Industries

Transportation & Logistics Management and Restructuring

Some of the many challenges logistics and transportation companies face include increased fuel costs, regulatory compliance, driver shortage, inventory management, technology integration, supply chain disruptions, and sustainability. Companies must be able to efficiently and cost-effectively transport goods, regardless of disruptions like weather conditions, geopolitical conflicts, natural disasters, pandemics, and labor strikes.

When a company involved in transportation or logistics faces strong headwinds, this could result in a loss of revenue or a liquidity crisis. At times like these, a lender, board, or the company itself may bring in a financial advisor to assess its options. 

SierraConstellation Partners provides expert advising and management solutions for the logistics and transportation sector. We offer financial restructuring, turnaround management, performance improvement, talent and culture and interim management services.

Transportation & Logistics Interim Management

Transitions, as well as sudden downturns, can lead to uncertain times. In cases where a transportation company is undergoing a merger or acquisition, when there are unexpected challenges in logistics, or when a top executive leaves the organization, there may be a sudden absence of leadership. At times like this, the company may need interim management services to temporarily put a strong leader in place to steer the ship. 

As an expert advisory firm for the logistics and transportation industry, SCP offers interim CEO, CFO, COO, CRO, and general managerial services. Our team provides hands-on temporary management, the development and execution of revenue strategies, and performance improvements that align with the company’s goals.

Stay on course even when there’s a gap in leadership with our interim management solutions. Our interim managers can provide the guidance and continuity of leadership needed to succeed during the most challenging times.

Transportation & Logistics Financial Restructuring

When a logistics company experiences missed covenants or a liquidity crunch due to rising costs, a loss of customers, or out-of-control expenses,  it may become necessary to restructure the business. If the company is insolvent and cannot be made profitable again, it may be prudent to maximize the value of the business and sell off its assets. This way, lenders can recoup their losses, and other stakeholders can identify the most significant returns.

SCP is frequently brought in as a financial advisor to assess the situation and make recommendations.

Transportation & Logistics Turnaround Management

Some common problems that transportation companies face are rising fuel costs, missed revenue and EBITDA projections, declining customer demand, a liquidity squeeze, and a communication breakdown between management and lenders. 

Prior to insolvency, a company may consider hiring an advisory firm to perform a detailed analysis and make recommendations. SierraConstellation Partners has deep management expertise in the logistics and transportation sector. 

We don’t just write a report and recommend strategic plans. Our former executives and investment bankers get to work alongside your team to execute a business recovery plan focused on sustainable growth and profitability. We’ll help to manage cash flow, implement reorganization plans, and re-establish communications and credibility with lenders and other stakeholders.

Transportation & Logistics Performance Improvement

Is your logistics firm seeing a decline in top-line and bottom-line performance? Is there limited liquidity due to inflation and increased competition?

SCP’s transportation and logistics experts work with companies that have an immediate need to improve performance for sustainable success. We’ll dive deep into company operations and finances and make data-driven recommendations for the best way forward. Then, we’ll step in and help implement these plans. This may include a 13-week cash flow forecast, daily cash management, lender and vendor negotiations, operational audits, and financial planning, among other robust actions.

This way, our team will help improve your company’s liquidity, operational efficiency, and help reach long-term goals.

Transportation & Logistics Talent & Culture

The strength of a company depends on the strength of its team. During a transition, whether it’s an acquisition, merger, fast ramp-up of a new product line, or a key executive’s sudden departure, there may be uncertainty among the workforce and low morale. 

SierraConstellation Partners provides logistics and transportation companies with a wide array of talent and culture services. We can help with strategic organizational development, integration with recent acquisitions, compensation and workforce planning, risk assessment, and HR compliance. SCP uses robust talent data intelligence to enable businesses to make strategic decisions.

Frequently Asked Questions

What challenges are transportation and logistics companies facing in today’s market environment?

These businesses must contend with rising fuel costs, possible supply chain disruptions, labor shortages, consumer expectations, and shifting regulations. They must streamline operations and manage costs while navigating unpredictable economic conditions and maintaining a consistently high quality of service.

