Using Strategic Acquisitions to Satisfy Your Customer Base
Global shippers continue to face supply chain challenges that seem to change more often and more dramatically than ever before. They require logistics partners who can react to these changes and help them navigate the complexities of global trade. Shippers want 3PL partners that not only responsively evolve service networks and capabilities to flex with the market, but also can anticipate and be ready to meet future service requirements.
For any logistics partner to be successful and compete on a global scale in today's dynamic marketplace, they must focus first and foremost on the needs of the customer. Often this requires investment in expanded service offerings and capabilities that align with market demands. As a Burlington Northern Santa Fe, LLC and Berkshire Hathaway company, BNSF Logistics not only has the willingness to invest in expanding network and service capabilities, we have the financial depth and resources to do so.
One area where BNSF Logistics recognized growing customer need was the global project cargo arena. Project cargo is generally defined as the movement of over-dimensional and overweight shipments requiring specialized handling and equipment. We believe there is an Industrial Renaissance underway globally, as emerging economies invest in infrastructure development and established economies refurbish much of theirs. These investments are driving project cargo volumes that significantly outpace the general economy and could be maintained for the next 20 years. In 2012, global volume in project cargo rose to more than 300 million tonnes. Current projections list project cargo volumes growing more than 50 tonnes over the next two years in industries such as mining, oil & gas, chemicals, and renewable energy. With this volume of tonnage shipping globally, and with the market showing steady growth each year, it's difficult for third-party logistics companies not to take notice. And BNSF Logistics couldn't help but notice something else—the project cargo market is highly fragmented, often lacking world-class resources and standards of performance expected by best logistics practitioners. Further, Federal Corrupt Practices Act requirements and the international activity that project cargo engages, could be at conflict. Our customers told us they needed a North American based provider, with uncompromising commitments to integrity and ethics, to help them navigate in challenging environments.
So, when our customers expressed their needs in these areas, we didn't just listen… we acted and we invested. After conducting extensive market research, and doing appropriate due diligence, we identified Toronto-based Albacor Shipping Inc. as a leader in the global project cargo market. Albacor Shipping established operations in Canada and the United States in 1998, expanded to Europe in 2003, and recently acquired eight operating locations throughout Russia. We took steps to acquire the company, and through that acquisition significantly extended our physical reach and enriched our organizational expertise in project cargo capabilities. Acquiring Albacor expanded our North American presence, and enabled us to answer our customers' call for expansion into new foreign markets.
We also listened—and acted—when our customers asked for help with their global expansion projects that required more expedited service solutions. Within days of the Albacor acquisition, we purchased EP-Team, a Flower Mound, Texas-based company that operates multiple locations in the United States and globally. EP-Team occupies a specialized, exciting, and demanding space in the project cargo market that perfectly fills one of the few gaps in the BNSF Logistics portfolio. EP-Team has experience and global reach in the expedited project cargo arena and proven logistics capabilities in moving time-critical, high-value, and often over-sized cargoes, serving the Oil & Gas, Defense, Space & Aviation industries.
By combining the assets of Albacor Shipping and EP-Team's offices and unique expertise with BNSF Logistics' extensive resources and financial depth, our customers now have access to unprecedented project cargo logistics service options, along with the assurance that managing these projects anywhere in the world can be done with a commitment to the standards and responsibilities that a strong and reputable 3PL with deep North American roots can provide.
These two acquisitions are just a means to an end—and that end is providing BNSF Logistics' customers with a comprehensive suite of logistics services that span both the globe and the entire spectrum of our customers' supply chain activities.