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The Panalpina magazine 2_2005
onnect
September 22, 2005:
Going public
of Panalpina

2
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Page 4 IPO
Page 12 Oil and Gas
Page 20 SME
Page 22 SCM
Page 26 Human Resources
Page 28 Worldwide
Page 31 Publishing details
An investment which has always proved to be very
profitable
Wilfried Rutz (right), Chairman of the Ernst Goehner Foundation
(hitherto Panalpina's main shareholder), Gerhard Fischer,
Chairman of Panalpina, and Roger Schmid, Managing Director
and board member of the Foundation as well as board member
of Panalpina, talk about the flotation of the company.
The all-round partner
The wide range of services Panalpina offers the oil and gas industry.
Reliability: the be-all and end-all
How Panalpina provides logistics support to Cambridge America, a small
company which operates in the electronics sector.
SCM for hi-tech customer in Eastern Europe
Electronics manufacturer Celestica turns to Panalpina again for its new
production facility in Romania.
Dedicated – heart and soul
How Kornelija Capek, Regional Key Account Manager, actively supports
her customers IBM and Lenovo.

Dear readers
22 September 2005 represents a milestone in the history of Panalpina. It is
the day on which Panalpina shares were publicly traded for the first time
on SWX Swiss Exchange under the symbol PWTN.
The Ernst Göhner Foundation, formerly our sole shareholder, enabled Panalpina
to open up to investors and the stock market by selling a majority of
the stock. Nevertheless, the Foundation intends to retain a sizable stock
holding over the long term. For us, this decision is a sign of confidence in
what we have been building up over the past decades. In the interview
with representatives of the Board of Directors on page 4, you can find out
why we are more than happy with the Foundation’s decision.
This well considered and carefully planned IPO will bring our company a
number of clear and invaluable benefits. The name Panalpina will become
even better known, and we will have access to a widespread group of
shareholders and thus to the capital markets, which will give us greater
financial flexibility in future.
But what impact will the IPO have on our plans for the future and on our
day-to-day business? With this additional strengthening of our already
very solid financial basis, we can confidently pursue our proven strategies:
clear focus on international freight forwarding by air and ocean and on
supply chain management solutions. On the other hand, the public listing
enables us to expand our worldwide network and reinforce our leading
position as a globally active company. However, our size will never stand
in the way of our taking the various individual requirements and special
wishes of our customers into consideration. Panalpina will always make
the extra effort necessary to offer the precisely tailored and flexible forwarding
and logistics solutions that customers expect. This is exactly
what our motto “A Passion for Solutions” means.
We can be proud of what we have already achieved, and now that we are
present on the stock market we can be confident that we will continue
along our successful path.
Bruno Sidler
President and CEO
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Retail& IPO
“Panalpina remains a precious jewel in our portfolio.”
An investment which
has always proved
to be very profitable
On 22 September 2005, the shares of Panalpina World Transport (Holding)
Ltd. were for the first time publicly traded on the SWX Swiss
Exchange. On the eve of its going public, “connect” talked with (from r.
to l.) Wilfried Rutz (Chairman of Panalpina’s main shareholder, the Ernst
Goehner Foundation, and Vice Chairman of Panalpina), Gerhard Fischer
(Chairman of Panalpina and Vice Chairman of the Foundation), and
Roger Schmid (Managing Director and board member of the Foundation
as well as board member of Panalpina) about the motives and consequences
of the decision to open the long-established company to the
public, about Panalpina’s strategy and about what makes it different
from its competitors.
4 connect 2_2005

Why has the Ernst Goehner
Foundation decided to open Panalpina
to the public, and why at
this precise moment in time?
Wilfried Rutz: In line with the strategy to
further diversify its assets, the Ernst Goehner
Foundation has been pursuing this idea
for quite a while. In the portfolio of the Foundation
the forwarding and logistics group
Panalpina has for decades represented a significant
asset – a “precious jewel”, I might
say. The IPO is a move which makes most
sense to both institutions because it safe-
guards Panalpina’s possibilities to expand
within a rapidly changing environment
while at the same time it ensures a continuation
of our shareholding. As you know, a
first attempt at going public was made in
2002, but due to the unfavourable situation
on the stock markets back then, we had to
postpone the project. Today, the stock
climate is much more friendly, even ideal for
such a move.
Gerhard Fischer: From the point of view of
Panalpina, going public brings some
obvious advantages, too. Apart from an
increased brand awareness and an enhanced
company profile, we will be able to
enlarge and diversify our shareholder structure
and simultaneously increase our financing
flexibility by gaining access to the capital
markets. Last but not least, linking
management focus with shareholder value
creation will serve as an additional incentive
to performance and growth.
Why is the Foundation selling a
majority of the shares?
Roger Schmid: We wanted to be crystal
clear with the signals we are giving. By
placing up to 56% of the shares in public
hands, we underline our firm commitment to
opening up the company to interested investors
and the stock market. The substantial
capital which we will keep under our control
shows that we are absolutely convinced about
the huge potential of this successful company
and its management and staff, but it can also
be seen as a sign of loyalty towards an investment
which has proved very profitable to us
over many decades and which, we are convinced,
will keep doing so in the future.
Why is the Foundation offering the
shares at this point in time?
Roger Schmid: We are convinced that the
timing for the IPO is ideal. Market conditions
are very good, and the potential in
Panalpina’s industry is huge. Moreover the
company is in our view well positioned for
profitable growth.
What makes Panalpina attractive in
the eyes of the investor community?
Wilfried Rutz: First of all, not only the
expert, but also the average investor is
beginning to understand more and more
the enormous impact and complexity of growing
globalization and the important, if not
to say crucial role which freight forwarding
and logistics have assumed over recent
years. Today, logistics is high on the agendas
of company managements as the deciding
factor between success and failure in the
global markets. Thus, the sector as such is
already very interesting and will continue to
be attractive in the future. On the other
hand, most of our competitors of similar size
have already gone public. Now Panalpina
offers one of the last investment opportunities
in the area of global logistics providers.
And there are a number of good reasons for
investors to consider our company.
What are these reasons? What
differentiates Panalpina from its
competitors?
Gerhard Fischer: We have a very solid
financial basis, and we follow a tried and
tested strategy with a clear focus on international
air and ocean transport and supply
chain management solutions. This marks us
out from our main competitors, who offer
integrated contract logistics and generally
use their own infrastructure to store goods
and transport them by road. Our asset-light
business model increases our flexibility,
reduces risks and improves our liquidity. On
the other hand, we have established a global
network which is big enough to make us a
global player and at the same time still small
enough to care for individual customer
requests – a fact which makes us attractive
to both major multinational companies and
small and medium enterprises.
What is the “asset-light business
model”, and why do you call it a
competitive strength?
Gerhard Fischer: As a principle, Panalpina
does not own transportation assets, but
relies on third-party carriers for trans- >
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Retail& IPO
portation services. The same applies to office
and warehouse facilities. This gives us
significant operational and financial flexibility
and allows us to provide various transportation
options to our customers and to develop
optimal solutions for their transportation
needs. You need flexibility, especially in
today’s supply chain management. Just look
at the number of OEMs that are shifting
their production platforms further east, both
within Europe and to Asia. Being asset-light
and cooperating with best-in-class suppliers,
we are able to adapt very quickly to
specific customer demands.
Apart from the general situation on
the stock markets, what has
changed since 2002? What have you
achieved to make Panalpina even
more fit for going public?
Wilfried Rutz: To start with one of the most
recent changes, we have, at our extraordinary
general assembly of 23 August, revised our
Articles of Association and approved an
extension of the Board of Directors from five
to seven members. The four newly elected
members (see page 8) will further enhance
the industrial competency of the board and
will help to ensure that the Group’s leadership
stays in experienced hands, both in
regard to the listing and in view of our growth
strategy. We have every confidence in this
new team, and I am sure our investors will
honour this decision. At the executive
management level, we have reduced the Executive
Board to four members in June of this
year. By making it leaner and introducing the
two new functions of Chief Operating Officer
and Chief Administrative Officer (see page
10), the Executive Board’s decision-making
process has been facilitated considerably and
flexibility has clearly been raised.
6 connect 2_2005
“The Foundation
will retain a
substantial stake
in Panalpina over
the long term.”
What were the reasons for the
recent changes at regional management
level?
Gerhard Fischer: By implementing regional
management structures three years ago,
Panalpina has reached its essential goals, in
particular strengthened local sales capacities
and standardized global operation processes.
Also in June 2005, in a second step
towards the further development of these
structures, we partially redistributed the
responsibilities between the regional centres
and corporate head office in Basel. This
adjustment was particularly geared to support
the Group’s productivity objectives
through more efficient functional guidance
at managerial level as well as to re-focus our
global project portfolio. The former Emea
region was divided into two separate
regions, with Europe on the one hand and
Africa/Middle East/Central Asia on the other
hand. Furthermore, China (formerly part of
the Asia-Pacific region) was split from Asia-
Pacific into a separate region. Thus, the existing
four were replaced by six regions,
managed by lean organizations operating as
regional competence centres.
What was the reason for choosing a
geographic rather than a product
segmentation like some of your competitors
do?
Gerhard Fischer: We have a global business
which is executed from area to area or
even from country to country and accordingly
influenced by local customer requirements.
We manage our company geographically
in order to enhance cross selling
opportunities and exploit the full potential of
our sales force. We are convinced that our
approach is successful, as most of our customers
are organized by geography as well.
Which of your regions has the
highest growth potential? One would
guess it’s probably China, isn’t it?
Gerhard Fischer: The Asia-Europe/Europe-
Asia trade lane represents Panalpina’s most
important market, and our share of the volumes
transported on this lane is significantly
higher in both air and ocean freight than our
respective overall global market shares. Panalpina
intends to increase its turnover by
capitalizing on its strong presence in Asia,
where demand for transportation is expected
to grow faster than in other regions of
the world. Asian cargo markets continue to
lead air cargo industry growth while ocean
freight volumes are anticipated to grow at a
similar rate to air freight. The liberalization
of trade services in China paved the way for
Panalpina to obtain the licence for a wholly
owned enterprise in Shanghai in 2004. Nine
additional operating branch licences have
been applied for, and we expect to obtain
the respective licences this year.
So far, Panalpina has been growing
organically. Will this strategy change
in the future? Is providing the financial
means for bigger take-overs
one of the reasons behind the IPO?
Gerhard Fischer: Our growth strategy will
not change. We don’t believe in huge acquisitions
just for the sake of growing “by any
means”. Our focus will remain on organic
growth, supported by very specific and
selected so-called “bolt-on” acquisitions, as
for instance we have done this year by
acquiring Janco Oil Field Services (see article
on page 18). Talking about expansion of
scales, we intend to strengthen our position
in the fast growing trade lanes and to
improve our market position in areas where
the Group is relatively underrepresented.
As regards network expansion, we will keep
acquiring partner companies in strategic
countries to secure our direct control of the
customer base. And when it comes to
expansion of skills, we intend to further add
to and strengthen our capabilities in
selected industry verticals and in specific
geographic areas.
“Loyalty towards
an investment
which has always
proved very
profitable.”

