Acquisitions plug service gaps

Acquisitions plug service gaps    While large acquisitions among freight forwarders appear out of the question during these challenging economic times, that hasn't stopped some of the largest from snapping up regional and niche players.
   For example, Kuehne + Nagel in January bought three South American freight forwarders that specialize in transport of perishable food products: Translago S.A.S. and Agencia de Aduanas Excelsia Ltd. in Colombia, and Mastertransport SA in Ecuador. The Swiss forwarder said the acquisitions give access to two key export markets for flowers and other perishable products, as well as a larger presence in the region's air freight market. Combined the three forwarders move about 75,000 tons of produce and other products by air each year.
   Also in January, K + N entered an agreement to buy the shares of the U.K. trucking and logistics firm Rennies Investment Ltd. (RH Freight), based in Nottingham. RH Freight consolidates freight between continental Europe and the United Kingdom, employing 630 staff across 17 locations in the United Kingdom and at two sites in Finland.
   Another Swiss forwarder, Panalpina, in February integrated its longtime partner, Apollo Forwarding, in Southwest Australia, following a similar move in Adelaide last year. Also that month, Panalpina bought Grieg Logistics, which is heavily involved in the Norwegian oil and gas, shipping and maritime industries.
   Paul Svindland, managing director and co-lead for New York-based Alix Partners' Global Transportation and Logistics Practice, called these large forwarder actions 'smart, strategic acquisitions.'
   Alix Partners, a specialist at helping companies manage mergers and acquisitions, expects this activity to continue through 2011, although prices for these deals are starting to rise.
   'If they're forced to pay a little more, so be it,' Svindland told American Shipper. 'They're plugging a gap and it should pay for itself down the road.' ' Chris Gillis

Kuehne furthers succession plan
   Klaus-Michael Kuehne continues to implement his personal succession plan for the giant Swiss freight forwarder that bears his family's name by recommending in May that Karl Gernandt become chairman.
   In 2008, Kuehne announced Gernandt as his successor for functions in Kuehne Holding AG, majority shareholder of Kuehne + Nagel International, and the Kuehne Foundation.
   'I have decided to pass further responsibilities into younger hands,' Kuehne said. 'I am convinced that Mr. Gernandt as my successor in the function as chairman will ensure stability and continuity, fostering the company's further development.'
   K + N's board meanwhile named Kuehne honorary chairman of Kuehne + Nagel International. He will remain a member of the board's Nomination and Compensation Committee, but handed over the chairman function to Joerg Wolle. ' Chris Gillis

Crane scores with Astros
   On May 16, Jim Crane, chairman of Crane Worldwide Logistics and chief executive of private equity fund Crane Capital, made his long-time dream come true by becoming the newest owner of the baseball team Houston Astros.
   A group led by Crane bought the Astros for $680 million, the second-highest price ever paid for a major league baseball team.
   The Texas businessman, who once headed Eagle Global Logistics, has always had a great interest in baseball. He reportedly played the sport in the 1970s while attending Central Missouri State.
   After EGL was bought by Apollo Management in 2007, Crane began to pursue the purchase of a baseball team. He first tried to buy the Astros, but struck out, and next the Chicago Cubs and Texas Rangers ' all whiffs.
   But Crane proved he's no quitter. 'If you're an old baseball player you never give up,' he told the Associated Press. 'You're not going to win every game. So we stayed at it, we stayed focused and we didn't give up.' ' Chris Gillis

Brokers' hands clean on food imports
   The National Customs Brokers and Forwarders Association of America, in an April 28 letter to the U.S. Food and Drug Administration, said the responsibility for safety of imported foods under the Food Safety Modernization Act rests on the shoulders of the people who have knowledge and control over the supply chain, not the brokers.
   In the NCBFAA's view, they are the U.S. owner, consignee who purchases the product, or a U.S. person who specifically takes on the role as the agent of the foreign owner for this purpose.
   'It will not serve the goals of the act to place this responsibility on third parties (customs brokers) simply because they are at a convenient point in the supply chain, yet are not in a position to know first-hand details about the product or to control who supplies the product,' said NCBFAA President Jeffrey Coppersmith.
   In the letter, he recommended the FDA:
   ' Choose 'substance over form,' meaning in general, the 'importer' should be a person with a financial interest in the product and the FDA should not rely exclusively on terms, such as consignee, agent or importer of record, which are used in different ways in different contexts.
   ' Require affidavits signed by the U.S. agent and foreign food supplier accepting this specific safety role for the purpose of FDA food importations, and that no one should have that responsibility forced on them by virtue of their presence in the supply chain.
   ' Recognize the commercial role of the parties and that a customs broker is not an importer with a financial interest in the importation; 'confusing the two is like confusing the travel agent with the traveler.'
   ' Define the terms 'importer,' 'consignee' or 'agent' for determining the admissibility of food products, and take care not to confuse definitions and terms used for other purposes under other statutes.
   'We think the importer for FDA purposes should be the person who caused the goods to come to the U.S. ' that is, the party in the U.S. with a financial interest in the product or a U.S. agent designated by a foreign manufacturer or supplier through a specific written agreement between the foreign entity and the U.S. agent and filed with the FDA,' Coppersmith wrote in the letter.
   'Either of these parties should be required to register with the FDA and receive a registration number, which would be provided at the time of entry,' he added. 'This would provide the certainty required for FDA and would ensure that a true party in interest is responsible for the food product.' ' Chris Gillis