Who's Who in Logistics and Supply Chain Management - Armstrong ...

3plogistics.com

Who's Who in Logistics and Supply Chain Management - Armstrong ...

Who’s Who in Logistics and

Supply Chain Management - The Americas

16th Edition

Armstrong & Associates, Inc.

Providing transportation and logistics expertise since 1980.


Who's Who in Logistics and Supply Chain Management - The Americas

* Sixteenth Edition *

© Copyright 2008

Armstrong & Associates, Inc.

100 Business Park Circle, Suite 202, Stoughton, WI 53589 USA

Phone: +1-608-873-8929 Fax: +1-608-873-5509

www.3PLogistics.com

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,

electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Armstrong &

Associates, Inc.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that

the findings, conclusions and recommendations that Armstrong & Associates delivers will be based on information

gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to

guarantee. As such Armstrong & Associates can accept no liability whatever for actions taken based on any

information that may subsequently prove to be incorrect.

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 2 of 833


16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 3 of 833


Table of Contents

Section 1 - Summaries of North American-Based 3PLs

Page

Major North American-Based 3PL Revenues

Dedicated Contract Carriage Units

Section 2 - 3PL Market Growth & Logistics Costs

10

11

U.S. 3PL Market

U.S. Logistics Costs

Global Logistics Costs and 3PL Revenues

Section 3 - North American & Latin American-Based Providers

14

15

16

Definitions and Explanations of Terms

24/7 Express Logistics, Inc.

3PD, Inc.

A.N. Deringer, Inc.

ACCEL Logística

Access Logistics, LLC

Active Aero Group, Inc.

ADI Logistics

ADS Logistics, LLC

Aerospace Products International, Inc.

Aimar S.A.

Aimi Cargo S.A.

AIT Worldwide Logistics, Inc.

Aldia Logística

Allen Lund Company

Almacenadora, S.A.

Almacenadora de Depósito Moderno, S.A. de C.V.

Almacenadora Mercader S.A.

Almacenar S.A.

Almaviva S.A.

Alpopular S.A.

América Latina Logística S.A.

AmeriCold Logistics, Inc.

Aspen Distribution, Inc.

ATC Logistics & Electronics

Averitt Express Supply Chain Solutions

Barrett Distribution Centers, Inc.

BDP International

Bear Transportation Services, LP

Beltmann Integrated Logistics, Inc.

Bender Group

Binotto S.A.

BNSF Logistics, LLC

Bomi de México, S.A. de C.V.

Bonded Logistics, Inc.

Brightpoint, Inc.

Burris Logistics, Inc.

C.H. Robinson Worldwide, Inc.

California Cartage Company

Capacity LLC

20

23

26

30

34

37

43

50

53

57

61

64

67

75

78

82

85

88

91

94

97

100

105

110

113

122

128

132

136

139

143

147

150

158

161

164

168

173

181

185

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 4 of 833


Section 3 - North American & Latin American-Based Providers

Cardinal Logistics Management Inc.

Caterpillar Logistics Services, Inc.

Celsur Logística, S.A. de C.V.

Centro De Almacenes Congelados C.A.

CEVA Logistics (The Americas)

Champagne Logistics

Champion Logistics Group

Coimex Logística Integrada S.A.

Columbian Logistics Network

Commercial Warehouse & Cartage

Cornerstone Systems

Crowley Logistics, Inc.

CRST Logistics, Inc.

Commercial Traffic Co. AKA CT Logistics

CTSI

Companhia Vale do Rio Doce

D.W. Morgan Company, LLC

D+S Distribution, Inc.

Derby Industries, LLC

DHL & Exel Logistics (The Americas)

Direct Fulfillment

DSC Logistics

E*Fill America

England Logistics, Inc.

Estes Air Forwarding, LLC

Exologística S.A.

Expeditors Int'l of Washington, Inc.

FedEx Supply Chain Services/FedEx Trade Networks

Freightquote.com

GENCO Supply Chain Solutions

GIRAG

Greatwide Logistics Services, Inc.

Grupo TPC

Hanover Terminal, Inc.

Hub Group, Inc.

Ingram Micro Logistics

Inland Empire Distribution Systems, Inc.

InSite Logistics, Inc.

Interstate Distributor Co.

J.B. Hunt Dedicated Contract Services

Jacobson Companies

Julio Simões Transportes e Serviços Ltda.

Kane Is Able, Inc.

Kelron Logistics

Kenco Logistic Services

Keystone Dedicated Logistics

Kuehne + Nagel, Inc. (The Americas)

LAN Courier S.A.

Landair

Landstar Global Logistics, Inc.

Laney & Duke Terminal Whse. Co.

Leicht Transfer & Storage Co.

LeSaint Logistics

189

195

201

204

207

215

219

222

225

228

231

235

240

244

249

254

259

264

267

270

277

280

285

290

295

298

301

310

315

320

329

332

338

341

344

350

356

359

363

366

373

378

381

387

390

395

398

405

408

412

419

422

428

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 5 of 833


Section 3 - North American & Latin American-Based Providers

Levent

Lily Dedicated Logistics Systems

Livingston International, Inc.

Logistics Management Solutions

LOGISCO

Logística Industrial S.A.

Logistics Insight Corporation

Logyx Almacenadora S.A. de C.V.

LynnCo Supply Chain Solutions, Inc.

Mallory Alexander International Logistics

Matson Integrated Logistics

MBX Logistics, LLC

MD Logistics

Megatrux Inc.

Menlo Worldwide Logistics

Midwest Express Group

NAL Worldwide LLC

National Traffic Service

Network Global Logistics LLC

New Breed Logistics

Nexus Distribution

NFI Industries

Nippon Express USA, Inc.

ODW Logistics, Inc.

Onest Mexico, S.A. de C.V.

Ozburn-Hessey Logistics

Pacific American Services

Pacer Global Logistics Services

Patterson Warehouses, Inc.

Penske Logistics

Performance Team

PFSweb, Inc.

Phoenix International Freight Services, Ltd.

PLS Logistics Services

Rapidão Cometa

Redpack S.A. de C.V.

Regal Logistics

RSI Logistics, Inc.

Ruan Transport Corporation

Ryder System, Inc.

Saddle Creek Corporation

Salem Logistics, Inc.

Schenker Americas

Schneider Dedicated Operations

Schneider Logistics, Inc.

SCI Logistics Inc.

Scott Logistics Corporation

ServiceCraft Logistics

Servicios Logísticos de Colombia S.A.

Servientrega S.A.

Sudamericana Agencias Aéreas y Marítimas S.A.

Summit Global Logistics/FMI International

Sunteck Transport Company, Inc.

432

435

439

443

448

453

456

461

464

468

473

477

481

484

488

499

502

507

511

516

521

526

531

536

541

544

551

555

561

564

572

575

581

586

590

593

597

605

609

613

624

631

636

642

647

657

663

666

670

673

676

679

684

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 6 of 833


Section 3 - North American & Latin American-Based Providers

Swift Transportation Co., Inc.

syncreon

TBB Global Logistics

The Terminal Corporation

Tito Global Trade Services LLC

Total Logistic Control

TMSi Logistics

Total Quality Logistics, Inc.

TransGroup Worldwide Logistics

Transplace

Transportadora Americana Ltda.

Transportadora Itapemirim S/A

Transportation Insight LLC

TranzAct Technologies Inc.

Trinity Transport, Inc.

United Facilities, Inc.

Union Pacific Distribution Services

UPS Supply Chain Solutions

UTi Worldwide Inc.

VersaCold

Verst Group Logistics

Wagner Industries, Inc.

Warehouse Services, Inc.

Warehouse Specialists, Inc.

Weber Distribution Warehouses, Inc.

