Whos Who in Logisitcs International 2010

Armstrong & Associates, Inc.
100 Bus iness Park Circle, Suite 202, Stoughton, WI 53589 USA
Phone: +1-608-873-8929 Fax: +1-608-873-5509
Who's Who in Logis tics and Supply Chain Management - International
www.3PLogistics.com
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Armstrong &
Associates, Inc.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Armstrong & Associates delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Armstrong & Associates can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

8U.S. 3PL Market Growth
10Global Logistics Costs & 3PL Revenue Estimates
Section 2 - International Logis tics Providers
12Definitions and Explanations of Terms
15 ACCEL Logística
18 AFL Logistics
45 Almacenadora Mercader S.A.
48 Almagrán y Almacenar
64 APL Logistics
110Beijing Logistic Inc.
113Belfor Logistics N.V.
137Blue Express International S.A.
146C.H. Robinson Worldwide, Inc.
164Caterpillar Logistics Services, Inc.
175CEVA Logistics
184CHINATRANS International Limited
190CWT Limited
195D.Logistics AG
222De Well Group

226DHL Supply Chain & Global Forwarding
236Dimerco Express Group
248Emons Spedition GmbH
265Fatton Transport
275Fiege Logistics AG
287GEFCO
292Geodis
298GIRAG
310Headwin Logistics Co., Ltd.
318Hercules Logistics & Forwarding Ltd.
334IMPERIAL Logistics
348Julio Simões Logística S.A.
367Konsortium Logistik Berhad
402Luís Simões
405Mainfreight Limited
441OOCL Logistics Limited
457Pantos Logistics Co., Ltd.
475Poh Tiong Choon Logistics

478Rapidão Cometa
492Ryder Supply Chain Solutions
526Sinotrans Ltd.
535STACI
541Sun Logistics
553Toll Global Forwarding Limited
574Transportadora Americana Ltda.
623Zimag Logistics

Section 1

U.S. 3PL Market 1996 - 2010E (US$ Bill ions)

U.S. 3PL Market Revenues & Profitabi lity by 3PL Segment - 2009
*Total 2009 gross revenue (turnover) for the 3PL market in t he U.S. is estimated at $107.1 billion. $3 billion i s included for the contract logistic s softw are segment.

*Includes Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

Section 2

Basic Definitions Logistics: Logistics is part of the supply chain process. It is the part involving planning, doing and controlling the
flow and storage of goods and information. Goods and information flow from origins to customer’s destinations.
Contract Logistics: A contractual agreement to provide logistics services. Usually prices, length of contract (term), services required and other considerations are defined and agreed to by the parties.
3PL: The value-added logistics provider who contracts to provide the requested services.
4PL: A consultant operating in the capacity of an LLP, LLM or SCI.
LLP (Lead Logist ics Provider): A value-added logistics provider who manages other contract logistics operators and provides supply chain consulting services for his customer.
LLM (Lead Logis tics Manager): A value-added lead logistics provider who designs, builds and manages supply chain assets, processes, people and technology.
1 COMPANY BACKGROUND
Asset Focus The 3PL is primarily: A=Asset Based, N=Non-Asset Based or a combination of both.
Founding Business Original business model.
Market Area Designates primary market area focus (i.e. Int'l=International; N. America=North America; U.S.=United States; Regional=Regional U.S.)
2 INFORMATION SYSTEMS
EDI Electronic Data Interchange.
ERP Interfaces The system can interface with Enterprise Resource Planning systems.
Integrated TMS & WMS TMS and WMS work together as a whole.
Internet Customer Access Provides customers with systems resources via the internet.
Many-to-many Supply Network Optimization The system optimization routines can handle many-to-many relationships between parties as opposed to just one-to-many or one- to-one. This enables complete supply chain collaboration among different companies.
Mode Conversion/Optimization The system consolidates shipments and optimizes the mode selected (e.g. LTL to TL).
Network Modeling Software used to model supply chain networks for D.C./Warehouse site selection.
Radio Frequency Uses radio frequency technology to identify goods in the system.
Real-time Track & Trace The system can track and trace shipments anywhere in the supply chain within minutes.
TMS Transportation Management System.
WMS Warehouse Management System.
XML Data Handling The information systems can handle communications between parties using XML or similar technology. Primarily used for Internet communications.
3 TRANSPORTATION MANAGEMENT
Air Freight Forward ing Provides air freight forwarding services.

Carrier Mgmt and Contracting Handles carrier management, negotiations, and contracting.
Contract File Maintenance Maintains files for long-term contracts between shippers and carriers.
Dedicated Contract Carriage A service that dedicates equipment and drivers to a single customer for its exclusive use on a contractual basis. This is arranged with the providers own drivers and equipment or through the use of well- coordinated, contracted transportation providers or owner-operators.
End-to-end Matching Matches shipments with available carriers to build continuous moves within the supply chain.
Freight Brokerage Is licensed as a freight broker.
Freight Pay Outsourced Offers freight bill payment services through a third party.
Freight Pay Performed In-house Provides freight bill payment services through internal operations.
Freight Pay Post-Audit Performs freight bill audits after the freight bill has been paid.
Freight Pay Pre-Audit Performs freight bill audits prior to bill payment.
Home Delivery Handles delivery of catalogue orders or deliveries to residences.
Load Tendering Has systems and processes in place for tendering loads to carriers.
Loss and Damage Claims Handles processing of claims for loss and damage.
Mode Conversion Selects optimal modes for shipments to minimize cost while meeting service requirements.
Small Package Can arrange for delivery of small package shipments to individual destinations (consignees).
Tracking & Tracing Can track & trace shipments and provide transit status.
4 WAREHOUSING & VALUE-ADDED
Customization Performs customized manufacturing services or postpones services until the appropriate time for manufacturing.
Facilities Mgmt The management of warehousing operations and/or facilities maintenance.
KanBan Can replenish manufacturing/assembly lines in a JIT environment.
Kitting Light assembly of components or parts into one new kit.
Manufacturing Support Can support manufacturing operations in other ways.
Merge in Transit Merges shipments from multiple origins into one large shipment prior to delivery at the final destination.
Pick/Pack Can pick and package orders from locations within a warehouse.
Pool Distribution Can "pool" small shipments into truckload quantities.
Rail Siding The warehouse has an accessible railroad track running up to the facility.
Sequencing/Metering Performs sequencing or metering of component parts for manufacturing operations.
Sub-Assembly Performs sub-assembly services for manufacturing operations.
5 VALUE-ADDED SERVICES
Labeling Can label products or tag with prices, etc.
Lot Control Can track and, if necessary, perform a recall of items by lot.
Repair/Refurbish Performs repairs on products.
Returnable Container Mgmt Can manage inventories of returnable containers such as totes, IBC's, gaylords, etc. and can track each container in the system.

Specialty Packaging Can provide special packaging functions.
Store Suppor t/DSD Provides in-store support, shelf stocking or direct store distribution (e.g. convenience/grocery stores).
6 OTHER 3PL SERVICES
Factoring/Financial Services Provides banking, factoring, credit and other financial services.
Installation/Removal Can perform installations or take-downs.
Order Management Takes customer orders and manages order statuses through the supply chain.
Project Logistics Can handle logistics functions of entire projects such as trade shows or oil well construction.
Purchase Order Management Can track and manage supply chain information by purchase order.
Quality Control Will perform quality control functions.
Union Services Works with union operations.
7 INTERNATIONAL SERVICES
Areas Served Performs services in the geographic areas indicated. Countries where offices are located, either owned or through agents, are listed under "Countries with Offices."
Consolidation Combining two or more shipments in order to obtain lower transportation rates.
Customs Brokerage Can routinely handle customs clearance for international shipments.
Export Crating Crates shipments for export.
Foreign Trade Zone Is designated as a Foreign Trade Zone.
NVOCC Is a Non-Vessel Operating Common Carrier.
Port Services Transportation, handling and related services at ports.
8 SPECIAL SKILLS & HANDLING
Bulk Commodities Handles shipments consisting of bulk quantities.
Food Grade/Sterile Provides facilities or equipment that are food grade quality or sterile conditions such as those for pharmaceuticals.
Hazardous Materials Handles substances or materials that are capable of posing a risk to health, safety, and property when stored or transported.
ISO Certified Has achieved ISO certification for quality in at least one location.
Temperature Controlled Handles items requiring temperature-controlled conditions including protect from heat or freezing and/or maintaining temperature.

