DC Velocity - March 2015

The Transportation Marketing & Sales Association (TMSA) has named John Haggerty of Burris Logistics to its board of directors as well as chairman of the TMSA membership committee. … Intelligrated’s Earl Wohlrab has been elected to the Robotic Industries Association’s board of directors. In other company news, Intelligrated has appointed Parks Stewart senior sales engineer for its Southern regional sales and operations, based in Alpharetta, Ga.

… Weber Logistics, a third-party logistics company serving the Western U.S., has promoted

Steve Buckman to senior vice president of corporate services, responsible for human resources, risk management, quality and compliance, and other administrative functions. … Third-party logistics service provider Kane Is Able Inc. has appointed Satu Mehta senior vice president of business integration. … Baldor Electric Co. has named John Malinowski senior industry affairs manager. … Karl B. Manrodt has joined Georgia College as director of the logistics and supply chain management program in the J. Whitney Bunting College of Business. … James Lichtenberg has been promoted to business manager of Ametek Prestolite Power, a manufacturer of motive-powered battery chargers and accessories for industrial lift trucks. … Danvers Dai has joined Paragon Software Systems’ business development team in Shanghai, and Liz Zheng has joined the company’s support team in Dorking, China. Paragon is a developer of vehicle routing and scheduling software. … Charles Suggett has joined MIQ Logistics’ sales team as business development manager for the Los Angeles area.

newsmakers

BUCKMAN

Kintetsu World Express Inc., making an ambitious leap into the Americas contract logistics market, will buy third-party logistics service provider APL Logistics from parent Neptune Orient Lines Ltd. (NOL) for $1.2 billion.

The deal, expected to close in June, will give Tokyo-based Kintetsu a sizable foothold in the U.S. and the Americas. Its U.S. division generated $305 million in revenue in the 2013 calendar year, according to data on Kintetsu’s website. Airfreight forwarding represents a large portion of the U.S. unit’s revenue.

APL Logistics, headquartered in Singapore and with U.S. headquarters in Scottsdale, Ariz., had 2014 revenue of $1.65 billion. About two-thirds of its revenue is generated from operations serving the U.S. and points south, according to Transport Intelligence, a U.K. consultancy.

APL Logistics has an especially strong operation in automotive logistics between the U.S. and Mexico, and a solid domestic land transport business that includes its intermodal operations. Its annualized revenue has increased fivefold since it was formed in 2000. NOL’s business has been composed of APL Logistics and ship line APL, which NOL acquired in 1997 for $285 million.

NOL TO FOCUS ON LINER BUSINESS

Ng Yat Chung, NOL’s group president and CEO, said the proceeds from the APL Logistics sale would be used in part to pay down debt. Divesting APL Logistics will allow NOL to focus on its liner business, Ng said, without going into detail.

NOL in mid-February reported a $260 million net loss for its 2014 fiscal year, compared with a $76 million net loss in the prior fiscal year. The 2013 fiscal year results included a one-time $200 million gain from the sale of its headquarters building.

As with other liner firms with sizable U.S. exposure, NOL’s cost and service levels were negatively affected starting around mid-year by mounting congestion problems at West Coast ports. Yet the liner operation may have more secular problems, namely its perceived status as a mid-sized player caught in a tough and volatile market with little opportunity to achieve the economies of scale of big liner companies like Danish player Maersk Line and Germany-based Hapag-Lloyd AG. Thomas Cullen, an analyst for Transport Intelligence, said in a Feb. 17 report that the APL Logistics divestiture might clear the way for NOL to be acquired by a larger ship line.

NOL had been shopping APL Logistics for several months with the hopes of fetching as much as $750 million for the unit. Cullen called the Kintetsu offer “generous” since it represents more than a third of the Japanese company’s most recent reported annual revenue of $2.8 billion.

The price tag suggests Kintetsu is about to embark on a “very ambitious strategy” for global growth, Cullen wrote on Transport Intelligence’s website. Cullen said the acquisition has the potential to radically transform Kintetsu’s contract logistics business in terms of size, scope, and customer profile.

In a statement, Satoshi Ishizaki, Kintetsu’s group president and CEO, said the acquisition continues a “strategy to strengthen our international presence, especially in the U.S. and Asia.” Kintetsu will run APL Logistics as a standalone unit and keep its Singapore headquarters, Ishizaki said.