Werner Enterprises Dedicated & Logistics

Wheels Group of Companies

WOW Logistics

Yobel Supply Chain Management

YRC Logistics

Zimag Logistics

687

694

699

704

707

710

715

722

726

729

736

739

742

746

750

753

757

761

772

781

784

788

792

795

798

805

812

816

821

824

830

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 7 of 833


Company Name: Ryder System, Inc.

Address: 11690 N.W. 105th St., Miami, FL 33178-1103 USA

Phone Number: 888-887-9337

Email Address: www.ryder.com/contactscs

Fax Number: 305-500-4339

Website Address www.ryder.com

COMPANY BACKGROUND

Parent Corporation: Ryder System, Inc.

Year Started in Logistics: 1957

Market Area:

Int'l

Founding Business: Truck Leasing

Asset Focus: A, N

(A = Asset Based, N = Non Asset Based)

Subsidiaries or Related Companies

OVERALL CAPABILITY

Overall Capability of Provider: Tier 1 global supply chain manager and presence in most major markets. Very good DCC.

KEY PERSONNEL

Gregory Swienton

Chairman & CEO

Rosario Rizzo

SVP DCC

Robert Sanchez

EVP & CFO

Tom Jones SVP U.S. SCS Dave Bouchard SVP International

FINANCIAL INFORMATION (FY 2007)

Total Logistics Revenue ($Millions): 2,818

Total Net Logistics Revenue ($Millions): 1,867 *

Total Logistics Employees (Including Drivers): 17,482

Total Long-Term Contracts Held: 850

Average Length of Logistics Contract (Years): 3-5

Ticker Symbol: R

Exchange: NYSE

* (Net Logistics Revenue is net of pass-through revenues for purchased transportation.)

ASSETS

Dedicated Contract Carriage Power Units/Trucks:

Total Tractors: 3,489

Total Trucks: 546

Total Other: 4

Dedicated Contract Carriage Trailers:

Total Dry Van: 4,939

Total Reefers: 400

Total Flatbeds: 447

Total Tankers: 19

Total Other: 61

Total Transportation Assets:

Total Tractors: 51,703

Total Trucks: 57,646

Total Trailers: 49,423

Total Aircraft:

Total Ocean:

Total Other: 798

Total Warehouses & Distribution Centers:

Total Warehouses/DC's: 202

Total Square Footage: 22.8 (Million)

Total with Rail Doors:

Avg Truck Doors per DC:

Asset Ownership v.s. Leased:

Transportation Equipment: Owned/Leased

Warehouses/DC's: Owned/Leased

FREIGHT FORWARDING/NVOCC VOLUMES

Total Annual TEUs:

Total Annual Airfreight Tonnes:

MAJOR MARKETS

INFORMATION SYSTEMS

Total Licensed Customs Brokers:

(For detailed industry information, see "Customers" section.)

Automotive Consumer Goods Elements Food, Groceries Industrial

Retailing

Technological

Overall Information Systems Rating: G (E=Excellent, G=Good, C=Capable/Adequate, and I=Inadequate)

Software Type:

Software Vendor/Brand:

Transportation Management System (TMS): i2 Technologies, Proprietary

TMS Optimization Routines:

Transportation Planning and Optimization: i2 Technologies

End-to-end Matching/Continuous Moves

Warehouse Management System (WMS): V3 Systems, Manhattan--PkMS, Proprietary

Mode Conversion/Optimization

Network Modeling/Site Location:

i2 Technologies

Many to Many Supply Network Optimization

Freight Bill Audit/Payment Software: Proprietary

Order Management System:

Other Systems Capabilities:

Bar Coding

EDI Handling Integrated TMS & WMS Internet Customer Access Real-time Track & Trace

Demand & Supply Forecasting ERP Interfaces Internet Order Fulfillment Radio Frequency Devices XML Data Handling

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 613 of 833


TRANSPORTATION MANAGEMENT SERVICES

Transportation Planning Transportation Execution Transportation Services

Carrier Mgmt and Contracting

Inbound Shipment Planning

Outbound Shipment Planning

End-to-end Load Matching

Mode Conversion/Optimization

Contract File Maintenance

Exception Handling

Load Tendering

Loss/Damage Claims

Tracking & Tracing

Freight Bill Payment:

Pre-Audit

Post-Audit

Performed In-house

Outsourced

Air Freight Forwarding

Consolidation/Deconsolidation

Dedicated Contract Carriage

Freight Brokerage

Home Delivery

Less than Truckload (LTL)

Ocean Freight Forwarding

Rail

Rail TOFC/COFC

Small Package

Specialized

Truckload (TL)

WAREHOUSING & VALUE-ADDED SERVICES

Warehouse/Distribution Center

Facilities Mgmt Frozen Refrigerated Rail Siding

Value-Added Services

Call Centers

Kitting

Pick/Pack

Cross Docking

Labeling

Pool Distribution

Customization

Lot Control

Repair/Refurbish

Inventory Control/Vendor Mgmt Merge in Transit

Returnable Container Mgmt

KanBan

Manufacturing Support Reverse Logistics

Store Support/Direct Store Delivery

Sequencing/Metering

Specialty Packaging

Sub Assembly

OTHER 3PL SERVICES, SKILLS & HANDLING

Other 3PL Services

Consulting/Process Reengineering

Factoring/Financial Services

Special Skills & Material Handling

Bulk Commodities

CUSTOMERS

Hazardous Materials

ISO Certified Certification Locations:

Other Services:

Installation/Removal

Purchase Order Mgmt

Quality Control

Order Mgmt Project Logistics Union Services

Food Grade/Sterile

Numerous locations globally.

INTERNATIONAL SERVICES & PRIMARY AREAS SERVED

International Services

AES/AMS/C-TPAT

LCL Consolidation

Customs Brokerage

Export Crating

A sample of 3PL clients.

Customer

Andersen Windows

Duty Drawback

Foreign Trade Zone

NVOCC

Port Services

Areas Served

Africa/Middle East

Asia/Pacific

Australia/New Zealand

Temperature Controlled

Europe

Latin/South America

North America

TM-Transportation Mgmt WM-Whse/DC Mgmt VA-Value-Added DCC-Dedicated Contract Carriage

Inte-Integrated TM&WM IM-Intermodal Intl-International SCM-Supply Chain Network Mgmt. Lead-Lead 3PL

Services Rendered by Ryder

Industry Location TM WM VA DCC Inte IM Intl SCM Lead Other

Building Materials, Glass

Applied Materials Semiconductors, Electronic Components Europe, N. America

ArvinMeritor Motor Vehicles & Parts Asia, Europe, L. America

Aspects Beauty

BellSouth

Boeing

Boral Bricks

Brandsmart

Household & Personal Products

Telecommunications

Aerospace & Defense

Building Materials, Glass

Specialty Retailers

Carrefour Food & Drug Stores Argentina, Brazil

Carrier Corp. Aerospace & Defense N. America, L. America

Coca-Cola Beverages N. America

Comcast

Telecommunications

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 614 of 833


COUNTRIES with OFFICES

Countries served through owned offices or agents

Africa/Middle East Asia/Pacific Australia/New Zealand Europe North America Latin/South America

China

Singapore

France

Germany

Ireland

Italy

Romania

United Kingdom

Canada

Mexico

United States

Argentina

Brazil

Chile

EDITOR'S COMMENTS

Ryder, one of the most recognizable 3PL brand names, is a big-5 logistics 3PL. It has a state-of-the-art

logistics optimization center near Lansing, Michigan to serve General Motors’ new style plants. Ryder is a lead

logistics provider for most GM plants, services DaimlerChrysler, Toyota and Honda plus a multitude of Tier 1

suppliers. Ryder runs top notch inbound supply chain management, sequencing centers, just-in-time and dedicated

contract carriage operations.

