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On the positive side, third-party logistics revenues in North America, driven by domestic growth, increased 11 percent in 2011. Dedicated contract carriage, a mature segment of the industry, came back to life. Domestic transportation management/freight brokerage also hit double digits, and value-added warehousing and distribution shook off much of its tight inventory yoke. Admittedly, the picture for international transportation management wasn't quite as rosy. That's because in the second half of 2011 ocean and airfreight volumes slumped.
So what's the expectation for 2012? Armstrong & Associates sees more modest, single-digit growth - more than 5 percent - as the U.S. economy improves by 2.5 percent to 3 percent.
Perversely, third-party logistics and transportation spend will gain in the U.S. because of the "hold" put on the Keystone XL Pipeline project that would link oil-sands production in Canada to refineries in the southern United States. Rail and truck activity will increase as substitutes as they have with the Bakken Shale petroleum deposits of North Dakota and the natural gas recovery from the Marcellus Shale wells in New York and Pennsylvania. Rail and truck equipment is already in short supply in these areas.
Outside of the U.S., activity in Asia Pacific, or APAC, is still the main global story. APAC has the largest ocean freight market with 25 million TEUs - 40 percent of global volume, according to Morgan Stanley. Also, the International Air Transport Association estimates that APAC has 41 percent of airfreight tonnes. The upside potential is huge for India, China and Southeast Asia. The largest opportunities are domestically in China and India. China has to manage and liberalize while avoiding hyperinflation. India needs to make dramatic structural changes to open its markets and cut corruption. Unfortunately, major reform of corruption recently failed in India. Indonesia, Vietnam, Cambodia and Thailand are moving. As a sign of the times, we have been recently dealing with 3PL situations in China, India, Pakistan and Sri Lanka.
For Europe, things are not nearly as bright. Outside of Scandinavia and Germany, the outlook for 2012 might even be described as bleak, and 3PLs will be challenged to grow. That means that major logistics services providers, such as DHL, DB Schenker, Kuehne & Nagel and Panalpina, will have to look elsewhere for gains.
In Latin America, Brazil leads the surge. Nevertheless, Colombia, Chile and Ecuador are moving forward. All have international structural problems that offer significant 3PL opportunities. Mexico is sure to keep gaining, despite its drug-related bloodbath, because of near-sourcing advantages for U.S. markets.
In the following section, we provide compact descriptions of the Top 50 3PLs. This is not a ranking, which suggests one company is qualitatively superior to another. Rather, the highlights are intended to showcase the industries and areas that each company focuses on.
The largest providers are global supply chain managers. They have tremendous scale features in organization and technology. Most have evolved, standardized solutions for major industries. These standard solutions can be tweaked and implemented quickly. All have established quality and process improvement programs. In addition, they are all culturally adaptive.
The regional operators who round out the Top 50 are very good at what they do. For example, GENCO ATC, Menlo Worldwide Logistics, Penske Logistics and Ryder System do not have global reach. At the same time, they all have international operations, Class-A capabilities and best-in-class operations.
Whatever your logistics need, there could be a great 3PL in your future.
Armstrong's Top 50 3PLs
DHL Supply Chain & Global Forwarding
DHL Supply Chain (DSC) is by far the world's largest 3PL and contract logistician. Contract logistics accounted for 53 percent of its gross logistics revenues for 2010. The revenues for Exel (DHL Supply Chain - Americas) contract logistics are $4bn with 491 warehouses and 95 million square feet of space. Exel/DSC has operations of virtually every kind on every continent. Current major initiatives involve expansion in pharmaceuticals and sustainability.
DHL Global Forwarding (DGF) grew through the acquisition of highly respected companies like Danzas. DHL and Danzas are strong branches in Europe and Asia. DGF currently has 31 global carrier partners with 81 contracts in a multitude of trade lanes and more than 330 gateway facilities. Its annual volume is 2,772,000 TEUs and its LCL is 2,000,000 cubic meters. There are more than 45,000 weekly point pairs for LCL globally. DGF handles 2,200,000 shipments annually. DHL's scope allows its customers to more easily adjust vendor supply chains.
Kuehne + Nagel
Handling more than 2.9 million containers per year, Kuehne + Nagel is the second-largest ocean freight forwarding operation It is also the fifth-largest airfreight forwarder. With the addition of the ACR group, contract logistics operations more than doubled in 2006 and are now 52 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; Miscellaneous, 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 (in 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 14 percent of net revenues. Net revenue was $826m in 2010 for the Americas with more than 50 percent from freight forwarding. Kuehne + Nagel has developed its own land transport management and trucking network for Europe.
DB Schenker Logistics
DB Schenker made significant purchases from 2006 to 2008 to double the size of its operations. The acquisitions 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 more than 700 trucks and 16 million square feet of warehousing space covering the Iberian Peninsula. BAX added significant capacity in North America and Asia. The gross revenues are each over $2.5bn - the Americas (6.5 percent of total revenue) and Asia (5.2 percent of total revenue).