MAJOR MARKETS
OVERALL CAPABILITY
Company Name ACCEL Logística
Address: Virginia Fábregas No. 80, Col. San Rafael, 06470 Mexico, D.F. Mexico
Phone Number: 52 55 57 05 27 88
Fax Number: 52 55 57 05 47 94
Email Address: [email protected]
Website Address: www.accellogistica.com.mx
Parent Corporation: ACCEL
Market Area: North America
Asset Focus: A, N

Servilogistics de Mexico, S.A. de C.V.
Manuel Javier Muñoz Martin CEO
Georgina Castro Marketing Mgr.
Miguel Altamirano Gallegos CFO
Total Net Logistics Revenue ($Millions): 37
Total Long-Term Contracts Held:
Total Tractors:
Total Trucks:
Total Other:
Dedicated Contract Carriage Trailers:

Exchange: MX**
Overall Information Systems Rating: C (E=Excellent, G=Good, C=Capable/Adequate, and I=Inadequate)
Transportation Management System (TMS): SCA, Proprietary
Software Type: Software Vendor/Brand:
Warehouse Management System (WMS): SCA, RedPrairie, Proprietary
Network Modeling/Site Location:
TMS Optimization Routi nes:
XML Data HandlingRadio Frequency Devices
Founding Business: Merchandise Safekeeping
Overall Capability of Provider: Capable VAWD 3PL specializing in manufacturing.
INT'L FREIGHT FORWARDING/NVOCC VOLUMES
Total Annual Ocean TEUs:
(A = Asset Based, N = Non Asset Based)
Internet Order Fulfillment
Total Licensed Customs Brokers:
* Financial information may be actual company reported or A&A estimates.
** Net Logistics Revenue is net of pass-through revenues for purchased transportation.
*** Average exchange rates for the respective year are used to convert revenues to USD.
Food, Groceries Retailing

TRANSPORTATION MANAGEMENT SERVICES Transportation Planning Transportation Execution Transportation Services
End-to-end Load Matching
Factoring/Financial Services
Installation/Removal
Other Services:
Customs Brokerage
Export Crating Port Services
Industry Location TM WM VA DCC SCMInte IM Intl Lead Other Customer
Services Rendered by ACCEL A sample of 3PL clients.
Chedraui General Merchandisers Mexico
Soriana General Merchandisers Mexico
Wal-Mart Stores General Merchandisers Mexico

ACCELCOUNTRIES with OFFICES Countries served through owned offices or exclusive agents
Afr ica/Middle East Asi a/Paci fic Aus tralia/New Zealand Euro pe Latin/South AmericaNorth America Mexico
United States
EDITOR'S COMMENTS
ACCEL is divided into two divisions: Logistics which is 17.6% of revenue and Manufacturing which is 82.4%. Its clients are mainly in the consumer food and confectionary, retailing, automotive, technological, and healthcare verticals. Additional services offered include plastic injection, metal stamping, tool design, and paint finishing.
U.S. Headquarters Contact Information:
4606 FM 1960 West, Ste. 325, Houston, TX 77069 Phone: +1-281-440-5595 Fax: +1-281-440-4042 Email: [email protected]
Provider's Strengths
CASES & NEWS Seven Leading Latin American Companies Choose RedPrairie and NetLogistiK for WMS [Reuters, February 26, 2008]
Warehouse management solution to be installed at 31 sites, including the first implementation in Argentina
MILWAUKEE--(Business Wire)--RedPrairie Corporation, a world leading consumer driven optimization company, and its partner NetLogistiK, today announced that seven companies in Latin America have recently chosen RedPrairie's Warehouse Management solution. NetLogistiK will implement RedPrairie's Warehouse Management solution for six new customers in Mexico and one in Argentina. NetLogistiK and RedPrairie became partners in 2003 and currently have 42 sites in Mexico and Latin America. "Latin America is awakening to a more advanced supply chain technology. As the world becomes more globalized and boundaries irrelevant, Latin American companies of all sizes are facing increasing competition from both near and far away countries. Especially in the vertical industries of retail and high-value goods, such as pharmaceutical, electronics and third party logistics (3PL), companies are adopting technology to better manage inventory both in the warehouse and in transit while protecting their operating margins. These companies are gaining supply chain security and visibility to give them a strong competitive edge," said Francisco Giral, CEO for NetLogistiK. Companies that recently chose RedPrairie solutions in Latin America include:
-- Accel, a third party logistics provider, chose RedPrairie WMS and RF solutions to run at more than 10 sites in Mexico -- Servicargo, a third party logistics provider, plans to implement the WMS and RF solutions at five sites in Mexico -- Farmacias del Ahorro, a pharmaceutical retailer, will implement WMS, Voice Picking and RF at three new sites in Mexico -- Multipack, a third party logistics provider, has implemented its first site in Mexico City in a record time of 12 weeks -- Grupo Dico, a furniture retailer, has chosen NetLogistiK for distribution center design and RedPrairie WMS for two new sites in Mexico -- Farmacia Guadalajara, a pharmaceutical retailer, plans to implement WMS and Voice Picking at its facilities -- Celsur, a third party logistics provider, has chosen WMS for its Buenos Aires distribution center
"We understand that technology will play a key role in the growth plans and success of our organization," said Marcelo Ormachea, Operations Manager from CELSUR Logistica. "We are certain that the experience acquired by RedPrairie in its collaboration with the world's leading 3PL's will provide us with more flexible and scalable advantages to our expanding business," said Francisco Alvarez, CEO of CELSUR Logistica. "Nowadays the logistic providers sector (3PL's) demands real time information as well as broad controls, traceability and flexibility among the services provided to its customers. RedPrairie offers a solution especially robust for logistics providers that combines all these advantages,
with differentiated configurable options to service each customer. In addition, its billing capabilities enable us to assure and surpass the expectations of each one of them," said Jesus Lara, CIO from Accel Logistica.

MAJOR MARKETS
OVERALL CAPABILITY
Company Name AFL Logist ic s
Address: Lok Bharati Complex, Marol Maroshi Rd., Andheri East, Mumbai 400059, Maharashtra, India
Phone Number: 91 22 6646 3500
Fax Number: 91 22 2920 6993
Website Address: www.afl.co.in
Market Area: International
Asset Focus: N
AFL WiZ Express Division
AFL DACHSER Pvt. Ltd.
Cartridge World (South Asia)
Juzar Mustan CEO
Sanjeev Jain CFO
Total Tractors:
Total Trucks:
Total Other:
Asset Ownership v.s. Leased:
Transportation Equipment: About 50/50
Exchange:**
Transportation Management System (TMS): Proprietary--Agrani
Transportation Planning and Optimization:
Warehouse Management System (WMS):
Freight Bill Audit/Payment Software:
Founding Business: Airfreight Forwarding

Consumer Goods Industrial Retailing Technological

ISO Certified Certification Locations:
Customs Brokerage
Services Rendered by AFL A sample of 3PL clients.
Arvi nd Mi lls Textiles
Blue Star Electronics, Electrical Equipment
Canon India Computers, Office Equipment India
EnPro Industries Manufacturing
L&T John Deere Construction & Farm Machinery
Madura Garments Lifestyle Ret Appar el India

AFLCOUNTRIES with OFFICES Countries served through owned offices or exclusive agents
Afr ica/Middle East Asi a/Paci fic Aus tralia/New Zealand Euro pe Latin/South AmericaNorth America India
Singapore
Thailand
Canada
United States
EDITOR'S COMMENTS
AFL is a sizable 3PL for India. It has three business divisons: Express Courier, Logistics, and International Cargo. In 2007, AFL set up a joint venture with German 3PL DACHSER named AFL DACHSER Pvt Ltd. based in Mumbai. Each company has 50% stake. Earlier this year, AFL formed a strategic alliance with UPS Jetair Express to expand its international presence while expanding UPS's presence in India.

