Auto Load Logic.Crowdfunder.Business Summary.rev.4.23.14


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A summary explanation of the business of Auto Load Logic, LLC. Auto transport software.

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Auto Load Logic.Crowdfunder.Business Summary.rev.4.23.14

  1. 1. IT'S  TIME  TO  RETHINK  AUTO  TRANSPORT. EASY.    FAST.    EFFICIENT.     BUSINESS  SUMMARY   The  Only  Logical  So<ware  for  Auto  Transport  
  2. 2. The  Problem   The  largest  auto  aucDon  company  in  the  US  has  said,  regarding  the  used  vehicle  market:     “The  thorniest  barrier  to  achieving  the  promise  of  a  digital  marketplace  is   not  technology  or  management  commitment;  it  is  vehicle  logisDcs.         We  have  made  it  easy  to  bid  on  a  vehicle  anyDme  and  for  consignors  to  list   cars  sDll  at  remote  locaDons.  So  buyers  have  access  to  tens  of  thousands  of   vehicles  online,  but  transporDng  vehicles  over  long  distances,  in  less  than   truckload  quanDDes,  is  difficult  and  expensive.”       -­‐  Manheim  Inc.   TransportaDon  of  used  vehicles  represents  a  large  market  that  is  growing  increasingly  complex  as  the  way  we  buy   and  sell  cars  changes.         Technology  is  creaDng  great  opportuniDes  for  efficiencies  in  vehicle  transacDons  but  that,  in  turn,  creates   complexiDes  in  the  transport  market.         Only  with  beTer  technology  in  the  transport  market  can  we  solve  the  problems  created  by  beTer  technology  in   the  transacDon  market.  
  3. 3. Our  Product   Is  a  complete  so<ware  soluDon  for  managing  the  process  of  auto  transport.  It  connects:     o  Those  who  need  to  ship  cars  –  car  dealers,  aucDon  buyers  or  individuals  who  are   shipping  their  cars  to  or  from  other  locaDons  or  have  bought  cars  that  are  far  enough   away  that  3rd  party  transport  is  needed   o  The  auto  transport  brokers  –  many  transports  are  arranged  by  specialized  brokerage   companies.  There  are  about  1,000  of  these  companies  acDve  in  the  market  today.   o  The  trucking  companies  that  transport  cars  –  there  are  about  4,000  trucking  companies   in  the  US  that  transport  used  vehicles,  and       o  Those  to  whom  cars  are  shipped  –  many  used  car  dealers  buy  their  inventory  at  aucDon   or  from  other  dealers  and  need  to  have  the  cars  shipped  to  their  lots,  for  example;  and   many  individuals  are  now  buying  vehicles  on-­‐line  and  then  need  to  arrange  transport.  
  4. 4. Our  Product   The  “SoluDons”  and  “Features”  pages  on  our  website  contain  descripDons  of  features  offered  as  well  as  text  and   video  explanaDons  of  many  aspects  of  our  market  and  product.     o  Provides  industry-­‐leading,  unique  and  valuable  funcDonality  for  each  type  of  user       o  Allows  each  type  of  user  to  search  for,  analyze,  select,  contract  for,  track  and  document  the   services  needed;  or  the  opportunity  to  offer  the  services  it  provides.   o  Is  seamless,  end-­‐to-­‐end  and  fully  integrated         o  Includes  a  number  of  funcIons  for  which  patent  protecDon  is  pending  (#13/246,514)   o  Provides  important  cost  savings,  operaDng  efficiencies  and  risk  reducDon  for  all  user  groups  
  5. 5.   Our  Market   We  define  our  addressable  market  as  including  all  used  vehicle  transports  of  500  miles  or  more.  That  market   currently  includes  about  4.0  million  vehicle  transports  per  year.     As  more  and  more  transacDons  are  made  on  line,  our  market  will  conDnue  to  grow  at  a  rate  greater  than  that  of   overall  vehicle  transacDon  volume.   An  Unusual  Market  CharacterisIc:       o  Few  markets  enjoy  the  benefit  of  protecDon  against   disrupDon  at  a  basic  funcDonal  level.  Transport  of  used   vehicles  is  one  of  them.     o  When  used  vehicles  need  to  be  transported  they  are   moved  almost  exclusively  over  roadways  and  on  trucks.     o  UnDl  Amazon  creates  a  drone  that  can  airli<  a  Ford  F150   to  your  driveway,  that’s  preTy  much  how  it’s  going  to  stay.  