German operations, including Europe's largest rail freight and trucking operations, are 70 percent of total revenues. DB Schenker's European trucking by land transport has 23,000 employees/owner-operators and handled 81 million shipments in 2010. Russian and Eastern European operations are substantial.
DB Schenker is significantly expanding its contract logistics operations. Dave Bouchard was added to lead the Americas effort. Detlef Trefzger leads global contract logistics and is spearheading expansion efforts.
North American contract logistics operations are 42 percent Consumer Goods; 30 percent High-Tech; 16 percent Industrial; and 12 percent Automotive. DB Schenker is now second among world airfreight forwarders (1.2 million metric tons), third in ocean freight (1.6 million TEUs) and fifth in contract logistics.
Nippon Express Co. Ltd.
Nippon Express is comprehensive in its coverage of Japan. Its the country's largest domestic transportation company, and its Pelican Express operation is the largest package operation in Japan. About 90 percent of Nippon revenues are from 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, airfreight forwarding and warehousing. Freight forwarding operations and warehousing are tied together.
Profits for Nippon Express Co. soared 134 percent to $128m in the first half of fiscal 2011 despite flat revenue, according to a number of reports. Revenue dipped 0.3 percent year over year to $10.3bn between April, when the fiscal year started, and September. Operating profit fell 7.3 percent to $179m. Like many companies, Nippon's operations were hampered by the devastating floods in Thailand.
The major question for Nippon is how much will it grow internationally?
C.H. Robinson Worldwide
Here's a positive statistic: C.H. Robinson continues to be the most profitable tier-one 3PL regularly achieving net income margins higher than 20 percent. C.H. Robinson dominates domestic transportation management in North America. While 73 percent of the company's net revenues are truck transportation related, it has solid domestic intermodal, international air and ocean, food sourcing, fuel card services and fuel management, and supply chain management. 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.
The provider'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 and profitable. They are a natural fit for Europe's atomized owner-operator based companies. Asian operations continue to grow. Recently, Robinson acquired offices in India and continues to make careful purchases of companies with specializations and has access to the free 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.
CEVA Logistics is one of the world's largest logistics companies and has been the world's largest automotive 3PL. It has a heavy emphasis on manufacturing and is expanding operations in other sectors. CEVA's industry sectors are Automotive, 25 percent; Technology, 24 percent; Consumer/Retail, 20 percent; Industrial, 15 percent; Energy, 6 percent; and Other, 10 percent.
CEVA operates in more than 100 nations, and the CEVA operations Armstrong & Associates have visited get top marks. CEVA is very good at value-added support activities. Its Matrix software suite reflects its range of logistics capabilities, including materials management.
The company's core services include fulfillment centers, high-velocity cross-docks, sub-assembly, sequencing, dedicated contract transportation, and network designs/redesigns. Its revenue is split 50/50 between contract logistics and freight management.
The Americas account for 30 percent of its revenues; Asia Pacific, 29 percent; Northern Europe, 23 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.
Fiat, CEVA's largest customer, began moving many of its operations outsourced to CEVA back in house in the spring of 2011. Also, CEVA's Apollo Management funding reckoning has been rescheduled to 2016-2018.
UPS Supply Chain Solutions
UPS is a giant in the arena of global supply chain services. Revenues for contract logistics were $1.8bn in 2010. Net freight forwarding/NVOCC/customs brokerage revenues were $4.7bn. UPS SCS had a profitable year in 2010. UPS SCS contributes more than $2bn per year in package business to its big brother.
UPS handles about 700,000 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.
The company has 1,400 employees involved in customs brokerage: 400 in Aiken, S.C., 250 in Cleveland, and 750 in Louisville, Ky. UPS built its DCC 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. UPS's DCC has on-site managers at 900 locations. 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 is primarily a non-asset company. EBITS are 5.2 percent. Nearly half of its operations are European over-the-road; its Air & Sea division makes up about 43 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 60 countries in Europe, the Far East and the Americas. Via professional and advantageous overall solutions, a worldwide yearly turnover of Ã¢"šÂ¬5.7bn ($7.5bn) is realized by the Group's 21,300 employees. ABX Logistics was acquired by DSV on October 1, 2008. ABX Logistics was included in DSV's financial statements as of that date - under the Air & Sea division.
Panalpina World Transport
Panalpina is a Top 10 freight forwarder. It is the third-largest in airfreight and fourth-largest in ocean freight. It handles more than 1.2 million TEUs per year, more than 800,000 metric tons of airfreight and about 1 million tons of non-containerized break bulk cargo. It has 242 sub-contracted warehouses in 150 countries and is consistently profitable.
The life blood of Panalpina is its ongoing financial stability and transparency. Its gross profit runs greater than 20 percent, EBITDAs (earnings before interest, tax, depreciation and amortization), EBITs and net incomes consistently run among the industry's best. Like all of the truly strong players, these results are clearly and straightforwardly reported for each financial period. Gross profit (net revenue) runs 49 percent for airfreight, 39 percent for ocean freight and 12 percent for logistics. Panalpina concentrates on six verticals/segments: Automotive, Healthcare, High-Tech, Oil & Gas, Retail/Fashion, and Telecommunications. Telecom growth was major in 2007. Its Oil & Gas operations are primarily in project logistics, which accounts for 10 percent to 15 percent of Panalpina's revenues.