How have AI and new technologies changed the transportation and logistics industry?

Innovations such as real-time tracking, automated warehouse operations, and enhanced demand forecasting help reduce costs, speed up deliveries, and improve efficiency across the supply chain. Fuel efficiency and route optimization help businesses minimize their environmental impact.

What management services does SCP provide? Are they long-term solutions or is it a temporary fix?

SCP offers turnaround solutions, financial restructuring, talent and culture management, performance improvement, and interim management services. We can quickly help enhance the value of struggling businesses and return them to liquidity. However, our solutions are designed for long-term sustainability unless a quick sale of assets is warranted.

SCP Helps Drive Your Business Forward

Contact us today, and see how we can help you navigate the path forward.

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Case Studies

Transportation & Logistics Industry Team Members

Roger Gorog

Senior Director

Philip Kaestle

Managing Director

Bob Riiska

Managing Director

Carl Moore

Managing Director

Ben Smith

Senior Director

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Roger Gorog

Senior Director

Los Angeles, CA

BiographyNotable AssignmentsMedia & Awards

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Industry Expertise

Roger Gorog, a Senior Director at SierraConstellation Partners, provides operational and financial advisory services to underperforming companies and companies in transition. His experience includes in- and out-of-court restructurings, business cost rationalizations, operational turnarounds, interim management, and transaction advisory services. Roger has experience across a variety of industries including, Aerospace & Defense, Business Services, Construction, Consumer Products & Retail, Energy, Financial Services, Food & Agriculture, Healthcare, Manufacturing, Real Estate, and Transportation & Logistics.

Before joining SCP, Roger was a Director at Alvarez & Marsal in their Healthcare Group where he worked on several large bankruptcy cases and numerous out of court restructurings. Prior to A&M, Roger worked in public accounting at Deloitte & Touche where he worked on financial statement audits of various corporations, both public and private.

Roger received his bachelor’s degree in economics and accounting from Claremont McKenna College and his Master of Business Administration (MBA) from The Peter Drucker School of Management at Claremont Graduate University. He is licensed as a Certified Public Accountant (CPA, inactive) and a Certified Insolvency & Restructuring Advisor (CIRA). He is an active member of the Association of Insolvency & Restructuring Advisors (AIRA) and the American Institute of CPAs (AICPA).

  • Interim CFO to a food manufacturer facing serious operational issues after losing its largest customer. He successfully reduced operating expenses and cash burn while negotiating with major vendors and the Company’s lender to extend their runway.
  • Officer for a leading cancer research institute where he was responsible for all finance and accounting related activities during a Ch. 11 bankruptcy and associated sale.
  • Financial advisor to large retail chain facing serious liquidity and liability issues. Communicated with all constituents, negotiated landlord concessions, and managed cash while we prepared for bankruptcy filing and associated liquidation sales.
  • Served as a financial advisor to a national ambulance company through a prepacked Chapter 11 bankruptcy that reduced balance sheet obligations by $350 million.
  • Financial advisor to an oil and gas E&P company where we successfully sold assets to strategic buyers, providing needed liquidity to maintain go-forward operations and successfully repay lenders and creditors.
  • Lead a due diligence assessment of a target company for a private equity firm that led to a successful transaction of medical information services provider. After the acquisition, he was further retained to assist in developing the integration plan, including development of various strategic initiatives to improve overall financial performance.

Awards

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Philip Kaestle

Managing Director

Seattle, WA

BiographyNotable AssignmentsMedia & Awards

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Industry Expertise

Philip Kaestle is a Managing Director at SierraConstellation Partners, where he provides financial and operational advisory services to companies in transition. He has experience with balance sheet restructurings, interim executive management, operational turnarounds, identifying strategic opportunities, debt and equity capital raising, mergers and acquisitions, financial modeling and forecasting. Philip has worked in a variety of industries, including aerospace, apparel, automotive, distribution, entertainment, food and beverage, healthcare, industrial services, manufacturing, marketing, media, real estate, restaurants, retail and software.