At the same time, the asset-light business
model also reduces Panalpina’s exposure
to the business cycles of the transportation
industry and the industry sectors it serves.
Capital expenditure is limited and largely
focused on IT systems that reinforce our competitive
strengths. As a result, Panalpina
enjoys strong cash-flow generation and high
returns on capital employed.
Without possessing its own fleets,
how does Panalpina cope with
steadily increasing demands and
with imbalances in air and ocean
freight capacity?
Gerhard Fischer: We believe and have in
fact proved that our Central Procurement
and Capacity Management (CPC) generates
benefits in terms of improved efficiency,
reduction in duplication, and better co-ordinated
and standardized processes. Our procurement
is managed by a small global team
of professionals who, together with specialized
information technology platforms such
as our Airwarder and Seawarder IT platforms,
ensure full transparency and open
communication amongst the specialists
involved. This, in turn, provides maximum
benefits to both the carriers and Panalpina
by meeting agreed targets and supporting
the carriers in their efforts to reduce unused
capacities caused mainly by trade imbalances.
We have also found that central procurement
results in an optimization of ground
network services and rationalization of
costs, which plays an increasingly important
role as the port/airport-to-port/airport products
become more and more commoditized.
What are the main key industries
you are focusing on, and what role
do they play in your business?
Gerhard Fischer: Over the past few years,
Panalpina has installed industry competence
centres for the automotive, health care,
high tech, retail and fashion as well as the oil
and gas industries. Each competence center
is staffed with dedicated experts and is
exclusively geared to developing new
and innovative industry solutions and to
supporting Panalpina’s sales force in gene-
rating business from existing and target
customers. The expertise accumulated by
these staff has not only proved to be a
valuable internal resource, but has also led
to Panalpina being recognized as a leading
innovator in these markets. We believe that
our specialist sector capabilities are essential
to building customer relationships and
to maintaining a consistently high level of
service quality across our business.
We have long been concentrating on the
oil and gas industry, for instance, and we are
proud to consider ourselves the world’s market
leader in supply chain solutions for this
sector. The transportation needs of the oil
and gas industry require highly complex
solutions and specialist skills and, therefore,
provide better differentiation potential for
freight forwarders. Based on our leading
market share and customer relationships,
our reputation in the sector and our specialist
experience and capabilities (e. g. specialist
engineers), we believe that Panalpina is
in a uniquely strong position globally to
provide freight forwarding services for this
industry, which is truly key to the world
economy.
What about Panalpina’s customer
base? What do you mean by having
a “healthy balance between major
global customers and SMEs”?
Gerhard Fischer: Panalpina serves a large
and diverse customer base of over 100,000
customers globally. We estimate that approximately
20% and 80% of our net forwarding
revenues are derived from our global
accounts and SME customers respectively.
Retaining a well balanced customer mix is
both a high priority and essential for us. On
the one hand, global accounts have a significant
volume on certain trade lanes, which
enables the Group to optimize the procurement
of transportation capacity and foster
the expansion of its operations. We operate a
highly experienced global account division,
clearly underlining the importance of our
three dozen top accounts. On the other
hand, maintaining a diversified portfolio of
SME customers helps us to limit the risks of
our exposure to any individual global
account. This customer mix strategy helps
balance the Group’s growth and creates
benefits for its customers.
You have been quoted as saying “it’s
the ideas which move the freight”.
What do you mean by this?
Gerhard Fischer: Well, at the end of the day
it’s always the people that make the difference.
The most sophisticated strategies and
systems will only help if your staff are committed
to going the extra mile for their customers.
We are very fortunate to have this kind
of people. Panalpina considers itself to be an
employer-of-choice in the industry. In order
to achieve our corporate objectives, we are
strongly committed to attracting some of the
best talents in the market and to retaining
our internal high performers. Panalpina
focuses on people who embrace the Group’s
core values and who reflect in their behaviour
what we call “A Passion for Solutions”,
which means finding the best possible solution
and turning challenges into promising
opportunities. >
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IPO
Board of Directors
8 connect 2_2005
Rudolf W. Hug Member
Swiss, born 1944
elected 2005 (till 2008)
Rudolf W. Hug holds a doctorate
in law from the University of Zurich
and an MBA from INSEAD,
Fontainebleau (France). In 1985 he
participated in the senior executive
programme of the Graduate School
of Business at Stanford University.
From 1977 to 1997 he worked in
several positions for Schweizerische
Kreditanstalt (today Credit
Suisse). From 1987 to 1997 he ran
the International Division and was a
member of the executive board
of Credit Suisse and Credit Suisse
First Boston. Since 1998 he has
been active as an independent
management consultant.
Wilfried Rutz Vice Chairman
Swiss, born 1939
elected 2003 (till 2007)
Wilfried Rutz holds a university
degree in economics as well as a
PhD from the University of St. Gallen.
Since 2003 he has been a
member of the Board of Directors;
in 2005 he was elected Vice Chairman.
Glen R. Pringle Member
American, born 1947
elected 2005 (till 2008)
Glen R. Pringle holds a degree
from the University of Alabama as
well as from the Georgia Institute of
Technology and Indiana University/Perdue
University. From 1967
to 1969 he worked as state director
of sales for CENCO Instrument
Company. After working at
WVNI/WBIL Radio Station as sales
manager, he joined the Alabama
Development Office in 1986 as a
development director until he became
development director of
Retirement Systems of Alabama in
1995.