Formerly known as Hankook Logitech, Hyundai GLOVIS is part of the Hyundai Kia Automotive Group under its parent company Hyundai Motor Co., Ltd. It specializes in the automotive, industrial and chemicals industries. More than three-quarters of its revenue is generated from Korea. The rest comes from its 13 branch offices. Canada branch was established in September 2009.
Until recently, Sinotrans was completely protected for many years by the laws of the People's Republic of China from direct foreign competition. In some ways it is a highly transparent company. Eighty-one percent of revenues are derived from freight forwarding. Sinotrans handles 6.9 million TEUs, 384,100 tons of airfreight and 21 million express packages per year.
Sinotrans Limited 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, express services and shipping agency services. Its support services include storage and terminal services, trucking and marine transportation.
BollorÃƒÂ© / SDV Logistics
BollorÃƒÂ© Logistics is made up of BollorÃƒÂ© Africa Logistics, a major stevedoring company in Africa which generates 43 percent of revenue, and SDV a quintessentially French transportation and freight forwarding company, which generates the remainder of logistics revenue. BollorÃƒÂ© Africa Logistics, which has been in Africa for more than 50 years, has 250 subsidiaries, about 20,000 employees and operates in 43 countries.
SDV is ranked No. 1 in France by the IATA and No. 5 in Europe. It operates in 92 countries with a large footprint in Europe, Africa and Asia. It also has 15 branches in major U.S. cities.
Expeditors International of Washington
Expeditors is the largest, best run North American-based freight forwarder. Net revenues have reached $1.7bn and produce a gross margin of 28 percent. 2009 was a difficult year but revenues came back in 2010 exceeding 2008 levels. Net revenues are 38 percent airfreight forwarding, 39 percent customs brokerage and 23 percent ocean freight forwarding. U.S. and Asia business account for 81 percent of revenues. Expeditors is the largest forwarder/NVOCC in the Asia/U.S. lane. It handles about 880,000 TEUs per year globally. Of those, 428,000 are shipped from Asia to the U.S. Expeditors' European operations primarily in airfreight and constitute about 13 percent of revenues.
Expeditors's 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 is France's largest provider of transportation and logistics services and is one of the top European 3PLs. With third-party logistics revenues of $5.6bn and 12,000 employees, Geodis Group covers more than 120 countries 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 60 percent of total revenue. Asia-Pacific accounts for 20 percent and the Americas account for the rest. 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 36 percent of revenue. Groupage is next at 25 percent; then contract logistics, 15 percent; supply chain optimization, 13 percent; and truckload, 11 percent. In Europe, Geodis's industry segment 3PL revenue breakdown is as follows: 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, including the one from IBM and One Source Logistics. There are 18 offices, including two for its chemicals specialist operation, Rohde & Liesenfeld. It relies on a strategic alliance with International Paper's xpedx.
Seventy-five percent of Toll's revenues are Australian-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/FMCG, which accounts for 33 percent of its revenues.
Sixty percent of SembCorp was acquired in 2006 by Toll Holdings, 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 sizeable 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.
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 three major business groups. Global Integrated Logistics (GIL) is the largest, generating approximately 65 percent of Agility's revenues and having more than 23,000 employees. 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.
The Defense & Government Services (DGS) business group generated approximately 32 percent of Agility's revenues and had a workforce of more than 10,000 before 2010. It provides 3PL services tailored to governments, relief agencies and international institutions worldwide. These services include extensive warehousing and trucking operations in Kuwait to support U.S. Department of Defense distribution needs in the region.
Another business unit is Investments, 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. Investments accounts for approximately 3 percent of Agility's revenues and employs more than 2,000 people. Hans Hickler is COO of Asia and is expanding operations there, particularly in Southeast Asia and Vietnam.
Dachser handled 46 million shipments in 2010 - 452,000 airfreight shipments and 300,000 less-than-containerload and containerload ocean shipments. Its largest business segment, Dachser European Logistics, accounted for 63 percent of revenue in 2010. Its other business segments include Dachser Air & Sea Logistics, which accounted for 25 percent of its 2010 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 19,250 employees are based in Germany. Dachser tends to be more modern and aggressive than many of its competitors.
Hellmann Worldwide Logistics
Hellmann is a privately held German company, which continues to be competitive against the big guys because it has good freight forwarding and contract logistics operations. Coverage in Asia and China is extensive. The U.S. generated about 11 percent of total revenue in 2010. At the same time, Hellmann continues to build up its European operations.
Earlier this year, Hellmann UK initiated new logistics services into Poland. In addition, Hellmann Worldwide acquired several assets from a Swedish firm, which should enhance Hellmann's nighttime distribution capabilities throughout Europe.
UTi's net revenues increased 14 percent last year. UTi's contract logistics and distribution operations are 63 percent of net revenues. The company 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.