Philip has served in a variety of senior-level positions including Chief Restructuring Officer, Financial Advisor, Investment Banker, Interim Chief Financial Officer, Interim President and Liquidating Trustee to numerous middle-market companies and is particularly skilled at assisting clients through challenging situations.

Prior to joining SCP, Philip was an associate vice president in OneWest Bank’s Media and Entertainment Finance Group where he was responsible for structuring, underwriting and executing new senior debt transactions and recapitalizations for media and entertainment companies. He was also a senior financial analyst in OneWest Bank’s Commercial Real Estate Group, responsible for managing and liquidating non-performing real estate assets.

Before joining OneWest Bank, Philip was an associate at Arch Bay Capital, a Southern California-based real estate investment fund. He started his career as an investment banking analyst with Imperial Capital, LLC in Los Angeles.

In 2020, Philip received the M&A Advisor’s Emerging Leader Award, which recognizes leading M&A, financial and turnaround professionals who have reached a significant level of success while still under the age of 40. In 2022, Philip was named to the Turnaround Management Association Northwest Chapter Board of Directors.

Philip holds a Bachelor’s degree in Financial Economics from Claremont McKenna College and is one of the co-leaders of the Claremont McKenna College Seattle Alumni Chapter.

  • Chief Restructuring Officer to a producer and processor of dried fruits where significantly improved liquidity and profitability, sold non-strategic real estate to reduce leverage and conducted a competitive a refinancing process which resulted in full repayment to the senior lender despite ongoing litigation between the company and the same lender.
  • Liquidating Trustee and Chief Restructuring Officer to a distributor of alcoholic and non-alcoholic beverages where he raised senior debt through a refinancing of the company's credit facility, then sold the assets of the company through a competitive process and completed the wind down despite ongoing litigation between the two shareholders.
  • Interim President and Chief Financial Officer to a dental laboratory manufacturing company where he rebuilt management and finance teams and significantly reduced operating expenses through a series of strategic initiatives despite a volatile operating environment.
  • Chief Restructuring Officer to a clinical-stage biopharmaceutical company which filed for Chapter 11 as a lawsuit with a former co-development partner was coming to a head. SCP led a settlement negotiation to resolve the litigation and completed an orderly wind down of the business, which resulted in full repayment to the pre- and post-petition lenders.
  • Chief Restructuring Officer and Interim Chief Financial Officer to an ethnic grocery store chain. Key responsibilities included cost reductions, vendor relations and cash management. He implemented a $12 million restructuring within a three-month timeframe which stabilized the business and allowed for a sale and subsequent recapitalization.

Media

Awards

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Bob Riiska

Managing Director

Los Angeles, CA

BiographyNotable AssignmentsMedia & Awards

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Robert O. Riiska, a Managing Director at SierraConstellation Partners, has over 25 years of turnaround and advisory experience, including serving in interim senior management capacities for clients and performing numerous value-added consulting assignments. Clients have included multigenerational family businesses, sponsor-backed roll-ups and large publicly traded corporations.

Mr. Riiska is a Certified Turnaround Professional (CTP), Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA). He received a Bachelor of Science Degree in Economics from the Wharton School of the University of Pennsylvania, and an M.B.A. in Finance and Marketing from the University of Chicago Booth School of Business.

Mr. Riiska serves on the boards of several leading industry associations including the Executive Committee of the Turnaround Management Association’s Southern California Chapter, the Advisory Board of the American Bankruptcy Institute’s Bankruptcy Battleground West and as a Secured Finance Network member director.

In 2019, Mr. Riiska received the Turnaround Atlas Award for his work as Chief Restructuring Officer of LORAC Cosmetics prior to joining SCP in 2018.

Mr. Riiska’s recent engagements have been in diverse industries, including automotive dealerships, transportation, furniture manufacturing and retailers, apparel, mining, cryptocurrency lending, nonprofits, consumer products, restaurants and industrials.

