september 2014
featuring.... Maersk Line Integration Point Kuehne + Nagel Fairfield Inn & Suites TransGroup Worldwide Logistics
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Better employee health. Better bottom line. Healthy employees are the life force of an engaged and profitable workplace. And HEALTHWORKS by Carolinas HealthCare System is here to help our employer partners identify employees who are sick or may become sick to provide comprehensive care solutions, when and where they need it. After fully assessing the health of your workforce, we create individualized health management solutions that enhance your workplace well-being and reduce your overall healthcare costs. For more information, visit CarolinasHealthCare.org/HEALTHWORKS
BUSINESS FORUM SERIES
2014
THE AMERICAS
Join the U.S. Commercial Service and the North Carolina District Export Council for DISCOVER GLOBAL MARKETS: The Americas and transform market potential to market success.
Private Consultations with U.S. Commercial Diplomats Whether for market opportunities, help in overcoming challenges, or general questions, meet with U.S. commercial diplomats from 14 countries: • Argentina • Brazil • Canada
• Chile • Colombia • Costa Rica
• Dominican Republic • Ecuador
• El Salvador • Guatemala • Honduras
• Mexico • Panama • Peru
Exploring the Markets of the Americas • • • •
How are the markets of the Americas performing today? How will the markets be performing in five years? What are today’s and tomorrow’s opportunities? What challenges do these dynamic markets present to U.S. companies?
Panels featuring economists, industry professionals, trade experts, and U.S. commercial diplomats will explore these questions and others to help you define your competitive strategy for the Americas.
Intensive Breakout Sessions on Refining Your Export Strategy
Register Now! Details/Registration:
http://go.usa.gov/BtKV Event Dates October 29–31, 2014 Location The Westin Charlotte 601 South College Street Charlotte, NC 28202 (704) 375-2600 Participation Fee $295 if registered by June 16 $350 after June 16 Benefits of Registering • Access to all conference sessions. • Private consultations with commercial diplomats. • Networking lunches, breaks, and receptions. • Conference materials. For More Information Greg Sizemore (704) 333-4886
greg.sizemore@trade.gov
Market success needs a winning strategy. Learn from experts and business leaders through in-depth, hands-on sessions covering: • The impact of free trade agreements (FTAs) and how they can contribute to your success. • Strategies for due diligence and risk mitigation. • Latin America’s credit markets and how they affect potential customers. • Your marketing strategy: the mix of technology and personal contact. • Contract considerations and dispute resolution in challenging business climates. Platinum Partners:
Silver Partners:
Bronze Partners:
f e a t u r i n g The Ocean’s Great Dane
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Maersk Line is the largest container shipping company on the planet. The Copenhagen-based company first docked in Charlotte in 1999, when SeaLand, the company that invented container shipping, was purchased by what was then A.P. Møller-Maersk Line. The office here handles North American Inland Operations. Senior Vice President Tim O’Connell says, “One thing that really matters to Maersk is how our customer needs to be served.”
Connecting Business Globally
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Integration Point delivers global visibility and localized knowledge allowing organizations to manage import/export and various trade programs to comply with regulatory requirements while improving visibility and realizing savings. “Trade programs in different parts of the world vary dramatically,” explains CEO Tom Barnes, “and corporations need one platform to facilitate the management of their trade programs efficiently. We bring those capabilities together on one platform.”
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Facilitating the Global Economy
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Michael Raffler, vice president for the company’s Carolinas division, says, “Think of Kuehne + Nagel as a travel agent for cargo. As a freight forwarding company, we do the same for cargo through contracts with major airlines, steamship lines, and trucking companies. And you can track the progress of your shipment every step of the way!” Raffler adds, “We view Kuehne + Nagel as an extension of our customers’ businesses.”
Uptown Property Seeks New Heights
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Layer-by-layer, room-by-room, the hotel property at 201 South McDowell Street has been transformed by major renovations and is now officially open as Fairfield Inn & Suites Charlotte Uptown, newest member of the Marriott family. “This was not merely a cosmetic renovation,” says General Manager Bill Moore. “There has been almost as much done that the guests and public will not see as there has been in aesthetic upgrades.”
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Anything is Possible
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U.S.-owned TransGroup Worldwide Logistics is a full-service domestic and international freight forwarder and global logistics provider, providing transportation, warehousing and specialized logistics solutions, coupled with software tailored to meet the specific needs of individual customers. Charlotte Branch Manager Anita Sanders says, “We started from a small company and we’ve certainly grown as TransGroup—one single company—for 28 years.”
o f i n t e re s t … 2
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Commercial Loan Covenants for Small Businesses
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Exporting: An Achievable Goal for Small Businesses
september 2014 | greatercharlottebiz.com
7 GLOBAL
MATCH LLC
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Part VI: One More Time—Why Sell to “Insiders” Who Have No Cash? publisher’spost Forging a Regional (Two-State) Economic Development Strategy
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September 2014 Volume 15 • Issue 9 Publisher
John Paul Galles x102 jgalles@greatercharlottebiz.com
Associate Publisher/Editor Maryl A. Lane x101 mlane@greatercharlottebiz.com
Graphic Artist
Trevor Adams graphics@greatercharlottebiz.com
Account Executives
Gina M. LaRosa x104 704-778-0728 Cell glarosa@greatercharlottebiz.com Nelson E. Sweezy x105 704-778-8866 Cell nsweezy@greatercharlottebiz.com
Business Development Consultant Philip Volponi x107 704-574-0439 Cell pvolponi@greatercharlottebiz.com
Contributing Writers Kathleen E. Conroy Zenda Douglas Robert Ecker Pete Prunkl Andrew Rusnak
Contributing Photographer Fenix Fotography
Printing by:
Progress Printing Plus Calvin Hicks • 1-800-572-7804 chicks@progressprintplus.com
Galles Communications Group, Inc. 7300 Carmel Executive Park Dr., Ste. 115 Charlotte, NC 28226-1310 704-676-5850 Phone • 704-676-5853 Fax www.greatercharlottebiz.com
• Press releases: editor@greatercharlottebiz.com. • Editorial: mlane@greatercharlottebiz.com. • Advertising: jgalles@greatercharlottebiz.com or sales@greatercharlottebiz.com. • Subscription or change of address: subscriptions@greatercharlottebiz.com. • General: info@greatercharlottebiz.com.
Source: https://www.uschamber.com/sites/default/files/documents/files/Top10OverlookedFacts_Trade_FIN.pdf
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© Copyright 2014 by Galles Communications Group, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable. However, Galles Communications Group, Inc. makes no warranty to the accuracy or reliability of this information. Products named in these pages are trade names or trademarks of their respective companies. Views expressed herein are not necessarily those of Greater Charlotte Biz or Galles Communications Group, Inc. No part of this publication may be reproduced or transmitted in any form or by any means without written permission from the publisher. For reprints call 704-676-5850 x102. Greater Charlotte Biz (ISSN 1554-6551) is published monthly by Galles Communications Group, Inc., 7300 Carmel Executive Park Dr., Ste. 115, Charlotte, NC 28226-1310. Telephone: 704-676-5850. Fax: 704-676-5853. Subscription rate is $24 for one year. POSTMASTER: Send address changes to Greater Charlotte Biz, 7300 Carmel Executive Park Dr., Ste. 115, Charlotte, NC 28226-1310.
OF INTEREST: Accounting, Tax and Consulting Solutions
COMMERCIAL LOAN COVENANTS FOR SMALL BUSINESSES
B
anks often include loan covenants in their documents when they lend to businesses. These covenants can be thought of as restrictions that the bank sets to help protect it from loan losses. Generally, covenants fall into three categories: affirmative or active covenants, negative covenants, and financial covenants. As a business owner or manager, you should understand your loan covenants, and you should periodically verify that your company is adhering to these requirements. Significant covenant failures or repeated failures can lead to a loan default. Also, bankers do not like covenant surprises, so if you project a covenant violation, you should discuss this with your banker in advance. Affirmative or Active Covenants. These covenants usually require a business to take action such as providing accountant-reviewed or audited annual financial statements. The bank might also require copies of company-prepared, monthly or quarterly, financial statements or copies of the business tax returns. If a bank provides a line of credit to finance seasonal growth, the bank may ask for copies of the monthly inventory and accounts receivable aging reports. Specific due dates for these reports are included in the loan documents, and businesses should provide this information on or before the due date. Negative Covenants. These covenants usually define what a company cannot do. Some restrictive covenants are obvious: a company cannot go bankrupt or the loan immediately becomes due, collateral already held by the bank cannot be pledged as collateral to someone else, and/or the company cannot be sold or ownership significantly change or the bank must be paid. Other negative covenants may be added based on a company’s specific financial condition: dividend payments or the repayment of loans to owners may be prohibited, or rental increases may not be allowed if rents are paid to company owners. Financial Covenants. These covenants are often financial ratios that are calculated using figures from a company’s financial statements. The mathematical formula is defined in the loan documents, and these calculations must be performed at specific times (annually, quarterly or monthly). Banks may use different ratios for different industries, and banks may adjust these limits based on a company’s financial strength. For example, a company with little debt and significant cash reserves might have a lower financial covenant requirement than a firm with high debt and little cash. Different banks even calculate similar ratios using different formulas, so it is important to understand the calculation method that is used. Some of today’s more common ratios fall into two categories: Debt coverage. These ratios measure financial performance and cash generated by the business. Fixed Charges to EBITDA, Debt Service Coverage, or Fixed Charge Coverage
ratios are used to compare a company’s cash flow to its debt and other fixed charge payments over a specific period. Banks use these ratios to confirm that a company is generating sufficient cash to repay the bank’s loan and, in some cases, other fixed charges. Leverage. These ratios compare a company’s level of debt to its net asset value, Contributed by equity, or cash flow, and this financial covenant may be called Debt to Tangible Net Worth, Debt to Equity, or Funded Debt to EBITDA. Banks use these financial covenants to keep a company from over-borrowing. In some cases, the bank might instead set a minimum Tangible Net Worth amount that the company must maintain. Regardless, the purpose of this covenant is to keep a company from increasing its borrowing to a risky level. Loan covenants are included in bank documents to help protect the lender from loan losses. Because of increased banking regulations and oversight, local bankers may be unable to forgive or waive loan covenant violations. Even financially strong businesses that provide late financial statements or repeatedly miss financial covenants, even slightly, can be adversely impacted by their failures. As a borrower, businesses have a contract with their bank as defined by the loan documents. Failing to satisfy conditions of that contract can cause a loan default, so it is important to fully understand all loan covenants and whether they are being met. Content contributed by Potter & Company, a local certified public accounting firm with four locations around Charlotte—Charlotte, Concord, Monroe and Mooresville—offering core services of audit, tax, business consulting and financial analysis. Content written by Michael Waddell, MBA, Financial and Management Consultant. For more information, contact Michael or Sam Leder, CPA, Partner, at 704926-3300 or visit www.GoToPotter.com.
