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Last Mile
Logistics Group, Inc.: Going The Last Mile For Customers and
Investors Alike
AllPennyStocks.com News
June 11, 2008 (AllPennyStocks.com Media, Inc.) – Last Mile
Logistics Group, Inc.
(OTCBB:LMLG) is a service-oriented 3rd party logistics
company which was founded in 1997 by Brian and Regina Flood.
The company operates primarily through its subsidiary,
Chesapeake Logistics. Chesapeake Logistics provides last-mile
logistics services in the Mid-Atlantic region of the US. The
company's last mile logistics services include scheduled
door-to-door delivery of larger items of merchandise such as
furniture and electronics/entertainment products. The company
also assembles and installs these items in customers' homes as
part of their service.
Last Mile Logistics Group has focused their efforts on this
fast-growing market segment of home delivery and related
services for heavy consumer goods. The company targets
businesses that distribute or sell appliances, furniture, TVs,
home medical equipment or other similar merchandise and offer
home delivery to their customers. Last Mile Logistics has
provided their services to major companies such as: Sony, Pier
1 Imports, Mitsubishi, JC Penney, LG, and Wal-Mart. As of the
end of 2007, the company provided services to approximately 60
business customers.
Last Mile Logistics has focused on this niche logistics market because unlike
the home delivery of envelopes and packages, there are no large dominant
providers of home delivery of heavy freight such as Fedex, UPS, and USPS. This
has left a gap for businesses that sell products nationwide and have a need for
local logistics providers that offer quality delivery services. Last Mile
Logistics is looking to fill this market gap.
The market for 3rd party logistics providers is large and growing. The market
value of the heavy goods home delivery industry in the US is estimated to be
approximately $10 billion with $1 billion of that in the Mid-Atlantic region
that Last Mile Logistics focuses on. The market for 3rd party logistics
providers such as Last Mile Logistics should continue to grow rapidly. One
factor contributing to growth in this market is the increasing number of
companies that are selling products online to buyers across the nation. In 2005,
online sales were estimated to be $172 billion and they are expected to reach
$329 billion by 2010.
Last Mile Logistics and other 3rd party logistics providers have other strong
tailwinds in their favor. In tough economic times retailers need to cut costs.
Companies are beginning to realize that outsourcing their production to other
countries such as India and China is not as cost effective as believed. Yes,
their production costs are lower but their overall supply chain costs are
actually increasing. Companies' supply chain costs are rising because of the
sharp increase in the cost of fuel which, of course, raises air freight and
other related transportation costs.
One way that companies are trying to offset these rising supply costs is by
'near-sourcing'. Near-sourcing means using providers like Last Mile Logistics
for the local distribution and delivery of products. A company, instead of using
their national distribution network, will use local providers such as Last Mile
Logistics to save on the fuel costs associated with actually getting the product
to the customer. Last Mile Logistics President Brian Flood said "It's easy for
the scale of an overseas supply chain to overwhelm supply chain managers, given
the number of variables involved and the associated costs. One way to offset
these supply chain costs is near-sourcing: balancing the benefits of lower-cost
manufacturing with shrinking the distance of supply source to the markets
served."
Last Mile Logistics does seem to be benefiting from these trends. The company
has experienced an annual average growth rate of 30% in their first six years of
existence. For 2007, the company's revenues increased by 13.6% to $1.9 million
and in the first quarter of 2008 the company's revenues rose by 37% as compared
to the first quarter of 2008. The company's recent stock price is 0.10 with a
market cap of approximately $4 3/4 million. The stock price has gone from a high
of 0.30 in January to a recent low of 0.07.
Last Mile Logistics' management aims to continue to grow the company via
acquisitions, and increase the company's revenues by over $10 million in the
next few years. The company has already identified possible acquisition targets
in the Mid-Atlantic market. The company is planning to make five acquisitions
over the next two years. These acquisitions should allow for greater
efficiencies in the company's operations. Despite the increase in fuel costs,
the company in the 1st quarter of 2008 increased its gross margin by 26%. This
was due to revenue growth from new customers as well as fuel surcharge
agreements with customers to offset the cost increases. Overall, Last Mile
Logistics has found a growing industry in good and bad economic times, and
investors are encouraged to give Last Mile Logistics Group a closer look in the
days and weeks ahead.
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Although the majority of
AllPennyStocks.com reports are independent, it has received
compensation for carrying the report on Last Mile Logistics
Group, Inc., the compensation is ten thousand two hundred
dollars by the company for its efforts in presenting the LMLG
profile on its web site and distributing it to its database of
subscribers as well as other services. This creates an inherent
conflict of interest and readers are encouraged to view the
main disclaimer at
http://www.allpennystocks.com/aps_us/company_spotlights/archives/lmlg.asp
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