Featured In Issue: CLT.biz Insights 16.09.08
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Most people don’t think about the possibility of needing home health care, but for one entrepreneur, the thought of assisting others became his passion.
In 1975, Mark Baiada, alongside one nurse, created BAYADA Home Health Care in order to meet the rising need for home health services in Philadelphia, Pa. Today, the company has expanded across the globe with nearly 300 locations, including five right here in Charlotte.
As a BAYADA Division Director Melinda Phillips says, “Our company was founded on the principles of compassionate care and understanding for those in need. Mark Baiada realized that medical technology advancements didn’t need to keep people confined to hospitals for long periods of time, so he set out to create a company that would allow individuals the chance to receive care at home.”
Today, BAYADA Home Health Care operates offices in 22 states and in India, providing a range of home health solutions for clients facing a variety of needs, including wound care, light housework and habilitation.
Responding to the Need
Phillips describes Baiada’s model for growth as allowing people who had proven themselves to go where they wanted and open offices to expand the business and offer compassionate care. In 1989, one of his trusted employees, Tom Mylet, decided to come to North Carolina and open an office in Winston-Salem.
“In fact,” says Phillips, “I started working with BAYADA Home Health Care as an associate at that location in 1994, allowing me to engage in my passion for service to others.”
“After some time as an associate, I became a client services manager and had my own case load. Once that grew large enough, in 1998, I presented Mark Baiada with the idea of opening a Charlotte location. I saw how we were able to help people in Winston-Salem, and I knew there were needs elsewhere in the state. He agreed and the first BAYADA Home Health Care office in Charlotte opened in the University Park Executive Drive area.”
The new office was a success from the start. Under Phillips’ leadership, the company opened more office locations in Charlotte, designating Charlotte as a division with multiple offices.
By 2009, Phillips observed that each office handling all lines of service, including pediatric home care and home health aide care, put a strain on resources and personnel. She had a logical suggestion.
“It seemed logical with multiple offices to start specializing. So now, each office in the Charlotte region specializes in a specific type of care. This allows BAYADA Home Health Care to better manage our client’s needs,” she affirms.
There are over 50 BAYADA offices across the Southeast, including North Carolina, South Carolina, Georgia, and Florida. And, as per the company’s decision to offer specialty care, each office offers a different specialty. These specialties are adult nursing care, adult personal care, pediatrics, and habilitation, which offers care for people with developmental and intellectual disabilities.
“We saw that BAYADA Home Health Care could provide a greater number of services and a better quality of care if the company were more focused,” attests Phillips.
“All of the locations I oversee each have a director, client services managers, and clinical managers who are registered nurses. The client services managers handle interviewing staff and scheduling case shifts, and the clinical managers handle oversight of the clinicians. So, across all service lines, we ensure that each base is covered.
“We’re one of the few home health companies in Charlotte that does it all,” Phillips adds. We don’t do it all from one office, but we can handle anything. If you need home care, we can get it to you.”
Phillips stresses that BAYADA Home Health Care is committed to not just providing care, but also seeing patients get better. She notes that, 30 years ago, a child who underwent a tracheostomy (a surgical procedure to create an airway into the trachea when the usual route for breathing is somehow obstructed or impaired) would be in the hospital for months, but today, through BAYADA Home Health Care, that same child can recover at home under the supervision of trained specialists.
In fact, Phillips notes, “BAYADA Home Health Care is the largest provider of pediatric home health services in Charlotte.”
Aside from traditional at-home care, BAYADA Home Health Care also offers its services to assisted living communities, and it often receives referrals from doctors and hospitals. Additionally, the company has a dedicated staffing office in Charlotte that provides medical assistance to physicians’ offices, hospitals, and other medical businesses throughout the region.
Speaking globally, Phillips says, “We’ve recently begun services in India through India Home Health Care. They wanted to adopt our model, so last year, Mark Baiada asked me to go to India and support them, give consulting, do some training. It was a great experience, and I can’t wait to see that division grow. We’re also currently working to gain an acquisition in Germany.”
