The folks behind Liquid Freight, and sister companies Korth Transfer and Hagen Tank Wash, always have been solutions oriented.
The combined group, which has undergone several name changes over the years, sprang out of Lowell C. Hagen Trucking, whose founder broadened the operation’s scope through the 1980s and 90s by running transfer stations where milk produced by Wisconsin dairy farmers was collected and combined for longhaul shipments.
Today, company leaders continue to think outside the tank by using technology to spark innovation, and further growth, in liquid food logistics.
Hagen earlier this year secured a kosher certification from the Chicago Rabbinical Council (cRc) that authorizes it to convert non-kosher tank trailers into a kosher-certified units without a rabbi on location, a new solution powered by their ability to collect and transmit photographic evidence to the cRc for remote approval.
Now, while also planning a tank wash expansion, they’re working on two new projects: A transportation management software-as-a-service (SaaS) offering for liquid foodgrade haulers, similar to one they introduced for foodgrade brokers last year, and a blockchain system that would allow companies to digitally detail certain aspects of the food supply chain, including washes and prior products, in unalterable and unassailable records.
The blockchain project was made possible by a $100,000 grant Hagen Logistics, dba Liquid Freight, received in June from the U.S. Department of Agriculture’s National Institute of Food and Agriculture (NIFA). It’s part of a $1.1 million investment through NIFA’s Small Business Innovation Research program in 11 U.S. businesses intended to spark commercial innovation that addresses emerging food safety issues.
“It’s a really exciting time,” said Brandon Johnson, chief vision officer and co-owner of The Hagen Johnson Group. “We are definitely a group of companies that has a culture of change in mind. And we’re not looking to change for change’s sake. We’re refining processes, documenting them, and saying, ‘OK, what’s the next thing that’s going to be coming down?’ And whatever that change is, that’s needed in the supply chain, how will it affect our current processes, and alter what we’re doing now? Sometimes that involves technology, and sometimes it’s regulations, safety process improvements, or new food safety standards.”
Innovation’s origin
The Hagen Johnson companies started with Lowell Hagen’s post-Vietnam vision for a milk-hauling operation based in Wisconsin.
He incorporated Hagen Trucking in 1979, secured a contract with a major milk processor for plant-to-plant shipments of raw milk in 1986—when the company still had only 10 milk trailers—then continued to add farm pickup loads while diversifying into new bulk liquid cargoes, including chocolate, cane sugar, soy sauce, and edible oils.
The next big break came in December 1995, when Foremost Farms—created earlier that year by the consolidation of Wisconsin Dairies Cooperative and Golden Guernsey Dairy Cooperative—announced its plan to acquire the Morning Glory Farms Region of Associated Milk Producers, Inc. (AMPI) during the World Dairy Expo, and partner with Lowell’s operation to build a new milk transfer, or reloading, station in Elkhorn, Wis. The facility included bulk storage and a cleaning system for milk tankers, marking their first venture into tank washing.
Johnson, who married Lowell’s daughter Theresa, entered the family business in 2004, when he partnered with Lowell’s sons, Levi Hagen and Luke Hagen, to purchase Korth Transfer, established in the 1930s as a liquid dairy transportation company in Hillpoint, Wis. Johnson also guided the launch of Hagen Logistics in 2008.
Fast forward to today, and the family’s still-evolving group of companies are headquartered in Janesville, Wis., with Korth Transfer’s foodgrade division, which operated as Hagen Trucking until December 2020 when it was combined with Korth’s business, and Hagen Tank Wash located at the site of another converted milk transfer facility Lowell acquired, and Liquid Freight situated in an office down the road.
Korth’s Reedsburg, Wis., terminal still handles dairy hauling for Foremost Farms, along with Organic Valley and Milk Specialties Global, but the family sold the Elkhorn facility, which had served only as a foodgrade tank wash the last five years, in February. Lowell retired in 2015, and Luke exited the business last year.
Between its two divisions, Korth now runs 103 tractors and 167 liquid tank trailers, piloted by 85 company drivers; and Liquid Freight, the group’s liquid bulk brokerage, boasts 175 foodgrade carriers in its network. Combined with their foodgrade wash rack, they’re well-positioned in the middle of the region’s food supply chain, with insights from stakeholders on all sides helping inform their decisions about what comes next.
“I look at the whole supply chain, the portion we work in, and say, ‘How can we lift it up, and do our job to break down barriers, and increase education, awareness and understanding on both sides?’” Johnson said. “And since the logistics company is nicely positioned in the middle, shippers come to us with needs for either foodgrade or dairy movement, and sometimes we have to educate them on the carriers’ challenges. And then sometimes vice versa happens, where—since we’re always working on growing our carrier base—we have to educate the carrier on the challenges facing the foodgrade and dairy producers of the world.”