CASES & NEWS AFL Logistics opens 'retail ready' distribution facility [The Economic Times, September 1, 2008]
AFL Logistics, one of the leading integrated logistics service providers, has opened what is said to be a first-of-its-kind fashion and luxury retail distribution centre in Bhiwandi near Mumbai.
According to Juzar Mustan, CEO, AFL Logistics, demand for retail-ready distribution facilities has prompted the company to invest in creating such facilities in major metros across India.
He said, AFL Logistics is now poised to embark on significant expansion by developing its warehousing capabilities and retail presence in metro cities. It will shortly start another facility in Bangalore.
The 12,000 square foot facility at Bhiwandi boasts distinctive features like automated biometric access, infrared security and surveillance with high-end cameras which are capable of motion based capture, customized racking and a fully mapped warehouse management system. Binning and picking is guided by a wireless RF (radio frequency) gun which is one-of-its-kind in India.
The new 'facility within a facility' has been designed for one of its clients, Madura Garments Lifestyle Retail Company, a division of Aditya Birla Nuvo.
UPS, AFL launch strategic alliance in India [By Jeff Berman, Logistics Management, November 30, 2007]
MUMBAI, India—UPS Jetair said yesterday it has formed a strategic alliance with AFL, a provider of air freight forwarding , air express, and third-party logistics (3PL) services, which, UPS said, will significantly expand accessibility to UPS services in India and provide export capabilities to AFL. UPS said in a statement that this alliance will officially kick off on January 1, 2008 at which point all AFL WiZ Express Centres in India will promote UPS’s international express delivery service to India-based shippers. UPS Spokesman Mark Dickens told Logistics Management that India is a “priority market” for the company. He said that the company’s efforts in India to this point have really been focused on the international express business. The domestic business, he said is relatively fragmented, and UPS wanted to focus its attention on what presented the most opportunity in the short term. “We are going to be working on expanding our presence in India and saturating the market, and this [alliance] with AFL will allow us to do that,” said Dickens. Between now and January, UPS is examining ways in which it can optimize AFL’s network thought the companies UPS Jet Air Express effort, which is an international express delivery service provider that connects India with the global marketplace, according to UPS. UPS added that AFL will continue to function as a domestic service provider connecting businesses across India, and this strategic alliance
will allow AFL to pick up international export shipments on behalf of UPS destined for the more than 200 countries and territories served by UPS. It added that UPS access points for customers with international express delivery requirements will increase to more than 200 locations in India. Dickens said this strategic alliance is different from a typical joint venture in the sense that it is “harmonizing” the companies’ networks in India to make them more fluid and provide consistent service. In terms of the competitive advantages this strategic alliances offers shippers, Dickens said a lot of it comes down to scope and scale that comes from two experience and well-recognized partners working together.
Incredible India [International Transport Journal – 2007]
The Indian office of tourism has been advertising the country around the world under the motto “Incredible India”. The slogan could equally be used to characterize India's dynamically growing economy. The country's forwarding sector is always good for surprises too.
The global German logistics service provider Dachser set up a joint venture with AFL Pty Ltd, based in Mumbai at the beginning of February. AFL is one of India's leading logistics companies, although it is not yet well known internationally. AFL has 2,350 employees and generates sales of EUR 190 million annually, making it one of the major players in India's forwarding sector.
Comprehensive network in India
The family-owned company took its first steps in aviation over 50 years ago and then expanded its activities to all areas of the logistics

industry, including LTL and FTL transport, customs clearance and warehousing. It was a partner of DHL Express from 1979 to 2002. AFL has been developing its own CEP services in India (AFL WiZ) since 2002. In 2006, it launched AFL TouchWorld, India's first retail outlet chain for convenience services, providing foreign exchange facilities, money transfer, international telephone, domestic and international courier and travel insurance services, as well as e-ticketing. AFL also expanded into contract and valuables logistics in 1996. In the forwarding segment, AFL operates 200 branch offices, 16 logistics hubs, 46 warehouses and a fleet of about 1,000 containerized
vehicles in India. In addition, the company has its own offices in the USA and Canada. In other international traffic, however, AFL works with agents.
Worth waiting for
Cyrus Guzder, AFL's chairman and managing director, said that “with the expansion of the global players, which have set up their own networks here in India by now and are crowding us, our own international network was becoming less stable. We were faced with the choice of either finding new partners every year throughout the world, or looking for one single partner with a global network at its disposal." Guzder finally chose a family-owned company whose managing shareholder "thinks like me. He has the same philosophy. Moreover, we have concluded a very similar generation contract with our family members. This gives the two companies a great deal of stability.” Guzder said that he took his time with the decision. AFL had already collaborated with Dachser for over ten years before the joint venture
was formed. Guzder was impressed by the development of the German company in Europe, China and the USA in the last five years. Those are all important business markets for India. In return, AFL can offer Dachser a strong overland transport network in India, as well as a strong presence in South and Southeast Asia, to round out its activities. Each of the partners has a 50% stake in the new joint venture, AFL Dachser Pvt Ltd. The company employs 495 people in 30 locations and is based in Mumbai. AFL hived off part of its business to integrate it into the joint venture with Dachser. The members of the board are AFL chairman and managing director Guzder, AFL director Farukh Guzder, Dachser director Bernhard Simon, and Thomas Renter. Detlev Janik,
who previously served as global head of AFL Cargo, was named CEO of the joint venture. AFL continues to collaborate with its established partners in countries where Dachser has no subsidiaries of its own. However, in Great Britain, where Dachser has been active for many years, AFL will still continue to rely on Davis Turner as in the past. In Switzerland, AFL has switched from Natural (now called Agility) to Dachser. In China and Hong Kong, AFL also plans to change to Dachser, according to Guzder.
The subsidiaries in Canada and the USA were sold to Dachser (USA).
Will AFL take to the air?
Guzder sees splendid opportunities for growth for his company through the intensified collaboration with Dachser in all of its established areas of business (motor vehicles, consumer goods, electronics, mechanical engineering, telecommunications, energy, chemicals and pharmaceuticals, media, foods), but especially in project cargo and airfreight. There are rumors that Guzder is planning to found or participate in a cargo airline, but AFL will not comment on that topic. Guzder is known for his great interest in aviation. He was once a member of the board of directors of Air India, among other things. AFL's internal cargo

MAJOR MARKETS
OVERALL CAPABILITY
Phone Number: 965 809 222
Fax Number: 965 467 8953
Website Address: www.agilitylogistics.com
Market Area: Global

Agility Defense & Govenment Services
Essa Al Saleh President & CEO, Global Integrated Lo
Dan Mongeon President & CEO, Defense & Governm Hans Hickler COO, Asia
Ehab Aziz CFO
Total Net Logistics Revenue ($Millions): 2,176
Total Tractors:
Total Trucks:
Total Other:
Transportation Equipment: Owned
Warehouses/DC's: About 50/50
Ticker Symbol AGLTY
Exchange: KSE, DFM**
Overall Information Systems Rating: E (E=Excellent, G=Good, C=Capable/Adequate, and I=Inadequate)
Transportation Management System (TMS): Proprietary--MicroTransport, Oracle--OTM
ERP/Order Management System: Log-Net
Founding Business: Freight Forwarding

Total Annual Airfreight Metric Tons: 490,000
Auto mot ive Elemen ts Food , Groc eries Healthcare Indust rial
Retailing Technological

Hazardous Materials Temperature ControlledFood Grade/SterileBulk Commodities
ISO Certified Certification Locations: Multiple Locations
Other Services: Provides I.T. and customs services for the government of Kuwait.
INTERNATIONAL SERVICES & PRIMARY AREAS SERVED
Customs Brokerage
Services Rendered by Agili ty A sample of 3PL clients.
AAFES Military, Government US, Europe, Middle East
Aker So lut ion s ASA Engineering, Construct ion UK
Al-Nahd i Medi cal Medical Products & Equipment Saudi Arabia
Cadbury Adams Food Consumer Products US
Cemex Building Materials, Glass UK
Cookson Building Materials, Glass Europe
General Electric Diversified Financials Europe
Groupe Auchan Food & Drug Stores Bangladesh
Khafji Joint Operations Petroleum Refining Saudi Arabia
Lite-On IT Corp. Computer Peripherals Asia
Princess Cruises Entertainment US
Qatar Petroleum Petroleum Refining Qatar