  6. 6. Our  Market   TransporDng  a  used  car  typically  takes  from  one  to  five  days.  As  soon  as  one  vehicle  is  delivered,  the  trucker   wants  to  fill  that  empty  truck  space  with  another  paying  load.  Ideally,  that  next  load  has  already  been  idenDfied   and  contracted.  But  the  ideal  is  not  the  norm.         Any  tool  that  allows  the  trucker  to  reduce  Dme  spent  with  empty  truck  space  can  improve  efficiency  and   profitability.     
  7. 7.   The  Internet  Effect   An  increasingly  large   percentage  of  auto   purchase  transacDons  are   being  made  on-­‐line  by   both  industry  professionals   and  private  individuals.     In  an  industry  that  was  once   defined  largely  by  physical   locaDon:  i.e.  of  car  lots  and   aucDon  yards;  the  internet  is   making  physical  locaDon   increasingly  insignificant.   As  on-­‐line  purchasing  of   vehicles  grows,  purchase   opDons  and  opportuniDes     grow  for  both  professionals    and  individuals.     And,  very  importantly,  the   distance  between  the   purchaser  and  the  vehicle   purchased  tends  to   increase.     1   2   3   4  
  8. 8.   Transport  Distance  Analysis   Distance  of     Transport:   (miles)   Under  100   100  to  200   200  to  300   300  to  400   400  to  500   Over  500     500  to  1,000   1,000  to  1,500   1,500  to  2,000   Over  2,000   NAAA   (onsite)         60     12     8     5     3     12       NA     NA     NA     NA     Manheim   (OVE  online)         20     12     10     8     7     43       NA    NA    NA     NA     Manheim   (simulcast   Online)     20     18     12     8     5     37       NA     NA     NA     NA     Central   Dispatch         1     4     4     5     5     81       21     21     13     26     uShip         0     3     2     5     3     87       23     18     17     29     All  figures  stated  as     %  of  total  volume     NAAA  =  Na4onal  Auto     Auc4on  Associa4on     Source:  NAAA,  Manheim,   Central  Dispatch,  uShip    
  9. 9. Our  Market     As  distance  of  required  transport  increases,  complexity  of  transport  and  of  contracDng  for  and  managing   transport  increases.  As  that  complexity  increases,  the  need  for  more  effecDve  transport  management  tools   increases.   “Over  the  past  several  years,  buyers  have  grown  comfortable  buying  units   from  a  wider  geographical  area.  As  a  result,  they  have  become  more  reliant   on  transportaDon  soluDons  that  streamline  business  processes  and   maximize  profits.”     -­‐Manheim  Inc.   But  the  technology  available  in  the  used  car  transport  market  has  not  kept  pace.  Far  too  much  of  the  process   conDnues  to  depend  on  phone  and  fax,  on  paper  and  pencil;  and  those  inefficiencies  damage  both  process   efficiency  and  profitability.       The  parDcipants  in  our  market  badly  need  new  tools  to  beTer  manage  the  transport  process,  to  beTer  control   operaDng  costs  and    to  beTer  manage  risk.  
  10. 10.   The  CompeIIve  Environment   There  are  two  primary  segments  in  our  market:     The  industry  professionals:     o  Car  dealers   o  Transport  brokers,     o  AucDon  companies,   o  Fleet  operators,   o  Car  rental  companies,  etc.     Individuals     o  Who  need  to  either  send  a  vehicle  to  another   locaDon   o  To  arrange  to  have  a  vehicles  shipped  to   themselves.   The  professional  market  is  by  far  the  larger  of  the  two,  but  the  individual  market  is  growing  at  a  rapid  rate.       In  each  of  those  segments  there  is  currently  one  primary  so<ware  offering.    