Waddell
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greatercharlottebiz.com | september 2014
OF INTEREST: Global Logistics—Supply Chain Solutions
EXPORTING:
AN ACHIEVABLE GOAL FOR SMALL BUSINESSES Contributed by
GLOBAL
MATCH LLC
Cox
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M
illions of dollars’ worth of products are traded on the global market daily. The U.S. is known throughout the world for high quality, innovative goods and services as well as sound business practices. Selling goods and services in foreign markets is an excellent way to increase sales, profits and market share. People around the globe are increasingly using their electronic devices to buy goods and services; businesses that sell online can potentially reach billions of consumers in markets all over the world. The ease of connectivity and global demand have reduced the barriers to entering overseas markets. Since 95 percent of the world’s consumers live outside of the U.S., conducting business globally has become an essential part of the overall strategy for many companies. With increased export production and sales, companies can achieve economies of scale and spread costs over a large volume of revenue, reducing unit costs and increasing profitability and competiveness. Exports are a logical part of growth and allow companies to expand their businesses simply by offering new markets access to their products. Many companies are not exporting because they believe that the process is complicated and risky. If your company has been successful in the U.S. market, then there is a very good chance that it will be successful selling abroad. The world is your market, and these 10 steps will help get you on your way to selling and exporting your products overseas. 1. Identify the most profitable and fastest growing international markets for your products. There are government agencies, such as the U.S. Export Assistance Centers and the Small Business Administration, that provide trade counseling and market intelligence, and can connect you with additional trade resources. 2. Use due diligence to learn about your customer. The U.S. Export Administration Regulations (EAR) prohibit trade with specific individuals, companies, institutions and organizations. Research export enforcement websites to identify the Denied Persons List, Debarred List, Sanctioned Countries List, and Common Red Flags List. Information on these lists can be found at www.export.gov, www.bis.gov, and www. treasury.gov. 3. Identify your product by familiarizing yourself with regulations or licenses that may apply to the goods that you plan to export.
september 2014 | greatercharlottebiz.com
4. Identify the Harmonized Tariff Classification / Schedule B number(s) for your product(s). You can find them at www. census.gov/scheduleb. These numbers help determine applicable import tariff rates and whether the products qualify for a preferential tariff under a free trade agreement. They are also used to file information in the Automated Export System (AES) with U.S. Customs. 5. Identify the terms of sale by using the correct Incoterms. They are published by the International Chamber of Commerce and provide a set of rules for interpretation of commonly used trade terms. 6. Your transaction can be financed by using a Letter of Credit to insure that you get paid for the goods. It is a financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper of the cargo if certain terms and conditions are fulfilled. 7. The documentation that you will be responsible for preparing are the Shipper’s Letter of Instruction for the Freight Forwarder, the Commercial Invoice and Packing List. 8. Choose a good Freight Forwarder who will serve as your agent for moving the cargo overseas. They can assist in preparing export documentation, securing letters of credit, insuring the cargo is properly packed and labeled, and filing the necessary paperwork with U.S. Customs. They can also book the cargo under their volume contracts with the carriers to offer the most competitive rates for new exporters. 9. The cargo needs to be insured. The insurance certificate is used to assure the buyer of the goods that insurance will cover any loss or damage of the cargo during transit. The Freight Forwarder can provide this for the shipment. 10. The exporter must keep accurate records by keeping copies of all export documentation and invoices on-site. Your company should have written export procedures and an internal compliance officer. Many companies participate in the global market with the assistance of third-party logistics (3PL) and fourth-party logistics (4PL) providers, using external organizations to execute logistics activities and to design, build and run comprehensive supply chain solutions. Logistics assistance makes the path to global trade even easier. Content contributed by Sheila Cox, a principal of Global Match, LLC, a consulting and 4PL company, which means an integrator that assembles resources, capabilities and technologies of our organization and other organizations to design, build, and run supply chain solutions. For more information, contact her at 704-554-7948 or Sheila.Cox@GlobalMatchNC.com, or visit www.GlobalMatchNC.com.
OF INTEREST: Transforming the Business of Law to Meet the Needs of Business
PART VI: ONE MORE TIME—WHY SELL TO “INSIDERS” WHO HAVE NO CASH?
T
he last three articles have focused on the 10 important elements of a business owner’s plan to successfully sell or transfer his or her company to “Insiders” (family members, key employees and co-owners). Some of those business owners who read these articles are probably saying, “I really don’t think I’m interested in a sale of my company to Insiders. I simply don’t want to spend all that time planning and making sure all of those elements are in place. Anyway, I’ll get more money and more cash upfront if I sell my company to an outside third party.” These owners believe there is far less risk and time involved selling to a third party than to Insiders. Are they correct? As diplomatically as possible, we suggest that they just might be dead wrong! Third-party sales involve risk. Sales to third parties are less risky than sales to Insiders only if a business can be sold for all cash or if there’s simply no time to implement a carefully designed sale to an Insider. Investment banker Kevin Short reminds owners that unless a company has more than $1 million (or even $2 million) in EBITDA, is in an attractive market sector, has strong fundamentals, and enjoys a unique competitive advantage, it is unlikely to sell to a third party for substantially all cash. Also, the sale is likely to be structured as a small amount of cash upfront together with an “earnout” which is only paid in full if the company meets its projections going forward over the next several years.
Selling to a third party requires a third party wanting to buy. In a difficult M&A market, being in an attractive market sector is more important than ever. Again, according to Kevin Short, “hot” or “niche” industries include power, alternative energy, health care, medical services and healthy-living products. Companies engaged in construction, retail, real estate, automotive and consumer products will find it difficult to attract a buyer in today’s marketplace. Most owners who are able to find buyers for these “project-based” businesses discover that valuation multiples are typically low and cash upfront minimized. Our experience has been that for most companies, today’s M&A market is certainly more active than two years ago, but companies with less than $1 million EBITDA are unlikely to receive a purchase
price of more than 4 times EBITDA (cash flow). The most realistic owners quickly realize that there simply are no third parties interested in their companies. Waiting for third party buyers involves risk. We suspect that some owners hold to the belief that there’s little risk in waiting for a third-party buyer because it provides an excuse to “avoid the hassle” of planning. But, what if a qualified buyer doesn’t show up? What happens if, when you are ready to sell, the M&A market is dormant, or your industry niche has fallen out of favor, or your Contributed by business and/or the economy is in decline or worse? Why subject your future financial security to these uncertainties? Why not assume control of your exit—your life, really— by creating an exit strategy that allows you to choose your buyer, name your sale price, control ownership until you are fully paid; and shift the burden of the company’s future performance from you to the buyer? Insider sales require time to plan. While sales to Insiders require work on the owner’s part, sales to third parties can require just as much work and be just as time-consuming. Once owners understand third-party sales, they usually agree— especially if their companies are too small to attract qualified thirdparty buyers—that transferring to Insiders can be a far better course than liquidation. The objection to Insider transfers: “Insiders do not have money to begin buying your company.” That’s true—today. But they can, and will if your company has a good management team that desires ownership, your company has good cash flow, and you have ample time before leaving to design a tax-sensitive transfer plan and to implement that plan. Insider sales yield cash. Owners can often get as much cash (with no more risk) in an Insider transfer as they can from a thirdparty sale if they have time to work with their advisors to design and to implement a plan. For many smaller businesses, a sale to Insiders may be the only alternative to liquidation. If owners use their time wisely for small businesses, there’s no reason that the Insider transfer cannot yield as much cash as the third-party sale. Article presented by Robert Norris, founder and managing partner of Wishart Norris law firm, a member of Business Enterprise Institute’s International Network of Exit Planning Professionals. © 2014 Business Enterprise Institute, Inc. Reprinted with permission. Wishart Norris law firm partners with owners of closely-held businesses to provide comprehensive legal services in all areas of business, tax, estate planning, exit planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, contact Robert Norris at 704-3640010 or Robert.Norris@wnhplaw.com or visit www.WNHPLaw.com.
Norris
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greatercharlottebiz.com | september 2014
We Are Maersk Corporate Movie
THE OCEAN’S
GREAT
DANE
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MAERSK LINE: INTENTLY FOCUSED ON DELIVERING RESULTS by pete prunkl
september 2014 | greatercharlottebiz.com
C
harlotte’s role as a global hub for international commerce extends beyond the Catawba River to the high seas. Within the city limits are corporate, sales and marketing offices for 11 of the world’s major shipping lines. But there is little to compare among Orient Overseas Container Line, Horizon, Cosco, Evergreen Line, Maersk Line, Hyundai and Yang Ming. Maersk Line is the luxury yacht to their river rafts. With over 25,000 employees, 600 steamships and 100,000 customers worldwide, Maersk Line is the largest container shipping company on the planet. The Copenhagen-based company first docked in Charlotte in 1999. Their office was in Barclay Downs—the former Charlotte base for SeaLand. The building choice was hardly a coincidence. In 1999, SeaLand, the company that invented container shipping, was purchased by what was then A.P. Møller-Maersk Line. The buyout included vessels, containers, related container terminals and lease obligations.