Making a Difference
When asked what makes BAYADA Home Health Care different from other providers, Phillips says, “A lot of companies simply write their mission statement down. The difference is the BAYADA team is expected to live by ours. Our core values are compassion, excellence, and reliability, and our team is dedicated to living these values out in our personal and professional lives.”
Phillips recounts with some passion, “In 2004, Mark Baiada started thinking about articulating his legacy. Teaming up with Dr. Al Freedman, a teacher and psychologist, Mark described his emotions relating to client care. Dr. Freedman helped him craft The BAYADA Way, the defining set of values that we, as a company, live by today.
“Then, Mark wanted to ensure that the company’s values were uniformly supported, so he embarked on a nationwide tour of every single BAYADA Home Health Care location to speak with not only employees, but also clients.
“During this tour, Mark received feedback regarding everything from workplace happiness to client satisfaction. As a result, The BAYADA Way was finalized and distributed across all company locations. It provides a guide path to all employees regarding the dispensation of total care and compassion for clients, excellence in all that they do, and reliability in delivering professional medical services.”
Phillips emphasizes, “There are three essential things that separate us from the competition, and chief amongst them is The BAYADA Way. Our people live our core values. We truly mean it when we ascribe to compassion, excellence, and reliability.
“Second, we’re privately held, meaning we have a lot of flexibility when it comes to providing care. Mark’s heart and my heart are in this…all of our employees’ hearts are in this. While other home health care companies are bought and sold every few years, we’re not. They cater to shareholders, we cater to our clients’ needs.
“Third, is that we offer continuity of care. When you need multiple home health services, you’re going to be dealing with multiple companies, but with BAYADA Home Health Care, we have our clients covered across a range of services.”
This third point is ultimately what has made BAYADA Home Health Care as successful as it is in Charlotte and beyond. Phillips points out that the vast majority of the company’s marketing strategy has relied on word-of-mouth advertising and client referrals as well as repeat business. In addition, the company has continued to add more specialty services to its roster in order to drive business.
“In the beginning, we had basic home health care services, then we added pediatrics, and then more services were added as we saw needs grow. In fact, I remember starting out in Winston-Salem and receiving calls from Carolinas Medical Center and Baptist Hospital asking, ‘Who is going to care for these babies?’” recalls Phillips.
Phillips says that the people of Charlotte are what first drew her to the area; aside from the need in the city and its surrounding area, she says she observed the strong work ethic and the overflowing compassion that Charlotteans have.
“The people are what have made us successful in Charlotte. We’re tough on each other and hold each other accountable, but we’re all committed to the same goal: We put The BAYADA Way first. It’s not about us, it’s about the client,” smiles Phillips.
“We’ve evolved through The BAYADA Way,” Phillips continues, “but also through offering specialties. We encourage our people to find their niche, whether that be home health, pediatrics, or something else. When you put someone in a field they love, they’ll do all kinds of amazing things.”
Exceptional People; Exceptional Standards
Because home health care is such a personal industry, BAYADA Home Health Care goes out of its way to attract and work with the best. The company typically brings in new hires through recruiters and targeted ads, followed by a phone interview to assess qualifications. If they meet requirements, candidates are then brought in for an interview with office staff and a skills test. Only candidates who have at least one year of supervised experience are considered.
After that comes a thorough background check, a drug screening, and a clearance from the Office of Inspector General to ensure that candidates don’t have governmental violations. From there, successful applicants are brought in for an orientation and then spend another 30 to 48 hours in home and lab tests to further assess skills. After completion, a specialist may spend as much as 30 days with a supervising mentor in a client’s home to ensure a good fit.
Phillips explains, “Integrity is one of the most important things we look for in our employees. Because they are expected to live The BAYADA Way, we don’t cut corners in our hiring process.
“Success is measured by client satisfaction. We use a nationally-recognized outside vendor for surveys to gather satisfaction ratings. We have three key questions out of many that must be marked as 100 percent satisfactory in order to determine where we stand. If those three questions aren’t 100 percent, we investigate the problem completely.”
