Geodis-IBM logistics acquisition: win-win for both?

It’s not all gloom and doom out there – deals are still happening and this announced deal is huge. IBM gets, presumably, a huge chunk of change selling its global logistics operations and Geodis in turn acquires a EUR 1 billion/year client under a multi-year agreement. IBM sees a nice influx of cash to its short term bottom line and hopefully long term cost savings from its new deal with Geodis. Geodis locks in a gigantic client and contract over a lengthy time period and expands its global network and services offerings significantly.

The move is part of Geodis’ global expansion strategy, in which it aims to move from a European multi services company to a worldwide logistics provider. Since 2007 it has strengthened its position in the Americas and is expanding in China, India and Russia.

Jean-Louis Demeulenaere, deputy CEO of Geodis, said: “With this partnership, we will strengthen the skills and expertise required to service, both IBM’s and our existing and future clients, core logistics needs in more than 120 countries. IBM’s global logistics operations will significantly upgrade our services portfolio.”

Hat tip to China Logistics News.

Fuel prices causing companies to “Move West”

I lived in Los Angeles during the early 2000’s and had the opportunity to tour various inland logistics centers based in the Fontana/Ontario area of Southern California. Some of these operations were absolutely outstanding. For instance, the company I was working for at the time was running nearly one million square feet of warehousing and distribution for a major Life Sciences firm. My company was literally handling the entire operation including inventory, returns, distribution, etc. and was even in the preliminary stages of RFID development for the warehouse. At that time, I was also responsible for two large tech firms that were interested in relocating their warehouse operations to that region. During that time fuel was still reasonably affordable, so the main driving forces in the decision to move operations to that area were less expensive rent, less labor costs, and a somewhat close proximity to the ports in Los Angeles and Long Beach.

As companies continued to look for lower operating costs, companies began to push Eastward into the Redlands and Moreno Valley areas. Recently, with diesel fuel prices skyrocketing, many companies are now second guessing the decision to move that far East. According to an article on PE.com, many firms are once again looking West for places to establish their DC operations. Especially those firms that rely on the importation of finished goods from overseas. Local drayage rates into the inland empire average roughly $325 per container, while the Redlands area costs approximately $390. If you are importing 5,000 containers per year, that is a difference of $325,000 annually.

I assume that California is not unique in terms of companies looking to relocate closer to the ports. The majority of my career has been in the Western United States, so I can’t say if fuel is causing similar changes in the Southern and Eastern regions of the US. If you have particular insight, please drop us a comment below and let us know.

Tips for 3PL / Freight Forwarder salespeople (and complaints)

Lately it seems to have been an ongoing feature of what I call “Annoying and/or Idiot Sales Person of the Week” syndrome here at work, only it’s been almost every single day that I’ve had to endure at least one phone call from a sales rep that left me shaking my head in disgust or annoyance. I know you have a tough job trying to drum up new sales, but you’re not going to get any new customers by ticking them off or just plain coming across as stupid. Perhaps I’m being unduly harsh, but I need to get it off my chest and I figure a post on some of the more common occurrences and what to avoid might help those in the sales arena. So here’s some things to avoid when calling a new customer for the first time:

1) Don’t try to be a “friend” on that first call: I’m not your friend. I’m not your “buddy”. I don’t know you, so don’t pretend that we’re long-lost high school buddies because we aren’t.

I get these calls all the time. Someone has learned my full name and calls me out of the blue and when I pick up the phone I get the “Hi (your first name), what’s going on buddy / pal / friend?”. I don’t recognize the voice, which invariably gets my mind wondering exactly whom I am speaking to. The sales rep happily pushes on as if we’re best friends and may mention sports and the weather or a variation of something similar. After wasting my time with mindless one-sided chit-chat – I’m usually just listening, still wondering who the hell I am really speaking to – the sales rep finally begins to explain why they really called, at which point I simply cut them off, tell them I’m not interested and hang up the phone. You may have managed to increase the amount of time spent on the phone per customer call, but you’ve invariably turned off a potential customer to future business with your company.

- You’ve just wasted my valuable time.
- You pretended to know me, when you don’t. Deception upsets people and while I might not remember who you were, I will certainly remember the company you claimed to represent.
- Maybe I’m old school, but I find it rude to address a potential client on the phone by their first name. It’s either Mr, Mrs, or Miss until you’ve met them in person and have reached a comfort level or they’ve told you it’s ok.