The formidable SeaLand name did not entirely disappear with the takeover. The new container company became Maersk SeaLand Services. But simplicity eventually won out and in 2006 the Danes opted for Maersk Line. Maersk Line Agency, USA, is the North American container division of Maersk Line. The Barclay Downs office near the South Park Mall stayed active for the next two years. In early 2008, Maersk dramatically expanded their Queen City presence. They combined the east-coast and mid-west customer service, land and oceanside operations and a majority of their finance functions at 9300 Arrowpoint Boulevard on the city’s
“our
business is maturing. we are starting to understand how to best use data, facilitate trade and serve our customers in a more efficient and meaningful way.”
southwest side. Maersk had purchased the 346,000-square-foot building from Royal & SunAlliance in 2006. It became a model of environmentally friendly renovation.
Going Intermodal Maersk is not a name that easily rolls off the tongue. It is pronounced as if the “a” were absent—Mersk. Say it quickly and it sounds like a major drug manufacturer. “For my first five years with the company, my mother thought I worked for Merck,” chuckles Tim O’Connell. Since July, the 41-year-old O’Connell has been senior vice president of North American (NAM) inland operations. Also in Charlotte are Kevin
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greatercharlottebiz.com | september 2014
photo by jimmcguire.com
Maersk Line Triple-E: 18,000 containers: Enough to fill Times Square
Tim O’Connell Sr. Vice President Maersk Line
Maersk Line Triple-E: The largest, most efficient ship in the world
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Hickey in charge of customer service, Cindy Ott over human resources, and Al Gebhardt, in charge of liner operations. The Charlotte consolidated office is one of the newer developments in the company that A.P. Moller and his father Captain Peter Maersk Moller founded in 1904. The father-son team had just a single freighter. By the mid-1950s, Maersk had freighters in the plural, but they and other steamship companies were slowly evolving into container carriers, the paradigm-shifting invention of North Carolina native Malcolm McLean. Fast forward to the late 1970s and Maersk and others evolved again into door-to-door product delivery systems. Since 1977, steamship lines have interacted with rail and trucking companies in what the world has come to know as intermodal shipping. Although Maersk is headquartered in Florham Park, N.J., O’Connell refers to the Charlotte office as a “dual headquarters” with Florham Park. The
september 2014 | greatercharlottebiz.com
commercial functions are in Florham Park, while O’Connell, Hickey, Ott and Gebhardt handle operations, customer service and HR in Charlotte. O’Connell is well-suited for his role. He started with Maersk immediately after graduating from the University of Scranton in 1995. He liked the company’s philosophy right from the start. And they liked him. Maersk has moved the Pennsylvania native through customer service, pricing, sales, information technology, trade and marketing, and now inland operations for all of North America. What did Charlotte have going for it?
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Growing Wise Inquiries like these into innovative models of customer service are not typical of the shipping industry. In their 2014 book, Creating Global Opportunities, authors Chris Jephson, a former Maersk senior executive, and Henning Morgen, a company historian, back up this assessment with a telling anecdote. In 1978 an advertising agency was asked to celebrate the 50th anniversary of Maersk Line’s services between the U.S. and Southeast Asia with a video documentary, wrote Richard Milne in a book review. Maersk McKinney Moller, the longtime CEO and company figurehead, watched the video, thanked the people involved then shelved the film. Instead, he sent a personal letter to each top customer because it was more in keeping with what his father would have wanted. O’Connell acknowledges, “The container business kept growing and growing (in the second half of the 20th century), but the industry itself didn’t really grow.
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“Obviously, we already had a presence at the old SeaLand office at South Park,” says O’Connell. Among the other factors in Charlotte’s favor, O’Connell found a ready source of excellent resources, a sensible work-life balance, proximity to all of Maersk’s major suppliers and customers, the airport, great people, good colleges and jobs from entry level to executive. Charlotte’s growing role as a center for national and international conferences also played a part. “Charlotte enables us to attract a really good and diverse workforce,” attests O’Connell. “Aside from that Charlotte is just beautiful. I love it here,” he adds. O’Connell also commented on Maersk’s resurrection of the SeaLand brand announced earlier this year. “For our North American business, one of the key markets is Latin America,” he explains. Maersk has struggled with how best to serve that market. For answers, they looked to Seago, its intra-Europe/Mediterranean and MCC, Seago’s intra-Asia counterpart. These short-haul, small-customer operations served as a model for the new SeaLand. “As it turns out, the SeaLand brand carries a significant amount of weight in Latin America. In short, having a brand connected to the beginning of this industry is important and something that really resonated.” Headquarters for the new SeaLand will be located in south Florida.
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“there
are a number reasons to use maersk. i think most importantly it’s centered on our philosophy of constant care. whether that be for our customers, and delivering their promise to their customers, our business, our partners and their business, or our colleagues and creating a rewarding place to work, we work hard as company to ensure we have a strong balance and intent focus on delivering results.”
Volume-wise, yes, there has been growth, but how we think about business and global trade is somewhat antiquated. We are not really in the main stream of using e-commerce, efficiency programs and lean operation. For years the industry has been plagued with terrible results. Return on capital is very bad.” He then addressed the how-to-fix-it question. The answer is a third wave of evolution, says O’Connell; an evolution that builds on the foundation provided by containerization and door-to-door logistics. “Our business is maturing,” he says. “We are starting to understand how to best use data, facilitate trade and serve our customers in a more efficient and meaningful way.” O’Connell points to Soren Skou, the global CEO of Maersk Line, as a leader in an evolving industry. Skou learned his leadership lessons the hard way. During
his first two months on the job—January and February of 2012—Maersk Line lost $500 million. That’s $9 million a day. At that rate, the company was headed for a $3 billion end-of-year disaster. Instead, Maersk Line had a $461 million profit in 2012, but Skou admits that even that was not a good return on what the Maersk conglomerate had invested in Maersk Line. Under Skou, Maersk has adopted an even more green approach to fuel reduction and cost containment. In 2013, the company had reduced its carbon dioxide emissions per container shipped by 25 percent. Maersk had targeted 2020 for a reduction of that magnitude. Congratulations were short-lived, however. Skou raised the percent to 40 by 2020. The 50-year old MBA from IMD Switzerland also upped the ante on how the company is organized, serves its customers and meets its delivery schedules. Maersk Line recently reported a profit of $547 million for the second quarter of FY 2014. The container shipping division helped drive up the Maersk Group’s half-year earnings by 42 percent.
Growing Larger Skou is overseeing the launch of Maersk’s new Triple E class ships, the largest ships in the world. The Triple E designation plays well for marketing department spinmeisters: economy of scale, energy efficiency and environmental improvement. Maersk Line initiated the E Class in 2006 with the Emma Maersk and Estelle Maersk. Each holds the equivalent of 14,770 20 by 8 by 8 ft. containers (TEU). All eight Maersk E Class sister ships begin with the letter E. Triple E Class container ships—20 ordered, 10 delivered—are even larger. Each will measure a quarter mile long and hold 18,000 TEU on its 19 decks. The highly computerized EEEs will part the waves at 23 knots with a skeleton crew of 22. One kilowatt of energy per september 2014 | greatercharlottebiz.com
ton of cargo will propel a Triple E 114 miles. Compare that to a jumbo jet that travels a mere third of a mile using the same amount of energy per ton of cargo. Charlotteans who tour the Maersk building at Arrowpoint will find a large model container ship with thousands of tiny boxes nestled in its hull. “That’s onethird the size of a Triple E,” says O’Connell. The largest ship Maersk docked on the U.S. east coast was 10,000 TEU. More typically, it is 7,500 TEU.
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With all classes of container ships—large, larger and largest—port selection is a major concern for O’Connell. His port roster includes Wilmington, Norfolk, Baltimore, Newark, Charleston, Savannah, Mobile, Houston, Los Angeles, Long Beach, Seattle, Vancouver, Halifax and Montreal. “Larger ships place greater demand on a port,” says O’Connell. Cranes have to be large enough to reach over ships like the Triple E’s expanded hull. Ports have to be deep enough; rail lines and roads must be efficient and accessible. Another port decision issue, says O’Connell, is customer density. He cited Gildan and the Port at Wilmington as an
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example. Textile giant Gildan has a distribution center in Eden, N.C., that receives finished goods imported from Central American manufacturers. In 2012, Gildan increased its use of Eden and the port at Wilmington to export textiles to countries in the European Union. Maersk shifted Gildan’s import and export business from the port at Charleston to Wilmington. “One thing that really matters to Maersk is how our customer needs to be served,” says O’Connell. While markets in Central America, Africa and Asia are exploding, the elephant in the room is always China. “Our company has a very long history of doing business in China,” says O’Connell. In early 2015 Maersk’s trans-Pacific, trans-Atlantic and Asia-Europe business will enter a new evolutionary phase. That’s when a 10-year vessel sharing agreement between Maersk Line and Mediterranean Shipping Company (MSC), the so called 2M partners, is expected to go into effect. The agreement will mobilize the capacity of 185 container ships and possibly result in a 30 percent share of the total Asia-Europe container market.
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That is less than what Maersk, MSC and France’s CMA CGM hoped to gain from a proposed three-way vessel sharing agreement they floated in 2013. Known as the P3 Network—the P standing for parties— it would have controlled 40 percent of the trade detailed in the 2M arrangement. P3 was scuttled in June 2014 by the Chinese due to competition concerns. The quickly hatched 2M plan did not need approval from the Chinese Commerce Ministry. Only a few major and minor industries in the world are outside Maersk’s 100,000-plus customer base. When meeting the rare nonuser, Tim O’Connell first talks about needs, schedules, price and corporate fit. Then it’s a discussion of Maersk’s strong brand, long history, financial stability, good network and customer service. He concludes with a notion voiced by many in the container industry: “What’s not to like?” “There are a number reasons to use Maersk. I think most importantly it’s centered on our philosophy of constant care. Whether that be for our customers, and delivering their promise to their customers, our business, our partners and their business, or our colleagues and creating a rewarding place to work, we work hard as company to ensure we have a strong balance and intent focus on delivering results.” Pete Prunkl is a Greater Charlotte Biz freelance writer. Images provided by Maersk Line.