Phillips says that the goal is not just to manage a client, but to improve his or her health. If that isn’t happening, BAYADA Home Health Care is not doing its job.
BAYADA Home Health Care has also taken advantage of developing technology, using tablets for keeping track of patient and employee records as well as offering a physician portal on its website to allow doctors the ability to see patient chart information 24 hours a day.
In addition, the company has a simulation lab at its Charlotte office for training purposes. They use a mannequin that can simulate a variety of medical conditions. For example, anaphylactic shock—in such a case, the mannequin’s tongue actually swells to simulate a real-life reaction to an allergy. The simulation lab is also outfitted with cameras so that training staff can not only monitor trainees, but also play back video to demonstrate what went right and what went wrong.
BAYADA Home Health Care also uses technology to scour sources for government funding to cover Medicare and Medicaid patients, and in this tight economy, to find new ideas to provide more and better care at a lower cost.
“We’re committed to patient care and employee satisfaction,” says Phillips. “That’s The BAYADA Way, and it always will be.”
At any point in time, 25 to 37 percent, or more than one in four people in the United States are dealing with mental illness, according to the federal Substance Abuse and Mental Health Services Administration.
“It can—and likely will—happen to anyone during the course of their life,” says Peggy Terhune, Ph.D., CEO of Albemarle-based Monarch, which offers behavioral health services.
This statistic totally disrespects any category of wealth, poverty, race, ethnicity, gender, or economic level. Yet Terhune says that what she does not find within the population of people who turn to Monarch for help are clients and patients.
“They are no such things,” says Terhune. “We call them people. If we call them clients and patients, we’re calling them ‘other.’ You’re saying they are different from you.” Terhune is adamant that they are not. “You’re a human being—I’m a human being—with all the hopes, desires and dreams that come along with that.”
Monarch provides services for adults and children with intellectual and developmental disabilities, mental illness and substance abuse challenges. Services, treatments and resource assistance in Mecklenburg County are administered through open access centers, outpatient clinics, intensive in-home services, community support teams, assertive community treatment teams, and transitional housing for people with mental illness.
Helping People Feel Better
Terhune is especially proud of Monarch’s open access centers.
“Somewhere, someone in need is walking into an agency. It’s like urgent care for mental health. We help them on the spot,” says Terhune. Most agencies will agree to see a person immediately only if they are presenting as suicidal or of harm to others. Terhune’s response is, “Why wait? Each person should get what they need when they need it.”
People exit from Monarch’s open access centers with an assessment, a prescription if needed, and an appointment or referrals for recommended therapies. “It’s so awesome to be with an agency that can do the right thing,” says Terhune.
“Peer support services also play an important role. Relating to someone who has walked in their shoes can really help another person along,” says Terhune. She also touts the Assertive Community Treatment Team. “They even go find people in need under bridges. If you are so depressed you can’t leave your home, we can come to you.”
Additionally, other services, such as those provided by group homes, employment services, day programs, and community services for adults and children, are available in various counties across the state. Services vary from one area to the next because providers such as Monarch are not approved to provide all services utilized by any one local management entity (LME) or managed care organization (MCO).
The MCO responsible for managing Medicaid funding for mental health, intellectual and developmental disabilities and substance use/addiction services in Mecklenburg County is Cardinal Innovations Healthcare Solutions, the largest MCO in the state.
“We’re very creative and innovative,” says Terhune, citing pilot programs across the state designed to further integrative care and safely keep people out of the hospital, as well as medical consultation and teleconferencing. Monarch is responsible for bringing Mental Health First Aid, developed on a similar concept to CPR, to get the individual out of danger to North Carolina. Training is available to individuals and professionals. Monarch is also looking for new ways to provide services to veterans.
A not-for-profit, non-governmental entity, Monarch has grown into an $80 million budget aimed at providing services across much of the state of North Carolina. Thirty-thousand people were treated or assisted last year through Monarch services. The organization operates over a 100 group homes. Still, these numbers aren’t Terhune’s focus: “I don’t care about the numbers. My priority is the individual person.”