AgilityCOUNTRIES with OFFICES Countries served through owned offices or exclusive agents
Afr ica/Middle East Asi a/Paci fic Aus tralia/New Zealand Euro pe Latin/South AmericaNorth America
Algeria
United States
Argen tin a Arub a Bolivia Brazil Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Honduras Jamaica Netherlands Antilles Nicaragua Panama Para ua Peru Puerto Rico Trinidad and Tobago Uruguay Venezuela
EDITOR'S COMMENTS
Agility is the new name for PWC Logistics following the integration of its different acquisitions. These include major international transportation manager GeoLogistics and several smaller 3PLs. Agility has expanded its highly profitable business dramatically over the last five years from its warehousing base in Kuwait. It is a Middle Eastern leader in integrated supply chain solutions and is organized into three major business groups. Global Integrated Logistics (GIL) is the largest generating approximately 65% of Agility’s revenues and having more than 23,000 employees. The majority of GIL’s revenues (just under 90%) are generated outside of the U.S. It has core competencies in freight forwarding, contract logistics/warehousing, project logistics, fairs & events, and supply chain management 3PL services. The Defense & Government Services (DGS) business group generated approximately 32% of Agility’s revenues and had a workforce of over 10,000 before 2010. It provides 3PL services tailored to governments, relief agencies and international institutions worldwide. These services include extensive warehousing and trucking operations in Kuwait to support U.S. Department of Defense distribution needs in the region. The final business unit is Investments which draws on local insights from Agility’s global network to identify real estate and private equity opportunities in Asia, Africa and the Middle East. Investments accounts for approximately 3% of Agility’s revenues and employs more than 2,000 people. Hans Hickler, previous employed at APL and DHL, is now COO of Asia and is expanding operations particularly in Southeast Asia and Vietnam.
Limited North American warehousing capabilities.
Provider's Weaknesses
CASES & NEWS

Agility Continues its Global Expansion [To view in full html format, follow this link: http://www.3plogistics.com/Agility_2-2009.htm] Atlanta, GA USA - Site Visit March 10, 2009 Key Personnel: Mokhtar Bazaraa, Senior Vice President Gultekin Kuyzu, Senior Manager Overview
In 1979 Agility began providing logistics services and with 2008 revenues of $7 billion and operations in over 100 countries, it has expanded rapidly to become a top-ten global supply chain manager. It has grown both organically and through acquisitions of U.S. based GeoLogistics and several smaller sized third-party logistics providers (3PLs). Agility focuses on offering customers supply chain solutions tailored to meet individual business needs through a global network of warehousing facilities and transportation management operations. As part of its growth strategy, Agility has adapted an “asset-right” business model, which means acquiring assets to meet specific customer and regional market logistics needs. Major Agility customers include: ABB, BP, Epson, General Electric, Halliburton, Nestle, Nike, Princess Cruise Lines, Shell Oil, Siemens, U.S. Department of Defense, and Wal-Mart. Agility is a publicly traded company organized into three major business groups. Global Integrated Logistics (GIL) is the largest with revenues of $4.5 billion and more than 23,000 employees. Over $4 billion of its revenues are generated outside of the U.S. GIL has core competencies in freight forwarding, contract logistics/warehousing, project logistics, fairs & events, and supply chain management 3PL services.
Agility’s annual freight forwarding volume tops 420,000 ocean trailer equivalent units (TEUs) and its airfreight volume is over 490,000 tons. Defense & Government Services (DGS) generates $2.2 billion in revenues for Agility and has a workforce of over 10,000. It provides 3PL
services tailored to governments, relief agencies and international institutions worldwide. These services include extensive warehousing and trucking operations in Kuwait to support U.S. Department of Defense distribution needs in the region. The final business unit is Investments which draws on local insights from Agility’s global network to identify real estate and private equity opportunities in Asia, Africa and the Middle East. Investments has revenues of $200 million and employs more than 2,000 people.
Agility focuses on developing 3PL business and solutions for three major internally defined sectors: Technology & Electronics, Retail and Regional Sectors. For the Technology & Electronics sector, Agility provides extensive airfreight forwarding services and manages many vendor managed inventory (VMI) hubs globally. It manages many retail distribution operations globally in the Middle East, Europe and Asia. To support regional operations, Agility is investing $130 million in India to develop increased warehousing and transportation capabilities. It has been one of the leading 3PLs in developing projects in higher-risk/higher-return regions of the world.
Supply Chain Solutions Group
Within the GIL business group is the Atlanta, GA U.S. based Supply Chain Solutions (SCS) group headed up by Senior Vice President Mokhtar “Mo” Bazaraa. Mo’s group supports Agility by providing process reengineering and supply chain modeling and optimization services to internal and external customers. Its services include developing solutions, designing efficient warehousing operations, and modeling, planning and implementing improved transportation management programs. Agility's Supply Chain Solutions team has designed warehousing operations for customers such as P&G in Egypt and Morocco and Kraft in Bahrain. It has also redesigned Agility’s own European ground transportation network, which manages over $500 million in transportation annually.
Case Study: SCS Leverages i2’s Transportation Modeler in Developing an Optimal Nigerian Operation
Background: Agility was engaged to redesign and operate a warehousing and transportation management operation for a Fortune 100 consumer goods manufacturer* in Nigeria, Africa. Current Operation: The current logistics operation includes transportation management of raw and packaged materials (RPM) from Lagos, Nigeria’s TinCan and Apapa ocean ports and from local Nigerian suppliers to the manufacturer’s warehouse in Nigeria. RPM is then shuttled to the manufacturer's plant and finished product (FP) is loaded and shipped to the warehouse for storage and distribution.
Traditionally all of the shipments were tendered as one-way truckloads from the port, warehouse, and to each distributor. The domestic over- the-road transportation process consists of three main components:
• Ocean containers full of RPM are moved from the port to the plant. • 20’ trucks or 40’ trailers full of RPM are moved from domestic suppliers to the plant (currently, this segment is the responsibility of suppliers and the transportation cost is included in the product pricing).
• 20’ trucks move FP from the plant to distributors (the manufacturer contracts with local trucking companies for this service).
Each of the above components is presently handled independently on a lane-by-lane basis. To gain efficiencies, domestic transportation needed to be managed as a network and routing and carrier selection must be optimized. SCS Modeling: There is greater variability in equipment types, road infrastructure, and pickup and delivery facilities in Nigeria versus developed Western countries. Using i2 Technologies Transportation Modeler (Tmod) software, Agility analyzed historical shipment data in light of these service and network constraints. From the i2 analysis, it identified network redesign and daily transportation optimization opportunities.
The basic modeling process was as follows:
i2 Tmod Analysis Inputs: • Inbound/outbound shipments to/from the central warehouse. • Business hours of warehouses, distributors, ports, suppliers. • Vehicle/container types & their load capacities. • Loading & unloading times at each location. • Driving distances and transit times between locations.
i2 Tmod Analysis Outputs: • Optimized assignment of shipments to routes:

