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Where the 3PL Action Is: A Scan of Logistics Providers & Services Worldwide

Europe continues to fluctuate in and out of recession with ongoing economic austerity which is negatively impacting its output. Based upon its 2012 regional revenue, Armstrong & Associates estimates that 3PLs operating in Europe have penetrated 23 percent of the total potential market, so the trend to outsource logistics functions to 3PLs continues to provide for growth over and above the overall economy. The best European-based 3PLs have made acquisitions to globalize their operations and participate in developing markets with higher rates of growth.

Where the 3PL Action Is: A Scan of Logistics Providers & Services Worldwide

North America is benefiting from an improving U.S. economy with increasing manufacturing levels, the nearshoring of some manufacturing to Mexico, and newly addressable oil and gas operations in Canada and the U.S.  Consumers in the U.S. bounced back from the great recession of 2009 and started to spend more especially on large ticket items.  All of these factors are driving an improved 3PL market.

The geographic region with the highest 3PL revenue spend and the highest 3PL growth rates is Asia Pacific, where growth has traditionally been driven by companies outsourcing or offshoring manufacturing to lower-cost countries.  While this trend still continues in Myanmar, Malaysia, Indonesia, Vietnam, Cambodia, and to a lesser extent in China, Thailand, the Philippines and Singapore, increasing domestic consumption and demand for products are driving the need for modern distribution networks in the Asia Pacific region.  The emphasis is shifting away from export trade and ocean or airfreight forwarding to intra-regional ground distribution.  3PLs providing value-added warehousing and distribution services in these countries are experiencing significant growth.

China accounts for 48.8 percent of all Asia Pacific 3PL revenues.

Our estimate of 3PL penetration of the total potential U.S. 3PL market is 21 percent, up from 10 percent in 2002.  This compares to current 3PL market penetration rates of 23 percent in Europe and only 17 percent in China.  As a result, the underlying structural market dynamics are good and will support the trend for continued outsourcing to 3PLs in Asia.  In combination with its above-average economic growth, we anticipate Asia to continue to realize above-average growth rates for third-party logistics.

Basics of the Global Third-Party Logistics Market

The breadth of value-added services and capabilities a logistics provider can offer customers differentiates third-party logistics providers (3PLs) from transactional transportation companies and basic warehousing operations.  The table below includes some of the primary 3PL value-added services and capabilities.  The major change since 1995 has been an increase in the complexity and clustering of these services.  Several of the largest 3PLs (DHL Supply Chain & Global Forwarding, DB Schenker Logistics, Kuehne + Nagel, Nippon Express, Kerry Logistics and UPS Supply Chain Solutions) offer a wide array of these services to their largest customers.

The key competitive differentiators between 3PLs include supply chain management systems capabilities, operations management skills, and logistics engineering expertise.  Most tier-one 3PLs have implemented integrated systems platforms to support global transportation and warehouse management operations.  These platforms offer internet visibility and exception handling capabilities combined with transportation management functionality for the daily management of orders, customer inventory, and the optimization of thousands of shipments across large geographical areas.  The same 3PLs can run value-added warehousing operations, perform supply chain network analysis and design, and manage call center and fulfillment operations.  Several 3PLs have expanded to have global scope for all services.  Most often, global 3PL expansions have been through acquisitions.

International transportation management (freight forwarding and non-vessel operating common carrier (NVOCC)) and value-added warehousing and distribution are the key components of global third-party logistics.

International transportation management (ITM) 3PLs have a core competency in freight forwarding and often offer a host of additional value-added services.  They traditionally act as intermediaries arranging for international and related domestic transportation between their customers and transportation providers.  ITM 3PLs arrange and oversee all aspects of the transportation of products and materials, from origin to destination, by ground, ocean, air and rail.  An ITM 3PL will typically arrange to pick up goods from a shipper, consolidate shipments, procure transportation, and provide ancillary value-added services, including preparation and submission of documentation, customs and other clearance processes, and warehousing and auditing of shipments.  In addition, they will have systems for tracking and tracing shipments and automating processes with customs officials.  Typically, ITM operations are non-asset.

