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The
client had grown its business from being a Western European
freight forwarder of bulk fluid to offering its customers
(principally large chemical firms) a worldwide service. Company
procedures had not been appropriate for this expansion, and
utilisation had plummeted. The client company had lost money
for eight years, progressively hiring more containers long
term from its parent, who asked Collingwood to take over the
logistics and financial sides of the business.
The
most important changes made by Collingwood were:
Control
of the tank fleet. Collingwood developed a bespoke system
to control the worldwide tank fleet.
Improve
utilisation by collecting demurrage revenues. Demurrage revenues
were increased tenfold due to improved control.
Controlled
reporting from the agency network. Collingwood established
formal worldwide reporting from all agents around the world.
Changed
commercial strategy. Pegging hire rates to the utilisation
of sending and receiving tank areas increased both utilisation
and revenue hire rates.
As
a result of these changes, the client showed its first profit
in almost a decade, and the business grew to $24 million in
two years, largely self-financed. $1 million additional revenue
was collected on demurrage per year.
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