o Multi-stop, roundtrip. o Optimized departure times. o Selected appropriate vehicle types. • Improved equipment utilization.
From the i2 analysis, Agility was able to identify over $1.6 million in annual transportation spend savings through daily transportation management and using a network-based transportation management approach versus the lane-by-lane approach. This represented a savings of over 20%. In addition, the overall carbon footprint of the customer will be dramatically reduced. The reengineered operation is being implemented by Agility over the next few months. Agility will be responsible for managing the dedicated central warehouse and all of the transportation from the plant, to and from the warehouse and local suppliers, and to distributors throughout Nigeria. It will be using Tmod to optimize routes and select carriers on a daily basis. "This operation will be the first to use dynamic multi-stop truckload optimization in Nigeria, which will further improve the supply chain efficiencies," says Mokhtar “Mo” Bazaraa. The combination of using advanced tools such as Tmod and field operations know-how is helping Agility to reduce costs, increase market share, enhance its speed to market, and replicate its operating model in emerging markets such as Nigeria.
Summary
Agility has made strong strides in growing and developing its global operations since starting its first warehousing operation in 1979. By leveraging tier-one systems such as i2’s Tmod software and focusing on developing optimized integrated supply chain management solutions, we anticipate that it will play increasingly strategic roles within its customer base.
*At the time of this report the logistics services agreement with the manufacturer was being finalized and therefore its name was not disclosed.
Agility battles headwinds [By Eric Kulisch and Eric Johnson, American Shipper, June 2010]
Logistics company distracted by fraud case as i t seeks to improve financial performance.
The U.S. government’s fraud case against Agility Logistics for its work as a military contractor has the company on its heels, but should not knock the company from its perch as one of the world’s top 10 providers of outsourced logistics services, according to industry observers and precedent. A grand jury indicted the Kuwait-based company for allegedly submitting inflated bills and false claims under a huge contract to procure and deliver food and grocery items to U.S. soldiers in the Middle East. Agility has also separately provided warehousing, distribution, heavy vehicle lift, fuel delivery and other logistics services to the U.S. military. The U.S. Justice Department began investigating Agility in 2007 after a whistle-blower lawsuit by a former business associate and cousin of Chairman and Managing Director Tarek Sultan. The U.S. government quickly suspended Agility from bidding on Defense and other contracts until the legal proceedings are concluded, but the company is allowed to complete the term of any existing contracts. Agility, which entered a plea of not guilty, is trying to settle the case out of court, but had not negotiated an agreement with the Justice Department as of mid-May. The Justice Department is also conducting an informal investigation into whether cost reimbursement requests under two separate contracts
were proper. The company has previously stated that its high food prices are the cost of operating in a war zone, and that pocketing instant discounts for markups from suppliers is a normal practice in the food industry and the Middle East — and allowed by its contracts. It has asked a court to rule on whether the Justice Department followed the law by serving notice of the indictment through a U.S. affiliate instead of the parent company itself. Opinions differ among analysts about the extent to which the fraud case will hurt Agility’s ability to retain existing customers and gain new ones. In reality, the commercial business is separate from the Defense & Government Services division and its growth more likely depends on
Agility’s ability to better serve shippers. Major Agility customers include BP, Epson, General Electric, Halliburton, Nestle, Nike, Princess Cruise Lines, Shell Oil, Siemens and Wal- Mart. Defense Angle. In April, the Defense Logistics Agency (DLA) awarded the prime food supply contract that Agility had been handling to
Anham, a Dubai-based conglomerate with ties to the United States. Anham is a contracting company created by the principals of the Saudi Arabia-based Arab Supply and Trading Co., Vienna, Va.-based HII-Finance Corp., and the Munir Sukhtian Group of Amman, Jordan. It operates in 20 countries. Two other bidders — Kuwait Global Link (a management consulting, investment, technology services and outsourcing firm), and Intermarkets Global (a Jordanian conglomerate with logistics holdings) — quickly protested Anham’s selection, potentially delaying for several months the transition to a new supplier. The Government Accountability Office, which handles such proceedings, has until Aug. 4 to rule on the protest. Agility, which offers freight forwarding, contract logistics, customs brokerage, transportation management, supply chain management and other services, has held the prime vendor food contract since 2003. Kuwait-based Public Warehousing Co., as Agility was known before it became a global third-party logistics provider, received more than $3 billion under the initial contract and followed it in 2006 with a second contract worth $8.5 billion over five years to provide food and dry goods to U.S. military forces. The contract is scheduled to expire in December. Agility was also bidding for the third contract when the Justice Department handed down its indictment in November, knocking it out of the race. Under the new contract, the winning vendor will provide food and support services to U.S. military personnel and other federally funded customers in Kuwait, Iraq and Jordan. The supplier is responsible for procuring and delivering everything from fresh fruits and vegetables to so- called Meals Ready to Eat (MREs) and other rations. The initial contract period is for 18 months, with the Defense Department holding four option periods to renew the contract for up to six years. The contract is estimated to be worth $2.1 billion to Anham, including options if exercised, with the maximum value of the contract ranging up to $6.4 billion. Anham spokeswoman Trish Wexler said Anham has completed a number of government contracts since its inception six years ago, and is involved in several more in the Middle East.

“(We have) successfully executed several major contracts, many of which (were done so) under exceptionally difficult conditions,” Wexler said. “Anham has not only completed 100 percent of its contract obligations, but has consistently done so on time and on budget.” Wexler said she was unsure whether any of Anham’s previous contracts involved the supply of food to U.S. troops, but Managing Director David Brauss told Reuters in late April that the company intends to build on the successful food supply bid, which is the biggest by dollar value in the company’s history. “We are bidding for 20 to 30 contracts with the U.S. government,” Brauss said. “We expect to win additional contracts there.” Brauss said Anham had been bidding for the food supply contract for two years and that the price tag may appear higher than it is, with the cost of food inflating the final bill. “Even though it is a very large contract it is somewhat overstated, and includes surges if more troops come in,” he said. Wexler refused to predict how the competitive landscape might change if Agility is prohibited from participating in government logistics contracts. “There are highly capable contractors in this arena, and the market is fiercely competitive. But what I can tell you is that we at Anham look forward to a continued partnership with the Department of Defense, and to meeting or exceeding their expectations — as well as those that we serve every day — on this contract,” she said. Meanwhile, a DLA official said the agency has for years been working to improve oversight of vendor conduct. “With respect to this particular food service contract, among the improvements are increased contract oversight and a price evaluation for every item available for delivery, rather than a representative sampling of items,” spokesman Dennis Gauci said. “Also, our subsistence supply chain has negotiated pricing agreements directly with food suppliers.” Aside from these developments, Gauci said DLA started to require invoices be submitted 100 percent of the time — in essence, asking for the bills to back up the costs. “The Defense Logistics Agency operates under the philosophy that American taxpayers shouldn’t pay a penny more for logistics services than is absolutely necessary,” Gauci said. “Over the past few years, we incorporated additional safeguards in our acquisitions to address
vulnerabilities exploited by contractor fraud. For example, DLA has completely separated product price from the fixed distribution price for its future prime vendor contracts and requires manufacturer invoices for 100 percent of products. We’ve also established a ‘Center of Excellence in Pricing’ and we do multiple reviews and audits of prime vendor contracts at regular intervals to ensure the integrity of the pricing process. “Moreover, we have a new financial system in place to include new software that doesn’t have the vulnerabilities found in the previous system. The system is designed to help us identify potential fraud activities.” Wexler said heightened scrutiny by the DLA is welcome. “Anham has received the highest evaluations and recommendations from both private and public institutions who cite the company’s ability to execute contracts consistently on time and within budget,” she said. Agility’s Defense & Government Services division has lost a significant number of opportunities to win business, beyond the food supply contract that went to Anham, because it has been unable to pursue new government contracts for the past six months. “Prolonged suspension could have a material impact on the group’s government-related business and may result in the associated assets being impaired,” Agility said in its 2009 annual report. Agility is also in a dispute with defense contractor DynCorp International, which dropped the 3PL from its team in December after winning a large task order last summer to provide logistics services to the Army in southern Afghanistan under the controversial LOGCAP program. The Logistics Civil Augmentation Program was originally awarded by the Bush administration as a sole-source contract to Halliburton subsidiary Kellogg Brown & Root to provide logistics services during the early days of the war in Iraq. DynCorp was one of three companies that the Army pre-qualified to bid for work in the latest version of the contract. Agility argues that government rules allow it to continue work under existing contracts. DynCorp said in July that the one-year deal was
worth $643.5 million. Agility has said four option years bring the total value of the contract to $5.9 billion. Agility was to receive 30 percent of the contract for airfield support. But, as Mark Twain might say, reports of Agility’s potential demise may be greatly exaggerated. Companies have been indicted for defrauding the U.S. government or violating other laws and continued to survive and thrive. The ability to rebound usually depends on whether the illegal activity was rampant or contained to a few bad apples, and how quickly the company implements stricter internal compliance policies and oversight. Since 2005, the top 10 defense contractors in the United States have settled 55 civil, criminal or administrative cases involving contract fraud, and environmental, ethics and labor violations, and have all resumed business with the U.S. government, according to a database maintained by the independent Project on Government Oversight. Agility, which received $2.1 billion from the U.S. government last year, has only one instance of misconduct since 1995 compared to 50 for Lockheed Martin, the world’s largest defense contractor. Agility’s attempt to settle the dispute suggests it is trying to ensure a path to reenter the government marketplace as quickly as possible. Even if Defense & Government Services is barred from U.S. government work for a while, it still has clients among non-governmental relief organizations and international agencies, as well as militaries in Europe and the Middle East. In the logistics sector, Swiss freight forwarder Panalpina has dealt with the fallout of being accused of providing bribes to government officials in Nigeria to secure preferential customs treatment without any noticeable defection of customers concerned about its long-term
viability or ethical practices. In late April, Panalpina said it had nearly completed a settlement agreement with U.S. authorities over alleged violations of the Foreign Corrupt Practices Act in Nigeria, Saudi Arabia and Kazakhstan, and had reserved $110.7 million to cover anticipated fines, penalties and legal expenses. Panalpina’s behavior in Nigeria is also under investigation by the European Commission. The company has taken steps to prevent future payments to foreign officials, such as instituting tighter internal controls, pulling out of Nigeria and restructuring operations in West Africa. Price-fixing scandals in recent years have also plagued dozens of air cargo carriers, air freight forwarders and U.S.-flag carriers such as Horizon Lines and Sea Star that provide coastal shipping to Puerto Rico and other locations. “If you’re doing a good job with commercial clients and you credibly communicate that something went sideways, we’ve corrected the situation and it won’t have an impact, you can survive,” said Brian Clancy, managing director for MergeGlobal, an Arlington, Va.-based company that provides strategic consulting for the transportation and logistics industries. “I think they’ll live to fight another day. This industry is very relationship oriented and if you’re doing business with someone who is doing a good job, you’ll probably continue to do business with them,” said Tom Connolly, a principal at transportation investment advisor Eve Partners. Agility’s misstep is more serious because it affects the company’s core business compared to Panalpina’s skirting of the rules in order to conduct business in some developing economies, logistics industry consultant Dick Armstrong insisted. “Everyone knows that Nigeria is corrupt. You know in Africa, to stay alive, you have to know who to pay off to get anything accomplished. One way or another, you’re going to have to take care of the local guys or you’re not going to do business. “Trying to do business in a place like Nigeria in the way you do it in Amsterdam is pretty tough,” said the head of Stoughton, Wis.-based