In today’s world, companies increasingly utilize technology to overcome challenges, increase efficiencies, and enable growth, and Hagen Johnson certainly subscribes to that approach, with its commitment to innovation in cleaning, dispatching, and product tracing inspiring the next stage of its mission to “Move Food Forward.”
“For too long, the foodgrade and dairy industries have been behind on the technology piece of this business, and that’s something we’re working to address,” said Brandon Wollin, Liquid Freight business development manager and Korth Janesville GM. “We have customers who bring liquid product in, and ship finished product out in reefers or dry vans, so we’ve had them say, ‘Do you use this system?’ or ‘Do you know about this technology, or that piece of software?’ and that only happens two or three times before you feel it something’s you should address. So I don’t think the foodgrade tanker industry has come along with the rest of the freight industry, and it’s important to us that it does. We can say Liquid Freight is the subject-matter expert in the foodgrade tanker world—and we can also do something about it to make sure we are.”
Kosher certification
Hagen, which already was performing kosher and reefer washouts, began offering kosher tanker certifications in February. The work to build and refine a process worthy of cRc approval began six months earlier. “It’s something that, if done incorrectly, could have potential ramifications in the form of food recalls,” Wollin said.
The Hagen Wash Remote Kosherization Protocol includes two wash cycles—a prewash, followed by the hot kosherization wash that must take place at least 24 hours after the first dairy or caustic wash, and run longer at higher temperatures than those of a standard kosher wash. Each step along the way must be documented with time- and date-stamped photos that are taken within a “reasonable amount of time of each other.”
Kosher wash pictures must show the seals affixed to the trailer prior to the wash; the trailer bay with trailer number clearly displayed, and the computer display clearly indicating the type of wash, during the cycle; and a full, dated circle graph while it’s in the recorder, and the seals affixed to the trailer, after cleaning is complete.
The new offering adds flexibility as a wash facility, and as a carrier. Customers who already come to them for washes, or who are transitioning to hauling new products, now can have kosher certifications performed without an additional trip, or waiting for an available rabbi, who typically can only certify a limited number of tankers per visit. And Korth can certify its new tankers, or secure a backhaul, even if it nullifies prior certification.
“In the kosher world of Korth, since we’re foodgrade kosher, if we were at a facility, and there was an opportunity for a kosher dairy backhaul, or a regular dairy backhaul, there are certain instances where that could change our kosher classification on that trailer,” Johnson said. “Now that’s not necessarily a barrier for us anymore.”
TMS as a service
Liquid Freight’s path to a transportation management system (TMS) SaaS began in 2014, when, by customer request, the Hagen Johnson group purchased a TMS software package from Trimble’s TMW Systems to deliver greater visibility for its carrier customers, through the brokerage, and its own trucking operations.
By September 2016, Liquid Freight was so adept at utilizing the system, that it received TMW’s Innovator of the Year award at that year’s in.sight User Conference in Nashville, Tenn., for its integration of TMW’s software with liquidfreight.com. But while the group still uses TMW software in Korth’s dairy-hauling division, they eventually decided the brokerage needed a system tailor-made for foodgrade brokers.
“Us uncoupling from Trimble and TMW was really the impetus for being able to create the software as a service that we’re working on today,” said Jared Wallace, Liquid Freight’s director of business and technology.
“It allowed us to break off and be in full control of our own development cycle.”
With development help from Madison, Wis.-based Earthling Interactive, Wallace and his team disconnected liquidfreight.com from Trimble’s ecosystem, and built a new infrastructure within the existing web environment, so the experience of its carriers never changed, as far as access, and look and feel. The new, proprietary TMS launched internally in 2019. “The biggest thing for us was being in control of our own destiny,” Wallace said.
After seven months of company use, Liquid Freight started working on an SaaS offering, again at the request of a key carrier customer that also had a brokerage division. “They said, ‘Hey I love interacting with your system, it’s so easy, I wish I could put all of my loads in there, and not just the loads that I get from you.’” Wallace recalled. “We laughed at it at first, and thought, ‘Yeah, that’d be nice,’ but they didn’t let up.”
The new SaaS offering for brokers launched last year. It’s targeted at smaller liquid freight brokers contracting approximately 200 loads per week. “The shortest development path was to make what we have available to other third-party users, allowing them to contract with their carriers, the same way we contract with ours,” Wallace said.