GEFCO is a key partner for car manufacturers, rental firms and distributors of new and used vehicles. GEFCO transports about 2.5 million vehicles annually. Vehicle preparation and distribution accounts for more than 50 percent of GEFCO's total revenue. Its other main revenue components include consolidation and land transportation, which is 36 percent, and air and sea logistics, which is 14 percent.
GEFCO has a longstanding relationship with GM's Chevrolet division. Earlier this year, the provider was picked to distribute approximately 5,500 Chevrolets in parts of England, Scotland and Northern Ireland. GEFCO had already been providing distribution services for Chevrolet in Russia, northern Portugal and France.
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 Americas has its own airfreight forwarding capability. Sister company, Yusen Air & Sea, is a major airfreight operation, particularly within Asia. It recently set up a strategic agreement with Panalpina. Japan accounts for nearly 50 percent of the business.
Revenues for Yusen are split between air and ocean freight forwarding, warehousing, and domestic U.S. transportation management.
Norbert Dentressangle Group
Norbert Dentressangle now consists of three divisions: Transport, which generates 56.1 percent of its revenue; Logistics (warehousing), which generates 43.5 percent; and its newest division, Freight Forwarding, makes up the rest.
France is its largest contributor to revenue for both Logistics and Transport, accounting for 67.8 percent and 40.8 percent, respectively.
Norbert Dentressangle is a European leader in bulk and temperature-controlled goods. More than 62 percent, or 35.5 million square feet, of its warehouse space is dedicated to frozen storage. In December 2007, the company acquired Christian Salvesen, which broadened its service offering in the refrigerated and frozen logistics market in Europe. In January 2010, in-house freight forwarding capabilities were added. To expand on those capabilities and international presence, Schneider Logistics's freight forwarding division in the U.S. and China was acquired in November 2010. In addition, British freight forwarder TDG was acquired in March 2011.
Caterpillar Logistics Services
Cat Logistics has heavy U.S. and European operations with a growing presence in South America and Asia. It distributes to more than 190 countries from over 119 facilities.
Cat Logistics's scope reflects its parent's global reach and dealer network. Cat Logistics's business is split equally between North America and the rest of the world. It continues to expand its automotive logistics business in Europe. In the U.S., Cat Logistics has completely integrated warehousing and manufacturing supply chain services. Visibility in its integrated systems of SAP, i2 and GT Nexus is very good. Demand and supply forecasting and material planning capabilities are excellent. Forecasting for low turnover items is a controlled standard operating procedure.
Cat Logistics manages more than $2.4bn in purchased transportation per year. Cat Logistics focuses on customers with high-value durable goods. A major initiative involves logistics into and out of China. In March 2011, Caterpillar announced that it might sell its non-Caterpillar logistics business. There have been no takers to date because of the difficulty of separating existing operations.
As a leading European contract logistics company, Wincanton provides services across the supply chain. It is a market leader in food distribution for UK retailers, chilled consolidation, fuel product distribution and automated warehousing. Additional services include multi-temperature and time-critical distribution via tankers of food and non-food products, including petroleum. It also is involved in commercial vehicle fleet management. More than 60 percent of Wincanton's revenue is derived from the UK and Ireland.
GENCO is one of the largest value-added 3PLs in North America. It has a series of niche solutions heavily integrated with specialized IT applications. Basic services are contract logistics; reverse logistics; product liquidation (via its GENCO Marketplace); pharmaceutical services; damage research; transportation logistics, including a large parcel negotiation/audit operation; and government logistics and operations support.
GENCO ATC dominates the reverse logistics area, which provides about 40 percent of the company's revenue. There is a heavy emphasis on integrating Six Sigma/Lean Logistics and sustainability initiatives. IT applications include the leading return logistics software program, voice tasking, RFID, robotics, optical real-time location system, pick/put-to-light, and hydrogen fuel-cell-powered forklifts all supported by a R&D technology learning center. GENCO ATC is a technological generation ahead of most value-added warehousing and distribution 3PLs. The provider has a host of "A" level operations in all its value-added specializations.
The company's acquisition of ATC strengthened its dominance in reverse logistics. ATC had been one of the highest-quality and most profitable value-added warehousing and distribution 3PLs.
Kintetsu World Express
Kintetsu's largest operations within its global network are in Japan and China, with more than 100 offices in each of those countries. Forty-four percent of its business is airfreight-based. Ocean and logistics business accounts for 42 percent. KWE has a host of strategic joint ventures and affiliated companies. Its verticals are high-tech, automotive, healthcare and others. It has 138 logistics warehouses outside Japan, with 6.4 million square feet (warehouse space in Japan is more than 2.6 million square feet). Fifty-eight of those warehouses are in China. KWE handles about 870,000 metric tons of airfreight and 465,000 TEUs of ocean freight annually. KWE listens to the "Voice of the Customer" and promotes long-term collaborative business partnerships. It's a quality management success story.
Pantos Logistics has a full set of tools, including air and ocean freight forwarding, rail and road transportation in Korea, warehousing, customs, and express transportation. (DCC assets are only in South Korea.)
Customers include Korean-based companies like LG and internationals like Philips.