Gerhard Fischer Chairman
Swiss, born 1933
elected 1991 (till 2007)
Gerhard Fischer joined the Group
in 1964, when he started working
for Hans Im Obersteg Ltd., Zurich,
at that time a Panalpina subsidiary.
He was later nominated as delegate
for the Group’s Airfreight Far
East division. From 1973 to 1978
he headed Air Sea Broker (today
Panalpina Airfreight). In 1978 he
moved to the head office, where he
led the airfreight business of the
entire Group. In 1980 he became
managing director of Panalpina
Nigeria. From 1986 to 1987 he was
the Group’s COO. In spring 1987
he was appointed CEO, and in
1991 he was elected as a member
of the Board of Directors. In 1995,
Gerhard Fischer was also elected
Chairman of the Board of Directors
in addition to his CEO function. In
1998 he handed over the CEO
function to his successor.
Gunther Casjens Member
German, born 1950
elected 2005 (till 2008)
From 1976 until 2004 Gunther
Casjens held several positions at
Hapag-Lloyd, in 1983 as deputy
director of Europe / Far East Services,
in 1987 as managing director
North America Services and in
1988 as managing director North
and South America Services. In
1990 he became a deputy member
of the executive board of Hapag-
Lloyd, and from 1991 until 2004
he was a member of the executive
board of Hapag-Lloyd. In 2004
he became managing partner and
chief executive officer of Nordcapital
Holding GmbH & Cie KG.
Roger Schmid Member
Swiss, born 1959
elected 2003 (till 2007)
Roger Schmid holds a PhD in law
from the University of Zurich. From
1991 until 1995 he was legal
counsel and director at Bank Leu,
a subsidiary of Credit Suisse. Since
2003 he has been a member of the
Board of Directors.
Yuichi Ishimaru Member
Japanese, born 1939
elected 2005 (till 2008)
Yuichi Ishimaru holds a bachelor
degree in economics from Keio
University. He has worked for
the Marubeni Corporation since
1963. From 1995 until 1998 he
was a member of the board of
directors of Marubeni Corporation
and served as COO for
Marubeni America Corporation,
New York. From 1998 until 2000
he served as chief executive
officer for Europe and Africa for
Marubeni Europe PLC, London.
Since 2001 he has also held a
position as executive vice president
of Marubeni Corporation
and since 2003 he has acted as
special advisor to Marubeni Corporation.
>
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IPO
New responsibilities within the Executive Board
10 connect 2_2005
Bruno Sidler President&CEO
Chief Executive Officer since 1998
Born 1957
Additional responsibilities: Corporate Development, Corporate
Communications and Legal Services.
Bruno Sidler joined Panalpina in 1980. Until 1984 he worked for
Panalpina Johannesburg as sales manager and subsequently as
regional manager for South Africa. During 1985 he worked at Panalpina
Nigeria. From 1987 to 1994 he became managing director of
Panalpina Singapore. In 1987 he also worked as managing director
of Panalpina Indonesia. In 1994 he became managing director of
Air Sea Broker (today Panalpina Airfreight) until 1998, when he
was appointed President and CEO of the Group. Bruno Sidler
was trained as a forwarding officer. He has participated in various
management courses at the International Management Institute
(IMI), Geneva, and at the International Institute for Management
Development (IMD), Lausanne.
Roland Wider Chief Administrative Officer, CAO
Member of the Executive Board since 2002
Born 1959
Responsible for Human Resources, Corporate Information Technology,
Project Management and Management Information System.
Roland Wider joined Panalpina in 2002 as CFO of the Group and
member of the Executive Board. In 2005 he was appointed as CAO
(Chief Administrative Officer) of the Group. Prior to Panalpina, he held
several management positions at different companies in Switzerland
and in Asia. From 1996 until 1999 he worked for Kuehne&Nagel in
Hong Kong as regional CFO for the Asia Pacific Region. Roland
Wider holds a certificate in economics from the Hohere Wirtschaftsund
Verwaltungsschule Zurich as well as a degree as a certified
public accountant from the Schweizerische Treuhand- and Revisionskammer.
Monika Ribar Chief Financial Officer, CFO
Member of the Executive Board since 2000
Born 1959
Responsible for Financial Reporting, Tax Management, Corporate
Treasury, Controlling and Credit Control.
Monika Ribar joined the Group’s head office in 1991. She held several
positions within the Group’s controlling, IT and global project
management departments. From 2000 until 2005 she held the
position of CIO (Chief Information Officer) of the Group and was a
member of the Executive Board. In 2005 Monika Ribar was appointed
CFO of the Group. She holds a university degree in finance and
controlling from the University of St. Gallen. She participated in an
executive programme at Stanford University, Palo Alto, California, in
1999.
Jörg Eggenberger Chief Operating Officer, COO
Member of the Executive Board since 2000
Born 1961
Responsible for Air & Ocean Capacity Procurement, Operations,
Marketing and Sales, Business Processes & Quality.
Jörg Eggenberger joined Panalpina in 1977, holding several positions.
From 1981 until 1982 he held a management position at Panalpina
London, after which he returned to the marketing and sales
department at the Swiss company. From 1985 until 1988 he held
another management position with Panalpina in Melbourne. In 1989
he was assigned to a management position in Taipeh, and in 1990
he held the position of a branch manager at Panalpina Melbourne.
From 1990 until 1991 he worked as manager for the Far East with
Air Sea Broker (today Panalpina Airfreight). In 1991 he became
director of the seafreight division at the corporate head office. In
1998 Jörg Eggenberger became managing director of the West
Africa division of Air Sea Broker. In 2000, he became a member of
the Executive Board as COO for the eastern hemisphere. In 2002
he was appointed regional CEO of the Africa/Middle East/Central
Asia/CIS division. In 2005 he was appointed COO of the Group. In
2004 he participated in a senior management course at Colombia
University, New York.

100 years of innovation
A brief summary of Panalpina’s history
1895
Forwarding company Hans Im Obersteg & Cie. AG in Basel, Switzerland established, which was acquired in 1935 by the
Group’s former parent company Schweizerische Reederei AG. The Group was focused on Rhine river shipping.
1930–1940
Expansion of activities into maritime shipping and international forwarding operations.
1950–1960
Expansion of the global network, establishing numerous new branches in North America and later in Latin America, Africa, Asia and Australia.
1954
All freight forwarding activities of the former parent company grouped under a holding company named Alpina Internationale Transporte AG.
1960
Company changed its name to “Panalpina World Transport”.
1969
40% of the share capital of the company acquired by the Ernst Goehner Foundation.
1973
Established the Air Sea Broker unit in 1973 to act as an air charter broker and ship’s agency coordinator.
1980’s
Acquisition of the Houston-based J. P. Harle Group, which focuses on the oil and gas business segment. By 1983, Ernst Goehner Foundation
holds 100% of the company shares.
1990–2001
Network extension in Far East and Europe, Africa, Oceania and India. Acquired ChartAir, Netherlands, as well as the Jacky Maeder Group.
2002–2005
Granted “A” licence in China – enabling it to develop its own operational organization. Consolidated market leadership in the oil and gas
industry by taking over the Scottish firm Grampian International. Strengthened position in Asia by acquiring book of business of the
South Korea-based IAF. Acquired Singapore-based Janco Oil Field Services. Launched successful IPO at the SWX Swiss Exchange on
22 September 2005.
Panalpina’s USPs
In a nutshell, Panalpina’s “unique selling propositions” are
• global network combined with a strong presence on the local markets;
• high brand recognition and excellent reputation;
• healthy balance between major global customers and SMEs;
• strong customer base in all major key industries;
• global market leadership in the oil and gas industry’s supply chain;
• central procurement and air and ocean freight capacity management;
• non-asset-based business model;
• process-integrated IT platforms;
• management team with long-term experience in the industry;
• passionate staff.
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Oil and Gas
12 connect 2_2005

The all-round partner
In the oil and gas industry, things tend to work differently from most
other branches of the economy. Panalpina has been an expert in this sector
for decades and knows exactly what kind of service oil and gas customers
require in order to operate competitively. Classic forwarding thus
forms just one part of its broad portfolio of services, which spans a wide
range of solutions.
Crude oil is one of the most important raw
materials in today's industrial society, if not
the most important. Without petroleum and
its by-products, very little would function in
the modern world. Where would we be
without electricity or fuel? Oil is a basic
ingredient in the production of both. In
addition, crude oil is used by the chemical
industry to manufacture plastics and other
chemical products, the majority of which
can be constructed from several hundred
basic chemicals – molecular bonds predominantly
derived from crude oil or natural
gas. Thus numerous paints, varnishes,
medicines, detergents and cleaning fluids
have emerged as by-products of crude oil
chemistry. “Crude” is the basic raw material
for almost all automobile fuels, for the diesel
used in car and ship engines, for heating
oil, lubricants and engine oils, as well as
solvents. The list is practically endless, an
indication of the fact that the almost unrestricted
mobility enjoyed by modern man is
only possible thanks to the exploitation of
crude oil. The same is true of the global
economy, whose structure allows us to buy
merchandise from all around the world,
anytime, anywhere – and which relies on
forwarders, shipping companies and airlines
to get those products to their final
destination on time.
It’s a similar story with natural gas,
found in regions with oil reserves, where
subterranean pressure often forces it to the
surface. Natural gas, a compound consisting
primarily of methane with small
amounts of ethane, propane and butane, is
growing in importance as a source of energy.
It has a very high calorific value and can
be delivered to the consumer quickly and
cheaply. Today, natural gas covers almost
one-quarter of global energy consumption.
Times past
Crude oil was formed from marine plankton,
presumably around 2 billion years ago. It
has served as a raw material for several millennia
and is even believed to have been
used by the Babylonians. The term “petroleum”
comes from the Latin “oleum petrae”
roughly meaning “rock oil”. However, proper
exploitation did not begin until the 19th
century. In 1852, Canadian physician and
geologist Abraham Gessner obtained a
patent to produce lamp oil from petroleum,
which burned clearer and was less expensive
than the tallow candles then commonly
in use. In 1854 the chemist Benjamin
Silliman proposed using refined oil as a fuel.
The actual boom kicked off in 1859 when
Edwin L. Drake tapped the first major crude
oil reserves at Oil Creek in Pennsylvania,
unleashing an unstoppable demand for
"black gold". In 2004, 3,820 million tonnes
of crude oil were extracted globally, compared
with 2,275 million tonnes in 1970!
Around 84 million barrels are consumed
daily, with the United States accounting for
one-quarter of that usage, followed by
China, Japan and Germany. Global consumption
is currently rising by about 2%
per year. Saudi Arabia, Russia, the USA,
Iran, Mexico, China and Venezuela head
the rankings of leading crude oil and natural
gas producers, with the West African
states and, increasingly, the Central Asian
states making their way up the list.
Panalpina is right in the thick
of the action
Wherever oil and gas reserves are being
discovered and exploited, Panalpina is sure
to be part of the action – and has been for
decades. How did a company with roots in
inland shipping and traditional forwarding
services end up in the oil and gas industry,
with its very different requirements and
extremely capital-intensive – and thus
time-critical – business models? Forwarding,
in its narrow definition, is not always
the primary task performed by Panalpina.
The company supplies drilling sites with
groceries, medicines and replacement
parts, acts as an agent for drilling and transport
equipment, organizes crew changes,
takes care of storage for pipeline construction,
runs husbandry services along the
West African coast using a specially constructed
fleet of ships, and transports massive
components to the remotest areas of
Africa, Asia, Russia and Latin America.
And much more besides!
>
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13