  • Served as CRO of a gold mine located in the Southwest U.S., spearheading out-of-court restructuring efforts which led to a successful sale.
  • Served as financial advisor to a manufacturer and distributor of commercial office furniture, negotiating a forbearance agreement which would give the company sufficient operational runway to recover from the issues mainly caused by the pandemic.
  • As CRO of a prestige cosmetics company based in Los Angeles, oversaw all aspects of day-to-day operations, including directly interfacing with large national retailers and suppliers, and developing and executing liquidation strategies for excess inventory, while also coordinating successful sale efforts.
  • As financial advisor to a consumer packaging company, negotiated a new financing solution to provide liquidity to maintain core operations and pursue growth initiatives, while also achieving a successful sale of one of the divisions in an expedited timeframe.
  • As financial advisor to a $500 million long-haul trucking company, developed a successful turnaround plan and convinced the lenders to provide a significant structured loan overadvance to facilitate execution of the plan.
  • Served as financial advisor to a $300 million family-owned grocery wholesaler and developed a comprehensive turnaround plan to return the business to profitability.
  • Served as CRO of a $900 million publicly-traded staffing company with over 30,000 temporary employees. Successfully sold several business units after a massive tax fraud related to an affiliated company had been discovered.
  • Acted as Financial Advisor to one of the largest manufacturers of recreational vehicles while it operated in Chapter 11, leading to a successful asset sale.

Media

Awards

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Carl Moore

Managing Director

Dallas, TX

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Carl Moore, Managing Director and Head of the Dallas region at SierraConstellation Partners, has over 20 years of experience in distressed investing, private equity portfolio management, and the provision of advisory services to underperforming companies and companies in transition.

Prior to joining SCP, Carl had a 15-year career in the private equity, distressed investment and restructuring groups at Highland Capital Management in Dallas. Most recently, Carl served as the Co-Head of Highland’s Private Equity group managing a portfolio of 7 industrial and healthcare companies with a collective enterprise value of $700M. During and after the financial crisis, Carl co-managed a team of legal and investment professionals that led credit restructuring, amendment and related negotiations for the firm’s $25B+ leveraged loan and high-yield bond portfolio.

Prior to joining Highland, Carl practiced law as an associate with the law firms Brobeck, Phleger and Harrison and Looper, Reed & McGraw with a focus on financing and M&A transactions.

Carl graduated from the University of Texas at Austin with a BA in the Plan II Honors Program and a BBA in Finance, and then received a JD from the University of Houston Law Center. He is a member of the State Bar of Texas, and was licensed as a Certified Public Accountant (currently inactive).

  • Served as CRO of GDC Technics, a Fort Worth aerospace company focused on complex interior modifications and connectivity solutions for wide-body aircraft. SCP helped the client navigate a contentious bankruptcy process during which it completed an expedited transition into two new lines of business, settled a major lawsuit with a former contract counterparty, and sourced exit financing from a sponsor-backed customer that supported its post-emergence business plan.
  • Served as Interim Management for a Dallas-based distributor of fuel and lubricants. The client faced significant pressure from fluctuating commodity prices, customer concentration in oilfield service clients, and a thinly-staffed central management team. SCP improved reporting and internal controls, led communications and negotiations with the client’s main vendor and asset-based lender, and assisted the sourcing and onboarding of a permanent CFO.
  • Served on a SCP team that was the CRO for a Silicon Valley-based digital medicine company. In addition to customary bankruptcy-related matters, oversaw an extensive IP sale and technology transfer process to a former strategic partner.
  • Served as Chairman of the Board of a major chauffeured transportation portfolio company. Took an operational role in efforts related to the transition from an independent operator to employee business model and related litigation in several jurisdictions, as well as a comprehensive strategic and SG&A overhaul resulting in significant EBITDA improvement.
  • Served as Board member and worked with investment professionals and portfolio company management team to prepare a healthcare DME company for sale under an expedited time frame and intensely competitive industry environment. Managed multi-party negotiations with the Seller’s stakeholder group and a foreign strategic buyer. The sale resulted in significant value realization in the face of rapidly deteriorating subsector dynamics.
  • As Chairman of a development stage medical device company, led team that overhauled the finance function as well as provided operational guidance for its commercialization efforts. Led negotiation for distribution agreement with, and ultimate sale to, a major medical device company.