“We have lots of programs, but we try to allow people to tell us what they need versus fitting them into a program,” says Terhune. “We want to meet individual needs; craft something around what those specific needs are.”
Terhune offers up a few words that she believes describe the organization: cutting edge, mindful, holistic, proactive, and evidence-based.
Monarch, mantra “Helping Dreams Take Flight,” refuses to define people by their diagnoses. “Instead, we recognize each individual as a person of worth and value. We teach and remind people, some of whom have often been marginalized, devalued, maltreated or stigmatized, how to dream—how to live self-determined lives.”
“Individual goals vary widely, develop over time, and often have to do with some aspect of mainstream desires for a home, job or relationship,” says Terhune. “But most people seeking help, initially, just want to feel better. People who are hurting want to be able to get up in the morning, put their clothes on and have a nice day.”
Meeting the Need
Monarch operates under a volunteer board of directors. Three-fourths of the members either have, or are recovering from, a disability or mental health issue or have a family member who does. Additionally, each member brings some expertise to the board, such as finance, legal, marketing, human resources, or a specific experience, all which add up to a diversity of skills.
Members who cannot read or are otherwise unable are assigned a board buddy who helps them navigate material and discussion. “We especially want to hear from these folks; they are the ones most affected by the decisions the board makes,” emphasizes Terhune.
Monarch’s origins date back to 1958, when Albemarle was a relatively isolated locale with Charlotte a distance away. The post-WWII baby boom increased the number of children with disabilities. At that time, it was illegal for children with disabilities to attend school. They could sit in Sunday school classes, where it was witnessed that they could learn. According to Terhune, this led a group of Albemarle parents to get together and form The Association of Retarded Children.
They established the first group home. Their work led to the organization of The Arc of Stanly County, which is one of many chapters across the state and country. The organization evolved, changing its name to The Association of Retarded Citizens, then Arc Services and later Arc of Stanly County, all before becoming Monarch. The Arc of Stanly County remains as the local advocacy chapter now operated by Monarch.
During the 1960s, with states beginning to realize that they needed to take care of people with disabilities, area programs started to develop. These programs were self-managed, often with little accountability of funding and costs.
North Carolina responded by establishing local management entities which were financially responsible, but contracted out all services. They act more like insurance companies, approving services and expenses, and are referred to as MCOs. These groups have continued to be reduced in number for greater efficiency.
Today, the legislative debate is over Accountable Care Organizations (ACO) in which health care providers come together to simultaneously lower costs and raise the quality of care. This model puts a premium on integrative care which allows doctors to communicate with each other and reduces the duplicity of services, particularly diagnostic testing versus more general managed care.
These several decades have seen enormous strides in mental health care. “One of the things we know today is that one can recover from mental illness,” says Terhune. “We’ve gone from warehousing people that we thought would never get better to thinking that people can get better with appropriate services and medical intervention.”
Causes and Costs
Although much has been learned about mental illness, its exact causes still largely elude the medical research community. It is generally accepted that some mental illness can be hereditary, or genetically acquired, or caused by chemical imbalances in the brain.
Also, many medical issues carry a psychiatric component. People with chronic disease, such as diabetes or heart conditions, are more likely to have mental illness, as well. Circumstances, especially loss or trauma, can trigger mental illness. It is also believed that greater rates of diagnosis are behind the increased number of people with mental illness.
The social impact of mental illness and the stigma around it is often measured in losses—of homes, family structure, jobs, self-esteem, and overall health.
“Sufferers, if not treated, can lose everything,” says Terhune. There is also a great cost to productivity and the economy with losses of wages and tax dollars, and increased cost of services and systems—fire, police, EMS, prisons, hospitals, and schools—which are burdensome to society.
“The cost is huge,” laments Terhune. “We could so contain that cost if we had adequate, sufficient services.
Monarch obtains funds from Medicare, Medicaid, private insurances, Social Security and individual payments. Funding also comes in the form of grants, donations and in-kind contributions.