* Be courteous, be friendly, but be professional and don’t pretend to know someone you don’t. *

2) Failing to indicate who you are and where you are calling from: If you don’t tell me who you are and why you are calling, you are wasting my time. I don’t like people who waste my time.

For whatever reason, this seems to be a problem with trucking companies, particularly truck brokers. I envision some poor sales bloke sitting at a desk with the yellow pages open dutifully calling down the list and crossing off the names. They’ve called so many companies in such a short period of time that I can only guess that boredom and monotony have set in and they’ve completely lost sight of why they were calling companies in the first place. The call goes something like this:

Ring! Ring!

Client (me): “Hello, this is John Doe from ABC Company.”

Sales Rep: “Hi there, where do your domestic deliveries originate from?”

Client: “Um, are you trying to track down a local delivery?”

Sales Rep: “Oh no, I’m just trying to figure out your deliveries.”

Client: “Do you need to place a pick up or something…..? I can pass you on to Domestic Transportation….”

Sales Rep: “Who handles your domestic loads?”

Client:”I’m sorry, who am I speaking to? What company are you with.”

Sales Rep: “Well, I’m John Smith from Super – Fast – Rocket – Expedited – Warp Speed – Trucking and I know we could handle your freight….”

Client: “Sorry, not interested. Good bye!”

I’m sure he meant to introduce himself and tell me why he was calling. Really, I’m quite sure, but somewhere between call 500 and call 501 he got the order mixed up and went straight to confusing me with vague, general questions about deliveries and introducing himself later. I’m geared to solve problems and handle requests, so when I get these vague phone calls I’m going to assume it’s a warehouse or a customer asking about a pending delivery or pick up. When you finally get around to telling me who you are, you leave the customer wondering what kind of idiot you are who doesn’t introduce themselves properly to people. Sure, I may still not be interested and the phone call might be shorter, but if you annoy people that’s the image they are going to have of the company you represent.

* Introduce yourself from the get go. Tell people who you are and where you are calling from. *

Yes, this is common sense but it isn’t common practice. No, you are not going to get sales by trying to confuse the customer. Which leads me to my next gripe….

3) Trying to sneak into the customer’s door by pretending to know something specific about their business: I know who my providers are, so don’t call me because you managed to grab a waybill or invoice somewhere down the line and pretend to know my business.

This one really gets my goat. There is no surer way to convince me NOT to use you than try to talk your way into my office using shipment specific information that you happened to get ahold of. This is when sales reps call me inquiring about shipment status, claiming that there is a problem with billing, or making up some non-existent issue with the shipment in question, and then try to finesse the conversation into an opening for them to come in and talk to me. It must work otherwise sales reps wouldn’t try it, but I think it’s a cheap trick and dishonest.

* If you know about my business, come right out and say so and explain that you’d like an opportunity to discuss that particular area of business and how you can better serve it. A straight-forward, professional approach is the way to go. *

4) You don’t have anything to offer the customer, but continue to drone on and on….: Look, if, in the course of the conversation we both discover you have nothing to offer me, then please give up.

This is for those providers whose services I obviously don’t need or simply don’t fit with my business model and I’ve explained as such. Or providers who are speaking to the wrong person but just don’t get it. For example, I had a mom-and-pop NVOCC contact me about LCL export pricing. I explained that we strictly did imports only, zero export, and that all our traffic was full container, no LCL. But the person kept pushing on – maybe there was a chance we might do LCL in the future? Um…..no. Could we, might we, maybe start exporting? Um….no – I thought I already said we only do imports. Another time a domestic guy would not let me hang up the phone without being rude, even though I explained until I was blue in the face that he needed to be speaking to our Domestic Manager.

* Know who you are talking to and what area of the business they handle. If you get a sense that their business model doesn’t fit the services you are offering, politely end the call. *

These are good phone calls to learn about a company and their business, but once you understand you have nothing to offer them – or they make that clear to you themselves – it’s time to end the call.

Those are probably some of the most annoying things I’ve experienced lately, but I’m sure others could add to the list. What do all of these experiences have in common? A lack of professionalism, poor communication skills, and wasting other peoples time. Again, it sounds like common sense, but it’s certainly not common practice.

Opportunities in China: Logistics Sector to grow dramatically

At least according to China Logistics News and a report they link to:

An industry report states that the logistics sector is expected to grow 30% annually over the next three years. Which suggests it is just about to double in size.

Jones Lang LaSalle, a global real estate money management and services consultancy, said revenue in the logistics market is expected to double from US$105 billion to US$210 billion by 2009 .

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