Pantos is a good international supply chain manager with a large freight forwarding base (1.5 million TEUs and 330,000 airfreight metric tons). It recently opened a second logistics center at Korea's Inchon International Airport, reportedly the world's fourth-largest cargo airport by volume in 2010. Published accounts suggests that Pantos could become the largest logistics business in the airport's free-trade zone.
Maersk is the world's largest container line, and it and parent A.P. Moller have been financially strong, aggressive and successful for decades. Damco, its NVOCC and 3PL, has reported its separate financial results since 2009. More than half of its business is in warehousing and distribution; about one-fifth of the net revenue is from forwarding and consolidation. Supply chain management, airfreight forwarding and customs brokerage account for the rest. The majority of revenues are between Asia and North America. About a third are in Asia-European traffic.
Damco has marketed its new brand aggressively. In June 2011, it sold off its Gilbert West Coast apparel operations to NFI. In August 2011, it acquired a new operation in China, New Times Transportation, and opened a container freight station/cross-dock warehouse in Cambodia.
IMPERIAL Logistics is one of five divisions of Imperial Holdings Limited and contributed 31 percent of its total revenue in 2010. IMPERIAL Logistics has two divisions: Southern Africa, which is 70 percent of total logistics revenue, and International, which is 30 percent. These two divisions combined generated $2.3bn in revenue in its FY2010 with nearly 19,000 employees.
IMPERIAL Logistics continues to grow these business divisions via acquisition. The major industries served are automotive, chemicals, FMCG/retail, engineering/construction, and packaging.
IMPERIAL Logistics International is headquartered in Germany and its business units include: Panopa Logistik, Neska, Imperial Reederei Gruppe, and Brouwer Shipping and Chartering.
Penske Logistics is a major automotive logistics player. For example, it is Ford's lead logistics provider and provides significant services for General Motors, Daimler and tier-one suppliers. Penske Logistics is one of five major automotive 3PLs with more than $400m per year in automotive logistics revenues. It has made significant strides in leveraging its automotive experience to other verticals. Major wins include: Steelcase, PPG, Wawa, Mission Foods, Samsung, Sony, Merck, Eaton and Emerson.
Penske Logistics is a master of inbound supply chain management, cross-docking, sequencing, just-in-time support and dedicated contract carriage. Penske's legacy in DCC goes back to Leaseway, which was a major innovator in transportation and logistics. Leaseway was a founder of DCC in the late 1970s. Penske provides Cardinal Health with 700 tractors in DCC. For Wawa stores on the East Coast, it uses 38-foot trailers for deliveries to 575 stores. Penske logistics is divided into three regional groups. As a result, DCC, value-added warehousing and distribution, and transportation management are often overlapping and integrated. Tractors average about 80,000 miles a year because of length-of-haul and route structures.
Mexican and Brazilian operations are particularly strong. European business continues to grow and gain in a much tougher market. Penske Logistics recently opened a branch in Shanghai to broaden its global network. It has also expanded operations in India.
Sankyu is an asset-based, Japanese 3PL with a strong presence in the Asian market as well as in operations in Europe, the United States and Brazil.
Although Sankyu still does a significant amount of project logistics, the main revenue from its logistics division is from the automotive, chemicals, consumer goods and retailing verticals. Logistics generates more than half (55 percent) of Sankyu's total company revenue.
On January 15, 2010, the construction of Sankyu's new Flagship Distribution Center was completed. It has a total of 907,400 square feet and is located across from the container yard at the Port of Kawasaki, near Tokyo.
Fiege Logistics provides supply chain management services and designs the process to individual customers. It is organized into four divisions: FIEGE log (providing stationary logistics, warehouse management and affiliated IT systems); FIEGE net (includes distribution systems and affiliated IT systems); FIEGE ecm (combining e-commerce activities with logistics to successful online selling and offline delivery); and FIEGE engineering (in charge of consulting, development and realization of supply chain solutions). Fiege and U.S. 3PL Kenco Logistic Services have cooperated for some international customers. Fiege is profitable and well run. Fiege operates in 18 countries with 210 branches.
Hub 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 by and 7,660 are rented from either Norfolk Southern or Union Pacific.
Hub recently diverted a significant amount of its TOFC/COFC business from BNSF to the UP. Once complete, the UP will handle 90 percent of all western U.S. loads for Hub.
Comtrak Logistics Inc. ("Comtrak"), a Hub subsidiary, is a transportation company with services that include primarily rail and international drayage for the intermodal sector.
Approximately 11 percent of revenues are from Unyson Logistics, a network management 3PL and cross-dock specialist, while 19 percent of revenues are from its expanding truck brokerage. In April 2011, Hub acquired Mode Transportation. Mode 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.
Logwin, formerly Thiel, is a conglomerate that acquired Birkart, Microlog and other companies. Logwin has subsidiaries for automotive, fashion/lifestyle/media and furniture.
Logwin now has two business segments: Solutions (contract logistics) and Air + Ocean. Its Road + Rail business segment was discontinued in 2009. Its revenue split by business segment was about 50/50 in 2010. Nearly 70 percent of its revenue is derived from Germany and Austria.
