From The Top: In a Time of Consolidation, Mid-Sized Forwarders & Logistics Providers Can Compete And Succeed Against Global Players
The recent spate of mergers and acquisitions among logistics service providers would appear to signal an end to the mid-sized player. In fact, the opposite is true, according to Marcia Dorer, Director of Business Services with Silver Bullet Technologies. There's no question that the big providers are getting bigger. Names like DHL, Schenker and FedEx are constantly extending their reach by launching new services or absorbing local entities. Still, says Dorer, there are thousands of small to mid-sized forwarders operating in the U.S. today. In many instances, the big guys can't provide the same level of service. The key is information. Today, a mid-sized entity can supply its customers with real time information on the location and status of shipments that only large enterprises could offer a few years ago. It can provide a more personal touch on the customer-service front. And it can offer expertise in industries that face unique logistical challenges. Some of the strongest opportunities for smaller providers exist in such niches as high-fashion apparel, luxury automobiles and consumer electronics, as well as on select trade lanes with unusual requirements. They can also perform specialized tasks such as project forwarding, involving huge pieces of equipment and the need for flawless sequencing of shipments. Dorer says technology is no longer a barrier to keeping pace with the largest providers; mid-sized forwarders today can afford the information systems that allow for pinpoint tracking and tracing, document scanning and instant response to customer enquiries. Key data on the movement of goods across air, ocean, rail and truck can be automatically entered into the system, generating alerts when necessary. Most of all, says Dorer, the new applications can automate business rules to the level of management processes so that data on shipments, carriers and customs can be utilized by shippers in strategic planning. All of those capabilities are available to smaller logistics providers who are open to new technologies and processes, says Dorer. They have to have that vision, she adds. Otherwise, they will be absorbed.
Apollo Management Wraps Up Acquisition of TNT Logistics With Name Change to CEVA Logistics
The TNT Logistics unit, recently sold by TNT NV to Apollo Management LP, has been renamed CEVA Logistics. The corporate re-branding will be instituted throughout the company's 26-country service network. CEVA is said to be the world's second-largest logistics company. With a turnover of $4.6bn, it employs 38,000 people and operates more than 7.4m square meters of warehouse space. The action completes our transition from a company division to a stand-alone logistics company, said CEVA chief executive officer Dave Kulik. The re-branding program, including a new corporate logo, will be completed in 2009. CEVA's services include supply-chain design, implementation and operations on a national, regional and global scale. Industries served include automotive, high-tech, electronics, consumer goods, and publishing and media. Apollo purchased the logistics division of TNT earlier this year, for a price of $1.89bn. TNT retains a 5-percent equity stake in the company. Apollo is a U.S.-based private equity firm, with offices in New York, London and Los Angeles.
Con-way, General Motors Set a Price for Automaker's Buyout of Vector SCM
Con-way Inc. and General Motors Corp. have agreed on a value of $96.4m for Vector SCM, LLC, the contract logistics unit that GM is acquiring in full from Con-way. Vector was set up as a joint venture between GM and Menlo Worldwide, LLC, a subsidiary of Con-way, in December of 2000. The entity was formed to provide dedicated supply-chain services to the automaker. The contract gave GM the right to buy out Menlo's interest in the venture. The two sides relied on their own financial advisers, as well as an independent third party, to set the final valuation of Vector. Under the terms of the deal, Con-way will receive $84.8m for Menlo's interest in Vector, with the transaction to be completed on Jan. 5, 2007. In recent years, Menlo has sought additional supply-chain business under the Vector banner; it will retain all contracts with non-GM entities that were being served by the unit. Con-way Inc., Menlo's parent, is a $4.2bn freight transportation and logistics provider, with interests in trucking, freight brokerage, contract logistics, warehousing, supply-chain management and trailer manufacturing.
DHL Unveils North America Trade Lane Initiative, Creates SOA Logistics Platform With IBM
DHL has launched a North America Trade Lane Initiative, with the goal of streamlining cross-border shipping. The effort is aimed at U.S., Canadian and Mexican companies in the region's $8.8bn express and ground parcel shipping market. It involves numerous enhancements to DHL facilities, fleet and other infrastructure, including the creation of new international gateways and expanded Border Operating Centers (BOCs). The latter will streamline and expedite cross-border service in express and ground-parcel service within North America, DHL said. The BOCs will feature advanced-technology inspection equipment, fast-track customs clearance systems and specially trained staff. The centers will be set up in Tijuana, Juarez, Nuevo Laredo, Reynosa and Matamoros, Mexico, with corresponding facilities across the U.S. border. DHL will staff the centers with bilingual customer-service representatives. In another company development, DHL Exel Supply Chain, the logistics unit of parent company Deutsche Post World Net, has joined with IBM in developing a new warehouse-management system based on service-oriented architecture. The new service, known as system platform logistics, with go into operation in mid-2008 at 11 DHL locations. The platform is being developed for Karstadt Warenhaus GmbH, the logistics arm of Karstadt/Quelle AG, which was taken over by DHL Germany in 2005.
North American Trade Lane Initiative: http://www.dhl-usa.com/
SOA Logistics Platform: http://www.dpwn.de/
Transplace Highlights Strategic Carriers Through New Merit Program
Transplace, a third-party logistics service and software provider, has devised the Transplace Carrier Merit Program to showcase carriers that are offering superior service to its shipper customers. According to the company, the effort will identify the strongest opportunities for capacity utilization with contracted vendors, while enhancing the relationship between Transplace and the carriers that make up its service network. The program allow the provider to implement carrier-performance evaluations and metrics, drawing on an database of carrier and industry trends, capabilities and financials. It will also boost the ability of Transplace customers to deploy best practices in strategic sourcing. Carriers are placed in three tiers, according to their ability to meet Transplace's goals for service and collaboration. The highest benefits will accrue to the top tier of carriers, who will be awarded Platinum status. In 2006, 25 carriers were eligible for that designation. Other levels of recognition are the Gold and Bronze Seals of Approval. The Transplace network moves some 2.4m shipments per year.
Calendar: Upcoming Events of Interest to Logistics Providers
Interlog Winter 2007,
Lake Buena Vista, Fla.,
Jan. 29-Feb. 2, 2007,
4th Annual Reverse Logistics Conference & Expo,
Las Vegas, NV,
Feb. 5-7, 2007,
Transportation & Logistics Council Annual Conference,
Lake Buena Vista, Fla.,
Apr. 16-18, 2007,