian: Any forecasts for the year to come?

Luke: We are very excited about the future of Source Consulting. As we work to add a couple of additional solutions to our service offerings and pursue new marketing opportunities, we are looking forward to continuing to grow our Greater Good Initiative, our corporate responsibility program, as a component of our total growth.


Cristian: What about international deliveries, are you also helping companies that ship abroad?

Luke: Yes.  The majority of our business is currently related to clients that pay their shipping bills with U.S. dollars, which includes U.S. companies that ship internationally and domestically.  That said, any company incurring substantial shipping expense, either domestically or internationally, is a candidate for our solutions and their shipping costs will be reduced as a result of what we do.


Cristian: How is the pricing model? I guess your services should cost less than the benefits of optimizations, so is there really so much optimization that can be done?

Luke: With regards to our rate negotiation and shipping invoice audit services we get paid a contingency fee based on what the customer actually saves — meaning that savings must be realized before we get paid. We don’t solicit or provide services to companies that we knowingly cannot provide savings for—naturally, this wouldn’t make sense for the customer and would be unprofitable for us. If the shipping spend is significant, the opportunities to reduce that spend exist.  We are very confident in our abilities to reduce shipping costs.


Cristian: What are the most common complaints that shipping companies get?

Luke: The number one complaint is cost and it is a legitimate concern. Every year shipping costs go up, which is relatively uncontrollable by customers of shipping services or basically anyone who ships packages. For Source Consulting that means our services will always be needed to counteract those rising costs. While I am not advocating the root of that concern, it is job security. There will always be need for what we do. Services designed to reduce the cost of doing business will always be relevant.


Cristian: I’ve noticed you are also providing some software support for your customers. What are the solutions you are providing and what exactly do they do?

Luke:  HALO and Intelliship are our newest cloud-based transportation management software offerings for high-volume shippers and are designed to increase efficiency within shipping departments, as well as reduce costs. Intelliship includes a rate-shopping engine that ensures users select the carrier and service level that is best for each shipment. HALO has multi-carrier visibility functions that manages all in-transit shipments and provides detailed information about each shipment. Since these are cloud-based SaaS (Software as a Service) solutions, both technologies can be accessed anywhere there is Internet connection.


Cristian: In 2011, Source Consulting was named as one of Inc. Magazine’s “500 Fastest Growing Companies” and as a Top Ten in Logistics and Transportation. Did you expect this back in 2004 when you started? What was the key to success?

Luke:  When we started Source Consulting we knew there was a significant opportunity for growth. Our focus was never on winning awards with the rate of growth that we were targeting but rather focusing on making a good business out of a good idea.  The success that has occurred has been fun and exciting, and we are incredibly appreciative of the recognition.

Our key to success has simply been ‘sticking with it’.  Although Source Consulting’s services are simple, straightforward, and logical, growth has not been easy.  There are a variety of challenges in selling our services just like selling anything else whether it be airplanes, legal services, or roller skates. As an entrepreneur, you need to make it through the hiccups and keep finding ways to overcome challenges. If a business is modeled around a truly good idea and is executed well, it will be a success if you keep at it.


Cristian: What about the future? What’s next for you?

Luke: The addition of the two software technologies has opened up a lot of opportunity for Source Consulting.  Over the coming years there will be a significant amount of growth experienced in relation to expanding the usage of these technologies, finding new methods of reducing shipping costs, and continuing to execute well our current suite of services.


Connect with Luke on Facebook at or on Twitter at @Consult_Source