In recent years, Ryder has grown substantially into the High-Tech and Consumer Goods verticals, in large part

due to its advanced outbound capabilities managed through the Dallas-Ft. Worth TMC. Tom Jones, president of

U.S. SCS will push this expansion and margin improvement. These operations grew significantly in 2006 and

2007, contributing to Ryder SCS’ 16% and 11% net revenue growth (respectively).

Throughout 2007, Ryder added two key top managers – Todd Carter to drive profitability in the rapidly growing

Transportation Management arena and Rosario Rizzo to run and invigorate its DCC operations.

Provider's Strengths

Ryder has LLP supply chain management. Dedicated contract carriage and transportation management are

strong. Distribution center operations are capable.

Provider's Weaknesses

Increasing flexibility and central control.

CASES & NEWS

Ryder's Latin American Operations [To view in full html format, follow this link:

http://www.3plogistics.com/Ryder_LatinAmerica_2007.htm]

Among its Best

Monterrey, Mexico & Santiago, Chile – Site Visits

October 17-20, 2007

Key Personnel:

Eugenio Sevilla-Sacasa, VP & Managing Director

David Contreras Munguia, Director of Operations

Ernesto Donnadieu, Director of Operations

Ruben Elias, Managing Director

Matias Bernasconi, Manager of Operations

Carlos Bellavigna, Manager of Operations

Jose Gonzalez, Transportation Manager

Ryder

Ryder made an important decision 10 years ago when its Latin American operations were less than $10 million. It put Gene Sevilla in

charge of the operation. He surrounded himself with good people and built the Latin America operation into one of Ryder’s best. The ball

really got rolling after the meltdown of Argentina’s economy in 2002. Revenues for that year were $92 million. We estimate that 2007 year

end revenues will be $310 million. Revenues have increased 327%. The compound annual growth rate is 27.5%. Mexico and Brazil are

paramount. Each has over $100 million in revenue.

As a result of Sevilla and his team’s efforts, Ryder is now one of the three largest third-party logistics providers (3PLs) in Latin America

and is the fastest growing. Services offered are value-added warehousing and distribution (VAWD) including manufacturing support, nifty

variations of dedicated contract carriage (DCC), transportation management, and some returns management.

A Sevilla trademark is designing operations to match up with customer requirements. As seasoned observers know when third-party

logistics is done right, profitability increases. Not surprisingly, Ryder’s Latin American operations are among its most profitable. The home

office for Latin America is in Miami.

Ryder's Latin American Operations - Basic Facts:

• Employees = 3,825

• Dedicated Contract Carriage Units = 1,110

• Other Trucks Under Contract = 2,350

• Locations = 75

• Warehousing = 5 Million Square Feet

Mexico

Ryder has been especially successful in Mexico. When Sevilla took over, revenues were about $10 million. This year we estimate revenue to

be $150 million. Major customers include: Carrier, Hewlett-Packard (HP), Philips, General Motors (GM) and Toyota. Most operations are in

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 615 of 833


Monterrey, Guadalajara and the Mexico City area. Revenues are evenly split between VAWD and transportation activities.

Dedicated contract carriage in Mexico takes a slightly different form because of Mexican laws prohibiting ownership of trucking

operations by non-Mexicans. Ryder leases tractors and trucks to small Mexican trucking companies who then contract with Ryder to

provide services. About 300 tractors, 50 trucks and 500 trailers are involved in DCC-like carriage operations. Ryder Mexico equipment is

leased to Mexican customers, including Mexican carriers. Some of these carriers dedicate equipment to Ryder and Ryder utilizes it

interchangeably for its customers.

Ryder’s 25 locations in Mexico include nine warehouses it operates and 16 customer plants. The warehouses are all pretty new. They are

large boxes with modern layouts, clean and well kept. Most involve pallet and carton picking. A few are radio-frequency (RF) facilities. A

couple have piece picking, kitting, etc. Ryder manages about 1,000 truck border crossings a day. Transportation management planning is in a

280,000 square foot warehouse near Mexico City.

Carrier Corporation – Mexico

Ryder supports three Carrier air conditioner related operations in the Maquiladora rich area in and around Monterrey. It also runs an

inbound warehouse, a vendor managed inventory (VMI) space in another warehouse, an outbound distribution facility, and maintains a large

yard for loading oversized units for commercial buildings.

At the Carrier residential air conditioner factory in Monterrey, Ryder has 110 employees integrated with 1,100 Carrier employees. Ryder’s

personnel handle receiving, manufacturing (JIT/Kanban) support and shipping. They wear distinguishing red shirts. I saw 10 of them

participating in a quality/performance meeting with 25 or so Carrier employees. Ryder’s six-sigma quality program (ACE – Analyze, Chart

the course, Execute flawlessly) matches well with Carrier’s quality program which by coincidence also is referred to as ACE (Achieve

Competitive Excellence).

Carrier uses eight lines to produce 2,500-3,500 units per day. Operations cover six days with two shifts on the five air conditioner lines

and one shift on the three coil lines.

Ryder handles a significant portion of inbound with dedicated and managed transportation. About 80% of materials are local. Ryder also

does outbound transportation execution in this location. Transportation planning is done in Mexico City.

While this factory is 15 years old, it is clean, well maintained and modern in appearance.

At Carrier’s commercial unit manufacturing plant, 20% of the employees are Ryder’s. This new, modern facility is used to turn out

customized air conditioning units for large buildings like Target stores. Consequently, there are thousands of part changes each month and

about 400,000 parts overall. The facility is 220,000 square feet.

Ryder does all phases of the materials management for Carrier. It provides sequencing, kitting, picking and packing, and handles VMI.

Ryder uses ProAct as its warehouse management system (WMS) for these operations. RF will be implemented as Carrier gets SAP

implemented. For the commercial unit, Ryder handles inbound and outbound transportation using DCC as necessary.

The third Carrier facility we visited was the Stiva parts warehouse. This 180,000 square foot operation handles parts and materials for all

three Carrier factories. Inventory is managed on a consigned basis and moved to the plants on an as needed, JIT basis. Parts for similar

products are maintained in blocks for efficiency.

From what we saw in Monterrey, Ryder and Carrier have a true partnership where their quality driven joint efforts turn out top-notch

products.

General Motors

Ryder has three operations for GM in Mexico. (Overall, Ryder has support operations for GM at 17 of its 28 locations). The Mexican

operations are:

• Yard Management – Ramos Arizpe

• Yard Management – Silao

• Yard Management – Toluca

• Inbound Support Warehouse – Ramos Arizpe

• Inbound Support Warehouse – Silao

A major surprise in these GM locations is Ryder’s railroad switching operations. Ryder has five engines in Mexico used to move cars in

the loading process.

Ryder’s ASL (alternative storage location) inbound plant at Saltillo (Ramos Arizpe) is 180,000 square feet. It’s a container break facility for

supplying the GM assembly plant at Ramos Arizpe by updating customer systems electronically with the information created by Ryder’s

ProAct, RF capable WMS. The plant turns out 1,100 vehicles a day. The vehicles are Saturn’s SUV (VUE) and a small Chevy (CMA) sedan

for the Mexican domestic market.

Ryder’s yard management services are: 1) to drive the cars from the assembly plant to a large yard; 2) to handle car loading and shipment;

3) to make sure the finished inventory is taken care of and customer ready. At any given time, there are about 10,000 cars in inventory in the

yard. Loading is an efficient, careful and orderly process. Cars are driven into place and secured for movement. These operations are

controlled by a state-of-the-art information system with RF capability spanning a 45-plus acre yard. Ryder’s yard management service

operates in all GM Mexico plants.

British American Tobacco

Ryder’s operations for British American Tobacco (BAT) are a textbook example of supply chain management.