Value-added warehousing and distribution (VAWD) 3PLs manage customers' warehousing and related transportation management needs.  These services are typically performed under multi-year contracts in which the 3PLs systems and staff take over responsibility of critical logistics functions.  Responsibilities often include managing and optimizing warehousing operations, transport routes and providers –whether inbound, outbound or dealing with aftermarket returns – kitting and sequencing unassembled parts, providing support during manufacturing, picking and packing finished goods, and providing quality control and other value-added services.  Europeans tend to lump VAWD and the related outbound transportation into “contract logistics.”  Traditionally, this 3PL segment is asset-based.

Traditionally, companies outsourced functions to 3PLs in order to reduce costs, gain operational efficiencies, and focus on core competencies in manufacturing.  Starting in the early 1990s, there was a significant increase in offshoring of manufacturing operations and a shift from domestic supply chains with domestic logistics management needs to global supply chains with international logistics needs.  Doing business globally is more complex and requires increased regional and local market expertise in managing transportation and warehousing, and adhering to governmental regulations.  These increases in supply chain complexity have driven many companies to engage the help of 3PLs as logistics and regulatory specialists.  In turn, 3PLs with expertise in international transportation management and warehousing and distribution are providing economies with the operational “backbone” for global trade.

The Top 25 Global 3PLs by Revenue

The following is not a ranking that suggests one company is better than another; rather, the list is simply based on revenues, which were either reported by the company or are Armstrong & Associates Inc. estimates that have been converted to US$ using the average exchange rate in order to make non-currency related growth comparisons. The figures in parentheses represent gross logistics revenue in U.S. millions.

In addition, a snapshot is provided of many of services these 3PLs focus on.

DHL Supply Chain & Global Forwarding (31,639)

DHL Supply Chain (DSC) is by far the world's largest 3PL and contract logistician. Contract logistics revenues account for just over 50 percent of total revenues. Contract logistics revenues for Exel (DHL Supply Chain - Americas) are $4.5bn with 468 warehouses and 109 million square feet of space. Exel/DSC has operations of virtually every kind on every continent. Current major initiatives involve further expansion in pharmaceuticals. There are major sustainability and environmental efforts. Brazil and Mexico already have large, high-quality operations. DHL Global Forwarding (DGF) grew through the acquisition of highly respected companies like Danzas. DHL and Danzas are strong brands in Europe and Asia. DGF currently has 31 global carrier partners with 81 contracts on a multitude of trade lanes and more than 330 gateway facilities. Its annual volume is 2.8 million TEUs and its LCL is 2 million cubic meters. There are more than 45,000 weekly point pairs for LCL globally. DGF handles 2.2 million shipments annually. DHL's scope allows its customers to more easily adjust vendor supply chains.

Kuehne & Nagel (22,141)

Kuehne + Nagel is one of the world's leading logistics companies providing services at more than 1,000 locations in over 100 countries. It has strong market positions in the sea freight, airfreight, contract logistics and overland businesses, with a clear focus on providing IT-based integrated logistics solutions. With the addition of the ACR group, contract logistics operations more than doubled in 2006 and are 50 percent of net revenues. The industry breakdown for its contract logistics operations is: Retail 35 percent, Healthcare 22 percent, Technological/Telecom 18 percent, Chemicals 7 percent, Automotive 6 percent, Fulfillment 5 percent, Misc. 5 percent, and Services 2 percent. Kuehne + Nagel’s North American logistics network totals 12 million square feet of space across 50 DCs. There are 11 DCs in Canada (Toronto, Montreal, Calgary and Edmonton), 30 single- and multi-client DCs in the U.S., six facilities in Mexico, and four Mexican border locations for transborder/customs services. Americas business for Kuehne + Nagel is 16 percent of net revenues. Net revenue was $1bn in 2012 for the Americas with over 50 percent from freight forwarding. Kuehne + Nagel has developed its own land transport management and trucking network for Europe. In 2011, the globally operating Kuehne + Nagel maintained its growth momentum in a challenging market environment and achieved good results. Net earnings were slightly above the previous year and reached CHF 606 million – a new record high. In 2011 and 2012, Kuehne + Nagel outpaced the volume growth of the market. Sea freight and air freight business units led the way. In both areas, high internal productivity and strict cost management compensated for the costs of investments made in technology and product development and strengthening of niche segments. Leveraging its forwarding and contract logistics capabilities, Kuehne + Nagel has built good global spare parts logistics and cold chain/pharmaceutical capabilities.

