Baylor EMBA Program Forms Launchpad for Global Logistics Firm
For two graduates of Baylor’s Dallas-based Executive MBA program, what began as a business plan for a capstone course is now a successful global logistics firm.
Baylor EMBA Program Forms Launchpad for Global Logistics Firm
On the surface, John Hernando and Anthony Butler made an unlikely pair of collaborators.
John enrolled in Baylor’s Dallas-based Executive MBA (EMBA) program in his early 40s, looking for a career change after more than a decade spent climbing the ladder in the customer financial services industry. With a young family to support, he was betting on the EMBA program to help propel him into a role focused on supply chain management without starting from the bottom. He had also considered the idea of starting his own business, which he envisioned modeling after his brother’s freight brokerage in El Paso.
Anthony was more than 15 years younger than John. A sales professional for a new home builder, he enrolled in the EMBA program to expand his skillset and network with an eye on higher levels of management.
“John was thinking about leaving corporate America and starting something on his own, while I was still looking at corporate America as a ladder I wanted to climb,” Anthony said.
They may have entered the program with different goals and life experiences, but the two students recognized a similar drive and intelligence in the other. “We just hit it off,” Anthony said.
Laying the Groundwork
They trace the origin of their business partnership to a global strategy course taught by Gary Carini, a professor of Entrepreneurship and Corporate Innovation at the Hankamer School of Business. As part of the course, students develop a comprehensive business plan that analyzes the existing and future market potential for a product or service.
“I am always so encouraged by the work that the students produce and am especially happy for the entrepreneurs who launch the business of their dreams from the plan they developed in class,” Gary said.
John and Anthony teamed up to construct a business plan for a transportation company. From the beginning, John was committed to translating the plan into reality.
“I knew that I wasn’t going for an A on the project,” he said. “I was going to build a plan I would execute.”
For Anthony, on the other hand, the business plan started as a class project, not a career plan. It took time for him to come around and embrace the challenge of diving into an unfamiliar industry. “I thought long and hard about whether I wanted to spend the next 10 to 15 years working for someone else or take a bigger risk with an upside,” Anthony said.
In the end, he was drawn to the idea of starting something new, and he partnered with John to formally launch InstiCo Logistics in the fall of 2011.
Based in Dallas, InstiCo offers global supply chain management, expedited logistics and freight services.
“The transportation space seemed easy to figure out, at least initially,” John said. “We started as a middleman that connected shippers with trucks. We eventually planned to own a fleet and operate globally, but at first we were simply coming up with good rates to move product from Point A to Point B.”
Back in 2011, Dallas was not considered a prime area to move freight, but John and Anthony evaluated the market and concluded that there would be room to grow. Their instinct was correct: The past decade has seen the arrival of Amazon, the expansion of the Dallas Fort Worth International Airport and an overall boom in manufacturing throughout the region.
They were in the right place at the right time, but they encountered significant roadblocks on their path to success. “It was a challenge from Day One, because we had limited experience in running a freight brokerage,” John said.
Staffing was one of their earliest hurdles. John had convinced several friends in the transportation industry to join the company when it launched in 2011, but they backed out at the last minute. Fortunately, his brother came aboard in 2012 and leveraged his industry experience to help navigate the intricacies of licensing.
While Anthony joined the company as a full-time employee from the beginning, John continued working in his financial services job until 2013, when the business had gained enough traction to pay him a full salary.
In 2014, John and Anthony seized an opportunity to establish their own fleet and take on their first international contract, which required the creation of InstiCo Express to tackle a separate set of risks and licensing. Over time, they expanded their fleet from two to 36 trucks.
Like most transportation companies, they have had to develop creative ways to recruit and retain qualified drivers. They have also taken significant risks on short contracts that require a long investment of assets.
“We were constantly having to bet on yourselves that we would continue to grow our business to keep these assets moving and busy,” Anthony said.
At the same time, they have grown their business during a digital transformation in the supply chain space. They started out faxing agreements to carriers. Only 12 years later, all their systems are cloud-based.
Their most formidable challenge arose in 2020, when the pandemic shut down the international component of their business. InstiCo lost 40 percent of its revenue and barely broke even that year. As unpaid invoices piled up, John and Anthony took personal pay cuts to keep their doors open and avoid layoffs.
Then, in 2021, their perseverance paid off, and they experienced a breakthrough. “Before the pandemic, a lot of customers did not realize the vital role supply chain played in their business,” Anthony said. “That changed quickly, opening the doors to new contracts and opportunities over the past two years.”
In 2021, they grew their revenue by a whopping 116 percent, followed by 23 percent growth in 2022. “After a scary 2020, we emerged so much stronger than before,” John said.
Freight rates rose more precipitously than they had at any other point in the past decade, and InstiCo was perfectly positioned to take advantage of the windfall.
The company’s mounting success is the result of years of painstaking troubleshooting, creative problem-solving and networking. According to John and Anthony, it is also the result of the foundation laid during their time in the EMBA program.
From the local network of people available to be a sounding board to the technical knowledge gleaned from their courses, they credit the program with preparing them to tackle the unknown.
“The courses were challenging and the conversations were relevant,” Anthony said. “Being exposed to things I did not encounter on a daily basis, whether it was a profit and loss statement or a marketing plan, made me comfortable with what is now second nature. The EMBA program gave us something to build upon and opened doors we never expected to open.”
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