Oil and Gas
It all began in Nigeria
We spoke to Erik Hutter, Head of Global Oil
and Gas at Panalpina, who knows this line
of business inside out. “We first became
involved in this sector in the early 1960s,
with Nigeria playing a key role. At that
time, Panalpina had already established a
presence in the largest African nation,
having run its own operations there since
1954. One day we were approached by
companies with whom we were not familiar
and asked whether we could offer our services
in Port Harcourt and Warri. They explained
that it was to do with the extraction of
oil. Panalpina very quickly realised that here
lay an assignment that was not only unusually
challenging, but also held enormous
potential,” Hutter elucidates.
While the impetus may have come from
outside the company, the decision to enter a
completely new business segment nevertheless
required a great deal of courage.
However, it is a decision that has never once
been a matter for regret. Quite the opposite
– the oil and gas business is now one of the
main cornerstones of Panalpina’s portfolio of
products and solutions. An entrepreneurial
spirit, a willingness to take risks and the
courage to tread new paths are values that
are still much prized at Panalpina today.
Merlin and African Star
One example was without doubt the shipping
service along the West African coast,
14 connect 2_2005
The oil crisis of 1974 shook the global economy and sent demand spiralling upwards.
Nigeria tapped its reserves as fast as it could and the oil companies found they needed
the support of a logistics company that knew the territory, had international connections
and could do more than “just forward”. “We very quickly realized that Houston, Texas was
where the important decisions concerning the global oil and gas business were being
made,” Erik Hutter recalls. As a result, the first major acquisition in Houston was made,
in the form of J. P. Harle, at that time leading logistics provider for the local oil and gas
upstream industry. A few years earlier, Panalpina had set up Air Sea Broker Ltd. in Basel,
managed by individuals who had been involved in the Nigerian operations right from the
outset.
“Air Sea Broker was given the task of developing and marketing the catalogue of services
for oil companies active in West Africa, and especially for their subcontractors,”
Hutter explains. Over the years, the company subsequently expanded its presence into
Gabon (1980), the Congo (1982) and Angola (1985). It was not a matter of growth at any
price, more a case of being where the customers were and where out-of-the-ordinary
services were called for.
which got underway in 1986 with the supply
vessel “MS Merlin” and which can be
described, without exaggeration, as a pioneering
feat. In 1990 a second ship, the
“Merlin II”, was brought into service. These
vessels, specially constructed for shallow
waters, can also handle roll-on roll-off consignments
and are able to dock even where
there is no port infrastructure. They support
our dedicated coastal service between the

West African countries and offshore installations,
transporting replacement parts,
generators, drinking water, groceries and
fuel. The service is just as popular today as
back in 1986, so the state-of-the-art “MV
Merlin III” was taken on time-charter in
2004.
No less innovative is the “African Star”,
a combined air/sea cargo service operating
since 1993 and linking West Africa’s coastal
regions to Panalpina’s global airfreight network.
The “African Star” is another purpose-built
vessel, not just an ordinary ship.
It runs according to timetable, regularly
calling at a number of ports.
Mr Hutter, is it fair to say that the
primary focus of Panalpina’s Oil and
Gas activities is on West Africa?
“No, that was only true in the early years. In
the meantime we have become active in
every region where oil exploration and
exploitation is taking place. We have greatly
expanded our position in Central Asia
and Russia, for example. There was a considerable
upsurge in activity in this region
during the 1990s, partly as a result of the
upheavals in the former Soviet Union. It
goes without saying that we went wherever
our customers went, often entering completely
new territory. One example that
comes to mind is Sakhalin, where we really
did some ground-breaking work.”
Oil and Gas has been a real success story at Panalpina, and one that is by no means
over. From 2000 to 2004 the division, which currently employs a staff of around 1,000,
boosted its net profit by 53%. It should be noted that this growth was almost entirely
organic. And recent targeted acquisitions should help speed up this trend in future.
Our operations in Nigeria, Gabon, the Congo and Angola were followed by branches
in Ghana, Sakhalin, Brazil, Venezuela, Kazakhstan, Azerbaijan, Asia (Singapore and
China), Guinea and Cameroon. The next major phase of expansion is planned for North
Africa. Grampian International Freight Ltd (GIF), headquartered in the Scottish oil capital
of Aberdeen, was acquired in 2004, followed this year by Janco Oilfield Services Pte Ltd.,
registered in Singapore. Panalpina thus has an extremely strong market position in the oil
and gas "triangle" of Houston/Aberdeen/Singapore, the three decision-making centres of
the industry. Panalpina Oil and Gas operates strategic centres at these locations. Operations
in the western hemisphere, including Latin America, are coordinated in Houston,
while Singapore is responsible for the eastern hemisphere, taking in the entire southeast
Asian region, and Aberdeen is the main location in Europe, also covering Russia and Central
Asia. West Africa is looked after from both Aberdeen and Houston, depending on
where the client is based. This structure was not merely dreamed up by Panalpina: it
reflects common practice within the industry.
It is no coincidence that Grampian, a company that has been active in the oil industry
almost exclusively for over 20 years, and that has built up outstanding customer relations,
became a part of our Group, but it is certainly a stroke of luck. There were already
close links between the two companies prior to the takeover, with both sharing the same
business philosophy. All activities and processes are strictly aligned with customer
requirements, which, in this line of business especially, tend to be demanding ones. New
ideas, innovative products and a continually improved service are automatically expected,
as are mutual trust and honesty.
Panalpina doesn’t transport oil and
doesn’t operate tankers or pipelines.
To what extent is the company actually
active in the oil business?
“Well, this is something I’m often asked
about, just as I’m asked whether we deliver
heating oil to private households. We don’t,
of course – any more than we physically
transport raw materials. There are specialized
forwarders who do that. We offer
>
connect 2_2005
15

16
Oil and Gas
Monique Gubler, Area Managing Director Panalpina Angola, Congo,
Gabon.
integrated logistics services to all companies
in the upstream segment.”
What does “upstream” actually
mean?
“Upstream” refers to the exploration,
production and exploitation of natural oil
and gas reserves. It includes seismic and
geophysical evaluations, oil field logging,
the actual drilling for oil or gas and the
transportation and storage of the raw material.
“Downstream”, on the other hand,
refers to refineries, including further processing,
distribution and suppliers.”
Who are Panalpina’s customers in
the upstream business?
“They are active in oil and gas exploitation or
geophysics, or they provide maintenance
and supply services to rigs and exploration
sites. We are also called upon by the owners
of heavy transport vessels, as well as the
operators of offshore facilities, drilling companies
and, of course, the major service providers
such as Halliburton, Schlumberger or
Baker Hughes. Interestingly enough, the
number of companies in this industry is not
that large, meaning we tend to work with
them at several locations around the globe.
We know one another and are forever meeting
up. This shows how important it is to
offer the customer perfect service, to satisfy
their requirements (which tend to change
rapidly) and to create a foundation of trust.”
connect 2_2005
The overall package must be right: Jeffrey A. Miller of Halliburton.
Monique Gubler, Managing Director at Panalpina
Angola, agrees. “Of course expertise
in the field is extremely important, as is
industry know-how, but these are actually
taken as given. That’s why a client relation-
ship based on trust is so crucial. This involves
admitting your mistakes and not trying
to cover things up. There is a lot of money at
stake in the oil industry and every minute
of lost production gobbles up money.
“Confidence is of utmost importance,” states Jeffrey A. Miller. Until recently, Miller was
Vice-President at Halliburton in Angola and now works for the same company in Asia. “As
a service provider, we are only satisfied with the best quality. Our goal is always to keep
the customer completely satisfied with every aspect of our service. To do this we need
partners like Panalpina who are required to meet exactly the same standards. The success
of our customers – primarily exploitation and production companies – depends on
the performance of our partners, which is why we will not accept any compromises in this
area.” This particularly applies to what are known as “small” tasks. “If a customer is
unable to work owing to an error on our part or by one of our partners, we call this a “nonproductive
time catastrophe”, which might perhaps be instigated by incorrectly drafted
import documents. If, for that reason, a certain chemical is not delivered on time, this can
lead to an entire rig coming to a halt, which in turn will have far-reaching consequences.”
Flexibility, innovation, creativity, optimized solutions and reliability are the basic
requirements for receiving a Halliburton mandate. Miller believes he should be able to
expect his partners to think for themselves and not just follow instructions. After all, it is
in the interests of everyone involved that procedures are constantly reviewed and improved.
Since supply chain management and logistics are key success factors, the
responsibility placed on the provider is correspondingly high. Maintaining a dialogue and
complete openness are thus also important. Errors shouldn’t happen, but can occur from
time to time, in which case it is important to own up immediately and join together in
looking at ways to contain the damage.
“This is why we don’t just choose our partners on the grounds of price alone,”
Jeffrey A. Miller stresses. “Naturally, costs are a factor – that is the case wherever you
look in business. But our approach involves a kind of ‘balanced scorecard’, which
weighs up various competencies against one another. Knowledge of the market,
busi-ness philosophy and security measures feature alongside service quality, flexibility
etc. The overall package must be right!”