Nippon Express (20,321)

Nippon Express covers Japan. It’s Japan’s largest domestic transportation company. Its former Pelican operation, which was acquired by Japan Post, is the largest package operation in Japan. About 80 percent of Nippon's revenues are from its domestic Japanese operations. Its international operations in forwarding and contract logistics are tied to its Japanese base. In addition to truck-based operations, Nippon provides harbor and ship transportation, air and ocean freight forwarding and warehousing. Its warehousing is tied to its freight forwarding operations. Its current global 3PL revenues (not including domestic trucking and/or freight forwarding services) are $4.6bn in gross revenue and $948m in net revenue.  Its current APAC revenues (not including Japan) are $3.5bn in gross revenue and $792m in net revenue.

DB Schenker Logistics (19,789)

DB Schenker made significant purchases from 2006 to 2008 to double the size of its operations. The purchases include BAX in 2006, Spain-Tir in 2007 and Romtrans in 2008. Romtrans was the largest forwarding company in Romania with $140m in revenue and 1,500 employees. Operations go as far east as Georgia. Spain-Tir had over 700 trucks and 16 million square feet of warehousing space covering the Iberian Peninsula. BAX added significant North American and Asian capacity. German operations, including Europe’s largest rail freight and trucking operations, are over 70 percent of total revenues. DB Schenker’s European trucking by land transport has over 24,000 employees/owner-operators and handled 95 million shipments in 2012. Russian and Eastern European operations are substantial. DB Schenker is significantly expanding its contract logistics operations adding over $100m of new business in 2012. North American contract logistics operations are 42 percent Consumer Goods, 30 percent High-tech, 16 percent Industrial and 12 percent Automotive.

C.H. Robinson (11,359)

C.H. Robinson continues to be the most profitable tier-one 3PL regularly achieving net income margins greater than 20 percent. C.H. Robinson dominates domestic transportation management in North America. While 75 percent of Robinson’s net revenues are truck transportation related, it has solid domestic intermodal, international air and ocean, food sourcing and supply chain management. C.H. Robinson's purchase of Phoenix International has doubled its ocean freight operations to 500,000 TEUs. It has also been expanding its TMC operations which focus on large transportation network management. The TMC is now serving the Americas, Europe and Asia. Employees are highly incented to take care of customers. C.H. Robinson’s Canadian operations developed quickly and it has become a strong player with eight offices for freight brokerage, six for forwarding and three for produce. European operations have also been successful, profitable and expanding in Poland and the Eastern Bloc. They are a natural fit for Europe’s atomized owner-operator based companies. Asian operations continue to grow. Robinson acquired offices in India and continues to make careful purchases of companies with specializations. It has the cash flow to make more. C.H. Robinson's IT and business processes are tightly coordinated. Reporting capabilities provide good operating and profitability control. Ongoing modifications include much stronger and friendlier carrier/capacity management.

Hyundai GLOVIS (9,832)

Hyundai GLOVIS is part of the Hyundai Kia Automotive Group under its parent company Hyundai Motor Co. Ltd. Hyundai GLOVIS gets 85 percent of its revenue from the Hyundai Kia Automotive Group. Besides automotive, it also serves industrial and chemicals customers. It has 6,215,408 square meters of warehousing space (66.9 million square feet). With 37 warehouses, each warehouse is on average about 1.8 million square feet.