Armstrong & Associates. Agility’s problem is that its logistics contracts with the U.S. military were worth billions of dollars and fueled a significant acquisition spree that transformed the Kuwait-based warehousing company into a full-service, global logistics player. Now Agility is losing out on lucrative military business at a time when the commercial logistics operations are not performing well and taking up the earnings slack. Even without the legal challenges, Agility faces a decline in defense sales as the U.S. accelerates its troop withdrawal from Iraq and large government contracts, which accounts for 25 percent to 35 percent of Agility’s annual revenue, expire this year. Armstrong suggested that the black eye from the fraud case may not cost Agility existing customers, but could make it more difficult to win new ones. “The problems they had will hurt them in a lot of RFP (request for proposal) processes and its one more thing to overcome when trying to
win new business,” he said. Agility’s global integrated logistics division has also experienced a decline in revenues and many of the new acquisitions outside the Middle East haven’t produced revenue and profit growth as anticipated. In 2005, PWC began using proceeds from its military work to diversify into project and trade show logistics, infrastructure development and freight forwarding in North America, Europe and Asia, with a focus on emerging markets. The biggest acquisition was the $454 million investment in GeoLogistics, a troubled forwarder based in California that had an extensive network of offices around the world. The 3PL has about 35,000 employees in more than 550 offices and 120 countries, although the loss of some contracts in the Middle East has recently led to layoffs of some truck drivers and other hourly labor. Net income fell 52 percent to $61 million, with net revenue down 17 percent in the first quarter of 2010 from a year earlier. Defense & Government Services revenue fell 28 percent as falling U.S. volumes could not be supplemented with new revenue from Afghanistan or other parts of the world. Last year, Agility’s revenues fell 7.1 percent to 1.7 billion Kuwaiti dinars ($5.9 billion) primarily due to a drop in commercial freight volumes compared to 2008. Revenue was down 13 percent for the Global Integrated Logistics division. Net income increased 10.7 percent to $537 million. Profits previously declined for three years starting in 2006 even as revenues climbed, culminating with an 8 percent drop to $485.5 million in 2008. That fell short of Agility’s stated goal of achieving $8 billion in gross revenues and $800 million in net profit by 2008. The company picked up new contracts in 2009 with major customers such as Nokia and Mattel. It also acquired its Mexican forwarding partner Trafinsa S.A. and its U.S. affiliate, a Brazilian company to gain a Latin American presence. Sultan, the company’s top executive, recently said that the company’s goal this year is to grow organically, reduce costs and maximize yields on its core operations. He suggested the company “would need to assess all strategic options” for the Defense division if a settlement in the fraud case cannot be reached. “The focus now is more on execution and growth. The logistics business really has to perform and it’s a critical time for us,” Michael Bible, chief executive officer of Agility Americas Region, said in an interview. “We’ve made significant investments and the expectation is that we should produce a return on those investments. A much more significant contribution should be coming from commercial logistics,” he said. To that end the company has made several noteworthy hires, including former APL Logistics and DHL Express USA chief Hans Hickler in March to be CEO of the Asia-Pacific region. In the Americas, Bible appointed Michael Robinson as chief operating officer of the U.S. logistics operation in late 2008 and recently promoted him to CEO. Robinson brought on industry veteran Michael Gargaro from UPS Supply Chain Solutions to build up its non-vessel- operating common carrier business. Agility had a strong ocean wholesale operation in Asia, Europe and the Middle East — with about 600,000
TEUs of volume per year — but was still weak in the U.S. market. The group also added Michael Harradine as senior vice president to lead a more aggressive sales organization for the Americas. He was global account manager for Agili ty’s biggest customer, General Electric. Agility removed Mark Soubry as CEO of the Canadian unit in December and in May brought in Mario Cavallucci, the number two executive from Agility Europe. Bible said the move was made because the Canadian organization wasn’t performing well and had struggled with lost
volumes. Agility Americas has also lost several top executives during the past couple of years, including retail logistics leader Rosa Hakala, formerly of the Home Depot and now with Best Buy; Rich Anchan, global director of enterprise initiatives; and Massimo Columbo, the vice president of Latin American trade lanes, who recently left to join Panalpina. About 15 mid-level managers and two vice presidents were laid off this year as Agility collapsed its four operating regions in the United States down to two to better align the organization with business volumes and become more efficient, Bible said. The restructuring is expected to save about $2 million, most of it in personnel costs. Agility Americas has also added logistics operations staff in Miami and the Midwest because of new contracts and business with Brazil. Bible said he expects to hire more front-line sales and operations people this year. Another way the Americas region is trying to cut costs is by supporting shared services such as information technology and finance at the regional level to minimize the size of each country organization. That step is expected to save about $1.5 million, Bible said. “The North American organization has not met Agility’s expectations,” Bible admitted. “In 2008, we were on a pretty good growth curve, but lost some of our traction with the recession. Now, we have much stronger leadership. But we still have work to do. So we’re trying to accelerate the pace of growth to be a stronger help to the overall network” by bringing in more freight volumes.
Agility Wins Contract to Provide Khafji Joint Operations with 4PL Services [via website, June 1, 2010]
Logistics Leader accomplishes another success in the oil and gas sector
The Khafji Joint Operations (KJO) awarded a contract for fourth party logistics (4PL) warehousing and solutions in Al-Khafji, Saudi Arabia to Agility. The five year contract with a potential value of US$ 17 million was announced at a recent signing ceremony.
A partnership between Kuwait Gulf Oil Company (KGOC) and ARAMCO Gulf Operations Company (AGOC), the KJO conducts onshore and offshore activities related to exploration and drilling for Oil and Gas in the Divided Zone. With operations in both Saudi and Kuwait, KGOC represents the State of Kuwait in the Divided Zone and was established in an effort to improve cooperation for Oil and Gas development projects between Kuwait and Saudi Arabia. Over the 5 year span of the contract, Agility will provide all inclusive on-site warehousing management and operation services, including material receiving and handling services, as well as opening, inspecting, labeling, marking, bar coding, transferring, storing, issuing and transporting materials to users at different units within Khafji. Other types of services in this category include housekeeping of yards and
warehouses, documentation and inventory assistance, receipt of materials in addition to technical and administrative support services, material handling (containers loading and offloading, stuffing and de-stuffing).