Ryder Supply Chain Solutions
Ryder, one of the most recognizable 3PL brand names, is a Big 5 logistics 3PL. Ryder is a lead logistics provider for most GM plants, and it services Chrysler/Fiat, Toyota and Honda plus a multitude of tier-one suppliers. Ryder runs top-notch inbound supply chain management, sequencing centers, just-in-time and dedicated contract carriage operations.
Ryder and Leaseway (Penske) started DCC from single-source truck leasing in the late 1970s. For its key customers, it provides 200 to 350 tractors each. Its revenue target without the fuel surcharge is $150,000 a year. Ryder DCC has 150 on-site managers, 400 locations and 250 accounts. Ryder's transportation management center assists with balancing larger lanes. Equipment is specifically assigned to 85 percent of accounts. A large part of trailers are specialized equipment. Ryder runs more straight trucks than any other DCC. About 50 percent of its trips are greater than 500 miles. Around 200 to 300 owner-operators are used primarily for home delivery, newspaper accounts and some long-haul business.
John Williford, the chief executive officer of Ryder, and Tom Jones, executive vice president and chief of the automotive logistics operations, have changed Ryder's SCS emphasis. Their redesign is based on an expansion of Asia-U.S. retail business leveraging off of the purchase of Transpacific Container Terminals and CRSA and a joint partnership with Hong Kong-based Cargo Services Far East. Ryder's SCS business was about 60 percent automotive through 2008. In 2010, automotive was about 45 percent of the business, high-tech was 22 percent, retail/consumer packaged goods about 18 percent and industrial/other 15 percent.
Williford and Jones have been working hard on the further expansion of retail, consumer goods, and high-tech business. Operations in South America have been eliminated so that Ryder's resources can be applied more strategically. In December 2010, Ryder acquired Total Logistic Control, a leading 3PL in providing value-added warehousing and transportation management services to customers in the food and grocery and retail vertical industries. In January 2011, Ryder acquired two Southern California operations to expand its presence in dedicated contract carriage in the West, as well as increase its customer base in the retail vertical industry.
Nissin Corporation / Nissin Group
Nissin is a multifaceted Japanese 3PL with significant global freight forwarding operations. Headquartered in Yokohama, with branch offices throughout Japan, it has major centers of operation in Asia, Europe and the Americas. Competing with Kintetsu and Nippon Express, it offers a portfolio of international transportation services, logistics and supply chain management.
BDP is a leading freight forwarder with a strong emphasis on chemicals. Its operations are high quality. BDP handles customs brokerage for Dow Chemical and DuPont on about 600,000 containers a year.
In its portfolio of services is the BDP Global Network, an alliance of small to mid-sized logistics firms, which was set up to take on large multinational logistics and transport companies by delivering higher standards of customer service, BDP officials say. In tandem with BDP International's own extensive global coverage, the BDP Global Network gives companies active in global or cross-border trade access to professional and personalized logistics services in more than 120 countries.
Menlo Worldwide Logistics
Menlo is one of the leading U.S.-based 3PLs. It has adapted a Lean / Six Sigma management approach that is having positive results both on its profitability and in developing new business.
Menlo has solid, inbound supply chain management and finished goods distribution capabilities. It is a prime contractor for the U.S. Transportation Command's Defense Transportation Coordination Initiative and recently became the lead logistics provider for truck manufacturer Navistar.
Menlo has significantly grown its China and Southeast Asia network and is continuing to expand its European operations. Both are adding significant pieces of business with retailers such as Triumph in the U.K. and Malaysia and Puma in Singapore. In Southeast Asia, Menlo runs 27 value-added warehousing operations with 3.5 million square feet of space and a workforce of 1,175. Menlo's IT capabilities, including its recent addition of Oracle-TM's transportation management system, provide it with solid supply chain management and optimization capabilities.
Kerry Logistics Network
Kerry Logistics's business portfolio encompasses contract logistics, international freight forwarding, warehousing, transportation, distribution, trading, merchandising and a wide variety of value-added services and is now managing more than 26 million square feet of warehouse space, logistics centers and port facilities globally. Its Integrated Logistics division, mainly value-added warehousing and distribution, generates 44 percent of revenue and its International Freight Forwarding division generates 56 percent. Kerry Logistics handles 576,000 TEUs and 158,900 metric tons of airfreight annually.
Kerry EAS Logistics, the brand name of Kerry Logistics in mainland China, continues to provide high-quality logistics and solutions to customers in three major areas: freight forwarding, express parcel delivery and contract logistics.
APL Logistics's strengths have been in the automotive/industrial and retail client verticals. Thirty-four percent of revenues are in the automotive/industrial segment; 33 percent, retail; 15 percent, consumer goods; 4 percent, electronics/high-tech; and 14 percent, other.
