Category Archives: Logistics

BOS Group started with 1 truck. Now, it’s one of Miami’s biggest third-party logistics providers

BOS Group CEO/Founder Ozan Baran at his Allapattah warehouse in front of one of his new ‘Quickload’ trucks.

As an 18-year-old student living in Cyprus, Ozan Baran opened his first business in 1994, trucking oranges around the island nation.

“I went bankrupt,” he said. “It was a great learning experience.”

This setback did not discourage the Turkish native from getting involved in business again. After receiving a bachelor’s degree in international relations at Girne American University in Cyprus, Baran moved to Miami to live with his sister. He arrived in 1999 with $600 in savings.

“I worked at Royal Caribbean and then as general manager of Pasha’s [Mediterranean] restaurants,” Baran said. “I used to drive by the Port of Miami [now PortMiami], and it made me think about the opportunities here for logistics. I saved my money, and in 2005, bought my first truck and started my company.”

Using his savings and credit, the entrepreneur bought a flatbed truck for moving shipping containers and founded BOS Transport to move freight throughout Florida. BOS represents the initials of the first name of Baran, his mother Baysan and sister Simten.

“I worked very hard — 10-12 hours every day of the week,” Baran said. Demand for reliable trucking service was high, and by providing personal attention and excellent service, his business grew with the help of word-of-mouth recommendations. A few years later, he set up a small warehouse in Hialeah, bought more trucks, and hired more employees.

Over the years, BOS Transport evolved into the BOS Group, a major third-party logistics provider based in Miami. Its divisions provide trucking, warehouse, freight, fulfillment and other services and include BOS Transport, BOS Cargo, BOS Warehouse and a popular office rental facility at the headquarters building called BOS Business Center.

Bazan’s company has grown from a single flatbed truck into an enterprise that has more than 180 employees, a large fleet of tractor-trailers, revenues of over $10 million in 2016, and 250 domestic and international clients. The company, which has siding along the Florida East Coast Railway and is next door to Miami International Airport, operates out of a 56,000 square-foot headquarters and warehouse building. To help it keep up with the demand of moving containers in and out of PortMiami and Port Everglades, BOS is building a 125,000-square-foot warehouse a few blocks away, adding new trucks, trailers and other equipment, and hiring more personnel.

“As we grew, I saw new opportunities and studied each one before investing,” he said. For instance, he noticed that many foreign firms working in international trade needed small, economical office spaces, so he converted part of his headquarters into attractive, furnished spaces that are fully booked. He plans to apply this concept in other cities.

In 2015, he launched a new division, Quickload, a fee-based platform that allows shippers and truckers to connect through an app so that vacant space on trailers can be used. Trucking companies, which often see their trucks carrying only partial cargo loads, can line up guaranteed volumes for each route, thus increasing their revenues. And companies that want to ship freight can use Quickload to find available space on trucks and negotiate their own prices.

Walking through the Allapattah warehouse packed with slabs of marble, stacks of glass sheets for condo towers, nonperishable foods and a refrigerated section filled with Danish cheese and chocolates, Baran talked about plans to expand operations in other states and in Europe.

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Delivery by rocket could change the game for UPS and FedEx

The Loadstar

Morgan Stanley believes SpaceX could change the game for United Parcel Services and FedEx.

Elon Musk says his company’s BFR vehicle could be a reusable mode of Earth transportation, for up to 150 tons of cargo.

The parcel service “industry could see a fundamental reset with the introduction of rockets as a transportation modality,” Morgan Stanley says.

The rationale for this hypothesis from Morgan Stanley analysts is the plan by Elon Musk’s SpaceX to operate Big Falcon Rockets, being designed to transport people from Earth to Mars, but also around Earth – New York to Shanghai in half an hour. And with a payload of 150 tonnes, it could revolutionise the express business. It would certainly make it a lot quicker…

Airplanes and Panamax cargo ships redefined the parcel service in the 20th century, but those days may be fading quickly.

Morgan Stanley believes the SpaceX plan for the Big Falcon Rocket as a reusable mode of Earth transportation could change the game for United Parcel Services and FedEx.

“The freight transportation business — especially parcel delivery — is on the cusp of transformation from multiple new transportation modalities,” a team of Morgan Stanley analysts wrote in a note Thursday. “Elon Musk recently announced a new option that could potentially have the biggest impact of all — rockets.”

Wal-Mart Stores: Fighting Back

SeekingAlpha.com

Summary

In a world spiraling towards e-commerce which is dominated by Amazon, Wal-Mart is fighting back by reinventing itself as a technology company with physical stores.

Wal-Mart’s secret weapon is its Data Café: a state of the art, analytics hub which is the world’s largest private cloud.