The tobacco is raised in Virginia. It is shipped to the Maquiladora plant in Monterrey where it is made into cigarettes. The cigarettes are

shipped via truck to seven distribution points in Canada. In Canada, Ryder provides DCC delivery and transportation management to stores

and distributors. The BAT Canadian operation operates under the brand name Imperial Tobacco.

Ryder’s BAT warehouse is a new, food grade facility with 210,000 square feet. There is a protective cooler area of 60,000 square feet.

Product is controlled and shipped on a first in first out (FIFO) basis to Canada. In addition, Ryder manages the packaging material

(cardboard) for the plant. Cardboard is shuttled to the plant as needed and seven loads a day are brought back.

This RF facility uses WebSphere for its WMS. Manhattan’s PkMS is used for Canadian distribution. RF reading devices are Symbol guns

and pallets have license plates.

Ryder uses five tractors and 10 trailers for the dedicated shuttles. Celadon is the primary outbound carrier.

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 616 of 833


To summarize, Ryder manages packaging material to the plant utilizing its DCC for transportation. Ryder moves finished product to the

protective RF environment. It controls the finished product inventory until requested to release it on a FIFO basis. It provides

transportation management for outbound linehaul to Canada and distribution to Mexico. In Canada, it provides cross-docking, dedicated

store delivery and transportation management to get the product to customers.

Incidentally, BAT pays the cigarette taxes when the product is cleared into Canada.

Others

The HP operations in Guadalajara are a good example of multifunction supply chain management. Inbound is managed to the plant.

Transportation planning and execution is done for U.S. distribution. DCC is provided for activities close to Guadalajara. Ryder provides

extensive piece picking and packing and returns management for HP in Guadalajara.

Ryder has over 1,700 employees throughout Mexico.

A Note About Brazil and Argentina

Brazil is Ryder’s second largest Latin American operation. There is a huge tomato processing operation for Unilever with warehousing in

Goiânia which is in the middle of Brazil. Most other Brazilian operations are transportation based. Ryder has a specialized ability to handle

trucking between Brazil and Argentina. There isn't any standardized documentation for this activity. Each load is unique.

Aside from Unilever, Ryder’s largest customers in Brazil are: GM, Volkswagen and Toyota. Ryder has over 1,000 employees in Brazil.

In Argentina and Brazil, Ryder is involved with retail and automotive distribution. HP, Carrier and Philips distribution is handled.

Carrefour, Coke, Nestlé, Norte, and Peñaflor are also customers. There are 12 locations, 900,000 square feet of warehouse space, and 400

employees. Growth in Argentina has been steady following the 2001-02 economic melt down there.

Chile

To manage the Southern Cone (Argentina and Chile), Sevilla chose Ruben Elias a seasoned industry veteran. Both Elias and Sevilla have

low-key, personal management styles. They work very well together and with their teams.

Elias opened up the Ryder Chilean operations in 2005. The emphasis has been on retail accounts. Distribution services are preformed for

Nestlé, LTS Logística (Lider stores) and Ekono stores. Lider has over 120 stores. Ekono convenience stores total 22 and the chain is

growing quickly.

For LTS Logística, Ryder runs transportation planning and execution. LTS Logística has an 800,000 square foot warehouse which

supplies products to the Wal-Mart like Lider stores scattered throughout Chile’s 2,500 mile length. The warehouse is unionized with 1,200

employees. Ryder’s 27 transportation management employees are not.

Ryder manages 400 trucks on a daily basis. 70 tractors and 173 trailers belong to LTS Logística and are operated within 100 miles of

Santiago. This equipment moves about 70% of shipments. This fleet often delivers more than one load to a store in a day. Overall, the

average equipment utilization is 220 miles a day.

Throughout the system, deliveries are live unload. Delivery windows are 20 minutes. Shipments are palletized. Non-LTS Logística

equipment is used for longer length hauls.

Ryder uses proprietary software to speed deliveries for routing purposes. A global positioning system (GPS) is used to locate and track

individual tractor-trailer units. Information on individual trips is displayed with color codes (red for vehicles not on time) and can even be

displayed in Google Earth at the touch of a button. The LTS Logística operation manger is Matias Bernasconi and he runs a good operation.

Ryder maintains a separate 100,000 square foot warehouse for Ekono stores. Transportation management is done at that warehouse.

Ryder’s major warehousing operation in Chile, however, is in the Santiago suburb of Quilicura. This lean logistics, modern, 300,000 square

foot warehouse for Nestlé has 850 stock keeping units (SKUs).

Most inbound is received from four Nestlé production plants in Chile. Soup and food products come from San Fernando; liquid milk

products come from Los Angeles and Osorno; powdered milk comes from Llanquihue. Baby formula is imported.

The WMS Ryder uses in South America is GCL and Nestlé orders for it come electronically from Nestlé’s SAP. Roadshow is used by

Ryder to optimize routes.

Orders average 60% pallets and 40% cases. There are about 15 lines per order. There are 100 shipments per day. Each shipment normally

has multiple orders for the same location.

There are 93 pickers and receivers in this RF warehouse working three shifts. Racking is extensive and five rows high. Ryder license plates

are applied to pallets of product as part of putaway which regularly occurs within four hours.

The warehouse has 50 doors and 25 numbered bays are used for staging. Each bay has separate fencing to preserve order integrity.

Orders are loaded by the truckers or their lumpers.

Products in the warehouse are grouped using an A, B, C, D format.

This warehouse measures up to Nestlé’s high standards. Ryder does a good job of running it and controlling the store deliveries

throughout the country.

The overall quality of the Ryder warehouses that we saw was very good. Most are new, modern buildings. More importantly, the

employees are productive and hard working. Managers are involved and process improvement oriented. Gene Sevilla has built a strong team

and he coaches very well.

Ryder System Gains Traction in China

Shanghai, China Site Visit

October, 2007

[To view in full html format, follow this link: http://www.3plogistics.com/Ryder_China_2007.htm]

Key Personnel:

Christopher Woodward - Vice President & Managing Director, China

Alice Yu - Director of Business Development, Greater China

Gary Maida - Senior Logistics Manager

Chris Gee - Senior Logistics Project Manager, China

Ryder has been working in China since 2000 when it began assisting Shanghai General Motors (SGM) in launching an inbound logistics

management process for its production facility in Shanghai. In 2001 Ryder formally entered the market by forming a Wholly Owned

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 617 of 833


Consulting Company in the Shanghai Free Trade Zone. In 2006 Ryder received a logistics license to perform integrated logistics services in

China. Its main third-party logistics (3PL) service offering includes: transportation management, value-added warehousing and distribution,

and supply chain engineering and design services. Major customers in China include: Beijing Benz, Lucent, and Italian household systems

manufacturer Merloni TermoSanitari (Merloni). Ryder China's basic operational service offering is detailed in the figure below.

At the time of our visit in mid-October, Ryder had a team of 95 people in China, eight of which were logistics engineers. It managed

226,000 square feet of warehouse space in six cities: Shanghai, Beijing, Wuxi, Changchun, Nanjing and Kunming. Ryder was also managing

domestic transportation in approximately 200 distinct lanes. This December, Ryder is starting up a new operation for a consumer

electronics/white goods customer in Shanghai that will bring its total square footage to approximately 500,000 square feet, its transportation

management network to about 250 lanes, and its total number of employees to 160. This operation is set to go live the second week of

December. In addition, Ryder is contracted to open up warehousing operations in Guangzhou, Harbin, Fuzhou, Changsha, Wuhan, and

Zhengzhou in the first quarter of the new year.

In addition to Ryder's traditional transportation management and value-added warehousing and distribution operations, Ryder China is

currently providing some interesting global transportation management services that are capable due to the time difference of 12 hours

between the eastern U.S. and Shanghai. According to Chris Woodward--Ryder's managing director for China--by using teams composed of

Ryder staff in both the U.S. and China, Ryder provides a virtual 24 hour work day making it easier to staff and support central

transportation management operations required to run 24 hours, seven days a week.

