A fast-growing freight brokerage company is opening an office in downtown Chattanooga as the latest business to set up shop in the Scenic City in the growing transportation and logistics sector.
Tallgrass Freight Co. of Shawnee, Kansas, has leased space in the Lovemans building on Market Street where it plans to grow the office to about 20 people in a year, said David Barnes, the company's chief operating officer.
"We did a lot of research around the country looking for talent," he said.
Barnes said that Tallgrass, which landed in the Inc. 5000 list of fastest-growing companies in 2019, saw other businesses operating in the city such as data and content venture FreightWaves.
"If these guys are in Chattanooga, what else is going on there," he said. "We dug deeper and asked 'Why aren't we there?'"
The Chattanooga area has been dubbed "freight alley" because of the cluster of logistics and trucking companies, including a number of startups. Inc. magazine last year identified eight of the 13 fastest-growing small businesses in Chattanooga in the logistics field, including the freight brokerage firms of LYNC Logistics, Trident Transport and Steam Logistics.
Those companies are building locally on the foundation created by two of the nation's top 10 long-haul trucking firms - U.S. Xpress and Covenant Transport - and the country's biggest privately owned warehouse logistics company, Kenco.
Tallgrass, founded in late 2012, now has three brick-and-mortar offices with its suburban Kansas City flagship, Chattanooga and another in Scottsdale, Arizona, which opened last year.
While the coronavirus has roiled many businesses so far this year, Barnes said Tallgrass is expected to about double revenue to $80 million.
The company, with about 120 employees, is seeing more opportunity, he said.
"The silver lining is it has created an opportunity ... for us to be aggressive and expand and grow into [the new office]," said Barnes, who also is company co-owner along with Chief Executive Damon Anderson.
One key for Tallgrass is its culture, he said.
"The hardest part of running a business is maintaining a family atmosphere," Barnes said. "That has helped us in the growth."
Despite the recent growth on freight brokers and other logistics companies in Chattanooga, the trucking and logistics isn't immune from the impact of the pandemic.
In April, Arrive Logistics cut about 10% of its workforce nationally, including some Chattanooga employees. Also, Arrive's proposed expansion in the city, one of the biggest announced in 2019, hasn't happened yet and appears to face an unclear timeline. The company last year unveiled plans to create 500 new jobs along with a $3.6 million investment in the city.
Arrive CEO Matt Pyatt said last month that the Austin, Texas-based company's Chattanooga office has about 50 employees and remains a priority. He said that Arrive plans to "continue to grow that office although our timeline for expansion has evolved due to the impact of COVID-19."
Other logistics-oriented companies had started paring staff even before the coronavirus outbreak, including FreightWaves.
Also, Coyote Logistics, the freight brokerage firm with major operations in Chattanooga that UPS bought, shifted 25 carrier sales jobs to its Atlanta headquarters "to improve efficiency and customer service."
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.