CEVA Logistics (9,290)

CEVA Logistics is a top 10 ranked global logistics company and is the world’s largest automotive 3PL. It has a heavy emphasis on manufacturing and is expanding operations in other sectors. Its industry sectors are Automotive 28 percent, Consumer/Retail 23 percent, Technology 20 percent, Industrial 17 percent, Energy 7 percent and Other 5 percent. CEVA operates in over 160 countries. CEVA is very good at value-added support activities. Its Matrix software suite reflects its range of logistics capabilities, including materials management. CEVA’s core services include fulfillment centers, high-velocity cross-docks, sub-assembly, sequencing, dedicated contract transportation, and network designs/redesigns. Its revenue is split between Contract Logistics (54 percent) and Freight Management (46 percent). The Americas account for 30 percent of its revenues, Asia Pacific 29 percent, Northern Europe 24 percent and Southern Europe, Middle East and Africa account for the rest. Private equity owner, Apollo Management, acquired EGL Eagle Global Logistics which was rebranded as CEVA Freight Management in 2007. EGL added global freight forwarding to match CEVA’s high-quality, value-added warehousing, materials management and other contract logistics capabilities. In 2008, CEVA introduced its Century Partnership Account Program for 100 of its key customers selected by its Executive Board. These accounts have a global scope and represent more than half of CEVA’s total business. Apollo has restructured CEVA's debt burden to give it some breathing room.

UPS Supply Chain Solutions (9,147)

Revenues for contract logistics were $2bn in 2012. Net freight forwarding/NVOCC/customs brokerage revenues were $4.7bn. UPS SCS had a profitable year in 2012. UPS SCS contributes $2bn+ per year in package business to its big brother. UPS handles about 500,000 TEUs per year as a freight forwarder. Twelve percent of containers are LCL consolidations; 40 percent are Asia-U.S. Forwarding revenues are 60 percent air and 40 percent ocean. UPS has 1,400 employees involved in customs brokerage: 400 in Aiken, SC, 250 in Cleveland, OH, and 750 in Louisville, KY. The company's DCC was built from the purchases of Rollins and Overnite. More than 95 percent of its power units are assigned to specific customers. Average length of trip is about 400 miles. Customer operations range from 10 to 100 trucks. UPS has redesigned its supply chain operations to concentrate on high-tech, medical and some retail/consumer goods customers. These operations are highly integrated between value-added and package delivery services. Revenues per employee run $175,000 to $180,000.

DSV (7,759)

DSV is primarily a non-asset operation. EBITS are 5 percent. Nearly half of its operations are European over-the-road; its Air & Sea division makes up about 42 percent and Solutions (logistics) accounts for the rest. The DSV Group is Denmark’s second-largest supplier of transport and logistics services. The Group originates in the Nordic countries but has established its own operations in more than 70 countries in Europe, the Far East and the Americas. Via professional and advantageous overall solutions, a worldwide yearly turnover of €6 billion is realized by the Group’s 22,000 employees.

Sinotrans (7,523)

Until recently, Sinotrans Limited was for many years completely protected by People’s Republic of China law from direct foreign competition. In some ways it is a very transparent company. Just over 80 percent of revenues are derived from freight forwarding. Sinotrans handled over 8.2 million TEUs of sea freight, 417,200 metric tons of airfreight and 16.9 million international express documents/packages in 2012. (TEUs are a combination of freight forwarding, NVOCC, booking agent and custom broker activities.) Sinotrans is a joint stock limited company incorporated in the People’s Republic of China on November 20, 2002 with China National Foreign Trade Transportation Corporation (“Sinotrans Group Company”) as its sole promoter. The Company was listed successfully on The Stock Exchange of Hong Kong Limited on February 13, 2003. The Group’s core services are freight forwarding and shipping agency services with support services such as storage and terminal services, marine transportation, trucking and express.