Wal-Mart will enjoy PE expansion if it succeeds at this transformation.
Leverage 55 years of Experience and Assets

Wal-Mart Stores (NYSE:WMT) is the world’s largest retailer with $485 billion revenue in its fiscal year 2017, $14 billion profit after tax, and an operating cash flow of $31 billion. It has over 11, 600 stores in 28 countries. In U.S. alone, it has 4,700 stores which is located within a ten-mile vicinity of 90% of the U.S. population. Effectively, this is a very powerful and cost-effective delivery network as it expands its e-commerce platform.

For the past 55 years, when Sam Walton first founded this discount store in 1962 and disrupted the entire retail industry then, it has grown in financial strength by disciplined growth, capital allocation and delivering an EDLP (Every Day Low Pricing) policy for its customers. Over the past decade, as buying habits are dramatically remolded by online e-commerce, Wal-Mart has lost market share and its revenue growth declined. But it is not dead. On the contrary, it has quietly been amassing assets to fight this inevitable battle for customers’ dollars.
Goal: Transform into a technology company

Big Data and Data Café is at the heart of this transformation. Wal-Mart now can chew and spit 40 petabytes of data, and to give its management and associates “real time” solutions to complex business problems, which in the past, would have taken weeks to compile, compute and analyze. This ability has far reaching benefits: from increased sales, more efficient inventory control, supply chain management, merchandising, efficient delivery options, and climate control and the switching of lights in the stores.

Wal-Mart is using technology both online and offline to maximize the seamless experience for its customers. For example, customers can elect to pick up their online orders at a Wal-Mart location. Instead of having to go inside the store, customers can pick up their order at an automated pickup tower which looms 16 feet tall and holds 300 small to mid-size packages. As the customer walks towards the tower, its doors would automatically open. A screen scans the mobile receipt and the bar code, and disburses the packages. Viola!

What Is HOT In Logistics?

NY-NJ port urged to uniformly extend gate hours

A uniform increase in the gate hours of the major terminals at the Port of New York and New Jersey is needed to handle the expected surge in thousands of containers loaded on and off mega-ships, industry leaders argue.

With drivers scarce, smaller trucking companies add capacity

Truck capacity is tightening across the United States, but motor carriers, especially smaller companies, continue to add capacity in the form of terminals, trucks, and drivers.

NY-NJ port considers options after chassis pool collapse

As mega-ships increasingly call the Port of New York and New Jersey, the top East Coast gateway is picking through the options on how to ensure the smooth delivery and pickup of chassis after a seemingly done-deal to create a chassis pool collapsed in July.

US House members: Do not extend Jones Act waiver

Republicans and Democrats on a US House subcommittee said President Donald Trump erred in temporarily allowing foreign-flag ships to sail from the US mainland to hurricane-ravaged Puerto Rico, and that Congress should leave the Jones Act alone.

CMA CGM extends regional reach with Pacific island carrier takeover

CMA CGM’s announced plans to acquire South Pacific carrier Sofrana Unilines comes hot on the heels of its takeover of Maersk’s South American cabotage operator Mercosul Line as the world’s third-largest container shipping company expands its regional influence around the world.

How To Save The Mall

LOS ANGELES, United States — Do consumers still need shopping malls? One in four US malls won’t exist in five years, according to a June report by Credit Suisse. This year alone, American shopping malls will lose an estimated 8,640 stores to closures. That’s, in part, thanks to digital sales of apparel, which are growing fast and estimated to reach 35 percent of total apparel sales by 2030, up from 17 percent this year.

And yet, for those raised on the west side of Los Angeles, the Century City mall is an institution. On October 3, the latest, gleaming, iteration of the shopping centre — the third place of third places — will be officially unveiled to consumers by Westfield, the multinational mall operator which is doing its best to dispel the idea that the shopping mall is dead.

The new Westfield Century City, re-imagined in partnership with Los Angeles-based (and television famous) interior designer Kelly Wearstler, features outdoor dining spaces, acres of gardens, even a canopy of olive and palm trees. And yes, stores. Over 200 of them, including a three-storey Nordstrom, a Zara and a Bonobos.

Food, too: Lots of it. Along with Eataly, the first location of the high-end Italian food hall to open on the West Coast of the United States, there is an expansive location of the popular local grocery store Gelson’s and plenty of fast-casual and fine-dining restaurants, including Din Tai Fung (the first Taiwanese spot to receive a Michelin Star).

Fitness buffs can join the upscale Equinox gym, or take a class Gloveworx boxing studio. The company has even hired a “creative head of global entertainment” — well-regarded Broadway producer Scott Sanders — to run its live programming across its centres. Out of dozens of retailers, 50 of them have never before done business with Westfield.

