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In a conversation following its financial results call, CEVA Logistics CEO John Pattullo told World Trade 100 the third-party logistics provider had been focusing attention on developing its forwarding capabilities in air and ocean. Just weeks later, the company announced it had signed a landmark five-year contract with H.J. Heinz Company to handle the global food giant’s ocean freight – amounting to 60,000 twenty-foot-equivalent units (TEUs) per year.
According to CEVA, “The agreement represents the first time that a shipper with an annual volume of 60,000 TEU’s has entrusted a single logistics provider with exclusive management of its ocean freight.”
Inna Kuznetsova, chief commercial officer for CEVA, told World Trade 100 Heinz approached the selection as a well-thought-out strategic move. “We really admire Heinz’s vision in appreciating the fact that supply chain management is the driver of a company’s agility,” said Kuznetsova.
Heinz had used 20 or more ocean carriers to move their global ocean freight under contract, said Kuznetsova. The contract with CEVA allows Heinz considerable complexity reduction, enhanced supply chain visibility and reduced supply chain cost, she added.
CEVA was engaged for its ability to manage end-to-end supply chains, said Kuznetsova. “In the beginning, we found we shared a passion for excellent customer experience, discipline in execution and also for innovation in supply chain management.” Speaking of the collaborative, strategic approach Heinz took, Kuznetsova said, “We both see supply chain as a driver of the company’s agility in a challenging business environment with the possibility to take cost and waste out of the system – so continuous optimization of the supply chain. This is what inspired the relationship.”
The deal is not only for all of the Heinz ocean shipping – every bean that goes into those cans, said Kuznetsova. It will also include customs brokerage, and CEVA’s solution for end-to-end supply chain management. This will give Heinz full visibility and control over their shipments. And, she continued, CEVA committed not only to collecting data but analyzing it on a regular basis and coming to Heinz as a partner and recommending further optimization and improvements to their ocean trade system.
“This is what made the deal attractive,’ she added, “because Heinz sees it not only as a consolidation opportunity and a reduction in cost through bigger volumes, they see it as an opportunity to partner with a company who can help design innovation and constantly tune up the system and recommend optimization.”
This is not only a new contract for CEVA, it is largely a new relationship. The two companies took time to get acquainted and understand each others’ strategies, capabilities and needs and conduct test shipments.
Heinz approached this selection in a very thoughtful way, said Kuznetsova. They looked for excellence in execution and appreciated CEVA’s focus on lean and zero defects and an end-to-end solution. They approached it as a strategic selection rather than a cost reduction, she continued. “This is really a strategic partnership on both sides rather than a transactional relationship,” she concluded.
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