- THE MAGAZINE
John Pattullo, CEO of CEVA Logistics continued his refrain that the logistics market of the last six months has been “very challenging.” He cited external factors (Eurozone financial crisis notwithstanding) and pessimistic customers as examples. In this difficult context, he noted, CEVA is adapting well.
Some of that adaptation began 12 to 24 months ago as CEVA identified and addressed underperforming accounts. It also began a focus on some of its strongest customers, dubbed Century accounts because they represented the top 100 CEVA customers. The goal was to develop those relationships through closer collaboration and deeper penetration into the customers’ logistics spend.
Another area where CEVA focused attention was building its forwarding capabilities. Despite the acquisition of EGL, CEVA had occupied a position of 35th in the forwarding market; something Pattullo and his team strove to fix. With stronger internal resources, CEVA was prepared for the modal shift as customers who were facing their own market challenges moved away from air.
CEVA has also turned attention to its air forwarding side which Pattullo admits has underperformed the relative to the market. That’s readily explained, he says, in the fact that CEVA’s air business is heavily concentrated in high technology markets and the Trans-Pacific lanes – two areas he says have suffered most in the generally soft air freight markets.
“At a certain point, one has to develop new businesses and new capabilities to sustain growth,” Pattullo continues. Under the leadership of Greg Weigel, says Pattullo, “we have revamped our air strategy and, I think, done a good job to get our air product specialists together behind one game plan.”
The single game plan is another theme for CEVA. Its UNO Program is an ongoing effort to standardize its network and operations on best practices.
Process improvement is also a target in the air freight tender management activities, Pattullo points out. Managing that complex flow of data is complicated and challenging, says Pattullo, and so CEVA is in the process of putting in new system for its tender management team.
Another tactic for improving air is to make use of a process that worked well in contract logistics, explains Pattullo. That is to focus on a relatively small number of air freight opportunities. “In contract logistics we felt we were chasing too many opportunities and not winning enough of them.” They focused and, he notes, performance has improved dramatically in the last six months. “We’re now doing the same thing in air freight. We’ve got 25 deals that we’re very much focused on.”
China is another area where CEVA has focused in an effort to grow. Already well established, including a road transport network that has regular shipments to over 200 cities. “We think contract logistics is starting to take off in China. A lot of that business is multi-national companies replicating the sorts of systems they have in western countries. What we’re starting to see is mid-sized and larger Chinese companies starting to look at outsourcing and going to the 3PL industry for their logistics services.
A fifth area of focus for CEVA is its organizational capabilities. Pattullo repeats an earlier sentiment that CEVA wants to be the most admired company and the employer of choice in the industry. As with some of its product categories and markets, it has identified 25 projects to focus on change.
Pattullo notes that the company is committed to building diversity with a goal that 50 percent of its hiring globally will be female.
“We want to grow a cadre of people who understand end-to-end supply chain and are just as familiar with contract logistics and ocean freight and air freight and road transport.” Pattullo quickly points out the need for both the subject matter experts with their vertical knowledge and skills, but “I think what’s missing in the industry are the strong end-to-end generalists, and those are the folks we particularly try and cultivate.”