APL Logistics (APLL) is to buy GATX Logistics in a $210 million acquisition which will increase its revenues by 70% or over $300 million.
GATX is the second-largest warehouse-based contract logistics company in the United States and one of the top players in North and South America.
APLL is the supply-chain management arm of the Singapore-based NOL Group, which is engaged in global transportation and logistics. GATX provides integrated logistics solutions to blue chip companies, and has growing operations throughout Latin America.
Said Dick Metzler, CEO of APLL: “The GATX Logistics team, under the leadership of Joe Nicosia, has built a technologically advanced and highly focused organization, which is what we have been looking for to support our growth goals.
“There is an excellent fit between the two organizations, and the real beneficiaries of the new combined entity will be our customers.
Metzler continued: “GATX Logistics manages distribution from their warehouses to the final outlet for clients, which completes the global supply chain for APLL and adds to our menu of services. It means a cost-effective, time-definite, end-to-end regional and global supply-chain management for retailers, automotive and other companies who source internationally.”
This means, for example, that a toy retailer with both web and traditional store sales will have visibility of its products right from its factory in China to the store or to the customer’s door.
Metzler continued: “The close fit means savings for APLL as we expand further, because what we are purchasing is not just a warehousing company but a system of warehousing logistics and integration, and a business model that can be replicated globally. This will save us investment in our own warehouse management and transportation management systems.
“This is more than one plus one making two, or even three. It equals more like five because of the synergies between the service offerings. Better inventory visibility allows customers to manage changes in demand and exceptions at any point along the supply line. This not only reduces costs, but creates more revenue because they can better control their inventory flow. Our customers tell us that this kind of proactive management is non-existent today.”
Metzler also commented on GATX Logistics’ strength in information technology. “I am particularly impressed by the way technology has been used to enable total inventory visibility to their customers. It is compatible with our own internet-based suite of products, known as NetTrac, and will give additional depth and breadth to the services we provide.
“The emphasis that we put on eCommerce is mirrored at GATX Logistics, where they have developed a separate eFulfillment business,” Metzler said. “eCommerce is the ticket for admission to bids for overall supply chain management for many of our larger customers. It is a big growth area and we can leverage strongly on the combined customer base of both organizations.
“It’s also what allows true factory-floor-to-store or customer-door visibility and fulfilment.
“APL Logistics has now begun to realize the plans developed from the studies we commissioned when we turned our attention to accelerating the growth of APL Logistics after setting right the fundamentals of the Liner business,” said Flemming R. Jacobs, president and CEO of the NOL Group.
Jacobs added: “The two studies, which concentrated on customers’ needs, showed us the road to take, where to develop existing capacity and where to invest in strategic growth. We now have the vision, the management, the structure, and the plans in place to respond to what our customers tell us.
“We have set aggressive goals for APL Logistics - to challenge the Liner business as the major breadwinner in our company in a relatively short time. That means joint ventures, acquisitions and partnerships on top of the healthy organic growth rate of more than 20% annually that our Logistics business has experienced in recent years.
“This is just the beginning of what I expect to be a very exciting period for APL Logistics,” concluded Jacobs.
As a full-service logistics provider, APL Logistics is global in scope and offers services that span all aspects of a customer’s logistics supply chain.
By leveraging the capabilities of several specialized business units, APL Logistics is able to tailor business programs to meet customers’ needs. The focus is on improving the economic performance of its customers’ supply chains through inventory awareness, distribution networking, decision support, process management and information technology. To achieve this, APLL brings together extensive experience in process methodology with the latest technology to design supply chain solutions that allow customers to focus on their own core competencies.
APLL can receive merchandise today from customers in any of its warehouses in 52 countries, consolidate it into containers destined for their distribution centers or retail stores, and manage the movement of these products from the beginning of their supply chain to the end, including documentation and information management.
APLL offers barcode-scanning, whether on the factory floor or at cross-dock facilities. It also arranges for the timely delivery of documentation and provides customers with the information they need, electronically or online, to manage inventory.
APLL expects to grow its business significantly in the next few years by expanding its product menu, further globalizing its capabilities and marketing its products to supply-chain clients around the world.
APL Logistics is a wholly-owned subsidiary of Singapore-based Neptune Orient Lines (NOL), a global company involved in transportation and logistics businesses. Container transportation company APL Ltd is also part of the NOL Group.
GATX Logistics is one of the largest warehouse-based providers of contract logistics services. It helps businesses manage their supply chain logistics through a variety of integrated services, 3,000 employees, and a distribution network throughout the continental United States, Mexico, Canada and Central and South America which includes 35 markets and 93 facilities. It has a fleet of 700 tractors and trailers that log 20 million miles a year. In addition, it owns substantial computer hardware and software, including AS/400s and specialized systems and programs, including its proprietary logistics management software, Total Logistics Solution.
The company’s services include logistics management, contract warehousing, manufacturing support, freight management, dedicated contract carriage, returns management, custom packaging, electronic commerce, and technological support.
Based in Jacksonville, Florida, the company was founded in 1974, and some of its operations date back as far as 1914. GATX operates foreign trade zones in Indianapolis; El Paso, Texas; Syracuse, NY and Hebron, KY. It serves hundreds of clients, in consumer electronics and information technology, service parts and components, consumer packaged goods and consumer durable goods.
The company an investor/partner with Non-stop Solutions, a company that is pioneering the use of efficient consumer response in the food and grocery industries.