Awards

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Ben Smith

Senior Director

Chicago, IL

BiographyNotable AssignmentsMedia & Awards

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Ben Smith, a Senior Director out of Chicago at SierraConstellation Partners, has over 20 years of experience providing financial advisory, restructuring and turnaround, and operational improvement services to companies across the transformation spectrum from those significantly distressed, to those stressed in specific segments of finance/operations, to those with targeted performance improvement initiatives.

He has experience with complex restructurings (both in and out of court), operational improvement initiatives, financial planning and analysis, budgeting and forecasting, cash flow management and modeling, business plan development and strategy.

Ben has experience in a variety of industries, including: airlines; automotive; distribution; healthcare; industrial and manufacturing; restaurants; and transportation and logistics.

Prior to joining SCP, Mr. Smith was most recently a Senior Director at Huron leading and supporting turnaround, restructuring and performance improvement engagements for companies of varying sizes in multiple industries.

Mr. Smith holds a bachelor’s degree in Government from Cornell University and earned his MBA from the University of Florida. He is also a Certified Insolvency and Restructuring Advisor (CIRA) and Certified Turnaround Professional (CTP).

  • Served as a financial advisor to a $300 million transportation and logistics company during their multi-year financial and operational restructuring.
  • Served as a financial advisor providing due diligence services for a merger between two regional trucking companies.
  • Served as a financial advisor for a $200 million distributor during its asset divesture and reorganization process.
  • Served as a financial advisor to a $100 million manufacturer during their winddown and eventual sale of remaining assets.
  • Served as financial advisor to several clients in the healthcare industry during their turnaround and restructuring processes.
  • Served as a financial advisor to a producer of storage systems from their pre-bankruptcy planning to their 363 sale.
  • Served as a financial advisor for a CBD producer from their pre-bankruptcy planning through their in-court restructuring.
  • Served as financial advisor to an airline during their bankruptcy process supporting sales of their main line operations, commuter assets and loyalty program.

Awards

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Armored Car Transportation and Logistics Company

Situation

  • A $430 million armored car transportation and logistics company was facing multiple issues including, increased fuel costs, encroachment by larger competing companies as well as a break down of communication between management and the Company’s lenders.
  • An SCP professional was engaged as Financial Advisor to the Company.

SCP'S SOLUTION

  • The SCP professional performed a review of each business segment, prioritized each division and branch by performance and created a contingency operating plan which included branch, operations, and management restructuring if the lenders required to take further actions.
  • Worked with management to structure a stand-still agreement that would allow the company to continue operating while it attempted to recapitalize themselves to take out the existing lenders and improve the balance sheet.

Results

  • Based in part on SCP advice, the lenders and note-holders agreed to stand-still while the company attempted to find and close refinancing.
  • The company identified senior secured and second lien lenders to replace the existing financing, improve the balance sheet, and provide the financial flexibility necessary to fully execute management’s plan.
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Confidential Holding Company

Situation

  • A $140 million holding company for 3 companies engaged in mail handling equipment, material handling equipment, and a one-stop shop transportation company (drayage, long haul trucking brokerage and warehouse/3 P/L) began missing revenue and EBITDA projections due to a suspension of purchasing by a major customer as well as a reduction in capital spending and customer demand.
  • Further, due to a breach in financial covenants, four loan amendments prompted a 700-basis point increase in interest rates, resulting in a loss in confidence in management by the Lending Group.

SCP'S SOLUTION

  • An SCP professional implemented a 13-week rolling cash flow to more accurately assess near-term liquidity.
  • Assessed revised projections and recommended changes to the financial model including contingency reserves and sensitivity analysis.
  • Identified key upsides and downsides to projections.
  • Recommended additional cost reductions if revenue projections were not met.

Results

  • Based in part on SCP advice, the lenders and note-holders agreed to stand-still while the company attempted to find and close refinancing.Implemented $1 million in cost reductions.
  • Identified additional revenue synergies between operating companies.
  • Lending Group agreed to loan modifications in return for a reduction of exposure.
  • Identified additional sources of capital to reduce Lending Group exposure.
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Environmental Services, Trucking, and Warehousing Company

Situation

  • A $90 million environmental services, trucking, and warehousing company experiencing significant erosion in top-line and bottom-line performance with very limited liquidity as a result of the recession and increased competition.
  • SCP assisted the company with implementing best practices in financial and operational planning as well as cash management and vendor negotiations.