Panalpina (7,060)

Panalpina is a top 10 freight forwarder. It handles more than 1.3 million TEUs per year, more than 800,000 metric tons of airfreight and about 1 million tons of non-containerized break bulk cargo. Its warehousing footprint, including subcontracted space, totals 242 warehouses encompassing 22.3 million square feet of space in 150 countries. Of its total warehousing footprint, 12.9 million square feet and 160 warehouses are currently managed by Panalpina. Panalpina concentrates on nine verticals/segments:  Automotive, Chemicals, Consumer Retail, Fashion, Healthcare, High-Tech, Manufacturing, Oil & Gas, and Telecommunications. Its Oil & Gas operations are primarily in project logistics, which accounts for 10 percent to 15 percent of Panalpina's revenues.

SDV (Bolloré Group) (7,038)

Bolloré Group's logistics business consists of SDV, a France-based transportation and freight forwarding company, which generates 55 percent of revenue, and Bolloré Africa Logistics, a major stevedoring company in Africa, which generates the remainder of logistics revenue. Bolloré Africa Logistics, which has been in Africa for over 50 years, has 250 subsidiaries, about 25,000 employees and operates in 43 countries. SDV is ranked #1 in France by the IATA and #5 in Europe. It operates in 99 countries with a large footprint in Europe, Africa, Asia and the Americas. SDV USA has 15 branches in major U.S. cities and 475 employees.

Toll Holdings (6,760)

Toll’s revenues are 70 percent Australia-based where Toll has one of everything in logistics. Toll’s mission is to be the most successful provider of integrated solutions to the Asian region providing customers with global reach. Its largest vertical industry is Retail/Food & Beverage at 32 percent of total revenues. Sixty percent of SembCorp was acquired in 2006 by Toll, which owns Australia’s largest trucking and distribution operations. SembCorp is one of the largest logistics providers in Asia. SembCorp has extensive Asian operations (16 countries) and a sizable joint venture (St. Anda) in China. Its revenues are split as follows:  Northern Asia 53 percent, Southeast Asia 41 percent and Other 6 percent. In March 2008, Toll took over BALtrans, a large intra-Asian freight forwarder with operations to the United States and Europe. Toll has rebranded BALtrans as Toll Global Forwarding. In February 2010, Toll acquired Summit Logistics International to integrate it into Toll Global Forwarding and expand its capabilities in the Greater China to U.S. trade lane.

Expeditors International of Washington (5,981)

Expeditors is the largest North American-based freight forwarder. Net revenues are $1.8bn and produce a gross margin of 31 percent.  Net revenues are 34 percent airfreight, 42 percent customs brokerage and 24 percent ocean freight. U.S. and Asia business account for 76 percent of revenues. Expeditors is the largest forwarder/NVOCC in the Asia/U.S. lane. It handles over 860,000 TEUs per year globally. Nearly 50 percent are shipped from Asia to the U.S. Expeditors’ European operations are primarily in airfreight and constitute about 13 percent of revenues. Expeditors net revenues run 40 percent high-tech, 33 percent retail, 10 percent pharmaceuticals, 10 percent automotive, 5 percent furniture and 2 percent other. Expeditors limits its participation in value-added warehousing and distribution.

Geodis (5,868)

Geodis is France's largest provider of transportation and logistics services and is one of the top European 3PLs. With third-party logistics revenues of $5.9bn and 15,000 employees, Geodis Group covers more than 120 countries worldwide through its subsidiaries, including Geodis Logistics, Geodis Wilson, and Geodis Supply Chain Optimisation (which grew out of its December 2008 acquisition of IBM’s internal global logistics operations). Most of the Group’s revenue is European-based and accounts for 83 percent (France 53 percent) of total revenue. Geodis Group’s service portfolio has significant coverage in Europe where it has five core businesses: groupage (parcel delivery/LTL express), truckload, contract logistics, freight forwarding and supply chain optimization. Freight forwarding is its largest business segment generating 27 percent of revenue. In Europe, Geodis’ industry segment 3PL revenue breakdown is FMCG/Retail 42 percent, Automotive 17 percent, High-Tech 16 percent, Industrial 11 percent, Healthcare 4 percent, Textiles 3 percent and Other 7 percent. Geodis purchased TNT’s freight forwarder (Wilson) in late 2006. Wilson added significant new coverage for Germany, China, Australia, New Zealand, North America and South America. Geodis is expanding its penetration in the North American market through acquisitions. There are 18 offices, including two for its chemicals specialist operation, Rohde & Liesenfeld. It relies on a strategic alliance with International Paper’s xpedx.