But even with all the bells and whistles — Uber waiting lounge included — Westfield Century City is still, of course, a mall.

“The word ‘mall’ is a dated word,” says Steven Lowy, the corporation’s co-CEO. “It’s been lost in the vernacular.” The answer to making the word “mall” relevant again, Westfield and many of its competitors say, is to transform these properties into community centres that aren’t totally focused on apparel retail. The strategy rests on the hypothesis that the internet may be killing the mall, but humans still desire interaction.

In 2007, 42 percent of sales at Westfield developments came from department stores. Today, it’s only 28 percent. The company says that only approximately 12 percent of revenue from its two London malls — two of the most productive in its portfolio — come from department stores.

By shrinking its portfolio to 35 centres globally — which includes properties in the US, the UK and soon mainland Europe — the Sydney-based Westfield (which divested its Australian centres in 2014 to form a separate entity, the Scentre Group) says its properties, mostly located in urban areas instead of white-flight suburbs, are valued at $31 billion, with flagship assets currently making up 82 percent of the lineup. The rest are “regional” properties, many of which the company will likely sell off in the coming years.

“Ten years ago, Westfield had 69 shopping centres in the United States, today we have 33 and two in the UK. We probably will have quite a bit less over the coming years as we focus on being what we would regard as the highest quality retail real estate company in the world,” Lowy says. “We’re not far away from that right now, and the way we do that is by selling non-core assets and reinvesting that capital in assets like London, Milan, New York…Silicon Valley…etc.”

In 2018, after years of red-tape delays, Westfield will begin developing what is being touted as the city of Milan’s largest shopping mall, a €1.4 billion ($1.6 billion at current exchange) investment, built in partnership with Gruppo Stilo, which owns a quarter stake. Now scheduled to open in 2020, its crown jewel will be an outpost of the famous French department store Galeries Lafayette.

Westfield’s strategy is not unlike those of many of its competitors, who are betting that experience — including food, entertainment and health and fitness — will allow a certain sort of development to thrive even as consumers spend more time online.

“Changing consumer behaviours, attitudes and technologies have drastically altered expectations for a shopping experience, and we are facing this trend head-on by transforming our mall assets into community hubs, with varied offers that service each of our communities’ specific whole-of-life needs and aspirations,” says Skye Fisher, head of strategy at QIC Global Real Estate, a development firm with properties across the US and in Australia. “Offering more than a simple consumer transaction, we are creating places that encourage people to dwell, drawing in the community and ensuring people will visit again and again. By curating a more integrated, experience-led offer that responds to a broad range of customer needs, we’re supporting an uplift in sales across all categories including fashion and apparel.”

In the 12-month period ending June 30, 2017, Westfield said fashion sales in specialty retailers at flagship properties were up 1.5 percent, while leisure sales were up 6.4 percent. However, sales at general retail — which includes department stores — were down 5.8 percent. Today, food and dining make up 18 percent of the portfolio’s overall sales (from 15 percent a decade ago), while technology and auto make up 16 percent (from 9 percent a decade ago). “In some of our malls, Apple is the highest-grossing retailer, not the department stores,” Lowy says. “Apple is doing that out of 10,000 or 20,000 square feet. The department stores have 250,000 square feet.”

But can doubling down on these growing categories truly supplant the overall retreat from brick and mortar, and encourage consumers who visit these developments to actually shop? “I’ve seen the retail universe adapt to whatever changes consumers have thrown at them, but this generational change has created a conundrum for retailers of all types that it hasn’t been able to deal with,” says Richard Kestenbaum, a partner at Triangle Capital, a sell-side M&A and capital-raising advisory firm with a concentration in fashion and retail. “Every square foot of retail is worth less than it was 24 or 36 months ago. Once that is recognised, it changes the economics of retail. People will lose a lot of money in the transition, but there is money to be made.”

In order to eke productivity out of properties, developers not only have to change the mix of retailers represented, but retailers need to reevaluate the purpose of their brick-and-mortar stores. Today, many consumers view physical retail as a place to easily drop off online returns, rather than an opportunity to browse and shop. In October, the American value-driven department store Kohl’s will begin accepting Amazon returns at 82 locations in an unprecedented deal, underscoring the physical store’s role as a return centre.

Lowy, for one, is okay with that dynamic. “We all just need to evolve and not really care if the store is a store or a showroom. The consumer is going to shop how they want to shop,” he says, citing the prevalence of “click and collect” schemes in the UK and Europe. “I don’t really care whether the consumer comes to the mall and buys something or sees something and buys it elsewhere or returns something. We’ve just got to do what the consumer wants.”