Engineer Dakheel AI-Dakheel, Director of Business Development Department at Agility “This contract will allow KJO to concentrate on their core competency, which is oil exploration without having to invest time or efforts into reliable storage or transportation issues,” he added. Along with the deliverables mentioned in the contract, Agility will also provide KJO with other specialized services; inspection, site delivery, inventory management and reporting.
Ali Mikail, CEO, Agility Global Integrated Logistics (GIL), Kuwait highlighted, “In addit ion to our existing freight forwarding, customs clearance and complete 4PL support, we provide KJO with all the logistics services they require. With Agility's intensive presence in the region and our comprehensive portfolio of specialized services; we are well equipped to support the growing demands of the fast paced oil and gas sector in Saudi Arabia and Kuwait thus making us an ideal partner in this industry."
Agility is currently working with a number of prestigious local and international Oil & Gas companies and continues to drive its efforts to develop a growing presence in this sector.
A Dialogue with the Chairman on Agility’s Direction for 2010 [via website, May 16, 2010]
Tarek Sultan talks about first quarter earnings, impact of legal dispute, and company strategy
Historical Context: 2003 to 2009
Since 2003, Agility has developed a world-class commercial logistics business to complement its government contracting portfolio. That development has expanded Agility’s geographic footprint around the world, established our leading position in emerging markets, and added specialized capabilities to help us meet the needs of niche market segments.
Today, Agility’s commercial logistics arm, Global Integrated Logistics (GIL) operates in 120 countries and serves over 50,000 customers. Our operational platform is distinguished by its strength in high-growth emerging markets: China, India, and the rest of Asia; the GCC and the rest of the Middle East; Russia and Eastern Europe; and Latin America. And we offer specialized logistics solutions around Chemicals, Fuels, Fairs & Events, and Project Logistics.
We also have diversified our Defense & Government (DGS) business. Our focus has been on expanding our business with the US government in geographies outside of Kuwait and Iraq, as well as attracting other governments, international organizations, and non- governmental organizations as customers. Finally, we acquired a group of non-Agility branded companies working in the areas of industrial real estate management, aviation and ground handling, and customs modernization and e-government solutions, which are grouped together under
Agility Infrastructure. From modest roots in Kuwait, Agility became an acknowledged global top ten global logistics player. We bring global scope, flexibility, and
specialization of services to complex logistics challenges. We take pride in our commitment to personal service. Our customers consistently acknowledge that Agility goes above and beyond.
2009: Mastering a Challenging Year
The global financial crisis of late 2008 and the subsequent great recession of early 2009 tested the resilience of Agility and the logistics industry. Commercial freight volumes declined across the industry as international trade volumes contracted on a sustained basis for the first time since the 1930’s. Profit levels for nearly every logistics service provider were down substantially versus 2008 levels. Agility navigated this challenging year better than most logistics service providers. Net profit for 2009 was KD 156.4 million, up 10.6% over 2008 levels. This slight increase against such market conditions was due to several factors:
• Early adjustment of resource levels in the commercial logistics business, beginning in late 2008, as we saw the slow peak season as an early warning sign for a broader economic slowdown • Continued strong volumes through existing government contracts in Kuwait and Iraq, driven by sustained high troop levels • New revenue and profits from network expansion into Brazil, Mexico, as well as new government contracts outside the Middle East
2010: A Pivotal Year
We are aware that 2010 is a pivotal year for Agility because of the US troop drawdown in Iraq and subsequent phasing-out of some of our large government contracts. This year is the final option year for US government contracts that have historically contributed 25%-35% of Agility’ s annual revenue.
Although Agility anticipated and planned for the inevitable troop drawdown in Iraq, there are two additional, unplanned challenges that the company has also had to contend with in the last year.
• The first is the global recession that jolted the world at the end of 2008, along with the slower-than-expected recovery from that recession. The global slowdown has an ongoing impact on our Global Integrated Logistics (GIL) business.
• The second is the legal proceedings by the US government which led to the suspension on winning new government business. This has had a deep impact on our Defense & Government Services (DGS) business.
Together, these three challenges have created a changed financial landscape for Agility in the near-term. I want to explain our financial position today and, more importantly, our plans going forward.
First Quarter Results
Year-over-year comparison of profit levels going forward would be misleading, since Agility’s profits were up in 2009, in stark contrast to the dramatic declines in profitable for the rest of the industry. Going forward, Agility will measure current quarterly performance versus the previous quarter. This approach more accurately reflects the nature of business, in which large contracts ramp up over time and then decline as they reach the end of their contractual term.

Management focuses on net income and free cash flow. While we expect net income to decline in the near term, driven by the three challenges above, we plan to mitigate their impact through aggressive management of cash, and we expect free cash flow to be less severely impacted.
Our first quarter results are as follows:
• Revenues have declined by KD 67.7 million or 14.4% compared to Q4 2009. Our revenue in Q1 2010 is KD 403 million. To break these numbers down further:
o DGS’s revenues declined 28.8% in Q1 of 2010 to KD 131.7 mill ion compared to Q4 2009, mainly due to falling volumes in US government contracts as the troops withdraw from Iraq. As a result of the US government suspension on new business, the company was unable to supplement this anticipated revenue decline with new revenue growth in Afghanistan and other parts of the world.
o GIL revenue decreased by 5.8% or KD 17.4 million in Q1 of 2010 when compared to Q4 of 2009. GIL revenues now stand at KD 279.4 million. This is primarily due to typical seasonality witnessed in commercial logistics when comparing fourth quarter revenues to the current quarter. Nevertheless, underlying business in GIL has grown compared to Q1 2009. Revenues compared to Q1 2009 are 14% higher. o Agility Infrastructure companies contributed KD 20.8 million to total revenue, an increase of 22.7 % over Q4 of 2009. Agility Infrastructure has consistently shown healthy growth in the base business over the course of the last several years.
o However, net revenues for GIL have declined by 17.8% for Q1 of 2010 compared to Q4 of 2009. This is because carrier prices, which fell in the early days of the global f inancial crisis, have been steadily rising. This has put pressure on freight forwarding margins industry-wide.
• In combination, these factors have the following impact: o Operating profits are KD 18.9 million in Q1 of 2010, a 55.3% decline since Q4 of 2009. This decline is driven by the reduction in
volumes in the defense and government services business, and the pressure on GIL’s net revenue margins, as discussed above. o Cash from operations stands at KD 62 million in Q1 2010, a 33% increase over Q4 2009. Free cash flow for the quarter stands at KD
47 million, an increase of 404% over Q4 2009. o Net income is KD 17.6 million in Q1 2010, as compared to KD 40.8 million for Q4 2009. This results in Earnings Per Share of 17.5 fils
for this quarter, compared to an EPS of 40.6 fils in Q4 2009.
What this Means in the Near Term
Our investors, customers, employees, suppliers, and partners will want to know what these numbers mean and what they can expect from us in the near-term.
• Agility’s overall vision and strategy have not changed in the face of these challenges. However, we must adjust timelines and tactics. Realistically, 2010 will be a year of transition for the company. Agility is likely to face declining profitability over the course of the next four quarters, as a result of major US government contracts winding down in Iraq, recovery from the global recession, and the financial impact of the legal dispute with the US government.
• In order to reverse the decline in profitability, we will aim to grow revenue organically, accelerate realization of return on investment, reduce costs prudently, and maximize yields on core operating assets.
• While net income may decline over this period, we will focus on cash management throughout the business. We expect that free cash flow will be the key metric to guide us on the health of the business.
To give you additional information at the business-group level:
• The Defense & Government (DGS) business has been set back by the combination of the troop drawdown and the legal case with the US government. If the company is able to settle the dispute, then DGS will focus on aggressively rebuilding its business, reinvigorating business development and customer outreach. If we cannot reach a mutually-agreeable settlement, then we would need to assess all strategic options for the DGS business. For now, the situation is fluid and no decision has been made, but we have contingency plans in place. • The relative importance of the Global Integrated Logistics (GIL) business has grown in the face of uncertainty around DGS. GIL’s strategy remains the same, but timelines will be accelerated. GIL will continue to focus on growth, performance, and innovation. Growth strategies are centered around a tradelane development program and on growing business with global accounts. Performance strategies are focused on controlling overhead costs, maximizing returns on assets, and managing cash. Innovation strategies are centered on transforming our operations platform and investing in technological modernization which will lead to productivity improvements. In financial terms, there are some things you should know:
• Above all, we are committed to greater discipline. Already in the first quarter of 2010, operating expenses were KD 9 million lower than operating expenses in the fourth quarter of 2009. This is a result of our cost-containment efforts and initiatives to reduce overhead expenses. We
will continue to reduce our costs prudently. • Global Integrated Logistics (GIL) will strengthen its focus on managing working capital – we have already made significant investments in
building a global platform in the past, and we now seek to achieve “superior” returns on that investment.
Although we are facing challenges, I see them as a catalyst for change. I believe that with a commitment to discipline, Agility will emerge stronger, more flexible, and more competitive.
Agility loses DLA contract as legal wrangle continues [Air Cargo News, May 2010]
The US Defense Logistics Agency (DLA) has named a new contractor for food and beverage support to US forces in Iraq, Kuwait and Jordan. Dubai-based Anham is set to replace Agility as prime vendor by fall. Agility said it had been asked to continue providing services for six months to ensure an orderly and seamless transition as troops are redeployed and the new contractor beds in. The six-year contract for Anham could be worth up to $6.4 billion. The company was set up by Arab Supply and Trading Co, based in Saudi
Arabia, the Jordanian Munir Sukhtian Group, and HII-Finance Corp, a US-based investment group and international trade organization. Agility was indicted last November on charges of conspiracy and fraud while operating contracts worth $8.5 billion to supply food to US troops in the Middle East. The case is now in a federal court and if the company is found guilty of overcharging the Department of Defense, it