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Maersk Line North American (NAM) Inland Operations 9300 Arrowpoint Blvd. Charlotte, N.C. 28273 Phone: 704-571-2000 Local Principals: Timothy H. (Tim) O’Connell, Sr. Vice President; Kevin Hickey, Vice President Customer Service; Cindy Ott, Vice President Human Resources; Al Gebhardt, Vice President Liner Operations Parent Company: A.P. Møller–Maersk Group Founded: 1928 Copenhagen; 1999 Charlotte Office Employees: Over 25,000 in 325 offices, located in more than 125 countries Resources: 3.4 million containers and over 600 container vessels Customers: Over 100,000 Business: Global container shipping company in the world dedicated to delivering customerfocused, reliable global transportation services. www.maerskline.com
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Connecting Business Globally Integration Point Brings It onto One Platform
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T
by kathleen conroy
welve years ago, Tom Barnes purchased thin plywood boards from a local home improvement store to serve as “poor man’s whiteboards” in the guest room of his Matthews home. He and his first two team members looked for clients during the day, while he coded the initial version of global trade software at night. Those were the humble beginnings of Integration Point, a global trade management firm now employing over 500. Today, there is a bank of flat-screen monitors across the wall in the two-story Integration Point office off Providence Road. The screens track trade activity across the world, along with server data and a multitude of global information. Integration Point now has offices in six continents and manages trade in 167 countries. “There are many disparate solutions across the world today. My goal was to change all that,” he says of his start in 2002. “Trade programs in different parts of the world vary dramatically,” explains Barnes, “and corporations need one platform to facilitate the management of their trade programs efficiently. We bring those capabilities together on one platform.” Building software on a single, Web-based platform, Integration Point allows organizations to manage trade programs and comply with global regulatory requirements while improving visibility and realizing savings. The company also provides solutions for import/export management, supply chain security, entry validation, denied party screening, product classification, free trade agreement qualification, foreign-trade zones, and global duty deferral program management. “We have an opportunity to redefine global trade,” says founder and CEO Barnes, 46. “Some think of our business as software, but we are also involved in updating regulatory content. This, combined with the connectivity to supply chain partners and government entities across the world on one platform, provides the opportunity to help mold our industry.”
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photos by fenix fotography
Tom Barnes President and CEO Integration Point, Inc.
Global Brainstorm
“We have an opportunity to redefine global trade. Some think of our business as software, but we are also involved in updating regulatory content. This, combined with the connectivity to supply chain partners and government entities across the world on one platform, provides the opportunity to help mold our industry.”
Integration Point operates globally, not locally or regionally, so Barnes had his choice of great places to establish the company headquarters. “Charlotte offers the perfect environment both from a corporate and family perspective,” Barnes affirms. Although born in Mexico City, Barnes had lived in Texas, the Midwest and North Carolina. He graduated from East Gaston High School in Mount Holly. He went on to graduate from the University of South Carolina in Columbia, working on two degrees: management science and business economics. While living in Texas in 1993, Barnes was impressed with an uptick in growth and business in Charlotte. He kept in touch with his former home via The Charlotte Observer and had kept tabs on the employment classifieds.
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Speaking of his wife, Barnes says, “We both had job interviews there on the same day, flew up on the same day, and got job offers the same day. So we moved to Charlotte, deciding it was meant to be.” Barnes started his career as a software developer in Mexico, designing international trade systems at different consulting firms, and managing systems for a global manufacturing company. “I’ve always had one foot in the IT world and another in international trade,” he remarks. In 2002, he said to his wife, “I have a good idea for a business, so let’s take our life savings and invest in a company that can offer one trade platform for global needs.” “Luckily she agreed,” he says with a laugh, and they found a new use for their spare bedroom. Barnes then set to work forming a core team. “I thought of everyone I knew—the best of the best,” he says. “That’s important,” offers Clay Perry, senior vice president of global markets, who was also the second employee of the company. “We know a company like this is only good as the team.”
Making It Connective Barnes emphasizes: “Economies change. Governments enact new regulations. Trade channels are updated. Supply chain partners alter services or products. Regardless of the country or year, global trade is always dynamic.” It’s those factors that drive him and the team at Integration Point to provide a central platform for importers and exporters. “What a client needs for Brazilian imports and what a client needs for Asian fair trade agreements is completely different,” says Barnes “Our platform is
multilingual and supports all languages. We manage the regulations for 167 countries on a daily basis. Every company has its unique aspects to global trade and that goes with political regimes and economies. That’s why they need us even more to help keep track of this.”
“Trade programs in different parts of the world vary dramatically and corporations need one platform to facilitate the management of their trade programs efficiently. We bring those capabilities together on one platform.”
Barnes’ company provides solutions for: import/export management, supply chain security, entry validation, denied party screening, product classification, free trade agreement qualification, foreign-trade zones, and global duty deferral program management. “The platform is cloud-based. Our clients are processing off our server and all are on same code-base. It’s highly configurable,” he says. “We configure our technology to meet their needs. We must understand their business very closely. “To do that, we have to maintain a talent
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Barnes continues, “Integration Point is architected to satisfy the needs of customers to implement modules as required, on a functional, geographic and corporate basis. This enables them to pay for and use the capabilities required across the enterprises on a country-by-country basis.” Barnes says his goal from the beginning was to create a tool to give companies the visibility and the necessary regulatory information to facilitate compliance. “Even if you are an expert on exports in the U.S., you don’t know all the regulations for Japan, Brazil or Australia. There are big discrepancies throughout the world,” says Barnes from firsthand knowledge.
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pool like no other, as well as the ability to stay on top of global trade on a daily basis,” he notes. “To qualify for a free trade agreement you must be able to show where every component comes from and account for that to save duty,” he says. “Our objective is to expand our global footprint and associated solutions to meet the needs of our global
clients no matter what. It’s a big world.” He notes that the company’s very first client—a large global 200 company—still works with Integration Point. Integration Point also does quite a bit of work for large logistics providers. Their roster of clients includes large petroleum companies, electronic providers, recognizable retail names and pharmaceutical giants.
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“We have over one million regulatory controls in our content base and, wherever you are, you need to understand the rules and regulations and we give you the tools to do that. We have different competitors across different geographies and trade programs. The difference is that our one platform meets all those needs and provides visibility globally.” Barnes insists on high standards in the company’s hiring and exposes employees to a rigorous training program. He believes that Charlotte has a great talent pool—recruiting from regional universities that include USC, UNC Charlotte, Western Carolina, Winthrop, and Clemson.
Customs and Customization In addition to offering a global trade management solution, Integration Point also works closely with U.S. Customs and Border Protection (CBP), the largest federal law enforcement agency of the U.S. Department of Homeland, charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. regulations, including trade, customs, and immigration. Melissa Irmen, senior vice president of products and strategy, works for Integration Point remotely from her northern Virginia home. That way, she says, she’s closer to Washington, D.C. and in tune with everchanging regulations from the customs and border agency. “CBP is going through a complete systems overhaul right now,” she says. “With new software development, they have a
process of asking for information from the trade to help them build better systems. We spend a lot of time in interaction with CBP.” Irmen, a self-described “trade geek,” says it’s work that she truly likes. “I really enjoy my role as a government liaison. I’m contributing not only regulatory processes here but also trade everywhere,” she says. “Being able to deliver something to someone to help them leverage their business, I think that’s really exciting.” “We have locations in every major continent and personnel all around the globe— China, Mexico, Australia, India, Brazil, Belgium and more. Our goal is to focus and to have a localized presence in areas of high activity so that we have the knowledge and the scope of what’s in each country,” she says. She describes Integration Point’s product as a forever-growing platform with multiple functions and easy accessibility. “Perhaps all you need to do is denied party screening for your exports and you can purchase just that piece of the software, and later you start importing and you need a tool to help to manage free trade agreement,” she says. “If you are exporting you are required to screen all of the people that you send your exports. That’s one of the functionalities of the platform. If you are importing, you are required to file with the U.S. CBP, and the platform does that as well. We also offer trade programs to improve your competiveness.” “The key takeaway is that everyone exporting and importing needs to do these things and we make it simpler, faster and more cost effective to do so,” Irmen says. Because of Integration Point’s
involvement in community and regulatory agencies around the world, they are often recognized by trade organizations and industry magazines. In July, customers nominated the company to receive the designation of “Great Supply Chain Partner” for 2014 by SupplyChainBrain, a popular trade magazine. “It is always a compliment and huge honor when your customers take the time to point out how much they enjoy working with you, how much your solutions assist their operations, and the savings opportunities that are realized,” says Jeff McCauley, vice president of global accounts at Integration Point. Barnes says Integration Point’s software product, its diversity, ability to be configured and keeping in touch with government customs agencies is working. “We’ve been profitable from day one.” He points out that the company’s software pieces can be tailored to meet the
needs of customers quickly. “We have over one million regulatory controls in our content base and, wherever you are, you need to understand the rules and regulations and we give you the tools to do that,” he says. “We have different competitors across different geographies and trade programs. The difference is that our one platform meets all those needs and provides visibility globally.” Barnes says he sees a future full of opportunity. He is positive that Integration Point is meeting the needs of the global trading industry. “My goal is to build the network of global trade,” he says. “We are in the position to define an industry. Very few people have that opportunity.” Kathleen Conroy is a Greater Charlotte Biz freelance writer.