The Americas generate 61 percent of revenues; Asia/Middle East, 26 percent; and Europe, 13 percent. APL Logistics has automotive joint ventures in China. About 60 percent of APL Logistics's revenues are from contract logistics. Consolidation, deconsolidation and freight forwarding make up the rest. Its global warehousing network consists of 166 facilities with 24.7 million square feet of space. Its forwarding operations are closely linked to its parent company's ocean container operations. APL provides customers more transparency than other Asia-based logistics companies.
APL Logistics handles about 35,000 shipments in its intermodal division annually. Top intermodal customers include: 3M, Ace Hardware, Baxter, Bay Valley Foods, Del Monte, Hino Diesel Trucks (U.S.A.), IKEA, Wal-Mart, and Winn Dixie. APL Logistics purchased 1,000 new 53-foot APDU containers to expand its intermodal capabilities.
arvato logistics services
arvato logistics services, whose branding calls for a lower-case A in its name, is a modern supply chain manager with a fulfillment emphasis in B2B. Its specialty is advertising material development and distribution, but its reach extends well beyond that.
Sony Music is a major client, having selected arvato as its exclusive e-commerce distribution partner in the UK and Ireland. Arvato provides supply chain services for Sony's premium consumer offerings, such as music and exclusive merchandise from its MyPlay Direct artist stores.
The three-year partnership includes warehousing and direct to consumer distribution for hundreds of thousands of orders. These services and a comprehensive returns management program are managed from arvato's distribution facility in Milton Keynes.
The appointment expands arvato's existing six-year supply chain and commercial order-to-cash service relationship with Sony, which has contributed to the business process outsourcing partner becoming the leading distributor of CDs in the UK.
Last year, arvato won a national supply chain deal from Bosch Group. Under the agreement, arvato will take over the warehousing and distribution of the lawn and garden product division of Bosch Power Tools in the UK.
J.B. Hunt DCS & ICS
J.B. Hunt Dedicated Contract Services (DCS) has more than 300 dedicated contract carriage customers and is the largest American pure dedicated carrier. It is the benchmark standard for dedicated contract carriage comparisons. Armstrong &Associates estimates that about half of J.B. Hunt's dedicated tractors are tandem axle sleepers. About as many are day cabs used in regional operations. Driver turnover rates are about half of regular over-the-road trucking operations. It utilizes owner-operators for 10 percent of the driver base. Revenues run $560 per load, without recent fuel impacts, and most round trips average 300 miles. Average revenue per tractor per year runs $206,000.
A significant part of Hunt's DCS operations involve direct store delivery. It uses its parent company and other facilities for last-mile operations. It has 87 last-mile support locations and has introduced a major home delivery initiative. More than 95 percent of Hunt's dedicated contract carriage power units are assigned to specific accounts. J.B. Hunt DCS continues to grow and has spread into integrated transportation management.
J.B. Hunt Integrated Capacity Solutions (ICS) generates about a quarter of the gross revenue shown, and its gross margin runs 14 percent. ICS is primarily a transportation manager. Hunt is also one of the largest U.S. intermodal marketing companies. Intermodal is now 56 percent of its total business.
BLG Logistics Group
BLG's emphasis is on automotive logistics through Bremerhaven. Services include pre-delivery inspection, painting and installation of DVD players, GPS systems, mobile phones and sun roofs. About five million vehicles are handled annually. BLG has extensive car carrying business for VW and Daimler. The Automotive division generates about 36 percent of revenue. BLG's parent corporation was originally formed to provide port operations for Bremen. The German government owns just over 50 percent of BLG. Sister company, EUROGATE, is the largest European port operator.
The Container division generates about 36 percent of revenue. BLG customer Tchibo is the Starbucks of Germany. BLG runs three contract logistics warehouses in Bremen for Tchibo and has other operations throughout Europe. Other contract logistics customers include Mercedes, Siemens, and Ikea. U.S. operations started in 2004 to support the Mercedes assembly plant in Tuscaloosa, Ala. The Contract division generates about 28 percent of revenue.
During 2008, Ozburn-Hessey Logistics and all of its acquired companies were re-branded as OHL. The renaming project was undertaken to meld the multiple divisions, companies and brands that were parts of OH Logistics. Companies that had been acquired had specialized service offerings, management teams, customer relationships and were well-known within their geographies. However, none of the companies had an established international brand.
OHL intends to establish itself as a strong international supply chain management solutions provider. It has an extensive global network and a broad range of services. The company provides logistics solutions for several large companies, including Starbucks, Red Bull, Polo Ralph Lauren, Arkema and Apple.
OHL has more than 30 million square feet of warehouse space, primarily in North America, and has greatly enhanced and expanded its domestic and international transportation offerings. Private equity investment firm Welsh, Carson, Anderson & Stowe has reconfigured top management over the last few years to reflect OHL's push to 3PL globalization.
VersaCold Logistics Services
VersaCold's purchase of Atlas Cold Storage in 2008 created one of the world's largest perishable/frozen-products specialists. VersaCold has large trucking operations throughout Canada. Atlas operated primarily in Ontario, Quebec and the United States. VersaCold is a dominant player in British Columbia, Alberta, and the U.S. West Coast. In 2009, The Yucaipa Companies, owner of Americold, the largest perishable value-added warehousing and distribution 3PL in North America, bought 49 percent of VersaCold from Eimskip. Yucaipa invested $2bn in Eimskip with the option to buy the other 51 percent of VersaCold. In December 2010, most of VersaCold's operations were taken over by Americold.