Representatives of Panalpina Oil and Gas at a conference in Basel. Erik Hutter is in the middle of the front row (above the ‘N’).
Customers must have confidence in their
logistics provider, and the latter must go on
earning this trust over and over again.”
Mr Hutter, we have heard a lot about
products. But what exactly are you
offering your customers?
“In view of the process cycles in the upstream
sector, the varying requirements of the
companies involved and their geographical
spread, it is self-explanatory that we are
talking about complex requirements that by
far exceed what is traditionally on offer from
forwarders. These can range from devising
solutions for the transportation of
thousands of tonnes of drilling cement, to
the moving of 10,000 m 3 onshore landrigs,
through to the forwarding of bulky and
unwieldy equipment and materials to locations
in the desert or on the coast where
there is no port infrastructure. Services
such as order management, hub or distribution
management, industrial packaging,
forwarding costly underwater systems that
require careful handling, or the emergency
or hot-shot delivery of urgently needed
replacement parts are also part of the portfolio.
So much for the area of “forwarding” –
our products and services go much further:
we take on agency mandates and represent
offshore rigs, organize the temporary
import of all manner of drilling equipment,
construction or supply vessels, ensure
smooth handling by the competent authorities,
organize deliveries of medicines, groceries
or replacement parts to drilling rigs
and coordinate the changeover of crews on
the platforms. Quite a wide field really.”
So it can’t be that easy to find good
people...
“Our staff are the key to our success. As I
mentioned, we employ around 1,000 people
in the Oil and Gas division, many of whom
work in remote areas where the actual business
is taking place. Our professionals have
many years of experience and are enthusiastic
about their work. They are always on
the lookout for new ways of optimizing the
service and – most importantly – they can
talk to customers in the language of the
industry.”
A final word on organizational structure.
Panalpina differentiates between
Global Oil and Gas, Panalpina
Oil and Gas und Panprojects. Where
do the differences lie?
“Global Oil and Gas is a management unit,
steering and coordinating business at
global level. I am head of this area and work
closely with the Regional Heads of Oil and
Gas, our key account structure and a post in
R&D. We are tasked with strategic development,
defining and monitoring targets and
promoting sustainable customer relations.
In addition, we remain in close contact with
the people on-site and in the key regions
such as Aberdeen, Singapore, Houston,
Central Asia, Russia and West Africa.
Panalpina Oil and Gas is the new brand
name of ASB Air Sea Broker, a subsidiary
acting as a liaison and coordination office
for all our branches in Africa.
Panprojects, on the other hand, functions
as an independent business unit
within the Panalpina Group. For the main
part, it specializes in project-related forwarding
for construction companies. In
contrast to the Oil and Gas unit, Panproject
is extremely active on behalf of oil and gas
customers in the downstream segment,
wherever large industrial plant or power
stations are being built. The borders between
upstream and downstream tend to be
fluid, giving rise to many interfaces
between the various Panalpina units,
with the corresponding degree of close cooperation.”
>
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17

Oil and Gas
Out in front
Houston, Aberdeen and Singapore – those are the world's three strategically most important oil and gas
hubs. Panalpina is present in all three locations. Indeed, the acquisition of Janco Oilfield Services in Singapore
has enabled the Group to strengthen its position as the leading global supplier of logistics solutions to
the oil and gas industry.
Panalpina has been in the oil and gas business
since the 1960s. As a globally active
company that has undergone dynamic
development in the 50 years or more since it
was founded, Panalpina has continued to
expand in the oil and gas sector thanks to
organic growth and targeted acquisitions.
The acquisition of Janco Oilfield Services
Pte Ltd. in July 2005 was the final piece of
the jigsaw: “The integration of Janco is a
decisive move in the expansion of our global
network. The last gaps have now been
closed, enabling us to offer comprehensive
logistics solutions at all three major oil and
gas hubs in the world – Houston, Aberdeen
and Singapore,” says Erik Hutter, Head of
Global Oil and Gas at Panalpina.
Sustained growth
However, Panalpina did not see this as
merely a matter of filling in gaps in its network.
Janco Oilfield Services Pte is not just
any logistics provider. The Singapore-based
company, which was founded in 1984, is in
fact an acknowledged specialist in logistics
services to the oil and gas industry. It offers
logistics management solutions to customers
in the upstream segment (oil extrac-
18 connect 2_2005
tion) and has acquired a reputation for providing
high-quality service round the clock.
The takeover has therefore strengthened
Panalpina’s position as market leader for
logistics services to the oil and gas industry.
“Acquiring an established and highly efficient
company like Janco Oilfield Services is
exactly in keeping with our strategy of
sustained growth,” Panalpina CEO Bruno
Sidler explains. “We are strengthening our
position across the various geographical
markets and enhancing our competencies in
key industries through targeted acquisitions,”
he added.
Serving the customer
Ultimately, corporate mergers have to make
sense from the customer’s point of view. As
Sidler points out: “Bringing together the
competencies of Panalpina and Janco Oilfield
Services has numerous advantages for
the customer and creates new opportunities.”
Bernard Lee, General Manager and
former co-owner of Janco Oilfield Services,
believes that the merger enables the two
firms to derive great benefit from their complementary
knowledge and experience.
“Janco’s experience in the industry and our
good relations with decision-makers in Southeast
Asia, combined with Panalpina’s
international business contacts and the
range of logistics services it offers, mean
even better solutions for the customer,” says
Lee with conviction. And this isn’t just talk:
Lee intends to prove it, along with his former
management team and staff, in their work
for the company’s new owner, Panalpina.
Continuity is thus being preserved so
that customers can benefit from the team’s
specialist knowledge in future too.
Janco Oilfield Services
Janco Oilfield Services Pte Ltd. was founded
in 1984 and is based in Singapore at the
Loyang Offshore Supply Base, which is of
strategic importance for the oil and gas
industry. In 2004 Janco generated turnover
of SGD 25.1 million (CHF 17.4 million) and
employed 28 people. Its key customers
include all the leading oil and gas explorers
and producers. As Janco is an ISO
90001:2000 accredited company which
enjoys a very high reputation, the Janco
brand name will be retained.