DACHSER (5,670)

DACHSER handled 49.8 million shipments in 2012 – 448,000 airfreight forwarding shipments and 332,000 ocean freight forwarding shipments. Its largest business segment, DACHSER European Logistics, accounted for 60 percent of revenue in 2012. Its other business segments include DACHSER Air & Sea Logistics which accounted for 30 percent of its 2012 revenue and DACHSER Food Logistics, a specialist in warehousing and distribution in the temperature-controlled, non-frozen food segment in Germany, accounted for the rest. Nearly 60 percent of DACHSER’s 21,650 employees are based in Germany. DACHSER tends to be more modern and aggressive than many of its competitors. In December 2012, it acquired Spanish 3PL and LTL specialist Azkar S.A. The following month it purchased Spanish air and sea freight forwarder Transunion S.A.

GEFCO (5,267)

GEFCO is a key partner for car manufacturers, rental firms and distributors of new and used vehicles. Vehicle preparation and distribution is about 40 percent of GEFCO's total revenue. GEFCO transports about 4 million vehicles annually. Fifty percent of vehicles are transported by road, 30 percent by sea and 20 percent by rail. Major automotive customers include BMW, Ford, General Motors, PSA Peugeot Citroën, Renault and Volkswagen. Its other revenue components are consolidation and land transportation, generating 53 percent, and air and sea logistics making up the rest.

UTi Worldwide (4,608)

UTi's net revenues decreased nearly 7 percent last year. UTi’s contract logistics and distribution operations are 55 percent of net revenues. UTi has strong forwarding operations in Asia with an emphasis on airfreight and a major drug distribution operation in South Africa. It is expanding its contract logistics operations in Asia particularly in India, which it has designated for major market expansion. UTi’s roots are in South Africa and it does very well in British Commonwealth countries. It has a major North American effort underway to expand its domestic transportation management operations.

Agility (4,605)

Agility has expanded its business dramatically from its warehousing base in Kuwait. It is a Middle Eastern leader in integrated supply chain solutions and is organized into two major business groups.  Global Integrated Logistics (GIL) is the largest, generating approximately 83 percent of Agility’s revenues. The majority of GIL’s revenues (just under 90 percent) are generated outside of the U.S. It has core competencies in freight forwarding, contract logistics/warehousing, project logistics, fairs & events, and supply chain management 3PL services. Agility provides 3PL services tailored to governments, relief agencies and international institutions worldwide. These services included extensive warehousing and trucking operations in Kuwait to support U.S. Department of Defense distribution needs in the region. The other business unit is Agility's Infrastructure Group, including its Real Estate business, which draws on local insights from Agility’s global network to identify real estate and private equity opportunities in Asia, Africa and the Middle East.

IMPERIAL Logistics (3,800)

IMPERIAL Logistics is one of three divisions of Imperial Holdings Limited and contributes 35 percent of total company revenue. IMPERIAL Logistics has two divisions:  Africa Logistics, which is 53 percent of total logistics revenue, and International Logistics, which is 47 percent. These two divisions combined generated $3.8bn in revenue in 2012 with 28,000 employees. IMPERIAL Logistics continues to grow these business divisions via acquisition. FMCG/Retail contributes 44 percent of Africa Logistics' revenue, followed by Chemicals at 12 percent, Mining at 10 percent, Fuel/Gas at 7 percent, Building Materials 7 percent, Wood/Paper 6 percent, Agriculture 3 percent, Steel/Metals 3 percent, Pharma/Health 2 percent and Other 6 percent. IMPERIAL International Logistics is headquartered in Germany and its business units include:  Panopa, Neska, Imperial Shipping Group, and Brouwer Shipping and Lehnkering.

