The Global Players
Going global is not a choice for the undercapitalized or inexperienced. A shipment that starts in China can have a dozen hand-offs before it reaches its final destination in the U.S., and they all have to be included in the communications link. "Whoever does this has to be one of that limited group of companies that can really manage all of the information technology requirements," says logistics consultant Dick Armstrong, Armstrong & Associates.
U.S. trucking companies that opt to go international also must be ready and willing to compete with some of the world's biggest third-party logistics companies. In terms of 2005 revenues, the number one global 3PL was Exel, which recently merged with DHL Global Forwarding (number four last year). Number two is Swiss-based Kuehne & Nagel, the world leader in container volumes.
Schenker, number three in the 2005 3PL rankings, is also one of the biggest trucking companies in Europe. Earlier this year its parent, DB Logistics, bought American logistics company BAX Global, another major 3PL. Expansion into international logistics is a common growth strategy for European carriers, Armstrong notes.
"They had huge trucking operations, but when it came to doing things outside of Europe, they had to have another mechanism, so they became freight forwarders. Now the very large U.S. trucking companies are confronted with the same decision. Will they be trucking companies on one continent, or will they work out some mechanism to be global supply chain managers?"
U.S. companies are already well represented on Armstrong's list of the top 25 global 3PLs. Non-asset-based logistics providers include C.H. Robinson and Caterpillar Logistics. Expeditors International of Washington is a leading forwarder/NVOCC (non-vessel operating common carrier) in the Asia/U.S. lane. Texas-based Eagle Global Logistics is primarily an airfreight forwarder and logistics provider for U.S. Iraq operations.
TNT Logistics is considered to be the world's largest automotive 3PL and has extensive distribution and transportation operations in North America. Its Dutch parent, TNT N.V., recently sold the logistics division to affiliates of Apollo Management, a private equity firm with offices in New York, London and Los Angeles. Some of Apollo's current and past transportation and logistics industry investments include Pacer International and Quality Distribution.
Both UPS and FedEx have well-established global footprints. Both also have North American trucking operations that can tie into those global networks.
UPS Freight (formerly Overnite) offers truckload and LTL services in North America. Its international link is UPS Supply Chain Solutions. With the recent acquisition of Watkins Motor Lines, Fed Ex Freight added long-haul LTL to its regional LTL specialty. FedEx Trade Networks is the company's global 3PL.
Schneider Logistics last year was the number 10 global 3PL. Through its American Port Services subsidiary, purchased in 2005, Schneider provides transloading/deconsolidation, warehousing and distribution services in the U.S. Early this year it bought American Overseas Air Freight, an international freight forwarder. Schneider Logistics-Asia is headquartered in Shanghai. Schneider Logistics-Europe is based in The Netherlands and has a service center in the Czech Republic.
Penske Logistics operates some 12,000 dedicated fleet vehicles and 300 logistics centers throughout North America, South America and Europe. It recently formed a strategic alliance with ABX Logistics to provide integrated, global supply chain solutions for multinational corporations. ABX, based in Brussels, is a major sea and air freight forwarder and one of the top 10 freight transporters in Europe.
Ryder System expanded to the U.K. 35 years ago, starting with 250 rental trucks. Now it has 15,800 vehicles in Europe, operating out of 27 fleet management locations and 34 logistics centers. Several years ago it bought Singapore-based Ascent Logistics and formed Ryder-Ascent Logistics as the headquarters of its Asia/Pacific operations. Ryder also has operations in Latin America.
Con-way subsidiary Menlo Worldwide manages logistics activities in North America, Europe and Asia with dedicated facilities in 20 countries. It recently signed a contract to provide warehousing and fulfillment services for Siemens Ltd.'s Communications Group in Australia (Menlo has a similar program for Siemens in Texas). Con-way Freight and APL Logistics, a unit of Singapore-based Neptune Orient Lines, have a joint program offering rapid delivery LCL (less-than-container load) shipments from China to the U.S.
YRC Worldwide's Meridian IQ wasn't on last year's top 25 list, but is a global player with obvious growth plans. It has offices and facilities in North America, South America, Asia and Europe. Last year it bought Shanghai-based GPS Logistics and it has two joint ventures with Jin Jiang Investment, including a stake in JHJ, a Chinese freight-forwarding company.
Werner Enterprises stepped into the global arena this summer with the formation of Werner Global Logistics, an operating company within its VAS brokerage network. The company opened an office in Shanghai and is looking at other locations in Asia. Through a combination of company-owned assets and strategic alliances, Werner will offer an extensive menu of services in China, including site selection analysis, full container load (FCL) consolidation and warehousing, plus door-to-door freight forwarding and customs brokerage.
Going Global continued...