Going the extra mile
Agency mandates from customers involved in both oil and gas exploration and exploitation of the coast of
West Africa are one of Panalpina's strengths in the oil and gas industry. Panalpina is currently acting on
behalf of its long-standing client, the Netherlands-based Heerema Marine Contractors (HMC). HMC is one of
the four subsidiaries of the Heerema Group.
“This assignment actually has very little to
do with forwarding,” Soeren Zincke tells us
right at the start of the interview. Zincke is
Head of Tender Management Eastern
Hemisphere with Panalpina Oil and Gas,
headquartered in Basel. “However,” he continues,
“the qualities and attributes that you
pick up when working in the forwarding
sector do come in useful!” This statement
sums up the business: logistics providers
must be there for their customers 24/7 to
ensure a fast and flexible reaction. For it is
often the case that an unexpected turn of
events requires an immediate solution,
making both flexibility and reliability essential.
The customer must be able to rely 100%
on the service from Panalpina, because
even the slightest error can easily end up
costing a fair amount if production comes to
a halt or if the extremely expensive vessels
are unable to operate. Fairness and openness
vis-à-vis the customer, who must be
kept informed at every stage of our activities,
also play a role.
Panalpina has acted as an agent for
HMC in West Africa for more than a decade
now. The company is specialized in complex
offshore constructions and installations
for the deep-water exploitation of oil and
gas. Its clients include almost all the leading
oil companies and construction firms, and it
is primarily active in the North Sea, the Gulf
of Mexico, West Africa and Brazil. HMC can
look back on 50 years of experience in the
industry. It transports, installs and moves
various types of offshore construction,
including both moored and floating installations
for use in shallow or deep water.
Another subsidiary of the Heerema Group,
Dockwise, boasts a fleet of 16 semi-submersible
heavy transport vessels. The freight
deck of this type of craft can be lowered
beneath the surface of the water to facilitate
the loading or unloading of heavy or bulky
cargo. Dockwise additionally deploys a fleet
of tugs for towing drilling rigs and platforms.
A wide variety of tasks
“We provide HMC with a variety of different
services,” Soeren Zincke explains. These
include agency activities related to the construction
ships, heavy transport vessels,
tugboats and supply ships in use. At the
moment this applies primarily to the “SSCV
Thialf”, a 200m-long crane vessel with over
136,709 GRT, which was recently deployed
for installation work off the West African
coast.
What exactly does the assumption of
an agency mandate involve? According to
Soeren Zincke it covers the entire area of
port handling, i. e. organizing a mooring
berth or anchorage prior to the ship’s arrival,
hiring a pilot (if necessary), booking
tugboats, registering the ship with the port
and customs authorities and drawing up
the required documents. “In addition, we
organize the temporary import of units, act
as customs agent and provide the facilities
with fuel, water, groceries, medicines and
such like. As shipping and customs agents
we are responsible for all these different
tasks.”
Husbandry...
The term “husbandry” covers all manner of
services you would not necessarily expect a
forwarding company to provide. For example,
Panalpina organizes the changeover of
crews, which in the case of the “Thialf”
means around 400 people embarking and
disembarking all at once. “We also meet the
client’s representatives at the airport and
organize transport to and from their hotels.
In addition, we help individuals complete
the formalities for entering the country, provide
medical assistance, make hotel and
airline reservations on their behalf and offer
them the use of a workspace at our local
branch,” says Zincke, to round off the list.
... and freight transport
And what about forwarding services – don’t
we have any responsibility for those?
“Of course we do,” he assures us. This primarily
involves the forwarding of replacement
parts or handling equipment that has
to be ordered abroad. “And we also charter
vessels for customers if they so require.
Wherever possible we then take on the
agency mandate for these vessels!”
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19

SME
A small but highly efficient team: Cambridge America.
Reliability: the be-all and end-all
Small to medium-sized enterprises are often niche-players that know
their market like the back of their hand. That is certainly true of Cambridge
America, a small, agile, service-focused and successful firm
that operates in the electronics sector. Even though Panalpina is a large
corporation, smaller companies are keen to use its logistics services
because its global network makes it an ideal partner for SMEs.
Cambridge America LLC, located in Branford,
Connecticut (USA), is a distributor and
service provider of Printed Circuit Boards
(PCBs) to customers throughout the United
States and Canada. It focuses on an important
niche in the PCB industry, accommodating
orders involving large numbers of
parts which require specialized service
that many of its larger competitors do not
20 connect 2_2005
provide. Cambridge America has built its
business around this niche and its attention
to this market segment has paid off.
“Our focus is to serve customers who
utilize PCBs that comprise a large number
of parts and which therefore require a
higher level of parts service,” says Bill
Bansavage, President of Cambridge America.
“Many PCB suppliers are more inter-
ested in moving high volumes with customers.
We serve the needs of lower and mid
sized volume customers, with a focus on
excellent service.”
Part of the supply chain
Cambridge America provides prototype,
pre-production and low volume requirements
to US manufacturers and medium to

To Cambridge America, Panalpina provides various services, among them airfreight, consolidation, warehousing and customs clearance.
large volume requirements to Asian manufacturers.
It takes full ownership of the
manufacturing process on behalf of customers,
selecting the manufacturing plants in
Asia and coordinating customized parts
orders.
Freight forwarding is an important
extension of the company’s offering to
customers, and Panalpina plays a critical
role in its supply chain. Having worked
together since April of 2004, Cambridge
America feels Panalpina is a great fit for its
business requirements in terms of volumes,
weight and pricing. Likewise, Panalpina
finds Cambridge America to be a great fit as
an SME customer.
“The relationship between Cambridge
America and Panalpina is that of a true partnership
based on open communication and
trust. They are a loyal customer with growing
business needs. As they grow, we will
grow with them,” says Matthew Brockway,
Account Manager for Panalpina in Bradley,
Connecticut.
Tailor-made logistics solution
Panalpina provides air freight, consolidation
and warehousing, as well as customs clearance
services to Cambridge America. Products
are consolidated in Asia, then shipped
out of Taiwan and Hong Kong to Cambridge
America in Connecticut. About 1 metric ton
of this freight is shipped each week in two
consignments.
Panalpina provides a trustworthy and
reliable service with consistent transit times,
including the very busy peak season out of
Asia. “Cambridge utilizes key trade lanes
from Asia Pacific to North America. We are
able to offer especially competitive rates on
these lanes, and provide consistently excellent
service through close collaboration between
our Panalpina offices,” adds Brockway.
In the unlikely event that a shipment is
delayed, Panalpina is quick to notify Cambridge
America with status updates. Proactive
event notification has been key to the
success of Panalpina’s relationship with
Cambridge America.
Partner of choice
“Situations can occur, and when an issue arises,
Panalpina doesn’t run off in different
directions,” says Bansavage. “They quickly
notify us of the issue and provide us with
suggested solutions. They are the type of
partner you are truly able to trust.”
Cambridge America points out that
there are plenty of shipping companies all
over the world and that many other freight
forwarders often seek its business. But
Panalpina is its partner of choice, with the
service and reliability needed for timecritical
operations. Flexibility is important to
the growing company, and Panalpina has
developed a transportation programme that
meets both the needs of Cambridge America
and the expectations of its customers.
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21

SCM
22 connect 2_2005

Supply chain management for
hi-tech client in Eastern Europe
The electronics manufacturing services provider, Celestica, and
Panalpina extend their worldwide cooperation into an additional country,
Romania. What makes a leading company in electronics manufacturing
services like Celestica choose Romania as a location?
Celestica and Panalpina are old acquaintances:
their successful cooperation dates
back to 2003. Celestica has twice already
recognised Panalpina’s performance in integrated
air and sea freight solutions with a
“Global Supplier Award”. Last year, Panalpina
handled some 40,000 air cargo shipments
weighing 12,500 tons and around 600
sea freight consignments for Celestica.
Careful choice of location
Now the two companies are cooperating
within a new project. Panalpina is taking
care of the logistics of a new Celestica production
facility in Oradea (Romania). This
provides a good opportunity to glimpse
behind the scenes of Celestica, an electronics
manufacturing services provider (EMS).
The obvious question is:
What prompted Celestica to choose
Oradea in the first place?
Richard S. Williamson, Director Global
Logistics & Trade Compliance at Celestica
was glad to explain: “We are following
customer demand for low-cost solutions. As
one of the leading companies providing
electronics manufacturing services for
OEM customers, we are looking for locations
where we can produce at low cost.”
When Celestica decides to move into
an emerging country it is usually based on
a customer need and has the end goal of
improving the scope of service offerings to
customers. That said, Celestica prides itself
in providing a competitive offering and a
strategic global footprint to its customers
by anticipating customers' needs. Overall,
Celestica's goal is to provide the optimum
solution for its customers.
In making the decision to move to an
emerging country, Celestica considers the
following:
• Infrastructure (power, roadways, airports,
shipping, communications network, etc.)
• Working environment
• Political environment
• Proximity to customers and/or their end
markets
• Logistics – Is the location close to the
border – is there a strong logistics
scenario
• Workforce – access to labour pool and
technical skills
• Cost of building labour rates
Oradea, for example, is quite close to
Budapest with its well-developed transport
connections. Additional important factors
are dues and taxes and the administration
effort necessary for importing or exporting
goods to or from a certain country.
Equally important for us is the composition,
on different levels, of the local workforce.
Oradea has a good university. We cooperate
with them, bringing in engineers
from Western Europe to train students.
These students can later work in our manufacturing
plant. After a time of transition, our
Oradea location will therefore become a part
of our company which is self-sufficient even
on the personnel side.
Williamson speaks from his own experience
when he explicitly recognizes that the
infrastructure in Eastern Europe is well
developed.
>
The logistics centre in Oradea/Romania. Panalpina CEO Bruno Sidler receives the
Supplier Award from Celestica.
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23

