The rebranding of NYK Logistics as Yusen Logistics is an opportunity to create some excitement, says UK chief executive Ian Veitch. But as Christopher Walton reports, a business is more than just a name
On 17 April a new logistics operator will be born in the UK: Yusen Logistics. To be fair it is not an entirely new operator, it is the new name for NYK Logistics. The change was instigated in February 2010 at a corporate level in Japan through the merger of freight forwarder Yusen Sea and Air and NYK, with the rebranding rolling out across its global subsidiaries over the next 18 months.
The merger of Yusen Sea and Air's freight forwarding operations in the UK in the previously existing NYK Logistics creates a business with a turnover of about £220m a year (the Yusen contribution is circa £15m-18m). In the MT Top 100, NYK Logistics (UK) posted revenue of £196.9m, but made a pre-tax loss of £10.9m for the year-ending 31 March 2010.
Yusen will employ 2,100 people in the UK across 29 operating sites, with 3.5 million ft² of warehousing space, 400 vehicles and 600 trailers. It might be only a name change, but it is across a large business that affects some of the world's largest companies.
Ian Veitch, chief executive at Yusen Logistics UK, says the rebranding exercise gives the company an opportunity to create some excitement. Part of that excitement, once the name change goes live officially, will coincide with two particularly large contract wins (MT was unable to reveal them as it went to press), but the emphasis is on communicating the name change.
"Certainly in the UK the previous brand name was UCI Logistics; we were only NYK for four or five years," says Veitch. "The logistics business means we are similar to some competitors so we need to ensure the market understands what we are doing. We see this as being more of an opportunity than being lots of work."
Veitch is practical enough to understand that a logistics business is more than just a name. "There is the view that if you cannot do the day job right, then it does not really matter what spin you put on it."
Part of getting the day job right is meeting a wide variety of core customer needs. The old NYK (and the new Yusen) is heavily involved in pharmaceuticals (generally recession proof, but time critical in delivery); consumer electronics (slightly more exposed to the recession) and automotive (which has suffered in the recession but offers value-add opportunities in a complex supply chain).
"This year has been measurably better than the last," says Veitch, insisting that his major concern is in the property arena. "If you are taking out a 15 to 25 year lease for warehousing and you are selling that against three to five year contracts that means a lot of exposure."
Yusen, and by proxy Veitch, is not in the business of sweating property assets. It has entered into sale and leaseback arrangements on some of its sites, and offers more value-add services, such as port-centric logistics for Samsung's white goods operations, as well as a cross-dock facility at Heathrow.
Other multi-modal operators of similar size and scope might also offer such solutions, but Veitch's target is to do it well.
At the beginning of March, rival firm Kuehne + Nagel acquired RH Freight, and trumpeted that the deal would propel it into the top three suppliers of overland logistics routes into Europe. K+N also aims to be in the top three suppliers in every market it serves.
Yusen says it has its own targets, but it depends what it is benchmarking itself against. Its top target is to have double-digit growth and he believes such an approach is more relevant to a customer's perception of its logistics supplier.
"Our world standing [the combined company is forecasting revenues of 500bn yen globally] is much higher than our individual standing - we are obviously part of a global company and our benchmark is global revenue. We find ourselves at different levels in different environments. There is no point in being number one if you are not offering a service that is good. We will not go for growth at the expense of quality," says Veitch.
