Ex-Nedlloyd execs take the plunge with Summit
BY Ian Putzger, Toronto
Reprinted from Cargonews Asia
Take a fowarding operation focused on China, a logistics outfit built around trucking at US ocean gateways, add a group of seasoned cargo executives, and you end up with a new kid on the block trying to make a name for itself through adding value to traffic flows from China to the US.
Summit Global Logistics is the creation of a group of erstwhile P&O Nedlloyd managers around company chairman, president and chief executive officer Robert Agresti. They struck out on their own after P&O was taken over by Maersk.
While they were developing their business plan and looking for funding, the ex-P&O crowd acquired AmeRussia, an NVO (non-vessel owner) with bases in Russia and New Jersey, as a vehicle to work with and gain access to licences. By this autumn they were finally ready for the big leap to establish Summit Global through the acquisition of two lager operators - FMI International and the TUG Logistics group, which they purchased for US$163 million in early November.
TUG, which was established in 1994, is a logistics outfit with six locations in the US, a 50,000 sq ft warehouse in California and an Asian network consisting of seven offices in China and Taiwan plus over 40 agents in other Asian countries. Its main attraction for the Summit founders was its presence in China, with offices in Shanghai, Beijing, Ningbo, Dalian, Tianjin and Qingdao.
Founded in 1979, New Jersey-based FMI is integrated logistics provider which operates in major US ocean gateways, including New York/New Jersey, Miami, Houston and southern California. Its trucking activities and a strong customer base in the apparel and footwent sectors made it an ideal takeover target for Summit's business plan, according to Agresti '
The newly minted Summit Global Logistics projects consolidated operating revenues in excess of US$200 million for 2006. It commands over 75,000 TEUs of ocean cargo and controls more than 1.9 million sq ft of public warehouse space and owns and operates 240 tractors and about 500 trailers.
Summit offers the full gamut of logistics services, but the emphasis is on ocean cargo moving from Asia - particularly from China - to the US, Agresti said. By combining the forwarding footprint in Asia and the US with the FMI trucking operations out of major US gateways, the company aims to offer "unmatched last mile delivery execution and a full range of customised services with full shipment visibility".
Hence, the focus is on value-added services for timesensitive freight headed for the US. Where necessary, Summit can reach beyond its own operations by subcontracting part of the activities, but management does not want to farm out value-added services for key customers, Agresti said. By the same token, Summit is happy to work with agency partners in other countries but wants to control its business in China.
By mid-December, the integration efforts were in full progress. Agresti could not reveal a definitive timeline for the amalgamation, but he declared that it should be completed in time for the next round of contract negotiations with shippers and importers.
On the IT side, the integration means connecting e-freight the basis of Summit's NVO activities, with FMI's proprietary system to manage intra-US cargo movements and the Lognet system for end-to-end visibility. Management does not anticipate any significant challenges on that front.
Readers with activities in Australia may be puzzled by the new Summit Global Logistics. They may have come across another outfit of the same name, a full service freight forwarder and Customs broker with offices in Sydney and Melbourne and agents in Brisbane, Darwin, Adelaide and Perth. There is no connection between the two, Agresti confirmed, adding that the identical names should not be an issue, as the Aussie forwarder has no business in the US.