  11. 11.   Central  Dispatch   In  the  Professional  User  market,  the  dominant  product  is  Central  Dispatch.   Central  Dispatch  has  held  the  dominant  posiDon  since  its   introducDon  in  1999.  It  was  developed  and  owned  by  1st  Auto   Transport  Directory  unDl  August  of  2012  when  it  was   purchased  by  Dealertrack  Technologies,  Inc.  (TRAK)       We  esDmate  that  Central  Dispatch  is  used  to  facilitate  the   transport  of  about  1.4  million  vehicles  per  year,  of  which   about  1.1  million  are  transported  500  miles  or  more.     It  is  widely  acknowledged  among  professional  users  that  Central  Dispatch,  once  a  disrupDve  technology,  has   failed  to  keep  pace  with  changes  in  the  transport  market  or  in  technology.         Central  Dispatch  does  not  provide  a  product  for  use  by  individuals   That  represents  only  a  27.5%  market  share.  
  12. 12. uShip  is  a  newer  entrant  in  the  auto  transport  market.  Its  primary   business  is  managing  the  shipping  of  general  freight.     We  esImate  that   o  uShip  is  used  to  manage  the  transport  of  about  150,000   vehicles  per  year,  of  which  about  135,000  involve  transport   of  500  miles  or  more.       o  that  one-­‐third  of  uShip’s  volume  represents  professional  user   acDvity  and  the  balance  represents  individual  users.   That  represents  only  a  3.4%  market  share.   Auto  Load  Logic  will  offer  the  individual  market  a  beTer  product  than  uShip  at  a  much  lower  price.  uShip  has  not   gained  real  tracDon  in  the  professional  market  because  of  both  funcDonal  weaknesses  and  customer  service   issues.   uShip   The  product  most  used  in  the  Individual  User  market  is  uShip,  which  makes  its  planorm  available  to  both   professional  and  individual  users.    
  13. 13. Our  Pricing  Model   Professional  Users     o  Central  Dispatch  uDlizes  a  monthly-­‐subscripDon   pricing  model.   o  Rates  do  vary  among  users.  A  volume-­‐based   Dered-­‐pricing  system  has  been  recently   insDtuted.  But  payment  is  due  whether  the   customer  uses  the  product  or  not.   o  Our  pricing  model  is  based  on  use.     o  Our  aim  is  to  a  generate  a  revenue-­‐per-­‐vehicle   level  that  is  compeDDve  with  the  average   pricing  of  Central  Dispatch  but  to  achieve  that   by  charging  each  user  based  on  only  actual   usage.     Individual  Users     o  The  uShip  pricing  model  is  based  on  a   percentage  of  the  price  of  transport.  The  fees   are  significantly  higher  than  the  corresponding   per-­‐unit  price  of  Central  Dispatch.   o  We  use  a  price-­‐per-­‐use  model  in  this  market   also  but  at  a  cost  well  below  that  of  uShip.  
  14. 14.   Other  CompeIIve  Issues   There  are  other  so<ware  products  in  use  to  manage  vehicle  transport,  principally  those  created  by  or  serving  the   aucDon  market.  Two  aucDon  companies  represent  about  70%  of  the  total  vehicle  aucDon  market  in  the  US.   AucIon  Businesses:       o  Require  the  efficient  movement  of  vehicles  to   the  aucDon  sites  for  sale  and  from  the  aucDons   sites  a<er  sale.   o  Have  invested  in  so<ware  tools  that  help   manage  the  flow  of  vehicles  into  and  away  from   their  locaDons.       o  Mostly  require  relaDvely  short  distance   transports  that  are  not  a  part  of  our  market.   Some  though,  do  require  longer  transport.   But  transport  is  an  ancillary  acDvity  for  the  aucDon  companies,  not  a  primary  one.  The  aucDon-­‐based  products  are   not  primary  compeDtors.    