BusinessOfFashion.com

Green new Jaxport CEO

The Port of Jacksonville Port Authority Board of Directors unanimously voted to hire longtime Jaxport executive Eric Green as Chief Executive Officer. Green had served as interim CEO since March.

The Board conducted a national executive search to fill the vacant CEO position.

Green joined the port in 2005 and served previously as Senior Director, Government and External Affairs, leading the successful effort to gain authorization and funding to start the Jacksonville Harbor Deepening project. The project to take the federal shipping channel to 47 feet will begin construction in the next few months, the port stated in a release.

The port is served by CSX, Norfolk Southern and Florida East Coast Railway. It has volume of more than 1 million containers annually.

“Eric Green has demonstrated in his period of service to Jaxport, and his period as interim CEO, that he will be a great asset to this port as CEO,” said Chairman Jim Citrano.

Prior to joining the port, Green served in numerous leadership roles for the City of Jacksonville, including Deputy Chief Administrative Officer. In this position, Green managed several city departments and was instrumental in the successful development, passage and implementation of the $2 billion Better Jacksonville Plan.

Green, a Jacksonville native, is a member of the Board of Directors of the Jacksonville Chamber and the Florida Chamber of Commerce. He is a graduate of Saint Andrews Presbyterian College and holds a Bachelor of Arts degree in Political Science.

Railway Age

German Logistics Giant Investing Heavily in South East Asia

ASIA – DHL Supply Chain will invest more than €70 million in growing its regional footprint in Thailand, Vietnam, Cambodia and Myanmar by 2020. DHL Supply Chain already benefits from a well-established position in Thailand and Vietnam, and will concentrate on Cambodia and Myanmar, for further growth opportunities. Over the next three years, the company plans to build new facilities, expand its fleet of trucks, and invest in new technology, creating an additional 5,000 jobs in the four countries. John Gilbert, CEO DHL Supply Chain, commented:

“Asia-Pacific is one the most important regions for DHL Supply Chain being accountable for a significant share of our revenues in 2016. Consumer, retail and tech industries drive these developments becoming evident in increased amounts of new and extended contracts. Being already the market leader for the region it is fully natural for us to foster our commitment in the region and remaining a reliable partner.”

DHL says its investment will also serve the wider needs of a growing Thailand, and an economy which is expected to return to accelerated growth. Government investment in mega projects like infrastructure, the Eastern Economic Corridor (EEC), and airport expansion plans, to name a few, are attractive elements for foreign investors in Thailand, and according to Kasikorn Bank research, Thai Land Transport and warehouse market value in 2017 growth is expected to be around 5 to 7%.

DHL Supply Chain Thailand also recently completed a move to new premises located in Bangkok’s business area and its nationwide network now comprises of a combined warehouse space of approximately 650,000 square metres across more than 70 facilities, employing more than 10,000 people. DHL has also employed intelligent systems in both warehouse and transport operations such as in automation and robotics, unmanned vehicles, vision picking, transport control tower and telematics. Kevin Burrell, CEO, Thailand Cluster, DHL Supply Chain Thailand explains:

“With the technology and innovation that we invest in warehouse and transport operations in Thailand, coupled with our ability to deliver integrated solutions for customers, we are striving to drive enhanced value, which in turn acts as a strong differentiator for us in the market.

“We are committed to supporting customers by delivering exceptional operational services and innovation across Thailand’s entire supply chain, helping the country to become the premier logistics centre for Southeast Asia. We will continue to consolidate and support markets in which we lead, namely Thailand and Vietnam, and invest in markets where we aim to lead such as Myanmar and Cambodia.”

Handy Shopping Guide

Moody’s: Amazon still far from ruling retail

From Amazon’s Prime membership numbers to its entry into the grocery space to its retail “dominance,” Moody’s analysts led by Charles O’Shea tackled some widespread assumptions about the e-commerce giant’s place in the world in a recent report emailed to Retail Dive. Amazon did not immediately respond to a request for comment.

Analysts with the bond rating agency noted that, though Amazon dominates online sales, those sales account for just 10% of the industry as a whole. As for its recent acquisition of Whole Foods, the analysts wrote, “We believe it’s a big stretch to say — as many in the market have been doing — that Amazon will dominate food retail, and some have said this will happen within two years.” They pointed out that Amazon, even now with Whole Foods in the fold, controls only a $20 billion piece of an $800 billion market for food sales in the U.S.

O’Shea and his fellow analysts also called into question oft-cited estimates of Amazon’s Prime membership at 85 million, which they call “seriously overstated,” “highly improbable” and made “in the absence of any real guidance from the company itself.” Moody’s analysts, based on an evaluation of demographic data, think the figure for Prime members is closer to 50 million, well below Costco’s total of 86.7 million members.

RetailDive.com