|
Software Developer Keeps
Freight Moving
By STEPHANIE GAUTHREAUX
October 5-11, 1992 - Freight forwarding company executive Erwin Melzer took notice when the Texas firm he
was working for
spent over $200,000 on a basic accounting system back in 1980. Such an investment to
automate operations was prohibitive at the time for all but five percent of the nation's
freight forwarders: the process required a minimum of $100,000 for equipment and thousands
in monthly in maintenance costs.
Believing there was a better way, Melzer began work in 1984 on a more cost effective
method of automating freight forwarding operations. In 1986 he launched his company, Melco
Group International, to market his new system to the largely untapped market of small -
and mid-size freight forwarding companies.
Capitalizing on the shift from expensive mainframes to powerful PCs, Melzer developed a
turnkey solution that offers Novell Local Area Network compatible software, maintenance
and service for less than $20,000 up front and approximately $200 per month in maintenance
costs. The shift to PCs made automation affordable for small- and mid-size companies who'd
been in a "paper and labor-intensive situation," using typewriters and heavy
reference books to fulfill cumbersome government document requirements.
Melzer sold clients on the promise that within 90 days of installation, his system could
provide a 300
to 500 percent increase in productivity and pay for itself in four months. The pitch
worked. Melco now
boasts 75 clients in 15 U.S. port cities, six employees in New Orleans and
distributorships in New York; Long Beach and Los Angeles, Calif.; Miami; and Eden Park,
Minn.
Revenues are growing accordingly - after posting 1991 sales of $800.000, Melco is on pace
for 1992 revenues in the $1.4 million range. Melco's cornerstone product,
O.A.S.I.S.
(Ocean Air Shipping Information System), is an export document system designed for the
efficient entry of transport data and the production of export documents. Unlike many
other systems on the market, O.A.S.I.S. features input screens that resemble the documents
with which its user is familiar.
Selling was not without its challenges in the companies early days, says Sales Manager
Dean Bramson. "When you've got a product like software, there's a certain
difficulty in perceiving what a software package is going to do." Fortunately,
early customers helped Bramson out.
"Our clients are our biggest marketing machine," says
Melzer. "It's
a word of mouth thing. We're doing it one client at a time."
With no competition in New Orleans and only about 10 competitors nationwide, Melco
serves half of the top 10 freight forwarding companies in New Orleans -- including
(Gilscot Forwarding Co.
Inc., Gulf States Forwarding Inc., McCandless Inc., and J.W. Allen & Co. Inc.)
Melco Group is also tapping new market opportunities: in 1989 the company was
authorized by the U.S. Department of Commerce Bureau of Census to do electronic filing. According to
Bramson,
Melco is one of six software development companies in the country authorized to offer this
electronic means of data transfer for export control. Electronic filing cuts down
tremendously on freight forwarding companies' paperwork and helps eliminate government
waste. But there are many companies who do not yet employ electronic filing.
Of the 12 million export declarations filed each year, only ten percent are tiled
electronically, Melzer says. " We have 90 percent to go."
| 
City Business