Integration Point, Inc. 10720 Sikes Pl., Suite 300 Charlotte, N.C. 28277 Phone: 704-576-3678 Principal: Thomas D. (Tom) Barnes, President and CEO Locations: Headquartered in Charlotte, has offices in every major continent In Business: 12 years Employees: Over 500 Recognition: As a supply chain partner, top 100 IT provider and as a trailblazer in the global trade and supply chain industry Business: Provides import and export capabilities, up-to-date regulatory information for 160-plus countries and connectivity to supply chain partners and government agencies across the world. www.integrationpoint.com
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greatercharlottebiz.com | september 2014
FACILITATING THE by andrew rusnak
KUEHNE + NAGEL LEADS THE WAY IN FREIGHT FORWARDING
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september 2014 | greatercharlottebiz.com
I
f you’ve bought anything from shoes to pharmaceuticals in the last few decades, chances are good that Kuehne + Nagel was involved in shipping it. As the first place leader in seafreight forwarding, the second place provider of air cargo forwarding, and the third place provider of overland freight forwarding in Europe, Kuehne + Nagel delivers global logistics and supply chain management to top companies around the world, including many right here in Charlotte. Michael Raffler, vice president for the company’s Carolinas division, says, “Think of Kuehne + Nagel as a travel agent for cargo. Let’s say you want to go on a honeymoon with your loved one. You contact a travel agent, and even though the travel agency doesn’t own the airline, taxi, or hotel, they get your tickets and make sure everything is set up for you. As a freight forwarding company, we do the same for cargo through contracts with major airlines, steamship lines, and trucking companies. And you can track the progress of your shipment every step of the way!”
GLOBAL ECONOMY
Raffler adds, “We view Kuehne + Nagel as an extension of our customers’ businesses. Companies have to move parts, materials, and products on the international playing field. They can leverage one-stop shopping through our integrated logistics solutions— whether for airfreight, seafreight, overland or warehousing/distribution. Essentially, we handle the entire shipping process from start to finish.”
Growing Globally While the company got its start in Charlotte during the late 1970s, the heyday of textile manufacturing and woodworking in the region, its history extends back to 1890 in Bremen, Germany. There, August Kuehne and Friedrich Nagel partnered to create a shipping company. For the next 30 years, Kuehne + Nagel mainly focused on German transportation involving heavy cotton and lumber, but it quickly evolved.
“we view kuehne + nagel as an extension of our customers’ businesses. companies have to move parts, materials, and products on the international playing field. they can leverage one-stop shopping through our integrated logistics solutions— whether for airfreight, seafreight, overland or warehousing/distribution. essentially, we handle the entire shipping process from start to finish.”
In the 1950s, Alfred Kuehne, son of founder August Kuehne, began working to make the company a global presence. This was achieved by contracting with major shipping companies across the world and establishing local offices in industrial hotspots. As more locations were added, the company’s reputation in the shipping and logistics industries grew stronger, allowing it to gain more market share as companies began approaching Kuehne + Nagel for logistics and supply chain management solutions. In the 1980s, Kuehne + Nagel moved its global headquarters to Schindellegi, Switzerland, a city outside of Zurich. In the United States, New York serves as the national headquarters, and today, Kuehne + Nagel has 1,000 locations in over 100 countries and boasts a workforce of 63,000 logistics professionals. Of the Charlotte office, Raffler explains, “When the office was initially opened in the
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greatercharlottebiz.com | september 2014
late 1970s, there were only two people: a sales person and an assistant. When I joined the Charlotte office in 1990, there were 19 people. The Charlotte office now employs nearly 130 people, including full-time and temporary staff.” “We came when the textile and woodworking industries were booming, but our continued success in the Carolinas can be attributed to evolving with the region,” Raffler continues. “As Charlotte has welcomed automotive parts suppliers, Kuehne + Nagel has adapted to keep up. “The aviation industry has also come to the Carolinas, and we do business with many of these suppliers. Charlotte is still very strong in manufacturing and assembly, and, of course, it’s just a great place to live, work, and play,” he says with a smile. Globally, Kuehne + Nagel serves a variety of industries, including oil and gas, pharmaceuticals, fastmoving consumer goods, and technology, but in the Carolinas, the focus is a bit more narrow.
photo by fenix fotography
“we came when the textile and woodworking industries were booming, but our continued success in the carolinas can be attributed to evolving with the region. as charlotte has welcomed automotive parts suppliers, kuehne + nagel has adapted to keep up.”
(l to r) Michael Raffler Vice President Carolinas Shannon Schmidt Carolinas Sales Manager Kuehne + Nagel, Inc. september 2014 | greatercharlottebiz.com
“Here in the Carolinas, which contain our offices in Charlotte, Greenville, Raleigh, and Charleston, we focus mainly on automotive, aviation, aerospace, and general industrial as well as some retail,” explains Raffler.
Securing the Valuables When it comes to business assets, there are many options a company may choose to list, but for Kuehne + Nagel, its staff is at the top. The company provides an ongoing training program to ensure that all of its employees are up on the latest in logistics technology, and each staff member goes through a rigorous screening process before joining the Kuehne + Nagel team. “We care deeply for our people, and we’re very detail-oriented. When it comes to international freight forwarding, mistakes can be costly, so we ensure that only the best logistics professionals get hired,” notes Raffler. “Our team is quick to react to market changes, challenges, expansions, and contractions. We’re outstanding in identifying and eliminating weak spots. This is one of the most important factors in helping our customers,” he continues. Kuehne + Nagel has also gained a solid reputation in the shipping industry due to showing care for its customers, many of whom know Kuehne + Nagel for its entrepreneurial spirit, a spirit that has driven the company’s innovative approach to meeting customer’s needs. As Raffler tells it, Kuehne + Nagel often goes into countries and regions where specialized resources exist, such as oil and gas, in order to establish connections right where the suppliers are—ultimately allowing the company to meet needs that other logistics providers can’t. “One part of our focus is on vertical industries in order to handle logistics through multiple layers of the shipping process. We do this so that we can connect with customers directly,” he says. This approach allows Kuehne + Nagel to be nimble and flexible enough to adjust to changes in the industry as a whole and on a local level, which is crucial when facing a changing and evolving society.
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For example, a customer’s area may be facing certain socio-economic difficulties or political changes, and it’s imperative for Kuehne + Nagel to have a local presence in order to identify and meet such challenges.
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“our team is Quick to react to market changes, challenges, expansions, and contractions. We’re outstanding in identifying and eliminating weak spots. this is one of the most important factors in helping our customers.” Another key to Kuehne + Nagel’s success is how it cares for its branch managers. Each branch functions almost as its own entity, meaning branch managers are given the authority to make important business decisions without the weight of corporate bureaucracy stifling them. If a concern is encountered in a specific region, the corresponding office is able to react quickly to address a customer’s needs in the most efficient manner possible, and this is critical when it comes to the time-sensitive shipping arena. Failing to react and solve customer issues may result in delayed shipment or, in the case of fast-moving consumer goods that have been left to sit, unusable products and materials. In addition to caring for people, Kuehne + Nagel also goes to great lengths to care for its cargo. There’s no doubt that the shipping world has changed since 9/11 and logistics companies have had to change along with it. As security is a top priority, Kuehne + Nagel
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“security is a major concern for kuehne + nagel. today, our office here in charlotte is as secure as fort knox, if i may say so. our team recognizes the various threats facing the shipping industry, and we’re proactive in protecting our customers’ cargo and our people.”
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partners with a number of federal law enforcement and regulatory agencies to ensure that its facilities and its customers’ cargo are protected. “Security is a major concern for Kuehne + Nagel,” Raffler says. “Today, our office here in Charlotte is as secure as Fort Knox, if I may say so. Our team recognizes the various threats facing the shipping industry, and we’re proactive in protecting our customers’ cargo and our people.” He continues, “We’ve taken steps to ensure that we’re in compliance with all federal safety regulations, and we’re always screening cargo. Although this takes a little bit longer to prepare shipments, these are steps we’re willing to take to protect our customers and their materials and products. The secure movement of cargo is very important to Kuehne + Nagel.”
Connecting Customers and Information In addition to keeping up with security regulations, Kuehne + Nagel is also keeping up with technology. More and more, customers are craving information online, and Kuehne + Nagel’s KN Login is delivering that information with precision. KN Login is the company’s main information platform through which customers can see real-time, comprehensive data regarding a specific shipment’s status, including its location and expected arrival time
september 2014 | greatercharlottebiz.com
and date. This service is available 24 hours a day on the Internet and is accessible to all of the company’s customers, regardless of language or country. “We’re in a time where information technology is so important. We’ve seen so many changes over the last 15 years as a result, and our customers need information. Because we don’t own vessels, airplanes, and such, we interface with our service providers through a network of connections. “We take all of this information and pull it together on one platform, KN Login, to provide one complete
picture for our customers,” states Raffler. “Our KN Login portal is an industry recognized, state-of-the-art system to allow customers to see their cargo through each step in the logistics process.”
“we’ve taken steps to ensure that we’re in compliance with all federal safety regulations, and we’re always screening cargo. although this takes a little bit longer to prepare shipments, these are steps we’re willing to take to protect our customers and their materials and products. the secure movement of cargo is very important to kuehne + nagel.” Customers are also able to use this interface to place orders for shipments, minimizing or eliminating the amount of time spent on the phone or doing paperwork. Once an order is processed, Kuehne + Nagel takes care of the rest and provides each customer with updates through KN Login. When it comes to connecting with customers through marketing, Kuehne + Nagel relies heavily on its reputation. The company does very little in the way of traditional marketing and advertising, even when it comes to trade publications. “Our company is involved in direct business-to-business transactions, and if you’re not a part of global logistics and supply chain management, you might not know us. We don’t advertise much because our expertise and presence in the market speaks for us,” Raffler mentions. “Our network and our people, our local presence, these all provide a large amount of marketing for us.” This has created brand loyalty, and many of Kuehne + Nagel’s customers have been with the company for decades.
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The Future of Logistics Looking ahead, it seems that most changes in the logistics industry are greatercharlottebiz.com | september 2014
locations
positive. Due to the sophistication of much of today’s logistics technologies, workers are coming into the industry more educated. “The logistics industry has changed massively over the past 25 years,” says Raffler. “We’ve evolved into a logistics solutions provider. We used to talk to traffic managers who had minimal knowledge about freight outside of their own position, but today, so many people in logistics know so much more.