“We lose money on some services—people with no insurance—and balance that with other services,” says Terhune. “We also have to spend money on buildings, furniture and fixtures. The square foot rental cost of the restored warehouse where Monarch’s state headquarters is located is discounted by tax credits, but we can’t find that everywhere.”
Terhune’s frustrations are apparent when the discussion turns political. “Do I seriously hope that North Carolina legislature’s agrees at this point to accept the federal Medicaid expansion signed into law with the Affordable Care Act?
“Because behavioral health services are capitated, predictable and cost-effective, North Carolina needs to accept Medicaid expansion,” says Terhune, who sits on the five-member Medicaid Reform Advisory Group appointed by N.C. Gov. Pat McCrory.
“Can you imagine how many people could be helped? People express concern over Medicaid but we keep voting the same people into office. Why don’t we vote in people who get it?”
Monarch has experienced significant growth since its name change in 2008 and its expanded service offerings (beyond those for people with developmental disabilities) to include mental health programs. “People keep calling us and inviting us in. We’re in all of North Carolina’s MCOs in some way. We have the value they want,” says Terhune.
Another way Monarch has grown is by acquiring services from other organizations. “We are happy to merge with other providers; we do it all the time,” says Terhune. “We’re mostly looking for shared values, but we have taken on groups that are inept or are about to go under.”
Terhune explains that these expansions can be expensive. “Our board of directors says that we have to break even.”
One at a Time
One of Terhune’s first experiences with mental illness took place growing up in Brookfield, Ill., in the 1950s when her father, who worked in medical supplies, took her along to an orphanage of sorts that provided her with some ugly truths about how America treated people with mental illness and developmental disabilities.
The children were very sick, expected to die. Babies were housed in cribs lining the walls. Older children, ages four or five, were in cages and had not been taught any language skills. There was no visible staff. Terhune tried in vain to persuade her father to take one of the children home.
She remembers his words: “Peggy, you can’t save everyone, but when you grow up you can do whatever you want to do.”
And Terhune is doing just that. As horrific as it was, the experience solidified her desire to do something for the people represented there.
Having earned her bachelor’s degree in occupational therapy in 1974 and an M.B.A. in 1984, Terhune accepted her current post in 1995, after being second in command with a similar organization in Rochester. She has since earned her Ph.D. from The University of North Carolina at Greensboro. She has been married to “the love of her life” for the past 22 years.
Terhune loves kids. Her husband loves kids. Together, they have raised a combined family of seven children and have fostered over 100 children. They are currently serving as therapeutic foster parents.
“It’s who we are,” says Terhune. “When you do what I do, it’s your whole life; it’s your value.”
“I have the best job in the world. I am so privileged,” says Terhune. “Every day I get to come to work and save the world and do God’s work. You save the world one person at a time. Every single day one of my 1,800 staff is touching someone in need; helping dreams take flight.”
Charlotte’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 Sea-Land 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 southwest side. Maersk had purchased the 346,000-square-foot building from Royal & SunAlliance in 2006. It became a model of environmentally friendly renovation.
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 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 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?
“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.
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. 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.
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 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 one-third 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.
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 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.
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 non-user, 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.”
“It’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.
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 Branch 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 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 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.”
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 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.”
The six-person team in Charlotte has amassed an impressive 150 years of collective experience in the 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 cost-effective 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, Wilmington and Norfolk—as well as three international airports—Hartsfield-Jackson 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.”
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.
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 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 marketing 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 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.
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 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.
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.”
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 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.
“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, 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.”
If 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!”
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.”
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.
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 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, fast-moving consumer goods, and technology, but in the Carolinas, the focus is a bit more narrow.
“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.
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.
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 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 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.”
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.
The Future of Logistics
Looking ahead, it seems that most changes in the logistics industry are 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 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.”
“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.”
Twelve 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.”
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.
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.”
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.
Integration Point created and now maintains a single, Web-based platform that allows organizations to manage trade programs and comply with global regulatory requirements while improving visibility and realizing savings.
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 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.
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 ever-changing 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.
