Hanjin Logistics’ Ambrite asks if industry is losing its entrepreneurial passion.
Globalization has been a boon for the shipping industry, resulting in a huge increase in cargo volume.
But Robert Ambrite, vice president of non-vessel-operating common carrier activities at Hanjin Logistics, worries about an accompanying trend, the decline of “entrepreneurial, think-outside-the-box-passion.”
Just as some believe the U.S. automobile industry lost its way when leadership was passed from “car guys” to “finance guys” in the 1980s, Ambrite fears a similar change may be afflicting air and ocean carriers.
“Where are the shipping guys who cared about building great freight carriers, providing excellent service and creating jobs worldwide? Most of these companies are now managed by process and finance people — all very bright — but all looking to maximize that 90-day profit, reduce costs and believing that the flow of cash and information is more important than the flow of cargo,” he said.
Ocean carriers and large NVOs have turned their services into a commodity, Ambrite said, adding “when price and service are equal, relationships win the business.”
Ambrite has more than 30 years of experience in freight transportation, working at Maersk, “K” Line, the Port Authority of New York and New Jersey, and FedEx before joining Hanjin Logistics in 2004.
Hanjin Logistics was established in 2000 to provide value-added service to the core customers of both Hanjin Shipping, Korea’s largest container carrier, and its affiliate Korean Airlines. Customers requested from the logistics operation services such as purchase order management, customs brokerage, insurance, transloading, consolidation, warehousing, and door-to-door service for less-than-container load shipments.
By 2005, Hanjin Logistics had become a standalone organization and began signing service contracts with other ocean carriers, in addition to Hanjin Shipping, partnering with other co-loaders, and expanding into intermodal marketing, truck brokerage, and warehouse management.
While it does business with other carriers, Ambrite believes there’s big value in Hanjin Logistics’ close relationship to its sister liner company, especially when capacity becomes tight.
“After the economic downturn of 2008, it was evident Hanjin Logistics needed to find a new and better way to face the uncertainties of the future,” he said.
Ambrite said many 3PLs followed the lead of deregulated airlines and large container carriers in eliminating local offices and replacing them with “customer service centers,” sometimes located overseas. Elimination of locally domiciled employees can distance 3PLs from their core customer, so one organization essentially supplies all of the “backroom” services for everyone.
“Hanjin Logistics wanted to make sure their customers became loyal to their entire organization rather than just to local sales or customer service staff,” he said.
Ambrite said Hanjin Logistics has taken a number of steps to nurture partnership with customers, including concentrating on small to midsized importers and exporters rather than on large volume beneficial-cargo-owner accounts that usually maintain their own ocean carrier contracts and have international departments that are able to provide some of the same services Hanjin Logistics offers to smaller customers shipping 10 to 1,000 containers per year.
He said the company takes a “consultative approach with all customers” and tailors solutions to meet their goals and objectives. Hanjin Logistics offers a menu of services, much as an insurance broker offers different products.
The company has regionalized its North America operations, so customers know who they should contact, including senior managers, when they have questions or concerns.
American Shipper spoke with Ambrite on a day that he had worked with an electronics retailer to reroute a container of computer parts from an intermodal train to a cross-dock facility where cargo could be transloaded to a truck and sped to stores in time for a sale. Hanjin Logistics opened a new warehouse in Carson, Calif., where cargo can be transloaded to domestic trucks.
“By providing local staff and dedicated personalized customer service, importers and exporters alike know they are dealing with individuals who are familiar with their particular ocean terminal, inland intermodal hub, truck lines and rail services. This inevitably saves customers time and money,” he said.
Ambrite said Hanjin Logistics has taken the emphasis off of individual staff members and placed it on the “team.” Local offices operate without commissioned sales personnel, so all staff, including those in overseas offices, can concentrate on satisfying the customer.
He also said the company thinks long term, noting global markets are cyclical.
“Customers have choices,” Ambrite said. “The only way to succeed is with regular, return business. We value our margins as much as any company, but we also realize that a 90-day mentality for all products, in all markets, is not realistic.”
He said both communication with customers should be “simple and direct manner” — including bills.
Ambrite highlighted several Hanjin Logistics services, including a Fast-Ship product where cargo is loaded “last-on” at origin in Asia, then transits on one of Hanjin Shipping’s direct services with 13- or 14-day transits to the U.S. West Coast, and is discharged first. It’s attractive to shippers of electronic and telecommunication products, garments and some other general department store merchandise, and is a lower cost alternative to air freight.
Another is a Fragile LCL Intermodal Product Services (FLIPS) for products such as glassware, electronics and artwork. “Many of our customers who previously shipped via air to avoid what they perceived as potential damage to their cargoes” are now using FLIPS, Ambrite said.
In the past year, he said the company has put a lot of effort into destination operations, especially in the Los Angeles-area for major retailers.
The company has also increased the volume of trucks it handles both within the country and between the United States and Mexico.
Ambrite said Hanjin Logistics does a “hot delivery” service for urgent cargo and offers a “pre-pull” service in Los Angeles to help shippers avoid PierPass fees and further reduce their costs.