“This has caused Kuehne + Nagel to adjust accordingly by keeping up with our own staff’s education. We’re also constantly updating our technology to stay ahead of the market and provide the best freight forwarding services.” Unfortunately, there are some potential challenges on the horizon for the industry, including 3D printing. This technology, while not yet perfected or
commercially viable, does have the potential to eliminate manufacturing jobs, and therefore, lower shipping volumes. In its current incarnation, 3D printing has proven to be successful at manufacturing small items, but recently in China, entire houses have been 3D printed, signaling that this technology’s ability to create larger items may be in the near future. “I think 3D printing will likely change the
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face of international transportation, logistics, manufacturing, all of that,” Raffler states. “We’ll see less smaller-size consumer products, tools, parts, hardware, being shipped. It will all be done with a mouse click and produced at home or in a small business.”
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“as for our presence in the charlotte market, we’ll continue to grow with the city and our partners. our position right now is outstanding and our reputation in the market is wonderful. the future is bright for kuehne + nagel.” “I can’t imagine how the impact will be right now,” he continues, “but I expect it to have an effect. 3D printing is certainly something to watch.” As for the future of Kuehne + Nagel, however, Raffler says, “I’m confident that we’ll remain one of the top three logistics solution providers in the world as we’re always poised to meet our customers’ needs. “As for our presence in the Charlotte market, we’ll continue to grow with the city and our partners. Our position right now is outstanding and our reputation in the market is wonderful. The future is bright for Kuehne + Nagel.” Andrew Rusnak is a Greater Charlotte Biz freelance writer. Images provided by Kuehne + Nagel.
Kuehne + Nagel, Inc. 4724 Entrance Drive Charlotte, N.C. 28273 Phone: 704-359-8660 Principal: Michael Raffler, Vice President Carolinas Founded: 1890; 1979 in Charlotte Locations: More than 1,000 locations in over 100 countries Employees: Approximately 63,000 globally; nearly 130 in Charlotte Business: Global transportation and logistics company; provides seafreight and airfreight forwarding, contract logistics, and overland businesses with a focus on providing IT-based integrated logistics solutions. www.kuehne-nagel.com
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Fairfield Inn & Suites: The Next Generation
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Bill Moore General Manager Fairfield Inn & Suites Charlotte Uptown
by zenda douglas
UPTOWN PROPERTY SEEKS NEW HEIGHTS Fairfield Inn & Suites Brand in Uptown Charlotte Augments the Marriott Family
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ayer-by-layer, room-by-room, the hotel property at 201 South McDowell Street has been transformed by major renovations and is now officially open as Fairfield Inn & Suites by Marriott. Owner, JHM Hotels out of Greenville, S.C., purchased the hotel in June of 2011 while it was still operating as the Crowne Plaza Uptown Charlotte, whose branding contract with Intercontinental Hotels Group was set to expire. After transitioning the property into an independent hotel they named Charlotte Plaza Uptown Hotel, JHM has fulfilled its goals to renovate and reposition the hotel in the Charlotte market as part of the Marriott family.
“JHM is very excited to be part of the Charlotte Uptown marketplace,” says Michael Smith, vice president of sales and market-
ing for the hotel group. “Charlotte is a vibrant city with lots of marvelous aspects. We are thrilled to be part of this community.” According to Smith, JHM had its eye on the Charlotte market for some time. “Charlotte has a great hotel market. When we saw this hotel, we knew that it had an upside potential from its former condition. We knew that with renovation and the right brand it would be a homerun.” The building’s original occupant was The Downtowner Hotel which opened in 1972. It later became an independent hotel
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named the Government House prior to being branded as a Sheraton Hotel. Next, it was known as a Best Western Hotel and from there it was re-branded to a Crowne Plaza Hotel before being purchased in 2011 by JHM Hotels.
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“JHM is very excited to be part of the Charlotte Uptown marketplace. Charlotte is a vibrant city with lots of marvelous aspects. We are thrilled to be part of this community.”
The property has come a long way in the past year. “This was not merely a cosmetic renovation,” says Bill Moore, who has served as general manager to the property since 2006 and continues in that role. “There has been almost as much done that the guests and public will not see as there has been in aesthetic upgrades.” Moore cites work done to install new fire and life-safety systems, electrical systems, all new high speed Internet infrastructure, increased bandwidth, and sound proofing has been added to all guest rooms. “As an older building, I don’t think it had ever been brought up to current codes to be safer; more energy efficient. This was a deep, total, inside-out, top-to-bottom renovation. Everything was replaced.” Fresh, new color schemes adorn the interior and
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exterior of the hotel. New signage, driveway and a beautiful limestone wall around the new pool all add up to what Moore calls a “rebirth” for the hotel.
The Fairfield Brand The new Fairfield Inn & Suites Charlotte Uptown serves the Charlotte market with 196 well-appointed rooms, banquet and meeting space, and a complete kitchen for room service and full, rate-included breakfast. Q Tavern will serve both guests and the public for lunch, dinner and cocktails. “This location has had a really strong lunch business due to its proximity to county offices and the courthouse across the street,” says Moore. “This location has also had a strong occupancy rate. “Business in Charlotte is really good for hotels,” he continues. “Occupancy projections by the CRVA for Mecklenburg County are approaching 70 percent by the end of 2014. Our goal is always to be above market. With the transient demand that is generated uptown by Bank of America, Wells Fargo, Duke Energy and other uptown businesses, this should be doable.” The hotel caters to business travelers, those needing a mid-sized hotel for meetings and events, and leisure travelers who are visiting Charlotte around events or family or for a getaway. “We’ve repositioned this hotel to be an available niche that customers are looking for—not too high end, not too low-end. Whether they are traveling for business or pleasure, it’s a great place to stay,” says Smith. Approximately 40 percent of room sales are from the corporate market, while groups make up approximately 35 percent, and contract (e.g. airline) sales are approximately 15 percent.
“This was not merely a cosmetic renovation. There has been almost as much done that the guests and public will not see as there has been in aesthetic upgrades.”
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Within the Marriott family, Fairfield hotels are select service hotels, bundling services such as high-speed Internet connectivity and breakfast. Fairfield hotels will typically have less public space. A “full-service” Marriott would be more upscale physically, have more restaurants, higher staffing levels and charge for these types of services. “The Fairfield Inn & Suites Charlotte Uptown will be very atypical in that the hotel will have 10,000 square feet of meeting and banquet space and a restaurant attached to the hotel,” says Moore. “In addition, we own and operate our own parking garage which is a great advantage. Drivers can pull right off of Highway 277 into our parking lot. That’s a great value.”
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“The Fairfield Inn & Suites Charlotte Uptown will be very atypical in that the hotel will have 10,000 square feet of meeting and banquet space and a restaurant attached to the hotel. In addition, we own and operate our own parking garage which is a great advantage. Drivers can pull right off of Highway 277 into our parking lot. That’s a great value.” Also a bit unusual is JHM’s dual role as owner and management. This is very good for the hotel, according to Moore: “It’s a good situation when you have ownership and management as one entity. It totally aligns everyone’s goals. I feel confident that I could call the president of the company at any time. Things happen faster. “JHM is an operations and sales-driven hotel company,” Moore continues. “People in upper management of JHM have been hotel managers and directors. They know the business.” JHM has approximately 40 hotels across the country; mostly on the east coast with one in Illinois. This is their first hotel in Charlotte. “JHM really likes to work with Marriott,” says Moore. “With a great base of loyal travelers, 41 million members in the Marriott Rewards Program, and a great reputation for quality and service, JHM feels that Marriott-branded hotels perform well for owners.” Working with a brand also provides the benefit of reservations systems and marketing, according to Moore. With the transition to a Fairfield Inn & Suites Charlotte Uptown, the Marriott family of hotels is well represented in uptown Charlotte by the Ritz
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Carlton, Marriott City Center, Residence Inn, and Courtyard by Marriott.
Being a Good Host Miraculously, the hotel remained open throughout renovations. “We’ve had as many as half of our rooms out of service at one time but we never closed,” says Moore. “Some staff members had fewer work hours through renovations but we didn’t have to let people go. Some of our people were able to go to work at other JHM hotels which helped a lot. I don’t think we’ve lost a single person.” The restaurant and bar area did close down in March. The new Fairfield Inn & Suites has 75 associates on payroll including 10 net new positions resulting from its re-branding and renovations. A robust sales team that reports to the director of sales completes the staff. “We hired separate managers for Q Tavern and Studio 220 meeting space oversight, giving them less daily responsibility but greater focus on these specific areas,” says Moore. “All managers must be able to step in to overall hotel operations if needed.” To accomplish this, there is significant cross-training between departments.
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“Training is a big deal in the hotel business,” says Moore. Training is sourced through the hotel brand as well as the management entities. “When you come into the Marriott family, you have to be trained in the appropriate programs, for example, the Marriott rewards program, life safety programs and food service. There’s a whole curriculum built on several courses each associate must take.” A variety of tools is used including classroom instruction, study guides, DVDs, tests. An online training center situated within the hotel is available to associates. Marriott also offers off-site classes and seminars to staff and management of Marriott-branded properties. JHM Hotels also provides significant training. “Our goal is to insure that each guest will have the same quality experience no matter which department or associate they encounter,” stresses Moore. Running a hotel that is hospitable, comfortable, safe, efficient and attractive brings daily challenges. According to Moore, “All that we do to maintain excellence in the physical property must be done at the same time we are serving our guests. There is no downtime.” Attracting and keeping the right
associates is one ongoing challenge. “We are lucky here to have a core group—65 to 75 percent of our staff—that has been here for several years. We have great retention,” says Moore. “There is a lady who works in the kitchen who has been here for 32 years.” Still, there is always a certain percentage of associates that are coming and going, according to Moore: “We’re always bringing new people in and getting them up to speed. Keeping them trained, happy and incentivized in a 24/7 business can be a challenge.” Another ongoing challenge is keeping the hotel clean and maintained. “We can see a thousand people come through in a day,” reports Moore. “We’re constantly cleaning, buffing, fixing scratches.” The hotel’s preventive maintenance program requires each guest room to be inspected against a detailed checklist.