When most people hear the name Alibaba, they think of a character from “Ali Baba and the Forty Thieves,” one of the most familiar of the The Arabian Nights stories. But Alibaba also happens to be the name of the largest global tech company that you’ve probably never heard of. While Alibaba controls 80 percent of China’s online shopping market, it has little name recognition in the United States. But that may all be about to change.
Alibaba is in the process of amending its prospectus for an initial public offering (IPO) on the New York Stock Exchange (NYSE), which will probably occur sometime in September. Alibaba’s market cap will rank up there with household names like Microsoft, IBM, Oracle, Samsung, and Facebook. Some think the offering may approach $20 billion and value the company at well over $150 billion.
Now, in addition to launching what could be one of the largest IPOs ever, Alibaba has set its sights on the American online shopping market. But can a Chinese company and its dynamic founder who has “Americanized” the Chinese market “Chinafy” the American market with the same success? What will be the impact on U.S. online commerce and what are the takeaways?
Amazon, eBay and PayPal With a Dash of Google
Hangzhou, China-based Alibaba Group is a collection of Internet-based e-commerce businesses including online web portals, online retail and payment services, a shopping search engine, and online mapping. Alibaba serves as a marketplace, connecting buyers and sellers, and runs a platform where people and merchants go to sell things and people come to buy. Alibaba says it has no desire to sell products itself so as not to compete with the merchants who drive its middleman/facilitator business model.
Alibaba is, by some measures, the world’s largest e-commerce company. According to The Wall Street Journal, transactions completed on its various online sites topped $248 billion in 2013. That’s more than Amazon and eBay combined. Alibaba’s three largest marketplaces—Taobao, Tmall, and Alibaba.com have hundreds of millions of users and host millions of merchants and businesses. Alibaba has been likened to “a mix of Amazon, eBay and PayPal with a dash of Google thrown in.”
The company was founded in 1999 when Hangzhou native Jack Ma created the website Alibaba.com, an English language business-to-business web portal designed to connect Chinese manufacturers with primarily American buyers. Alibaba.com also offers a transaction-based retail website called AliExpress.com, which allows smaller buyers to buy small quantities of goods at wholesale prices.
Alibaba’s consumer-to-consumer portal, Taobao, is similar to eBay and by itself is China’s largest e-commerce site. Founded in 2003, Taobao is a huge online marketplace where more than 8 million sellers sell over 900 million products direct to Chinese consumers. In such a huge marketplace, it can be hard for sellers to stand out, so advertising designed to drive traffic generates the vast majority of Taobao’s revenue. The company’s powerful search engine also directs traffic to sellers and is an important component of the Taobao advertising strategy.
Tmall.com was launched in 2008 to complement Taobao, but instead of individuals and small businesses selling their products, Tmall is where large companies like Nike, Proctor & Gamble, Apple, Gap, and Walt Disney market their global brands to an increasingly affluent Chinese consumer base. These companies pay to be listed on the site and then advertise to compete and get noticed.
Alipay is an online payment escrow service linked to a customer’s bank account that is China’s biggest payments processor and operates similar to PayPal. Ma created Alipay in 2003 after realizing he could not successfully sell online without an escrow service to protect buyers and give them the confidence to do business with smaller merchants. Sellers do not get their money until the buyer is satisfied.
The company has also recently ventured into logistics because of China’s fragmented logistics network. Unlike the U.S. where UPS, FedEx, and the USPS provide quick and efficient delivery of products nationwide, in China there are literally millions of small one or two truck delivery services, along with a dozen or so larger providers. Ma and Alibaba are currently engaged in at least two major initiatives to create a software-based smart network to help integrate these millions of Chinese logistics providers to speed up product delivery all over China.
In June, Alibaba launched its first foray into the American retail marketplace, 11 Main (11Main.com), which hosts more than 1,500 merchants in categories such as clothing, fashion accessories and jewelry, as well as home goods and arts and crafts. 11 Main is intended to be a go-to for unique, interesting, limited edition products. The brand is designed to evoke a Saturday morning stroll amongst the small, unique shops of Main Street as opposed to driving your car to the Wal-Mart parking lot.