Over the last three years, Landstar has added integrated warehousing, freight forwarding and stronger transportation management. These new capabilities meet expanding customer needs and provide Landstar's network of agents with better tool kits for rapidly changing markets.
The push has been from the top. Executive Vice President of Logistics Services, Kevin Fletcher, is responsible for intermodal, air, ocean, warehousing, freight under management, and logistics technology services as well as the logistics engineering and analytical design function. Landstar acquired two transportation management companies, adding new solutions for small- to Fortune 100-sized companies.
Greatwide Logistics Services
Greatwide has a host of specialized trucking operations. Its dedicated contract carrier is the largest refrigerated trailer operator. In addition, it is the only owner-operator-dominated (75 percent) DCC. Wal-Mart is its largest customer. Approximately 50 percent of DCC revenue is from 11 of Wal-Mart's 39 DCs. Operations are DC to store. Average revenues run $135,000 to $140,000 per tractor reflective of the short haul nature of most of Greatwide's business. DCC operations have always been the strong point of Greatwide's offerings. In November 2009, Greatwide acquired YRC Logistics' Dedicated Contract Carriage division. DCC is about 55 percent of Greatwide's business. Greatwide also has heavy flatbed and good freight brokerage/transportation management. Greatwide is actively providing cross-docking services as part of upgraded value-added warehousing and distribution services.
Werner Enterprises Dedicated & Logistics
Werner is a major dedicated contract carrier and U.S. trucking company with growing non-asset-based domestic and international transportation management operations. Werner Enterprises has invested significantly in its non-asset-based 3PL operations, Werner Global Logistics (WGL) and Value Added Services (VAS), to expand beyond its core North American trucking operations.
Werner Global Logistics (WGL) is a licensed U.S. NVOCC, U.S. Customs Broker, TSA-approved Indirect Air Carrier, ITAR Certified Air Carrier and IATA Accredited Cargo Agent.
Werner Global Logistics (Shanghai) Co. Ltd. is a licensed freight forwarder and NVOCC in China and a logistics, consulting, warehousing, consolidation and ground transport operator throughout China.
Werner Global Logistics Mexico provides freight forwarding and NVOCC services to Werner Enterprises' customers in Mexico.
The Value Added Services operation consists of brokerage, freight management and intermodal services.
VAS and WGL have grown to more than $450m in annual freight under management. When adjusted for accounting revenues, combined gross revenues for 2010 were $273m and accounted for 15 percent of Werner Enterprises' total revenues. Total operating income for the non-asset logistics services operations was $11m in 2010, which equated to 8.1 percent of Werner Enterprises' total operating income.
Before 2009, Werner Enterprises' Dedicated services operations had grown at over 33 percent annually. With 2011 revenues of $780m, Dedicated services accounted for 40 percent of Werner Enterprises' revenues and approximately 47 percent of its total truck fleet with 3,400 tractors. Dedicated services' largest customer is Dollar General. Other major Dedicated services accounts include Anheuser-Busch, ConAgra Foods, Family Dollar, Home Depot, Kraft, OfficeMax, P&G, Sears, Staples and Wal-Mart (power only). Dedicated services manages over 120 individual customer fleets ranging from one to 100+ tractors. About 70 percent of the fleets are managed on-site at customer locations and about 30 percent of the smaller fleets are managed from Werner Enterprises' operations center in Omaha.
Founded in 1932, NFI offers a variety of integrated supply chain services. Its strongest operations are in the Northeast, California, Illinois, Ohio and Texas. The company is one of the largest privately held third-party logistics providers in North America. NFI's divisions include NFI Logistics, NFI Distribution, NFI Transportation (dedicated and OTR), NFI Intermodal, NFI Real Estate, NFI Global, NFI Contract Packaging, and NFI Consulting. NFI relies on NFI Real Estate for new warehouse facilities and National Distribution for established locations.
NFI continues to integrate its divisions and move its asset-based transportation away from transaction business to dedicated carriage. NFI made a few acquisitions over the past year, including IPD Global (now NFI Canada), World Warehouse and Distribution and the West Coast operation of Maersk subsidiary The Gilbert Company. NFI is at its best in integrated operations involving dedicated contract carriage, transportation management and value-added warehousing and distribution.
Transplace is a leading domestic non-asset-based transportation manager with offices in the U.S., Mexico and Hong Kong. It has expanded its international transportation management capabilities and is building out its Mexican market operations. Transplace manages over four million shipments annually, representing more than $3bn in transportation spend.
In December 2009, Transplace was acquired by CI Capital Partners. Having new owners has allowed Transplace to pursue domestic and international expansion. In October 2011, Transplace added intermodal marketing company, Celtic International, to complement it transportation management operations. Celtic is based in Chicago and will be a stand-alone division of Transplace.
Source: Armstrong & Associates
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