Getting the Word Out Marketing, too, is a joint effort between hotel staff, JHM Hotels and Marriott. Often, when a company wants to do business in Charlotte, especially for meetings and conventions, they will send a Request for Proposal to Marriott.
A really important piece of the marketing effort, according to Moore, is the group of sales managers who go out and make direct sales calls to large companies and universities. “People will do business with people that they have good relationships with and they like to be able to put a face to it,” says Moore, adding, “The hotel business is very competitive. All the hotels in the Uptown market are good, high quality hotels with strong sales and management teams. Our marketing program must be excellent.” The hotel also works closely with the Charlotte Regional Visitors Authority. “The CRVA does a great job,” says Moore. “They work hard to bring tons of business and revenue to Charlotte by way of sales and occupancy taxes.” “Many people don’t realize how big tourism is and how much it contributes to Charlotte,” says Moore. “We’re busy all the time—weekdays and weekends. In addition to our corporate and conference business, Charlotte pulls people in for concerts, sports events, festivals and other large gatherings. Visitors looking for a getaway are now seeking out Charlotte for its attractions,
36 Providing The Perfect Fit For Your Space september 2014 | greatercharlottebiz.com
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restaurants and nightlife. At night, people are everywhere.” Moore has been in the hotel business for 38 years. He’s been a general manager for the past 30 years and has worked exclusively in the Piedmont of North Carolina. “I’m a North Carolina guy,” says Moore who hails from Statesville. “I can’t imagine living anywhere else.” Moore says his entry in the business was serendipity: “I needed a part-time job at one point. I liked it and was in the right place at the right time.” Moore came on board in 2006 with the McDowell Street property when it was branded as a Best Western Hotel. “Like any business, you have tough days. But the great thing about being in the hotel industry is that you meet so many great people; fantastic people. The part I like most is engaging someone in the lobby and finding out what brought them to Charlotte. It’s a habit that follows into my personal life,” laughs Moore. “When I’m out with my family, I usually end up talking with strangers about visiting Charlotte.” JHM is constantly looking for opportunities to own or manage hotels in the southeast and would like to acquire others in Charlotte and other North Carolina cities, according to Smith. “We look at both new developments and newly built hotels as well as older hotels where the price is right and renovation can happen. The end game is to operate profitably. We are not a buy and sell operation,” assures Smith. “In the last five years, we have sold only one property. We’re in it for the long term.” Zenda Douglas is a Greater Charlotte Biz freelance writer.
Fairfield Inn & Suites Charlotte Uptown 201 South McDowell Street Charlotte, N.C. 28204 Telephone: 704-372-7550 Parent Company and Management: JHM Hotels (Marriott) Principals: Bill Moore, General Manager; Michael Smith, Vice President of Sales and Marketing Established: 1972 (original hotel property); August 2014 Fairfield Inn and Suites by Marriott brand Employees: 75 Business: Select service brand of hotels franchised by Marriott International. www.marriott.com/cltut
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Anything is Possible
‘‘I THRIVES IN A DEMANDING GLOBAL ECONOMY by robert ecker
t’s a small world, but I wouldn’t want to paint it.” That one-liner made famous by absurdist comedian Steven Wright decades ago never anticipated the ultra fast-paced world we live in today. In the intervening years, quantum leaps forward in technology and communications have truly made the world a smaller place. And while the ability to literally paint it remains beyond our grasp, the global reach of innovative third party logistics (3PL) companies like TransGroup Worldwide Logistics makes it seem figuratively possible. In the digital age, everything moves at the speed of bits. The constant stream of 1s and 0s has changed the world forever. This is especially true in business. Yesterday’s technology is antiquated today; tomorrow’s demands will be even greater. This insatiable need for speed oftentimes conflicts with another, unchangeable constant—the need for reliability. When these worlds collide, the results can be very bad for business. TransGroup Worldwide Logistics is a modern global company designed and engineered to succeed in the modern global economy. With its vast network of 90 stations stretched across five continents, and with more than 100 additional alliance partner stations worldwide, the company is uniquely positioned to meet the demands of its clientele head-on. The multinational freight forwarder offers a full complement of domestic and international services to companies of all different sizes. Complete A-to-Z transport logistics solutions are individually customized to meet each client’s needs, ranging from air and ocean charter services; to warehousing and distribution; to transportation of dangerous goods.
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greatercharlottebiz.com | september 2014
photos by fenix fotography
Anita Sanders Charlotte Station Manager TransGroup Worldwide Logistics
TransGroup Worldwide Logistics Video
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Specific Requirement Transportation (SRT) services are available for trade shows, museums and exhibitions; sensitive medical equipment and pharmaceuticals; government and military entities; and the furniture, garment and automotive industries, among others. The Seattle-based company carries hazmat and TSA certifications and U.S. Customs clearances. They are proud to have been the very first 3PL company to partner with the EPA’s SmartWay initiative for environmental sustainability. “We are a multi-national freight forwarder offering international services, domestic services and all kinds of other services for customers importing or exporting their products,” says TransGroup’s Charlotte Station Manager and local member partner Anita Sanders. “And we offer solutions for these customers to make this happen. We started from a small company and we’ve certainly grown as TransGroup—one single company—for 28 years.”
Success on a Global Scale Co-founders Ron Lee and Greg Vernoy launched TransGroup in 1986. From the outset, their mission to innovatively engineer “The Future of Transport
september 2014 | greatercharlottebiz.com
Logistics” was envisioned as a global endeavor. With stations today ranging from Anchorage to Auckland, Boston to Beijing, Bangladesh to Vietnam—and a network of international agents all over the globe—they have done just that. “Ron and Greg had a vision that there was a need for a single freight forwarding company that could offer some solutions for their customers outside of the box, that could customize programs to fit their needs,” adds Sanders. “And they just built that business over the years with each individual customer, each individual need.” That formula has proven to be highly lucrative. According to the company, TransGroup drives $800 million in revenue annually; $300 million in North American business and an additional $500 million internationally. It currently projects an organic growth rate of 10 to 15 percent over the next five years. Much of TransGroup’s success over nearly three decades in the business can be attributed to its intense focus on innovation. The company supports eight distinct technology divisions: TransTMS (Transportation Management System); TranShipper (shipment initiation); TransTracker (worldwide shipment tracking and
THE MULTINATIONAL FREIGHT FORWARDER OFFERS A FULL COMPLEMENT OF DOMESTIC AND INTERNATIONAL SERVICES TO COMPANIES OF ALL DIFFERENT SIZES. COMPLETE A-TO-Z TRANSPORT LOGISTICS SOLUTIONS ARE INDIVIDUALLY CUSTOMIZED TO MEET EACH CLIENT’S NEEDS, RANGING FROM AIR AND OCEAN CHARTER SERVICES; TO WAREHOUSING AND DISTRIBUTION; TO TRANSPORTATION OF DANGEROUS GOODS.
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reporting); TranStatus (worldwide shipment status); TransAlert (automated shipment milestone alerts); TransWarehouse (inventory management); TransTech (in-house technology customization); and TransLogic (integrated logistics solutions). “It’s a pretty sophisticated operation,” notes Sanders. “There are lots of different specialized groups under the TransGroup umbrella.”
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The TransGroup Charlotte station opened for business in 2006 at 3200 International Airport Drive, just off West Boulevard near the southwest corner of Charlotte Douglas International Airport. Industry veteran Sanders has been at the helm since day one. “I’ve been a freight forwarder in the Charlotte market for almost 30 years,” observes the native Charlottean. “When I started in the business I knew Ron Lee. I knew about TransGroup for many years and what they offered. The direction that they were going was very much of interest to me. “I’d worked for several multinational freight forwarders over the years,” she continues. “I’ve learned a lot in terms of all kinds of phases of international transportation, from customs brokerage to documentation to supply chain; offering solutions and where to go with solutions for customers; directing them along the way.” According to Sanders, Charlotte’s Southeastern location has been a boon for the company, even through some of the region’s most recent economic turbulence. “In 2008-2009 there was a significant
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“WE’RE ALL ABOUT EFFICIENCIES. TO OPERATE OUR OWN WAREHOUSE COSTS A LOT OF MONEY, SO IF WE WORK WITH THESE PARTNERS THAT HAVE THEIR OWN WAREHOUSES, WE CAN SAVE A LOT OF MONEY FOR OUR CUSTOMERS. WE WORK WITH A LOT OF INDEPENDENT PEOPLE WHO MAKE THIS WHOLE LOGISTICS PACKAGE COME TOGETHER. THAT’S WHAT WE DO. WE ALL KIND OF COLLECTIVELY OPERATE THAT WAY TO KEEP OUR OPERATING OVERHEAD DOWN.”
TransTMS - TransGroup’s Transportation Management System
drop in terms of manufacturing, and we were not alone, a lot of freight forwarders felt that impact during those years,” Sanders recalls. “It was difficult. That’s when we really sharpened our pencils and put together a lot of programs to save money and offer the customer added value.” As a result, TransGroup’s Charlotte office has been able to craft a complete range of one-stop shopping options, including door-to-door services for both domestic and international operations. “A lot of other offices will only offer international services or maybe some domestic services. We offer both,” Sanders explains. “We have a projects team here that not many offices in the country have. And that’s a definite plus.” The project group in Charlotte is part of the larger projects team based out of TransGroup’s Houston office. “The projects team deals with more sophisticated cargo that requires a lot of special needs,” is how Sanders sees it. “Big cargo, usually defined as over 30 metric tons, that doesn’t fit in a container, is out of gauge and that really requires specialized skills. They travel to job sites around the world, supervising loading, taking pictures, making sure that things are coordinated properly with permits and specialized equipment. It’s a pretty sophisticated operation that has to have blue prints, coordination and engineers on site.”