In May this year, Ma stepped down as the Alibaba CEO, but he remains the company’s executive chairman as well as a major shareholder. Few people expect the passionate former English teacher to slip away to the sidelines, though. Most view it as delegating the immediate operations to others while Ma continues to set the course for Alibaba as it expands from its China base into a global market.
Entrepreneurialism in China
Dr. James A. Tompkins is an internationally known authority on supply chain strategy and operations. He is founder and CEO of Raleigh-based Tompkins International, a supply chain and logistics consulting firm. Tompkins has studied Alibaba’s success in China and also has considerable insight on how Alibaba will impact the U.S. marketplace.
“In 2014, I believe that Alibaba will do $420 billion in online sales,” predicts Tompkins. “By comparison, in the United States we only do $475 billion online. I also believe that by 2015, Alibaba will become the largest retail platform in the world…even larger than Wal-Mart.”
Tompkins also points out that Alibaba is growing rapidly, with revenue growth running at an astounding 70 percent per year from 2009 to 2013. That rapid growth has also driven profitability to stratospheric levels as Alibaba earns $0.43 in profit out of every dollar of revenue. By contrast, the profit leader in American online commerce is eBay whose margin in 2013 was just 17.8 percent. Alibaba’s amazing success has also helped make China the world’s largest e-commerce market.
“Alibaba’s IPO will be huge because it is based on the rise of the middle class in China,” suggests Tompkins. “Today in China, only a third of the gross domestic product (GDP) comes from consumers. In the U.S., two-thirds of our GDP comes from consumers, so the growth potential for China is enormous.”
Tompkins believes that to understand Alibaba’s goals, you have to understand its visionary founder, Jack Ma. Ma learned English as an unpaid tour guide for foreign visitors, and later taught English in China for five years. But when he saw the Internet for the first time on a visit to the United States in 1995, he immediately saw its potential as a great equalizer at home. “Our competitors are not in China, they are in Silicon Valley,” Ma has been quoted as saying.
“Jack Ma is also seen as the Godfather of entrepreneurs in China,” says Tompkins. “Alibaba has offered other entrepreneurs the opportunity to have a place to build their own business. He has helped millions of entrepreneurs and has revolutionized retailing in China, but the world certainly did not expect to be taught a lesson on entrepreneurism and commerce by China.”
Chinafication and Americanization
From the beginning, Ma said his goal was to create a global business, but his eyes were always on the United States. His first online business, Alibaba.com, was designed to give Chinese manufacturers greater exposure in the West. So when the time came to expand outside of Asia, instead of focusing on other developing markets—like South America and Africa that have some similarities to the logistical challenges faced in China—Ma chose to set his sights squarely on the American market.
“Jack Ma’s area of expertise is not retail; it’s not technology; and it’s not logistics,” says Tompkins. “His area of expertise is the ‘Chinafication’ of things that work in the West. He studies what works in the West, adapts it and brings it to China. So he is extremely aware that when he comes back to the West he now needs to ‘Americanize’ what he did in China. And I think the real goal that Alibaba has for the IPO is to create brand recognition.”
Tompkins says learning about the U.S. market is one of the main reasons Alibaba has spent over a billion dollars on investments in U.S. companies over the last 18 months. These investments include sports merchandiser Fanatics, search engine Quixey, instant messaging service TangoMe, ride sharing and delivery service Lyft, luxury e-commerce 1stdibs, and online retail marketplace ShopRunner.
“His goal for M&A in China has been to increase his success and his profitability, but in the U.S. his goal for M&A has been to learn,” explains Tompkins. “When he’s made acquisitions in the U.S., he’s always asked for board seats to learn about the U.S.”
“Jack Ma practices martial arts, so he follows one of the key principals of Kung Fu, which is he should take your strength and turn it into his strength,” continues Tompkins. “His big competitors are the big American retailers, most of whom are mass merchants. So what does Jack do with his first true American site? He opens 11 Main, which is just the opposite of mass merchandising. It is designed as a personal relationship between a merchant and a customer. You have to request an invitation to join.