SCP'S SOLUTION

  • SCP completed an operational audit to understand key processes across the 3 operating divisions.
  • Identified a lack of operating procedures within Environmental Services related to Project Estimation versus actual Project Cost which led to negative margins.
  • Implemented a bottoms-up financial planning process.
  • Implemented 13-week cash flow forecast.

Results

  • Improved relations with the company’s senior secured lender, ultimately leading to a new $15 million debt package with this same lender at a lower interest rate.
  • Improved Net Income performance by $3 million per year.
  • Created a master view of all receipts and expenditures leading to greatly improved cash management and vendor stability.
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Moving & Storage, Transportation & Logistics Company

Situation

  • California company in business for almost 50 years that offered moving and storage, transportation and logistics services through its locations in Carlsbad, CA, Anaheim, CA, Phoenix, AZ, and Temple, TX.
  • The Companies were burning several million dollars of cash a year and the current ownership did not want to face the reality or reduce expenses. Further, vendors (other moving and storage companies that would refer business) went unpaid for a year, which only exacerbated the problem as these companies stopped referring business to Hidden Valley.
  • SCP professionals were engaged in September 2014 as well as the bank (Wells Fargo) who had not received financial reporting in over 18 months. Initially, SCP was engaged as Financial Advisor, but within three months, Wells Fargo asked that SCP take over as Chief Restructuring Officer, which occurred in December 2014.

SCP'S SOLUTION

  • SCP visited, reviewed and put together a comprehensive business analysis (including liquidation analysis) of all locations and operations. Additionally, a detailed 13-week cash flow was created for each of the operating units. Within 5 weeks, it was clear that the best course of action was to sell the businesses, real estate, and liquidate any remaining assets.
  • Despite initial resistance from the Company, SCP was able to successfully engage an investment bank to assist with the sale of certain assets. Some assets had to be placed into a receivership (at the request of Wells Fargo) and were liquidated through the receivership.

Results

  • SCP presented Company’s lender with all potential solutions, and the Company and Wells Fargo ultimately decided to sell and liquidate assets.
  • Despite Company’s ownership’s initial resistance to sell the operating assets and real estate, eventually sales and liquidations did occur, and Wells Fargo (only secured lender) recovered approximately 90% of its loan value during the Summer of 2015.
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Confidential Logistics Company

Situation

  • International temperature-controlled storage, transportation and food processing company was under LOI to acquire Maines Paper & Food Service, Inc. (Maines) when one of Maines’s largest customers abruptly moved its business to a competitor.
  • As a result, Company pulled its LOI and quickly negotiated a deal to acquire Maines’s senior secured debt from PNC at a ~40% discount.
  • Company, in its capacity as the new senior secured lender, was faced with a challenging and expensive path forward to take possession of and integrate the Maines assets into its existing platform.

SCP'S SOLUTION

  • SCP was engaged by Company a few days before the note was purchased from PNC to advise on buy-side diligence work streams and to provide transactional support.
  • Maines had originally planned to file for Chapter 11 protection to create an opportunity for Lineage to acquire the assets of Maines through a 363 sale.
  • However, this path forward was going to take several months and cost nearly $30 million more than originally planned. SCP and the Company’s legal advisors suggested that they pivot towards a consensual UCC Article 9 sale followed by an orderly wind down through a Chapter 11 process.

Results

  • Company successfully foreclosed on the assets of Maines just three and a half weeks after acquiring the Maines debt from PNC.
  • The foreclosure and subsequent wind-down path was approximately $20 million cheaper and at least 30 to 60 days faster than the original plan contemplated by Maines.
  • SCP also assisted with post-transaction integration efforts with respect to cash and liquidity management, labor force optimization, non-core asset disposition, financial planning and strategic guidance.