Now Liquid Freight is testing a TMS service for small carriers looking to transition away from spreadsheets, or paper and pencil. Work began in March, with the goal of launching in the fourth quarter. “We’re not trying to solve every problem for everybody,” Wallace said. “We’re not trying to be your planning worksheet, accounting software, and dispatch software. We’re trying to provide a place to manage the loads that you have, all in one place, while understanding that everybody has a different process.”
Added Wollin: “Because it was born out of system that was developed for a tanker freight broker, it’s automatically more user friendly to a tanker hauler as well. There’s not really anything else on the market like it.”
Blockchain grant
The blockchain project grew out of the need for a more secure way of tracking washes and prior products hauled, so food producers gain greater assurance in the integrity of their products during transport, and rabbis are more confident that kosher-certified carriers actually are following kosher law. “Other than wash tickets, and our own internal tracking, there’s not really a way to prove that as of right now, which is kind of crazy considering that it’s food that everybody is eating, so it’s very important,” Wollin said.
The USDA grant made Liquid Freight’s pursuit of a blockchain system possible.
“We were talking about things we wanted to do, but money was always in our way,” Wallace said. “We’re not an organization with bottomless pockets. We’re boot-strapping a lot of our development projects off the revenue and profits of our brokerage operation. So when we start talking about projects that are going to cost $100,000 or more, that’s a lot of money to spend on a ‘what if’ and ‘I hope it works.’
“That’s the other reality: If you don’t have something you’re 100% sure will be adopted, there’s a lot of risk involved.”
The grant application process started last summer, when the group learned of the existence of government-sponsored innovation projects from a consultant. After reaching out to a grant-writing expert who listened to their idea and confirmed its potential for investment, they set out to define the project’s goals.
“It was a pretty grueling couple of months that we spent focused very intently on the writing of this application, and the justification for the work we wanted to do,” Wallace said. Liquid Freight submitted its application in November, and found out a few months later it’d been approved. But they couldn’t move forward on the project until the official USDA announcement June 30, when the funds were released.
“There was the initial reaction of, ‘Holy cow, it happened,’” Wallace said. “And then there’s the excitement. This is pretty awesome. It took a lot of work to get to this point, and now somebody has recognized that we’ve got a great idea. But then it was also, ‘OK, will now we have to deliver this. Now it’s real. It’s not just something on paper anymore.’”
Work now is in the infancy stage. The goal is to have a proof of concept by the time the Phase I grant term expires Feb. 28, 2022, so the company can apply for Phase II funding focused on commercialization in the same year. Phase I objectives include selecting a blockchain/distributed ledger system and modeling transaction workflows, prototyping a mobile app or functional wireframe that implements that workflow, and testing the proof-of-concept process in a commercial setting to validate its benefit in food safety.
“A loading facility should be able to look at an app, and know, beyond a shadow of a doubt, that tank was washed up to their standards, and right now what we oftentimes see is there’s a piece of paper that’s been hand-written, and they forgot to check the box that says this was a kosher wash, which is what the requirement was,” Wallace said. “So now you’ve got people who don’t trust the information they’re being shown, and you’re causing tankers to be rejected, you’re causing delays; and in some cases, if the tanker was loaded, and now it’s the unloading facility that is validating the information, you could have a situation where product ends up being dumped—simply because somebody forgot to check a box.”
A blockchain system, comprised of “immutable” records inextricably linked through multiple servers, also would prevent dishonest parties from falsifying information, “leveling the playing field” for all food chain stakeholders.
“These systems are not built as databases,” Wallace explained. “Blockchain is not a database. Blockchain is, effectively, an operating system, and it’s something where you’ve got multiple nodes that verify the validity of the information being added to the chain. And it’s written with permissions that make the information unalterable.”
Cleaning upgrade
The group also is planning a significant investment in Hagen’s tank wash facilities, and pursuing additional certifications for its wash processes, which they hope to secure within the next year. The company’s current focus is on performing kosher and caustic washes, so Johnson’s goal is to add a second wash system, with separate infrastructure, that would enable expansion of their foodgrade cleaning capabilities.
“As much as we love to be able to do kosher washes, there are certain products for which we are handcuffed, because if we do a kosher wash, we can’t do an additional wash,” Johnson said. “There are products that would degrade our system, if we were to wash them there, and we want the flexibility to wash additional products. So the idea is to have one system set up as kosher, and another that’s non-kosher, or a different status of kosher.
“So the next stage of our growth is to look into the future and start transforming Hagen into the things it should be, instead of growing as business dictates.”
