Executive Briefings

SPECIAL ISSUE: 100 Great Supply Chain Partners

Newly Recreated Horizon Lines Wins Big Plaudits

Earlier this year, the containerized ocean trade routes from the continental U.S., Alaska, Hawaii, Guam and Puerto Rico that Sea-Land and its parent company, CSX Lines, had operated for years was sold for $30m to a private equity firm and renamed Horizon Lines. While many shippers were nervous about this change of ownership to the relatively unfamiliar Carlyle Group, readers of GL&SCS apparently are very happy with the result. Horizon Lines received more nominations than any other single company.

"Horizon Lines is always on time," says Lenny Keegan, logistics manager for Able Sales. "And there is no substitute for reliability."

Gina Braat, logistics manager for Frito Lay North America, also compliments Horizon for its on-time vessel arrivals and departures. She is especially impressed with its "excellent web interfaces, great sales and customer service support."

Horizon was praised for its "great supply of well-maintained equipment throughout the U.S.," by a director for a household goods company that also provides 3PL services.

"They are capable of serving numerous inland points with their truck and rail counterparts," he says. "Not only do they maintain a stringent sailing schedule, but they do an outstanding job synchronizing their entire transportation network."

Perhaps Horizon's greatest praise comes from Pacific Alaska Forwarders, one of Horizon's largest customers in the Alaska trade. No less than four senior managers gave Horizon high praise for its dependability, attention to customer service and technological support. Pacific Alaska Forwarders handles everything from large movements of construction materials to consumer goods for retailers such as J.C. Penney and McDonald's, as well as consolidating shipments of general commodities for small shippers. The forwarder has facilities and terminals and equipment in the Seattle/Tacoma port areas as well as in Alaska. While Pacific Alaska provides end-to-end logistics services for its customers, including booking, tendering, documentation, loading and consolidation, from the point of view of Horizon Lines, it is the customer. In fact, it is one of Horizon's top five accounts on the Alaska routes.

"We are excited about Horizon Lines becoming a private company, as opposed to small subsidiary of CSX," says J. Alain Smith, CEO of Pacific Alaska Forwarders. He believes the change is good for the carrier and for the customer. Smith says large, publicly traded companies tend to make decisions on what is best for the stock price in the near term. Now that the Carlyle Group owns the carrier, the focus is on customer service and operations improvement. Each division - Alaska, Hawaii, Guam and Puerto Rico - is individually operated as its own profit center, so each has to support itself.

"We have seen a tremendous improvement in service levels to Alaska, their delivery times, ship arrivals and operational efficiency," says Smith. "That improvement helps us, because moving our trucks in and out of the terminal areas quicker provides better equipment utilization, as well as better inventory management for our customers."

Because Horizon operates only to and from U.S. points, it is regulated by the Jones Act, which can add labor and equipment costs that drive up tariff-based rates. At least for the Alaska trade, Smith says Horizon is extremely competitive.

"Very little freight moves under tariff," he says. "In the Alaska market, 90 percent of the traffic is off-tariff because of competition from barge and truck operators."

Horizon also receives rave reviews for its Net Captain web site, which is powered by a sister division called Horizon Services.

"The web site has cut out most of the paperwork flow," says Smith. "We are almost completely paperless now in terms of exchanging information, invoicing, tracing, booking. We know exactly what is on the ship, so customer inventory accuracy is way up. Our phone work has been cut at least 90 percent because everything is done via the internet. We still pay via EDI, but any of the smaller customers can pay online. It is tremendous."

Pacific Alaska Forwarders is among a number of service providers that are considering buying a version of the online system through the Horizon Services division for use with their customers.

Earlier this year, the containerized ocean trade routes from the continental U.S., Alaska, Hawaii, Guam and Puerto Rico that Sea-Land and its parent company, CSX Lines, had operated for years was sold for $30m to a private equity firm and renamed Horizon Lines. While many shippers were nervous about this change of ownership to the relatively unfamiliar Carlyle Group, readers of GL&SCS apparently are very happy with the result. Horizon Lines received more nominations than any other single company.

"Horizon Lines is always on time," says Lenny Keegan, logistics manager for Able Sales. "And there is no substitute for reliability."

Gina Braat, logistics manager for Frito Lay North America, also compliments Horizon for its on-time vessel arrivals and departures. She is especially impressed with its "excellent web interfaces, great sales and customer service support."

Horizon was praised for its "great supply of well-maintained equipment throughout the U.S.," by a director for a household goods company that also provides 3PL services.

"They are capable of serving numerous inland points with their truck and rail counterparts," he says. "Not only do they maintain a stringent sailing schedule, but they do an outstanding job synchronizing their entire transportation network."

Perhaps Horizon's greatest praise comes from Pacific Alaska Forwarders, one of Horizon's largest customers in the Alaska trade. No less than four senior managers gave Horizon high praise for its dependability, attention to customer service and technological support. Pacific Alaska Forwarders handles everything from large movements of construction materials to consumer goods for retailers such as J.C. Penney and McDonald's, as well as consolidating shipments of general commodities for small shippers. The forwarder has facilities and terminals and equipment in the Seattle/Tacoma port areas as well as in Alaska. While Pacific Alaska provides end-to-end logistics services for its customers, including booking, tendering, documentation, loading and consolidation, from the point of view of Horizon Lines, it is the customer. In fact, it is one of Horizon's top five accounts on the Alaska routes.

"We are excited about Horizon Lines becoming a private company, as opposed to small subsidiary of CSX," says J. Alain Smith, CEO of Pacific Alaska Forwarders. He believes the change is good for the carrier and for the customer. Smith says large, publicly traded companies tend to make decisions on what is best for the stock price in the near term. Now that the Carlyle Group owns the carrier, the focus is on customer service and operations improvement. Each division - Alaska, Hawaii, Guam and Puerto Rico - is individually operated as its own profit center, so each has to support itself.

"We have seen a tremendous improvement in service levels to Alaska, their delivery times, ship arrivals and operational efficiency," says Smith. "That improvement helps us, because moving our trucks in and out of the terminal areas quicker provides better equipment utilization, as well as better inventory management for our customers."

Because Horizon operates only to and from U.S. points, it is regulated by the Jones Act, which can add labor and equipment costs that drive up tariff-based rates. At least for the Alaska trade, Smith says Horizon is extremely competitive.

"Very little freight moves under tariff," he says. "In the Alaska market, 90 percent of the traffic is off-tariff because of competition from barge and truck operators."

Horizon also receives rave reviews for its Net Captain web site, which is powered by a sister division called Horizon Services.

"The web site has cut out most of the paperwork flow," says Smith. "We are almost completely paperless now in terms of exchanging information, invoicing, tracing, booking. We know exactly what is on the ship, so customer inventory accuracy is way up. Our phone work has been cut at least 90 percent because everything is done via the internet. We still pay via EDI, but any of the smaller customers can pay online. It is tremendous."

Pacific Alaska Forwarders is among a number of service providers that are considering buying a version of the online system through the Horizon Services division for use with their customers.