Efficiency Experts The six-person team in Charlotte has amassed an impressive 150 years of collective experience in the
september 2014 | greatercharlottebiz.com
freight forwarding industry. That level of 3PL expertise helps TransGroup attract clients new to the area, as well as existing companies headquartered here and medium-sized companies that sometimes feel like they’re getting lost in the market. Sanders and her staff thoroughly engage each customer, listening carefully to their plans, taking great care to understand their business operation and really studying their agendas in order to craft personalized solutions. “We work very closely with these medium-sized customers to offer them ways they can develop their business internationally,” offers Sanders. “We know how to identify these people and we really take them in under our wing. “If they’re nervous about sending thousands and thousands of dollars’ worth of orders to some international customer that they don’t have a relationship with, we talk to them a little about that. We can help them open letters of credit through our partners that do legalized documents. “If they’re not big enough, if they don’t have a warehouse for example, but they want to bring in some products from China or from Europe but they’re small, we have partners here in the area that have warehousing we can coordinate for them through our own local databases. So we can do warehousing and distribution for them and help them grow their business. And they’re very interested in that because it’s a very costeffective way for them to grow.” Efficient, sustainable growth is the name of the game. Through its relationships with the major air carriers, TransGroup has the ability to strategically route flights and get its clients’ goods from point of origin to final destination at the best possible cost. These savings can then be passed along to the client,
boosting both bottom lines and customer satisfaction. In order to keep operating costs low, TransGroup maintains a network of partnerships with trusted third party vendors such as local trucking companies and warehouse operators. One such entity is International Express, a large independent warehouse in a nearby industrial park that leases space to TransGroup. “We’re all about efficiencies,” reports Sanders. “To operate our own warehouse costs a lot of money, so if we work with these partners that have their own warehouses, we can save a lot of money for our customers. We work with a lot of independent people who make this whole logistics package come together. That’s what we do. We all kind of collectively operate that way to keep our operating overhead down.”
The Allure of the Queen City Charlotte’s strategic location in the Carolinas offers tremendous geographic and business opportunities for TransGroup. With its ready access to three major ports— Savannah, Charleston and Norfolk—as well as three international airports—HartsfieldJackson Atlanta, Charlotte Douglas and Washington Dulles—and expansion of the Norfolk Southern rail facility, prospects for economic development of the region have rarely looked better, particularly for the third party logistics industry. As an important hub for import and export of manufactured goods via air, sea and land, Charlotte finds itself in an enviable position. With the expansion of the transportation hub with Norfolk Southern, Sanders says, “We’re looking at all of the possibilities that they’re going to offer in terms of moving cargo to and from ports. And it’s a block away from my office—it’s right here!” The ability to expand its radius of operations is hugely appealing. The Charlotte station predominantly handles shipments in and out of North and South Carolina, along with some business from Virginia. As infrastructure in the market improves, so does the market itself. And a rising tide raises all ships. “The market in Charlotte is growing,” confirms Sanders. “You’ve got a lot of interest in terms of multinational companies looking at Charlotte. We’ve got an active Chamber of Commerce, we’ve got a lot of companies coming here, and with the growth of the city we’re very happy to be anchored here and to be a part of that development.”
Looking Forward TransGroup Worldwide thinks globally and acts locally. The corporate office is bullish on the Charlotte market and is heavily invested in the future success of the region. “We’re very interested in what the city is doing in terms of bringing in multinational companies,” Sanders affirms. “We think there’ll be phenomenal growth. We’re real optimistic about this.” Along with growth come challenges. While Sanders expects the Charlotte station will experience a robust growth rate of about 20 percent this year, she knows that complacency is the enemy. “The biggest challenge is always to keep the customers happy and to build their business and to keep the pricing structure in place and provide the services,” comments Sanders. “There are always competitors that are going after your business, so you have to be one step ahead in terms of customer service and pricing. We have to stay on our game just to stay in business and do what we do well.” From its local station here in Charlotte to points all around the planet, TransGroup Worldwide Logistics is helping to make our
global village a little smaller every day. Yet one thing remains unchanged. We still wouldn’t want to paint it, even if we could. Robert Ecker is a Greater Charlotte Biz freelance writer. Images provided by Transgroup Worldwide Logistics.
TransGroup Express, Inc. dba
TransGroup Worldwide Logistics, Inc. 3200 International Airport Dr., Ste. 700 Charlotte, N.C. 28208 Phone: 704-357-3090 Principals: Ron Lee, Founder and President North America; Greg Vernoy, Managing Director and Founder; Anita Sanders, Charlotte Station Manager Employees: 6 staff in Charlotte, approximately 1,400 worldwide In Business: 8 years in Charlotte; 28 years total Stations: 90 stations on 5 continents Business: U.S.-owned full-service domestic and international freight forwarder and global logistics provider; provides transportation, warehousing and specialized logistics solutions, coupled with software tailored to meet the specific needs of individual customers. www.transgroup.com
.com “In the face of global competition, Charlotte needs to position itself as an ‘inland port’ with easy access to rail, interstate highways and the airways. We need to move with urgency. If we don’t have a strategy to compete, somebody will eat our lunch.”
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~Chase Saunders, organizer/leader of the Charlotte Global Vision Group
greatercharlottebiz.com | september 2014
[publisher’spost]
FORGING A REGIONAL (TWO-STATE) ECONOMIC DEVELOPMENT STRATEGY
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John P. Galles Publisher
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n the surface, it would appear that our regional economic development strategies are working well. In the past year, we have added several exceptional companies to our region including MetLife, Sealed Air, Keer America and Giti Tires. However, beneath the surface, our economic development efforts are being scrutinized by a study group organized by the Foundation for the Carolinas. This group is made up of business representatives that were recommended by the chairs of the Chamber of Commerce and the Charlotte Regional Partnership. Their mission is to examine the roles and functions of those two organizations with regard to economic development, as well as to learn the role of the new NC Partnership for Economic Development recently established by our Governor and the NC General Assembly. Basically, the Foundation group is to make recommendations in January 2015 that will “clarify” economic development efforts and demonstrate how best to target private contributions for the greatest benefit to our region. In other words, businesses may give to one or two groups, but giving to three entities seems a bit much. This region is also suffering because of indecision about longterm governance of the Charlotte Douglas Airport. While the operation remains under the governance of the City Council and the management of the City Manager, the longer term oversight and planning of airport assets is on hold. Perhaps taking a step back, we might see the big picture more clearly. Because of Charlotte’s strategic location on the North Carolina border with South Carolina, it is essential that we examine the economic development efforts of both North Carolina (NC) and South Carolina (SC). Urban strategist Michael Gallis suggests that we view economic assets and regions geographically to see how unique assets are linked to economic regions. While politicians frequently take credit for the role of government in economic development, they often create more interference than cooperation. We witness that disruption every time NC and SC pass along incentives to businesses to merely cross the state line with no corresponding boon to the region as a whole. What is most important is to examine the potential relationships and capacities of NC and SC to work together and to understand the dynamics of our economic regions in relation to global markets. There is no doubt that we can leverage our economic assets and capabilities by direct links with economic regions to facilitate new opportunities for growth. To be more specific, we have direct access to three major, deep-water ports—Norfolk, Charleston & Savannah—for distribution of goods anywhere in the world. We have two very important airports—Charlotte and Atlanta—that provide direct connections to U.S. domestic markets as well as international connections.
september 2014 | greatercharlottebiz.com
Our manufacturing and industrial facilities along the I-85 corridor are already pumping products totaling $1.3 trillion dollars per year. These plants can become even more advanced and efficient when linked with our intellectual and technological talent and insights. We can also expand our agricultural capabilities to support world populations needing food, grain and livestock. We can also leverage our commercial and financial strength in support of broader participation in the growth of our combined, regional community. And we have an abundance of smaller companies and a substantial workforce that are flexible and adaptive to new innovations and niches that support the larger business growth. Our colleges and universities provide a diverse mix of disciplines that will also contribute to our futures, educating the next generation of talent and training our workers with the skills that will be required in the new economy. Just look at a map of the two Carolinas and mark the assets including the shipping ports and the airports. Then circle the economic regions. There is one long region along the I-85 corridor. There is an agricultural region along the I-95 corridor. Another is a technology grouping in the Research Triangle Park. Then, identify the pockets of business activity like the Asheville region and the tourist communities. When you put NC and SC together with Charlotte at its commercial center supported by our excellent schools, colleges and universities, you will see that our potential to develop economically is substantially greater together than when our two states work independently. The keys to linking our two states are economic development strategies that logistically connect the resources and the assets with the output, innovation and creativity of our citizens for greater participation in the world marketplace. We can do that. We must do that to successfully compete in our global economy.
Source: Charlotte Chamber of Commerce
2014 Speaker Lineup Herm Edwards
Michele Gay
ESPN NFL Analyst
Sandy Hook Parent
January 10, 2014
August 8, 2014
Martha Raddatz ABC News Chief Global Affairs Correspondent March 14, 2014
Chad Knaus Crew Chief for NASCAR Driver Jimmie Johnson, Hendrick Motorsports April 9, 2014
Education Summit
• September 12, 2014
Dr. Ronald L. Carter
Pamela Davies, Ph.D.
President, Johnson C. Smith University
President, Queens University of Charlotte
Dr. Heath Morrison
Dr. Tony Zeiss President, Central Piedmont Community College
Superintendent, Charlotte Mecklengurg Schools
Nick Faldo
Lindsey Graham
CBS Sports Golf Analyst
United States Senator, South Carolina
May 2, 2014
October, 2014
Hood Hargett Breakfast Club is a “category exclusive” organization that develops and hosts some 36 events throughout the year for its members and guests. Members include men and women from more
Leif Babin Former Navy SEAL and Co-Founder of Echelon Front
than 50 local and regional businesses who have built their companies to become leaders in their respective fields. For more information,
November 14, 2014
contact Jenn Snyder at 704.602.9529 or jenn@hoodhargett.com.
Accepting New Members Call Jenn Snyder at 704-602-9529 • jenn@hoodhargett.com
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