  15. 15. Our  Company   Auto  Load  Logic  is  Texas  limited  liability  company  based  in  Abilene,  Texas.  Our  product  design  reflects  a  deep   understanding  of  the  needs  of  parDcipants  in  the  auto  transport  market  as  well  as  a  rigorous  analysis  of  market   characterisDcs,  trends  and  potenDal.           Product  design  began  in  2010  and  iniDally  focused  on  creaDng  a  unique  trailer  loading  algorithm  intended  to   allow  truckers  to  more  efficiently  decide  how  to  best  load  their  trailers.  As  it  became  apparent  that  the  transport   industry  would  need  to  respond  to  rapid  changes  in  the  transacDon  market,  the  team  developed  a  new  and  larger   vision  of  the  product  potenDal.       In  2013,  having  completed  our  market  analysis  and  idenDfied  the  opportunity  for  a  substanDal  expansion  of   product  scope,  we  completed  a  financing  round  that  allowed  expanded  product  development  to  move  forward.    
  16. 16. FOUNDERS   Deron  &  Laurie  Balch   The  Company  was  formed  by   industry  professionals  Deron   and  Laurie  Blach.     Deron  and  Laurie  have   established  and  operated  both   an  auto  transport  trucking   company  and  an  auto  transport   brokerage  company.       2012  ANGEL  INVESTOR   Mr.  CliZon  H.  Morris,  Jr.   In  2012  Mr.  Morris,  the  founder   and  former  Chairman  and  CEO  of   AmeriCredit  Corp.  (NYSE:     ACF  –  now  GM  Financial  Corp.)   made  a  significant  investment  in   the  Company.     That  investment  allowed  us  to   more  fully  explore  the  potenDal   scope  of  the  market  opportunity.     2011  SEED  CAPITAL   Don  Balch   Don  Balch  is  founder  and   managing  partner  of  a  mulD-­‐ locaDon  truck  driving  school     that  has  operated  in  Texas  for   over  25  years.       William  Barnes,  DDS   Dr.  Bill  Barnes  has  been  a   partner  in  that  business  since   its  founding.   Our  Company   For  more  detail  on  our  company,  our  management  team  and  our  business  philosophy,  please  see     the  "About  Us"  page  of  our  website.     CEO   Charles  Lightner   During  that  process  of  analysis   and  planning,  Charles  Lightner   joined  the  Company  as  CEO.       Chuck  did  not  come  from  the   transport  industry  but  has  a   broad  background  in  investment   management  and  finance.  
  17. 17.   TracIon  We  released  a  Beta  version  of  the  professional  planorm  in  summer  2013.  As  development  of  the  professional   planorm  proceeded  we  looked  more  closely  at  the  private  party  market  and  concluded  that  a  significant   opportunity  existed  there  as  well.  We  decided  to  create  a  simplified  user  interface  that  would  allow  individuals  to   benefit  from  the  power  of  the  professional  planorm.     In  4Q  2013  we  returned  to  the  market  with  the  professional   planorm,  modified  to  incorporate  user  feedback  obtained   during  the  Beta  tesDng  period,  and  including  the  newly-­‐ created  private  party  product.       The  ALL  system  is  now  being  used  successfully  and  is   performing  well.  There  are  over  100  registered  professional   users  of  the  system  and  private  party  acDvity  is  increasing.   Our  markeDng  efforts  during  this  period  have  concentrated  on  securing  a  relaDonship  with  a  high  quality   “catalyst”  user  in  the  professional  market.       In  that  effort  we  have  concentrated  on  the  larger  brokerage  companies.  Successful  brokers  bring  with  them  both   vehicle  inventory  and  networks  of  trucking  companies.  
  18. 18.   The  Catalyst  We  have  now  formed  a  relaDonship  with  the  perfect  catalyst  user!   One  of  the  largest  brokerage  companies  in  the  industry,  and  one  of  the   most  respected,  has  indicated  its  desire  and  intent  to  use  the  Auto  Load   Logic  system.     This  company  manages  the  transport  of  thousands  of  vehicles  per   month  and  has  an  excellent,  long-­‐term  reputaDon  in  the  industry.     Their  use  of  our  product  will  require  our  creaDon  of  a  connecDon   between  their  in-­‐house  management  informaDon  system,  in  which  they   have  a  substanDal  investment,  and  our  system.       That  work  is  currently  underway.       We  expect  this  vote  of  confidence  in  our  system  and  our  company  to  be   an  important  asset  as  we  accelerate  our  penetraDon  of  the  top-­‐Der   professional  user  market.