SCM
Full transparency
Panalpina maintains three further VMI (Vendor Managed Inventory) hubs on behalf of
Celestica. Two of them are located in the Czech Republic (Prague and Brno). In accordance
with Panalpina’s “asset-free” strategy, they are, just as in Oradea, run by an external
logistics and warehouse manager. A rule book drafted by logistics specialists from
Panalpina lays down the precisely defined tasks, responsibilities and competencies of the
management firm.
The third VMI hub is situated onsite at the Celestica plant in Vimercate near Milan.
Panalpina staff ensure its smooth functioning with the support of Panalpina’s own Warehouse
Inventory System (WIS), an innovative IT system that was launched at the beginning
of 2005.
Thanks to the specially developed SCV (Supply Chain Visibility) module, Celestica has
all the information it needs at its fingertips. Regardless of whether Panalpina outsources
its warehouse activities to subcontractors or operates the site itself with its own WIS
application, the customer can call up information on stocks and inventories at any time.
Suppliers are also connected to the system, naturally with access to information related
to their own goods only.
With its three innovative tools, SCV (for transparency), the rule book (defining procedures
at warehouse partner companies) and WIS (for own warehouse activities), Panalpina
has genuine added value to offer to its customers.
Lower-cost labour is not the only decisive
factor, and Celestica even provides development
assistance to Romania’s national economy.
What exactly is Celestica producing
in Oradea?
“I cannot disclose the specifics, but I can tell
you that we manufacture goods whose final
destination is Western Europe. Their distribution
is mainly via the road network”.
But we have never seen the Celestica
name on any electronic device ...
“This is part of our policy”, Williamson said.
“It is important that we keep the work we do
for our customers confidential.”
Where do you get the raw material
and perhaps the semi-finished
products Celestica is processing in
Romania?
“Most of it is procured in Asia, in part also
in the Americas and in Europe. We use
several methods of transportation, one of
which is airfreight.”
24 connect 2_2005
And how do you find the right
logistics provider, which fits into the
whole picture?
“When choosing a logistics provider we are
primarily looking at tangible factors like
what the company can do, what its abilities
are. In Romania, we are working with Panalpina.
We have concluded a "master transport
agreement" with a number of addenda
regarding imports and exports. This is in
accordance with our primary partner model
which proved its worth in western countries.”
Will Celestica – like other big international
companies – reduce the
number of its logistics providers?
“By means of a global request for quotation
(RFQ) process, we have reduced the number
of our logistics providers from about 20
to just three global partners. Panalpina is
one of them. Panalpina is a depended supplier
in airfreight. Besides that, we are cooperating
in contract logistics and have
out-sourced some activities to Panalpina.”
“We have other suppliers that move
small parcels. Besides that, we have suppliers
in ocean transportation and, by
region, in ground transportation. So we are
working with several forwarding partners.
Of course we keep trying to optimise
wherever this is possible.”
What do you most like about Panalpina?
“I particularly appreciate our good and
lasting relationship, and our cooperation.
We communicate with the senior management
in a direct and straightforward way.
We also have the same business values.”
And what is your biggest worry
today?
“Right now it is the flood and its aftermath
in New Orleans, even if it has not directly
hit our company. Then it is the price of fuel.
This has a huge impact on us, especially on
our logistics. It is comparatively easy to
pass on the additional cost as it hits everyone.
But I do wonder about the Global nature
of our business and the implications on
logistics?”
Interview Rolf D. Sulser

Celestica
Celestica is a world leader in the
delivery of innovative electronics
manufacturing services (EMS). Celestica
operates a highly sophisticated
global manufacturing network
with operations in Asia, Europe and
the Americas, providing a broad
range of integrated services and
solutions to leading OEMs (original
equipment manufacturers). Celestica's
expertise in quality, technology
and supply chain management, and
leadership in the global deployment
of Lean principles, enables the company
to provide competitive advantage
to its customers by improving
time-to-market, scalability and manufacturing
efficiency.
The company has over 40 locations
around the globe and is listed at
the Toronto and New York stock exchanges.
The company is led by CEO Steve
Delaney, its chairman of the board of
directors is Robert L. Crandall (formerly
of American Airlines).
Celestica was incorporated in 1994
as a wholly-owned subsidiary of IBM.
In 1996 it was acquired by the Canadian
investment company Onex
Corp. which is still its majority shareholder.
When Celestica went public
in 1998 it had annual revenues of
USD 3.2 billion. It grew to its present
size primarily by acquisitions, taking
over production facilities of OEMs
such as IBM, Motorola, Avaya, Omni
Industries, Lucent Technologies and
NEC Corp.
connect 2_2005 25

Human Resources
Dedicated –
heart and soul!
In day-to-day business, things seldom go exactly as planned, a fact to
which Kornelija Capek has long since grown accustomed. As Regional
Key Account Manager, she must be available 24/7 to provide a fast and
flexible response when clients IBM and Lenovo come to her with a
request or a problem.
This interview was actually supposed to
take place the week previously, but, at the
last minute, Kornelija Capek was forced to
make other arrangements and travel to an
important meeting with a client in Canada
along with other members of her team. This
is nothing out of the ordinary for Ms Capek.
After all, IBM and Lenovo are clients whose
high-tech products are manufactured and
sold all over the world. She doesn’t always
need to hop on a plane though, for urgent
talks are often held by teleconference late
at night or early in the morning. “There is
always someone awake and at work
somewhere on the planet. That means we
have to be available round-the-clock. After
all, it’s part of what customer service is all
about.” She is convinced that “commitment”
of this kind is one of Panalpina’s
26 connect 2_2005
major strengths and thus one of the secrets
of its success. “Clients know that we are
prepared to do everything in our power to
support them in their business. The name
Panalpina acts as a guarantee in that
respect.” Leaving these expectations aside,
she is in no way fazed by the nature of her
assignments. Quite the contrary: “I am
totally dedicated to what I do, heart and
soul. I enjoy working for Panalpina. And if
your heart’s in your work, that means you
do a good job. I feel sorry for people who
drag themselves to work each morning.
You should be doing something you enjoy –
that’s the main thing!”
You can tell from Ms Capek’s body
language and eye contact that she is not
just paying lip service here. She is lively
and enthusiastic when discussing her
career and clients or when expounding on
the joys of working in a responsive team
where there is plenty of room for initiative.
She is already familiar with the combination
of team spirit and resourcefulness from
her hobby, basketball, although she has not
been able to devote quite as much time to
it recently. Her activities as Regional Key
Account Manager don’t leave a great many
windows of opportunity these days.
A running dialogue with clients ...
But work makes up for a lot of things. Certain
aspects of her job – such as travel –
complement her hobbies. She finds it a
shame that she sometimes hardly gets to
see anything of the places she visits, other
than hotels and conference rooms. “However,
it’s a chance to get to know interest-

ing people and to negotiate with clients. I
not only find personal contact enriching, I
also consider it of key importance when it
comes to doing business. Some things can
be dealt with more easily and more efficiently
when you know the people involved,”
she explains. “A running dialogue
with the client is absolutely essential to any
good partnership, and is something the
customer automatically expects. We keep
in regular touch with our contacts, whether
it be by means of personal visits, by e-mail
or a telephone call. And it naturally works
both ways.” Clients have to be kept permanently
up-to-date, making a glitch-free flow
of information an absolute must. “And if a
problem or bottleneck crops up somewhere
along the forwarding chain, we need to
react immediately and present the client
with potential solutions. You need open
communication channels for that!”
… and dedicated teamwork
Customer care is required not just at international
level, but also regionally and locally,
and so the Key Account Management
Team is made up of individuals from all
around the globe. “Teamwork is very important
to me, because together we are capable
of really achieving something and of
providing clients with the level of service
they require. I can confidently state that we
have grown hand-in-hand with our clients
and established high-quality partnerships.”
The point is not merely to satisfy requirements
or follow instructions – just the opposite,
in fact. “Everyone on the Key Account
Management Team is constantly on the
lookout for even better solutions so that
clients really do feel they are being well
looked after and know that we are there for
them.”
Operational excellence at every level
“It is essential to employ outstanding people
at every level in every branch. This is
the case at Panalpina. We need to get
everything right, which of course boils
down to perfect handling from start to
finish. What good are all the concepts and
visions in the world if a consignment isn’t
cleared through customs, is delivered late
or arrives at the wrong destination?” In Ms
Capek’s words, that is why cooperation
throughout the entire organisation is so
important. This obviously applies in no
small measure to the Panalpina Airfreight
subsidiary, too. “We often require airfreight
capacity at short notice. We then discuss
all the existing problems with our colleagues
at Panalpina Airfreight, identify
potential bottlenecks and come up with the
best possible solutions. A local event such
as a strike, for instance, could threaten the
whole process. When that happens we
need to provide alternative solutions.”
Kornelija Capek’s main duties also
include regular monitoring of the core parameters
agreed with the client and taking
action, in collaboration with the Key
Account Management Team and the local
branches, should she spot something amiss.
This involves maintaining regular contact
with those on the front line to ensure they
are thoroughly informed about the exact
nature of the agreement and know what
requirements the customer expects to be
satisfied. “That is why every last person
counts, no matter what their position in the
forwarding chain. Understandably, I get to
know almost all of the Panalpina Group,
even IT, since I am responsible for the interface
between our systems and those of ‘my’
clients. My job really does offer me a great
deal of variety.” Asked whether tact, diplomacy
and negotiating skills come in at all
handy at meetings, she agrees with a
smile. “After all, there is a lot at stake. We
process around 11,000 to 12,000 consignments
per month, with a volume of around
5,000 tonnes, for these two customers.“
Long-standing staff member
Kornelija Capek has been involved in the
forwarding business right from the word go.
A Swiss citizen born in 1976, she completed
her commercial apprenticeship with a
medium-sized forwarding company. In 1998
she joined Panalpina in Zurich. She began
as a supervisor in the Airfreight department,
then went on to become a traffic
controller. In 2003 she took up her position
as Regional Key Account Manager. Alongside
her private studies, she also attended
courses at Panalpina as part of its Panacademy
programme: The Winning Piece,
The Winning Strategy and – at Cranfield
University – Leveraging Supply Chain
Management. “These training courses
were really worthwhile because they were
geared so much towards actual practice.
We drew up business plans, for example,
acted out meeting the customer and had to
prove ourselves in a crisis management
situation. It’s important to be able to keep
a cool head, even when you’re under great
pressure.”
connect 2_2005
27