Hellmann Worldwide Logistics (3,593)

Hellmann Worldwide Logistics is a privately held German company which continues to be competitive against the big guys. It has good freight forwarding and contract logistics operations. Air and Sea freight are just over half of the business. Coverage in Asia and China is extensive. Its regional breakdown is Europe 56 percent (Germany 45 percent), Asia 15 percent, the Americas 19 percent (U.S. 12 percent), and Oceania, Middle East and Africa 10 percent.

Yusen Logistics (3,526)

Yusen does not have the kind of strong domestic base in Japan that characterizes Nippon and others. It has aggressively grown international markets and expanded through organic growth and acquisitions. It started in 2001 by combining purchases and adding a transportation and warehouse network to expanding contract logistics and airfreight operations. Contract logistics and distribution are strong in Europe. In the Americas, seven companies have been combined to create a broad suite of logistics services offered in North, Central and South America. Automotive, industrial and retail/consumer goods verticals are emphasized. Its automotive logistics includes roll-on/roll-off, JIT and parts distribution. Nippon Cargo Air is now an NYK-owned entity and the Americas region has its own airfreight forwarding capability.  Japan, Europe and the Americas each account for about 22 percent of the business, South Asia and Oceania make up 18 percent and East Asia makes up the remaining 16 percent.

Damco (3,272)

Damco is a third-party logistics provider specializing in customized freight forwarding and supply chain solutions. The company has 11,300 employees in over 300 offices across 90 countries and agents in 30 more countries. In 2012, the company had a net turnover of $3.3bn, managed more than 2.7 million TEUs in ocean freight and supply chain management volumes, and air-freighted more than 210,000 metric tons. Damco is part of the A.P. Moller - Maersk Group.

Kintetsu World Express (3,155)

Kintetsu World Express's (KWE) largest operations within its global network are in Japan and China, with over 100 offices located in each of those countries. Nearly 57 percent of its business is airfreight-based. Ocean freight and logistics account for about 33 percent. Globally KWE handles over 1 million metric tons of airfreight and over 550,000 TEUs of ocean freight annually. KWE has a host of strategic joint ventures and affiliated companies. Its primary verticals are automotive, high-tech, and healthcare. It has 138 logistics warehouses outside Japan, with 6.4 million square feet (warehouse space in Japan is over 2.6 million square feet). Fifty-eight of those warehouses are in China. Japan generates 40 percent of the business, the rest of Asia and Oceania generate 39 percent, North America 12 percent, Europe and other regions account for the rest. KWE listens to the “Voice of the Customer” and promotes long-term collaborative business partnerships. It’s a quality management success story.

Hub Group (3,124)

Hub Group is the largest intermodal marketing company (IMC) in the United States and one of the largest truck brokers. It uses its network to access containers and trailers owned by leasing companies, railroads and steamship lines. On a daily basis, it controls between 23,000 and 24,000 containers. Of those, 8,400 are owned and 7,660 are rented from either Norfolk Southern or Union Pacific. Hub does a significant amount of business with the UP. The UP handles 90 percent of all western U.S. loads for Hub. In April 2011, Hub acquired Mode Transportation. Mode Transportation was formerly known as Exel Transportation Services, an operating unit of Exel – a leading contract logistics provider in the Americas and part of the supply chain division of Deutsche Post DHL. The Hub segment includes all business other than Mode. Hub’s subsidiary Comtrak Logistics is a transportation company with services that include primarily rail and international drayage for the intermodal sector. Challenge Transportation, an intermodal drayage trucker, and Domestic Transport, an intermodal drayage and truckload services provider, were also acquired in 2011 to expand Comtrak's drayage network and offerings. Approximately 10 percent of Hub's revenues are from Unyson Logistics, a network management 3PL and cross-dock specialist, while 21 percent of revenues are from its expanding truck brokerage.

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