Case Study: Merloni's, Ryder Domestic China, Network Redesign and 3PL/4PL Services

With the help of i2's Supply Chain Strategist, supply chain network optimization software, forecasted demand volumes and service level

requirements, Ryder's engineers designed an optimal domestic China distribution network for Merloni's Ariston water heater product line. In

addition, Ryder worked with Merloni in developing key indicators for monitoring supply chain performance.

By utilizing Ryder's optimal network design solution and its 3PL and 4PL services, Merloni has reduced its Chinese distribution center

(DC) network from 18 to 12 Ryder managed locations. The redesign has dramatically reduced Merloni's on-hand inventory levels while

improving its transportation service and direct service area coverage to customers.

While Ryder's main Merloni central distribution center operation is in Wuxi, we had a chance to visit its 4PL Shanghai regional

distribution center (RDC) operation in the northwestern Jiading district of Shanghai.

Ryder utilizes a local 3PL (Kanto) for warehousing, including non-management labor, and Merloni's Shanghai local transportation

services. The RDC is 22,600 square feet and product is stored on pallets on the warehouse floor. Most of the water heaters are destined to

Chinese big-box retail stores such as Gome and Yolo.

To support its Chinese warehousing and distribution operations including Merloni, Ryder uses a popular local warehouse management

system--"Flux" WMS. Flux is integrated with Merloni's order management system in Wuxi. As orders are generated they drop into Flux. Flux

is used to print paper pick lists for picking in the warehouse and for putaway of product as it is received. Once product is picked and loaded

into trucks for outbound distribution, Flux is updated with the information which also automatically updates Merloni's order management

system. Through this tight integration, inventory accuracy and visibility has been dramatically improved.

Summary

Ryder has learned many lessons since entering the Chinese 3PL market with SGM. It is using its logistics engineering expertise,

information systems, and operational process design expertise to develop tier-one Chinese supply chain operations and differentiate itself

from domestic 3PL competitors. Ryder has had to be creative in its business development approach and is beginning to see significant

success. With this approach, Ryder has become established in one of the fastest growing global 3PL markets and is on track to become a

leading domestic Chinese 3PL provider.

Ryder’s World Class Automotive Logistics

Lansing & Farmington Hills, MI - Site Visits

March 15, 2006

[To view in full html format, follow this link: http://www.3plogistics.com/Ryder_3-2006.htm]

General Motors is in the fight of its life to remake itself. It needs to radically redesign its cost structure and how it makes cars. As part of

its redesign, GM is completing two new automotive assembly plants near Lansing, MI. The first plant, Lansing Grand River, is in

production building the Cadillac CTS, SRX and STS. The second plant, Lansing Delta Township, will be producing later this year. Its

production will be the Saturn Crossover, GMC Crossover and Buick Crossover.

As GM Plant Manger, Ken Knight explained it “We planned the process first and planned the building later.” The new just-in-time

facilities use no tow motors. “What really drives us is material movement,” Knight said. “We bring the whole semi truck next to where the

parts are used so we use materials right off the truck.” As a sign of the seachange at GM, the new Lansing River plant has been rated as

one of the best in the world by JD Powers.

Critical to General Motors’s success is the need for a supply chain control partner operating flow through parts sequencing centers close

to its two new plants. GM chose its longtime logistics service provider, Ryder SCS, to design and run these critical support functions.

Ryder responded by taking over a building seven miles from the Lansing Grand River plant and one mile from the new Lansing Delta

Township location. Ryder renovated the facility using a REIT plan set up by Ashley Capital Development. It is in the process of building

and designing an adjacent facility. The two connected buildings will have over 1.6 million square feet and 160+ dock doors. Inbound loads

of parts, most in returnable plastic containers, will exceed 300 a day. Outbound shuttles to the GM plants will be more than 1000 per day.

Ryder’s new location (Logistics Optimization Center) is divided into two principal operations. The southern half of the building is laid

out for sequencing parts. The northern half is for handling containers of bulk parts (nuts, bolts, screws, etc.).

There are over 30 cells operating in the sequencing area. In these cells, mirror assemblies, trunk kits, springs, fuel tanks and other parts

are setup to be delivered in production sequence order exactly as needed on the GM assembly lines. Parts are tracked continuously to insure

that assembly time windows at the GM plant are met.

Throughout Ryder, LOC scanning technology is employed with workers utilizing hand held guns. All work processes are designed to be

lean and standardized. Performance is tracked and measured.

Ryder’s employees at the LOC receive about 40 hours of training before they are certified to work in the sub assembly and sequencing

processes. Control is tight – error rates and rework are minimal. Inventory scanned in using two dimensional RF scanners as delivered and

put a way as directed. Most locations mirror locations for GM’s assembly lines. Inventory received is reconciled to advanced ship notices

(ASN’s) sent to suppliers and carriers.

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 618 of 833


Ryder built its own information technology for the LOC. Logistics Management Suite (LMS) is the overarching technology platform for

transportation coordination. The WMS is LCMS.

Ryder’s supply chain planning activities using the contract management, logistics planning and data management systems are primarily

carried out at Farmington Hills, MI. Farmington Hills is the headquarters for Tom Jones, long-time Automotive VP for Ryder, Jim Moore,

VP of Business Development, Tom Kroswek, Senior Director-Logistics Solutions and 200 logistics engineers. This operation does the

planning for 60% of Ryder SCS business.

From this location, Ryder does transportation and material planning for 48 automotive assembly plants. Sixteen of the plants are for

General Motors. Ryder also operates as an automotive LLP for Toyota (4 plants) and DaimlerChrysler (all NA locations). It also provides

automotive logistics for Honda, Nissan, Mazda and Ford. (Richard Jennings, VP, is key to DaimlerChrysler and many other customer

relationships.)

Ryder coordinates parts flow planning with over 300 tier one plants handling over four million shipments a year. An example is Ryder’s

planning activity for Mopar, DaimlerChrysler’s aftermarket parts supplier.

Mopar has 41 North American facilities, including national DCs, field distribution centers and third party packagers. Ryder manages the

flow of parts to and from these facilities.

In addition, Ryder provides JIT service as an element of its “Plan for Every Part” control at LOCs for all DaimlerChrysler’s North

American car and truck assembly plants.

Ryder handles all inbound planning for DaimlerChrysler’s Integrated Logistics Centers. This activity coordinates with three of the other

main automotive logistics 3PLs. TNT Logistics runs the ILCs at Nashville, TN and Green SC. Exel does Portage, IN and Toledo, OH.

LINC handles Detroit. Penske, Ford’s primary LLP, and Menlo/Vector round out the core group of major automotive 3PLs. These large

sophisticated operations cooperate and compete regularly in insuring high quality supply chain management for North America based

automotive assembly operations. The level of operation maintained by Ryder, the largest U. S. automotive 3PL and its primary competitors,

has reached a point where it bars entry. Scale makes it a daunting task for any new 3PL to become a major player in this market.

Ryder’s transportation procurement operations are located in Ann Arbor, MI. Ryder has built this location after the purchase of

LogiCorp twelve years ago. This facility is ran by Tim Podvin, General Manager. It maintains and negotiates carrier contracts. It manages

the rate database, audits and pays freight bills. The Ann Arbor operation handles 3.7 million freight bills a year with over 100 employees.

Over 90% of transactions are now handled by EDI. 80% of audits are automated.

Ryder uses around 1400 contracted carriers. About 200 carriers handle 80% of Ryder’s freight spend. Ryder has a web-based freight bill

system (LEAPS) for 350 smaller non-EDI carriers.