could face a substantial fine or be suspended from bidding for future contracts. One former supplier claimed Agility had profited by $60 million by overcharging for fruit and vegetables. The company is also cited for failing to pass on discounts it obtained from US suppliers. The company denies all allegations. It said in a statement it was continuing to discuss the issue with the US government but added: “There is no guarantee that the parties can reach a mutually agreeable settlement.” Agility’s Kuwait-based parent company and legal entity is Public Warehousing Co (PWC). PWC Logistics, already a key player in the Middle East warehousing and trucking market, bought GeoLogistics, Trans-Link Group and US-based Transoceanic Shipping in 2005 to cement its position as the region’s largest locally based logistics company.
PWC rebranded as Agility the following year and, in addition to its expanding commercial operations, became the major provider of logistics services to the US military in the Middle East. On April 12, the US Attorney’s office in Atlanta extended an indictment against The Public Warehousing Company KSC to two PWC subsidiaries, DGS Holdings and DGS KSCc. Agility said in a statement: “The decision by the US Attorney’s office in Atlanta is regrettable. The indictment contains no new allegations, and simply adds two PWC affiliates as defendants. This move serves only to taint PWC subsidiaries that have a strong record of on-the-job performance and compliance with US law and federal acquisition regulations.” The company is currently pursuing a technicality and claims the US Justice Department, in attempting to serve a summons on the indictment, failed to follow US law. Rather than serve PWC through proper diplomatic channels in Kuwait, the US government attempted to serve a US subsidiary of the company. Under the US Federal Rules of Criminal Procedure, a company cannot be served with process on an indictment through service to a subsidiary. In a further statement, the company said: “PWC’s work on the food contract has been timely, reliable and cost effective. Its performance, under the most dangerous and demanding conditions, has been unparalleled. The prices it charges have been negotiated with, agreed to, and continually approved by the US government, which has found PWC’s prices to be fair and reasonable.” The company added that it had a “strong, compelling legal case” and delayed the release of its 2009 financial results by a few days until April 11 in the ultimately futile hope of resolving the case out of court. Finally reporting the results, Tarek Sultan, chairman and MD, said: “2009 was a mixed year for Agility. The company was able to report solid operational profits, continue to grow its emerging market footprint, and attract a number of important new customers around the world. On the other hand, Agility is facing a number of challenges, including the slower than expected recovery from the global economic recession, the troop drawdown in Iraq, and the ongoing legal issues.” Agility saw 2009 revenues decline by 7 percent as a result of decreasing freight volumes in its Global Integrated Logistics (GIL) business. Staff cuts and other cost control measures helped ensure an increase of 5 percent in operating profit and an 11 percent improvement in net profit. No provision has been made for a legal settlement. GIL’s revenue fell by 13 percent despite contract wins including Nokia, Mattel, Formula One Management UK and Yas Marina Circuit. The division expanded its network in emerging markets through new facilities in Malaysia, Singapore and Saudi Arabia, and opened offices in Poland and Ukraine. Acquisitions were made in Brazil and Mexico, and Agility signed a memorandum of understanding with Qatari-based logistics company GWC to “merge operations cost and cash management initiatives to align local business levels with customer requirements”.
Agility’s government contracting business, Defense & Government Services, increased its revenues in 2009 by 4 percent. Sultan added: “It has been a tough year, for the global economy, for the logistics industry, and for Agility. Yet we have performed well in these challenging times. Agility is differentiated by a strong emerging market platform, specialized logistics capabilities, and complementary businesses that provide a competitive advantage as well as operating efficiencies. Our path forward will be focused on growing revenue organically, reducing our costs prudently, and maximizing yields on core operating assets.” Agility employs more than 32,000 but laid off 600 personnel in March and is expected to shed thousands more in the coming months.
Agility to pay $600m to settle fraud charges [Gulf News, April 10, 2010]
Reaches preliminary deal with the US government to clear sum over a three-year period
Kuwait: Kuwait's logistics firm Agility is to pay the US government $600 million (Dh2.3 billion) to settle fraud charges, an Arabic-language daily reported yesterday, citing unnamed sources. Agility and the US government reached a preliminary agreement and the sum would be paid over three years, Kuwait's Al Jarida newspaper said. The Kuwaiti firm, formerly known as Public Warehousing Co KSC, is in talks to resolve an indictment accusing it of overcharging the US
Army on supply contracts in Iraq, Kuwait and Jordan. The company has delayed the release of its financial results until tomorrow and requested a trading halt on its shares, pending clarity on talks. Al Jarida said the settlement will mean the return of US government business to Agility, but it was not clear yet if that would be in full or in part.
Settlement
It said the settlement could be announced "in a day or two." "It [the settlement]... could include some slight changes, especially regarding the return of all contracts or the majority of them," the paper said. Agility was not immediately available to comment. Kuwait has become a major logistics base for US forces since the 2003 American invasion of Iraq. Agility said on Tuesday it will postpone the release of its 2009 financial results until April 11 as it tried to reach a settlement with the US government on a fraud case. Agility is publicly listed on the Kuwait Stock Exchange and on the Dubai Financial Market with more than 15,000 investors holding shares.
The company has over 550 offices in 120 countries, with a growing presence in emerging markets. Its business groups comprise global integrated logistics, which serve commercial customers in technology, retail, chemicals, and a wide range of other industries, and infrastructure. These support the needs of the industrial real estate, customs optimization, and airline services industries, primarily in the Middle East,
Africa, and South Asia., and the defense and government services sector, which has been set up to provide logistic services to government and military agencies, relief organizations, and international institutions.

Agility has appointed Hans Hickler as chief executive officer of its Asia-Pacific region. Hickler joins Agility from DHL, where he was CEO for global customer solutions, based in the United States. He was responsible for leading the development and sale of customer services for all DHL business units including DHL supply chain, warehousing and distribution, forwarding and express products. Previously, Hickler served as CEO of DHL Express USA and earlier in his career was CEO of APL Logistics. He will be based in Hong Kong. Hickler replaces Wolfgang Hollermann, who will transition to a new role as advisor to Essa Al-Saleh, Global Integrated Logistics (GIL) president and CEO.

MAJOR MARKETS
OVERALL CAPABILITY
Company Name Aimar S.A.
Address: 1a. Avenida 10-87, Torre Viva, Zona 10, Guatemala City, Guatemala
Phone Number: (502) 2326-0400
Fax Number: (502) 2326-0401
Market Area: Central America

Oscar Robles Operations Mgr.
Jose Cruz Accounting Mgr.
Total Long-Term Contracts Held: 3
Average Length of Logistics Contract (Years): 1-2
Total Logistics Employees (Including Drivers): 350
Total Tractors:
Total Trucks:
Total Other:
Total Warehouses & Distribution Centers:
Exchange:**
Transportation Management System (TMS): Proprietary
Transportation Planning and Optimization:
ERP/Order Management System:
End-to-end Matching/Continuous Moves
Founding Business: Shipping Line Agency
Overall Capability of Provider: Capable customs broker/transportation manager with bonded warehousing thoughout Central America.

Total Annual Airfreight Metric Tons: 1,500
49Total Licensed Customs Brokers:
Elements Retailing Technological

Other Services:
Customs Brokerage
Services Rendered by Aimar A sample of 3PL clients.
APL Shipping
Panasonic Electronics, Electrical Equipment Guatemala
Telefónica Telecommunications Central America
Xerox Computers, Office Equipment Latin America

Aimar COUNTRIES with OFFICES Countries served through owned offices or exclusive agents
Afr ica/Middle East Asi a/Paci fic Aus tralia/New

Whos Who in Logisitcs International 2010

Documents