“The vision of a Chinese Internet company coming to the United States and being successful is a huge barrier because Americans are just a bit uncomfortable about learning entrepreneurship from a Chinese guy. They view China as a Communist country, so he faces some huge barriers. What he is doing is very Kung Fu.”
But Tompkins believes that 11 Main is just the first step in Alibaba’s American strategy. He says the next step could be the real game changer.
“I think there is also going to be a big marketplace that will not be just unique products,” he says. “In that marketplace he will have stores for office products, stores for toys, stores for women’s merchandise, stores for men’s merchandise, drug stores, grocery stores, and more. I don’t know what he will call it, but I think it will be up and operating before the 2015 holiday season.
“That is the site American retailers have to fear—especially American retailers that do not have a unique product offering. If I am a large department store and I sell Coach and Gucci and Ralph Lauren, I will have a problem, because why would you want to shop with me when you can shop at Jack’s store that has all of those things and is going to give you a really good price.”
But haven’t Amazon, eBay, and other online retailers both big and small been doing quite well in the U.S. market over the last 20 years or so? Can Alibaba really change things in the more mature U.S. online marketplace? Tompkins thinks they can.
“It has to do with being a huge marketplace,” Tompkins suggests. “If you can become big enough to become a destination, you can turn off the other search engines’ spiders because people will come to you first. Merchants will want to be on your site, and then because merchants want to be there, customers want to be there too.
“When more customers do, more and more merchants will as well, and it just snowballs. As the site gets bigger and bigger, merchants have to buy advertising, so they shift their advertising budget away from where it traditionally has been and they give that advertising to Alibaba.
“So the question is how do you get huge? How do you prime the pump? You do that by making your fees very low. The fees for 11 Main are about half or less than they are on the other major U.S. marketplaces that are out there,” Tompkins points out.
“That fee 11 Main charges its merchants is 3.5 percent, but there are three very important exceptions—one is for books, one is for music, and one is for movies. For those, the fee is 0 percent, a strategy that seems aimed squarely at Amazon’s core business,” says Tompkins with emphasis. “That’s Ma’s Kung Fu philosophy in action.”
Fueling the Counteroffensive
If Alibaba is successful in revolutionizing online commerce in the United States, how will that impact the Charlotte region and how should American companies respond? Tompkins says the Charlotte’s region’s retailers, like those anywhere else in America, can’t just play defense, they need to respond with a counteroffensive.
“The first thing is price,” he explains. “Retailers need to reduce operating cost. They need to reduce inventory cost. This will allow them to offer things like free delivery and free returns.
“Second is selection. They need to increase non-stock items as well as stock items. They need to offer a broad selection and they need to own a category.
“Third is convenience. They need to provide the speed of delivery that their customers desire. Most people will not pay for same day or next day delivery. Some people want it quicker, but others are willing to wait.
“Finally is the experience. A merchant needs to offer a personalized and engaging experience. Their customers must feel like they are related to individually.
“A merchant’s supply chain is the fuel for their counteroffensive,” Tompkins continues. “They need to develop a channel strategy, and their channels need to be transparent to their customers. They also need to define their distribution and fulfillment network, something I call ‘Get Local.’ That means they must meet the requirements of the customer from a shipping and logistics point of view.”
Tompkins believes that Charlotte may be well-positioned to take advantage of the need to “Get Local.”
“The Charlotte region is located within a 24 hour drive of 60 percent of the U.S. population,” he explains. “That is very important because if companies are going to ‘Get Local,’ they are going to need to locate in those areas where you can get to locations quickly. So I think that is a big plus for Charlotte.
“Another big plus for the third party logistics providers, and for distribution and warehousing, is where Charlotte is located relative to the east coast ports. Charleston, Savannah, and Wilmington are going to become more important when the Panama Canal widening opens and we find more ships traveling from Asia direct to the east coast as opposed to Asia to the west coast. I see that as a substantial shift.”
While Alibaba may not be a household name here in America just yet, Tompkins says companies need to begin planning their counteroffensive today. “I believe that by the holiday season of 2015, we’re all going to be talking about Alibaba.”