28
Worldwide
connect 2_2005

Giant of the oceans
Germany On 17 June 2005 an inaugural ceremony was held for
the new container vessel “P&O Nedlloyd Manet”, named after the
French painter Edouard Manet. Some 350 people participated in
the festivities at the port. The ceremony was performed by Kathrin
Eisenblätter, wife of Thomas Eisenblätter, Managing Director of
Panalpina Ocean Freight, which has collaborated closely with the
P&O Nedlloyd shipping line for a number of years. The ship was
financed by German issuing house MPC Capital via the MS Manet
Star closed-end fund and built at the Japanese shipyard IHI Marine
United. It has been chartered out to P&O Nedlloyd for the next
15 years. The vessel is one of the giants of ocean-going shipping,
at 335 metres long, 42.8 metres wide, 60.84 metres high and with
a loading capacity of 8,450 standard containers. This huge container
vessel will ply the oceans between Europe and Asia carrying
consumer goods such as shoes, toys, electronic products and
textiles.
connect 2_2005
29

30
Worldwide
Race fever
Luxembourg/Italy/Russia/Netherlands/USA/UK/South
Africa The Event Logistics department is part of Panalpina Airfreight.
This department was founded in March 2004 with the
principal aim of supporting clients who are active in the racing
business, such as the UIM F1 Federation in Lausanne (Switzerland),
which organizes F1 powerboat championships. Another
example is Monaco-based SPES (Sports Promotion & Spectacle),
which is responsible for the World Aquabike Class Pro championship.
Then there's FIA F3 in Bitburg (Germany), which stages the
Formula 3 European Cup. The Panalpina team, which is based in
Luxembourg in the heart of Europe, knows how to tackle the shipment
of every kind of unusual and high-value freight, from boats to
aquabikes and motorbikes.
For instance, Panalpina Airfreight shipped 14 aquabikes plus spare
parts from Vicenza (Italy) to Moscow (Russia) for the Aquabike
Class Pro championships held there on 25/26 June 2005. Special
trucks and trailers were used for this shipment. Panalpina Vicenza
and Panfairs of Hamburg (Germany) also participated in this particular
project, assisting Panalpina Airfreight with document handling
and road forwarding. Furthermore, Panalpina Airfreight transported
the aquabikes back to Vicenza at the end of the championships.
Expansion in Central Asia
Kazakhstan In response to the growing demand for logistics
services in Kazakhstan, in 2005 Panalpina opened two ultramodern
offices in Atyrau and Aktau. The Kazakhstan branches,
both of which are on the Caspian Sea, offer the full range of Panalpina
logistics services. Their focus, however, is on providing
services to the oil and gas industry. Both of them therefore com-
connect 2_2005
The MotoGP World Championship in Laguna Seca, California
(USA) on 9/10 July 2005 was another big event, for which Panalpina
Airfreight shipped 180 tonnes by air from Luxembourg to San
Francisco, including 41 motorbikes, spare parts, two cars and promotional
material. First, the freight was consolidated in 14 special
transporters at the site of the previous Grand Prix – the TT in
Assen (Netherlands) – and taken to Luxembourg, where it was
loaded onto a chartered B747 and two regular flights of Cargolux
Airlines. In San Francisco an agent took charge of the goods and
saw that they were transported to the motor racing circuit. After
the race, Cargolux and Singapore Airlines flew the special cargo
from San Francisco to Nottingham (UK), where it was handed over
to the British motorcycle racing organization at East Midlands
Airport.
Another impressive feat was the transport of motocross bikes for
the MX Motocross championships held in Sun City (South Africa)
on 16/17 July 2005. Panalpina Airfreight flew 16 MX1-class racing
bikes plus parts from Luxembourg to Johannesburg for this event.
First, the bikes had to be collected from the various teams in Europe
by truck and transported to Luxembourg, where the valuable
machines were packed by specialists and loaded onto the aircraft.
In Johannesburg, the appointed agent took delivery of the racing
bikes and forwarded them to Sun City. Eventually, the bikes were
sent back to the individual teams in Europe by the same route.
ply with the Health Safety & Environment (HSE) standards which
Panalpina has implemented throughout the world. About 20 people
work in the 365 m2 office in Atyrau, in collaboration with
staff employed by a customer, Agip. The 370 m2 office in Aktau
has 22 staff. Panalpina is therefore well equipped to further
expand its business in Kazakhstan.

An unforgettable marathon
Switzerland On 28 August 2005 – a beautiful summer’s day –
the first Basel City Marathon was held. Some 2,500 runners set out
from the Basel Trade Fair Tower, the highest building in Switzerland.
The 42.195-km course then crossed three bridges over the
Rhine as it passed through the historic Old Town, followed the picturesque
riverbank in Kleinbasel and traversed four districts of
Basel. The finishing line was in the St. Jakob Park stadium, home
of the football club FC Basel. The attractive course through the
city of Basel with its splendid setting on the Rhine, along with the
various accompanying events, attracted a large number of spectators
and helped to make the day an unforgettable experience for
Panalpina wins again
Germany The Bosch Group is a leading international manufacturer
of technology products for the automotive, industrial and construction
sectors, as well as producing consumer goods. The group
recently presented its Supplier Award for the tenth time. The contenders
for the award are judged on the basis of quality, cost, reliability
of delivery, technological potential and readiness to pursue
a continuous process of development. At the beginning of July,
Panalpina accepted the Supplier Award 2005 at the Bosch Group’s
development centre in Abstatt, near Heilbronn (Germany). “Quality
is the most important success factor as far as Bosch is concerned.
In the long term, the only suppliers who have a good chance of
growing alongside Bosch are those offering the highest standards
of quality. There can be no concessions here,” explained Franz
Fehrenbach, Chairman of the Board of Management of Robert
Bosch GmbH, at the award ceremony.
everyone. Panalpina, which sponsored the event, set up a barbecue
stand in the Rhine port area, constructing an imposing “fortress”
of containers close to the Marathon route. Moreover, a number
of the company’s employees participated in the challenging
race: Caroline Hug, Jakob Bader, Patrik Schaub, Rolf Krattiger,
Robert Frei and Pia Rohner. Panalpina, its customers and employees
all cheered on the keen athletes during the race. Eticha Tesfaye
of Ethiopia won the men’s race in a time of 2:13:45, and there
was another victory for the same country in the women’s race:
Tsige Worku was first home in a time of 2:35:04.
Singapore Panalpina was also awarded the 2004 Global Supplier
Performance Award by the technology company Flextronics at the
end of July. Flextronics, which is based in Singapore, is a leading
global provider of electronic products and services. Its customers
includes companies in the automotive, medical and technology
sectors. With branches in over 30 different countries on every continent,
Flextronic provides its customers with design, production,
distribution and maintenance services for electronic products.
The reliability of the company's suppliers is therefore of paramount
importance. Mark Randall, Senior Vice President and Chief
Pro- curement Officer of Flextronics, therefore finds it fitting to
single out the five best suppliers each year and honour them for
exceptional service.
Publishing details: Editor, owner and publisher: Panalpina World Transport (Holding) Ltd, Viaduktstrasse 42, P.O.Box, CH-4002 Basel, Switzerland. Internet: www.panalpina.com. Tel. ++41 61 226 11 11.
Responsible for contents: Martin Spohn, Corporate Communications. Editor: Martin Spohn, e-mail: martin.spohn@panalpina.com, büro:z GmbH, Bern/Basel. Distribution: Monika Dups, e-mail:
monika.dups@panalpina.com. Publication intervals/languages: “connect” is published several times a year in German, English, French, Spanish and Chinese in over 100 countries. Total circulation:
60 000 copies. Photos: Cover: Panalpina; p. 2 (top), p. 3–10: Julian Salinas, Basel; p. 2, 12: Digital Vision; p. 14 (top and bottom left); p. 15, 16, 21, 22, 25–27, 32: Peter Maurer, Weisslingen; p. 18:
visipix.com; p. 20: Cambridge America; p. 28 – 29: P&O Nedlloyd: Design and production: büro:z GmbH, Bern/Basel. Printed by: bdv, Basel. Printed on 100% chlorine-free bleached paper
connect 2_2005
31

Kornelija Capek
Regional Key Account Manager
>
Profile on pages 26/27