The Ann Arbor facility handles $1 billion in freight payments and manages more than $2.9 billion in freight spend for its customers each

year. Included in this activity is back office functionality for Ryder’s Transportation Management Center in Dallas/Ft. Worth. The TMC

handles most of Ryder’s non-automotive business. It specializes in outbound transportation management and freight brokerage. The TMC

is a key part of Ryder’s expansion into the Hi-Tech vertical.

Pilot Pen Notes the Write Way to Outsource [Inbound Logistics, June 2008,]

To distribute its quality writing instruments in Mexico, Pilot Corporation of America relies on its 3PL not just for storage and transportation,

but also a competitive edge.

Trumbull, Conn.-based Pilot Corporation of America, the U.S. subsidiary of Tokyo, Japan-based Pilot Pen, has maintained a U.S.

operation since 1970. The company is authorized by its parent company to sell in the United States and in Mexico. Since 2000, Pilot Pen

Mexico, a Guadalajara-based business unit of Pilot Corporation of America, has been purchasing products made at the U.S. company's

manufacturing and distribution facility in Jacksonville, Fla., and arranging for their distribution in Mexico.

"We sell pens to Pilot Pen Mexico, which then sells the pens and makes its own profit," says Juan Estrella, director of supply chain for

Pilot Corporation of America.

Pilot Pen does business in Mexico without dedicating major corporate assets to the market by relying on Miami-based 3PL Ryder to

distribute its Florida-made goods south of the border.

The full line of Pilot Pen writing instruments spans 12 different categories, including a variety of pens and pencils, creative markers,

highlighters, and a mixed bag of supplies including refills, lead, and erasers.

Only a limited portion of the Pilot Pen line is distributed in Mexico. For example, "we don't carry No. 2 pencils. We sell mainly refillable

pens and markers," Estrella explains.

Equally focused is Pilot Pen's geographic concentration in Mexico. While it directs distribution operations throughout Mexico, the

company's primary market is the capital, Mexico City. Other major markets for Pilot Pen products include Guadalajara and Monterrey.

The pen manufacturer contracts with Ryder to select Mexican ground transportation carriers and to provide additional operational

support. Ryder is particularly careful about screening, selecting, and monitoring Mexican motor freight carriers serving Mexico City. Pilot Pen

depends on motor freight carriers "that can consistently deliver to Mexico City within a certain time window," Estrella says.

Pilot Pen began its relationship with Ryder in Mexico four years ago. The company had relied on another logistics company to handle

product distribution in Mexico until it filed for Chapter 11. Ryder took over the lease on an inventory-handling facility in Guadalajara, signing

new contracts with most of the former customers who moved merchandise through the facility, including Pilot Pen Mexico.

The transition to Ryder went smoothly. "We didn't want to diminish customer service," Estrella notes. "That's always the scary part of a

transition, wondering how long you are going to be down. We weren't down at all."

In making the transition to Ryder, Pilot Pen protected the short-term stability of its operations and the long-term viability of its

distribution cost structure in Mexico. Ryder maintained smooth shipping to key markets and integrated its management information system

with Pilot Pen's at minimal business disruption.

Ryder handles order processing, customer service functions, inventory storage and management, and shipment tracking for Pilot Pen in

Mexico. In addition, Ryder provides services related to importing U.S.-made Pilot Pen goods in Mexico. "We have our own import broker,"

Estrella explains, "but Ryder does the follow-up." This includes ensuring that extra import documents are provided, if necessary, and that

import duties are paid promptly so products quickly clear Mexican customs processing.

All Pilot Pen products sold in Mexico pass through Ryder's warehousing and distribution facility in Guadalajara, where security is a top

priority. "There's no pilfering in Ryder's facility; it does a good job securing the inventory," Estrella notes.

WORKING AS ONE

Maintaining open lines of communication helps the partners keep things running smoothly. Pilot Pen and Ryder employees hold weekly

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 619 of 833


meetings to fine-tune the distribution of Pilot Pen products in Mexico. Ryder works so closely with Pilot Pen in Mexico that customers tend

to see them as one company. The Ryder manager who supervises its facility in Guadalajara, for example, responds to calls from Pilot Pen

customers as if he were a Pilot Pen employee. "He answers the phone, 'Pilot Pen,'" Estrella says.

Ensuring order execution is critical to keeping major customers and attracting new ones in Mexico. "When Pilot went into Mexico, we

guaranteed our service, as we always do," Estrella notes. "Our culture is: we're going to get the merchandise there, wherever the customer

wants it." This dependability has been crucial in dealing with larger retailers. Office Depot, one of Pilot Pen's largest customers in Mexico,

insists on timely order execution, which Ryder has delivered.

With Ryder at its side, Pilot Pen hopes to capture the business of another U.S.-based retailer in Mexico: Wal-Mart. "We've been

approaching Wal-Mart for a few years, and recently got some positive feedback," Estrella says.

Pilot Pen may have nowhere to go but up in Mexico, given its short five-year presence in the market. "We're still in the infancy stage

there," Estrella notes.

Holding down distribution costs in Mexico is critical to accelerating its growth, so Pilot Pen works closely with Ryder to develop efficient

ways to do business.

One potentially money-saving idea under consideration would let Ryder handle Pilot Pen order-taking in Mexico. Currently, Pilot Pen

Mexico inputs customer orders into its own IBM server, an AS400 system, and the orders are then transmitted in a transfer protocol

designed specifically for Ryder's management information system. The partners may combine their systems to boost efficiency.

As Pilot Pen has become more comfortable working with Ryder, the pen manufacturer has begun to consider funneling customer orders

in Mexico directly to Ryder. That step would free Pilot Pen to devote more internal attention to other operations. And that's exactly the

kind of freedom a good partner provides.

Brazil Stakes Its Claim [Inbound Logistics, June 2008]

Shifting trade winds, strong domestic industries, and the presence of leading 3PLs have positioned Brazil in the middle of a global trade rush.

With so much attention directed toward the Asia-Pacific theater, and U.S. businesses bent on digging deeper into countries such as

China in search of less-expensive labor, Latin American markets have largely remained untapped.

Mexico notwithstanding, countries such as Brazil have been discreetly, albeit progressively, developing transportation infrastructure,

absorbing intellectual capital and best practices, and creating a business climate that is rapidly attracting foreign interest from businesses and

logistics providers alike.

Latin America is far from a new venture for U.S. industry. Henry Ford's foray into Brazil's rubber-rich Amazonian market and the ill-fated

development of "Fordlandia" in the 1920s foreshadowed the automobile's inevitable importance to the region's economic prospects.

Today, the automotive sector is among Brazil's top export industries and the country's emerging role as one of the world's leading

ethanol and flexible-fuel vehicle producers bodes well for continued growth.

In less overt ways, the development of the automotive industry, corollary demand for logistics and supply chain execution capabilities,

and the swift migration of U.S. 3PLs to the region have helped reinforce a nascent transportation and logistics network that is beginning to

pay major dividends for regional economic growth.

Ryder System first made inroads into Mexico, Brazil, and Argentina in 1995, notes Gene Sevilla, vice president and managing director of

Ryder, Latin America.

The Miami-based 3PL started selling into the Mexico market and its cross-border business organically evolved. Its expansion into Brazil

and Argentina has largely been through strategic acquisitions, and Ryder entered Chile two years ago with an existing customer.

"Mexico was a greenfield effort, beginning with automotive and consumer products," Sevilla says.

Its economy has been greatly helped by the North American Free Trade Agreement (NAFTA), evidenced by an upswing in

manufacturing integration, international traffic, internal consumption, and general business growth.

"NAFTA has been the wind under Mexico's wings," he observes.

South America, by contrast, has not enjoyed the benefit of a contiguous border or liberalized free trade and, consequently, is still internally

market driven and focused.

Brazil, however, is beginning to reap the benefits of social and economic reform and increasing domestic consumption, and this growth

is spilling out beyond the continent.

South America's slower growth has been a windfall in terms of sustainable development. Political and economic protectionism over the

past few years have helped stabilize fiscal management and strengthen domestic industries.

In the face of a weakening U.S. market and an otherwise thriving global economy, Latin America at large and Brazil in particular are

positioned to capitalize on a potential economic development bonanza.

"More people are buying consumer product goods in Brazil, including three million vehicles a year, many of which are manufactured incountry,"

says Sevilla. "Automobile producers are also exporting product to other South American countries as well as Mexico and China."

Strong government leadership has curbed once-rampant graft and is encouraging private investment. A more secure financial footing,

controlled inflation, and greater public/private collaboration are further indications that Brazil's traditionally domestic-driven economy can

sustain and grow commodity and specialized export trade.

"For exports, Brazil remains a low-cost producer of commodities. It has resources and can produce inexpensively," says Sevilla. "Despite

infrastructure concerns, Brazil can export cheaply and is becoming more efficient at achieving scale with manufactured goods."

But the infrastructure gaps are glaring, and inland transportation needs improvement to support warehousing networks as in Mexico and

the United States.

The cargo transportation network in Brazil depends heavily on trucking, with 62 percent of freight moving on roads, followed by rail (20

percent) and inland waterways (13 percent), says Adolfo Pimentel Filho, director of business development, Ryder Brazil.

"There are some efforts toward privatizing roads. Brazilian authorities are aware that they need to make strong investments in local

infrastructure - especially transportation - to support short- and long-term growth plans," he says.

Mauricelio Gomes Faria, general manager of logistics, Latin America for Fiat Auto in Brazil, perceives road transportation as the foremost

challenge and opportunity for business growth in the region. The South American arm of the Italian automobile company manufactures

components and assembles vehicles in Brazil and Argentina.

Fiat Auto in Brazil has partnered with Ryder to handle international transportation management for Iveco-Fiat Group's truck and

commercial vehicle division in Argentina and Brazil, and the Fiat Group's automobile business in Brazil and Mexico.

Growing consumerism, market competitiveness, and progressive technology investment have made Brazil attractive to Fiat despite

bureaucracy and infrastructure issues. The value of working with Ryder is evident in its "ability to react to new transportation demands," says

Gomes Faria.

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 620 of 833


While the broader difficulties of managing local transportation and warehousing, and linking these domestic components to global supply

and demand chains are readily apparent, they have yet to dam the tide of foreign speculation.

In fact, these obstacles have created demand for the type of responsiveness that third-party logistics companies can provide, hastening

the pace of manufacturing and logistics outsourcing growth in the region.

As 3PLs continue to expand their presence throughout Latin America, they are also leveraging experience and service capabilities to

attract U.S. and foreign businesses outside of the already entrenched automobile sector.

Ryder, which began working with automotive titans, has also developed local partnerships with leading consumer goods companies.

Much of what it has acquired and developed in terms of cultural knowledge and value-added logistics services for the auto industry are

transferable to other verticals.

On the transportation side, automotive companies' sophistication and focus on inbound and just-in-time require optimal routes for

delivery to manufacturing plants. It's easy to predict demand, but any disruptions, such as transport delays, can greatly impact operations.

These challenges necessarily impact local distribution.

"The automotive supply chain is contingent on network design and efficiencies gained or lost through warehousing and distribution

strategies such as crossdocking. This level of sophistication is not available working solely with local partners," Sevilla shares.

In the consumer products sector, the network between local manufacturing plant and final consumer is considerably more arbitrary -

businesses are less attuned to shifts in demand, and don't know what will be sold where. These companies require greater flexibility and

scalability.

As interest in Latin American grows, the task of integrating local transportation and distribution links with global supply chains will define

the evolving role of the 3PL - and give current outsourcing prospects a strike of certitude as foreign businesses explore new avenues for

growth.

Ryder in Latin America:

Argentina: 724 employees, 600 vehicles (17% owned, 83% dedicated) 200 carriers under contract, 11 locations*

Brazil: 1,100 employees, 1,000 vehicles (60% owned, 40% dedicated), 600 carriers under contract, 12 locations*

Chile: 5 locations*

Mexico: 1,800 employees, 1,000 vehicles (60% owned, 40% dedicated), 145 carriers under contract, 26 locations*

*including crossdock, warehouse, maintenance facilities

Logistics exec Williford to lead Ryder unit [American Shipper+, June 6, 2008]

Ryder System Inc. last week named John Williford to the newly created position of president, global supply chain solutions.

The move is part of the company's effort to combine its U.S. and international supply chain business units to form a single, integrated

organization that will provide global service to shippers.

Williford joins the company from Golden Gate Logistics, a Palo Alto, Calif.-based logistics portfolio company he helped create in

February 2006. Williford was chief executive officer of Golden Gate, which is backed by private equity firm GTCR Golder Rauner LLC,

Chicago. The company has made one acquisition, Atlanta-based ocean freight forwarder Global Link Logistics, so far.

Williford is perhaps best known as the former CEO of Menlo Worldwide Logistics, a large contract logistics company that is part of the

Con-way Inc. freight group. Menlo Logistics was formed in 1990 by then-parent company Consolidated Freightways at the suggestion of

Williford, who as director of marketing for the transportation conglomerate saw an opportunity to capitalize on the growing trend of

bundled logistics services. Williford was instrumental in building Menlo into a major international third-party logistics provider.

He left Menlo in 2005 after being passed over to head Con-way, then known as CNF Inc.

Williford will begin his new role on June 23.

Manufacturer of the Year for Supply Chain Excellence: Stonyfield Farm [By Neil Shister, World Trade Magazine, May 1, 2008]


Forty-odd trailers will pull up to the loading dock here today with each hauling away some 5,000 cases of product, a selection of the

company’s nearly one hundred SKUs of yogurt and drinks. The shell of this factory was the industrial strip mall that was Stonyfield’s early

home; they operated out of two bays, and Steven Inamorati remembers shuttling raw materials through the parking lot. Construction

workers are at work, installing more capacity.

This new capacity, along with plans to manufacture this year in Utah, is a measure of how Stonyfield has been able to expand scale since

the deal with Danone while still retaining most of its independence. “There are only two vetoes on us,” Hirshberg explains as we sit in his

office. “The only one that comes up on a routine basis is Capital Expenditures (the other is acquisitions).” Does the oversight slow down his

agility? “When we were negotiating our deal, this came up. They said, ‘okay, we have to veto all Cap Exs.’ I said, ‘no, no, no you can’t veto all

Cap Exs because that will take me forever.’ (We were a $94 million dollar company at the time, somebody would come in with a purchase

order, make a case and we’d get it done). We agreed on a number, anything over a million dollars. I said, ‘okay, a million dollars, no sweat!’

We rarely had anything that cost that much. Since then, I don’t think we’ve ever had anything under a million dollars.”

The challenges to devise innovative ways to keep the supply chain true to the company’s environmental mission have grown with the

growth in volume.

“One of the things we said when we started out,” recalls Hirshberg, when asked to discuss this question of size, “was that ‘we’re only

going to sell within a little area. We’ll assume that somebody else will be the New York area yogurt maker and somebody else will be Ohio’s.’

That was our vision. But we ran into this very complex concept that is like a brick wall that is called ‘scale.’ If you don’t have scale you can’t

be economical. And with scale comes efficiency.”

“We had this classic moment when it became clear. We were selling to 7 stores in the local area. And, we got a call from the buyer at

another chain that had 35 stores. He said to my partner ‘why are you selling your yogurt to my competitor and not to me?’ And Samuel said ‘

well, I don’t have enough cows.’ And he said ‘well get some more damn cows!’ and slammed the phone down. We took that as very good

business advice, so we scaled up.”

As scale grows, so has the complexity of optimizing production and distribution. Which would be the case for any company but, given

the need to include carbon footprints in the optimization functions, logistics becomes doubly significant at Stonyfield.

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 621 of 833


“I’ve been doing this for 25 years,” says Hirshberg, “and I would venture that for the first 20 years the supply chain was certainly a minor

consideration in terms of our planning because I’m quite sure it was a single-digit part of the P&L. I don’t think it ever got into double-digits

even with our geographic spread. But as we hit $100 barrel oil, it’s a whole other world. The relevance of the supply chain is entirely different

than it was even seven years ago, when oil was $30 a barrel. So, now the supply chain is central. It’s gone from a relatively minor functional

consequence to being a central consideration.”


Today, the company measures the carbon footprint of the entire supply chain and it does so with a passion and precision unlike many

others. The overall goal is for the company—in all its operations and sourcing—is to be 100 percent sustainable by the year 2015.

In terms of the transportation component, Stonyfield is doing this in conjunction with its logistics solution provider, Ryder System.

Working in tandem, the two are staking out what will likely prove to be significant benchmarks in the evolution of sustainable supply chains

—like measuring greenhouse emissions through the entire manufacturing-distribution cycle from the raw milk pick-up at the farm all way

down-stream to the final customer distribution center.

The relationship began two years ago, when Stonyfield decided to get rid of paper invoices in the wake of its growth. “Lots of

companies do their freight bill audit and payment off an electronic feed,” observes Ryan Boccelli, Stonyfield Director of Logistics. “What we

were looking for was a partner who could do more than that; we wanted to use freight audit and payment as the foundation for driving

changes in our supply chain.” They chose Ryder, in part because of the power of its system resources and engineers. And, in part to partner

with a non-asset based carrier in order to be assured of non-biased advice if the relationship expanded into transportation, which it did.

“Once we started data gathering we could identify all our existing lanes and shipments,” says Boccelli.

Lots of factors impacted the logarithms: the need for temperature-controlled transport, a selling season that peaks in January and

February, customer constraints (like delivery times, which could not be changed), and volume imbalances (heaviest in New England). “At

Stonyfield,” explains Mark Swenson, the Ryder Vice President who handles the account, “we took our Six Sigma tools and concentrated on

the supply chain. That allowed us to ask ‘who are the suppliers in this process, what are their inputs, what is the process (i.e. where are the

hand-offs), where do each of the silos impact the next hand-off?” What was unique about Stonyfield was that outputs were being measured

not only in terms of productivity but also greenhouse gases.

The resulting routing guide combines efficiency and reduced emissions (like all other systems at Stonyfield, transportation remains a work

in progress with such things under consideration as collaborative bookings with other refrigerated users and pulling tandem trailers with one

tractor to reduce carbon footprints). Part of the solution entails a fleet contracted through Ryder, which in addition to purely business

advantages (it carries 25 percent of Stonyfield’s volume), enables the company to exercise control over factors like the use of biofuel and

state-of-the-art environmentally friendly tractors. The size of this contract fleet is expected to grow in the future (“as we reduce carbon

emissions”). Meanwhile the selection of outside carriers isn’t always awarded on the basis of lowest cost, when feasible allowances are made

for environmental impact (“with a good EPA SmartWay provider, we might pay more”).

“The most significant change in our supply chain,” explains Ryan Boccelli, “is that we’ve added systems we never had before to let us

measure things we weren’t able to before.” Ryder invested considerable effort in ‘tweaking’ the EPA SmartWay fleet performance model,

customizing it to validate Stonyfield particulars and enabling precise readings of carbon emission per channel, vehicle and product. “You can’

t improve what you’re not measuring. Now we’ve got clear reporting, employees are looking at the data, measuring carbon, working with

customers, reporting that back into the business and reporting it out to the public.”

“Rather than just look at the P&L to each customer,” notes Steve Inamorati, “we also look at the input to greenhouse gases and the

carbon footprint.”

One of the features of Stonyfield management since 2006 have been Mission Action Teams, cross-functional teams charged with

developing specific goals and agendas to drive down company greenhouse gas emissions (“to make environmental efforts part of the

company DNA,” says Hirshberg). “Our biggest wins,” says Transportation Team member Boccelli, “have been tracking greenhouse gases to

the customer level and the elimination of LTL deliveries.”

As one listens to the Stonyfield story, the Big Question is ‘environmentalism at what cost?’ Conventional wisdom is that ‘managing for

sustainability’ is contrary to the best fiscal interests of the enterprise, that it may be a noble sentiment but bad business. Gary Hirshberg,

however, couldn’t disagree more. He describes different company initiatives undertaken for the sake of the environmental mission—a

porous parking lot to allow rainwater to drip into the ground rather than spill off into sewers, solar energy collectors, and factory carbon

offsets of 100 percent. “The mission has never cost us,” he insists. Granted, there’s an initial capital cost, but amortization typically occurs

faster than predicted, followed by positive cash flows. “Take the waste water plant. Seventeen percent more capital costs; it’s going to

generate $3.5 million of savings over ten years. That’s net.”

And the supply chain?

“Of most of the things we’ve looked at, things that are good for the environment are good for business,” says Steve Inamorati. “So

when you start talking about being more profitable and making more money, most of those things we talk about for greenhouse gas

footprint and carbon impact footprint are going to do exactly that—be good for business. Some are going to entail investment to do it, but

there’s always pay-back.”

So how are decisions made at Stonyfield?

Stonyfield is adding western U.S. production capability this year. Figuring out where to site the facility is a live question when I visit: how

to handle distribution out of a new production facility. The problem is that the equipment is suitable only for large batches, “too big for

some our products in the West” Boccelli explains.

The original intention to make all of the West Coast Stonyfield product there is thus not viable. Boccelli sketches out the options that

have been developed with their Ryder partners over a multi-month intensive analysis: “Do you bring back all the product to New Hampshire

and then ship it in single customer deliveries going West? That makes no sense from a cost and carbon footprint perspective or as a

business strategy. Do we put an inventory distribution center out there that inventories everything we’ll need for the West? You’re paying

that additional storage and handling costs of all of the product that you’re still making in the East. Then there’s the option to cross-dock.”

At this point he pauses for effect: “Or do you go to the historical faux pas of two purchase orders so you’re shipping some product to

each customer from the West and some from the East? Customers aren’t always open to this, it requires two deliveries and more

management.” But from a greenhouse footprint perspective, this is the best alternative.

“The decisive factor is whether you can persuade your customers to go against what would be their natural inclination. If you went to

your sales people and said ‘this is what we want to do’ (two purchase orders), their emphatic answer would be ‘absolutely not.’ But, this

particular time I said, ‘I’m not going to take ‘no’ between the four walls, we really have to talk to the customer about it and let them know

what we’re trying to do.’”

The result? “It’s been well received. Customers in the West are very well aware of what Stonyfield and our mission is. They’re open to it.”

To sweeten the deal as a kind of quid pro quo, these West Coast customers could be rewarded with more frequent shipments with reduced

lead-time. While perhaps not of historic magnitude, this distribution approach illustrates at the granular level just how environmentally driven

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 622 of 833


decision-making translates into win-win business practice that’s good for Stonyfield, good for its customers, and good for Planet Earth.

And, if social responsibility isn’t a sufficient motivator for change, Hirshberg is quick to point out that the petro-economy that has been

fueling industry is itself becoming unsustainable. “Oil is at $100 a barrel, where is it going to be in five years? That’s easy. Somewhere

between $150 and $200. And then 100 percent of our lives will be changed.”

16th Edition

©Copyright 2008 Armstrong & Associates, Inc., Stoughton, WI 53589 USA

Page 623 of 833

More magazines by this user
Similar magazines