In its 50th anniversary year, Schenker has grown into a coast-to-coast force, with revenues of $1 billion and 1,700 employees at 40-plus sites, spanning all major harbours, airports and border crossings. Its Mississauga presence alone includes the company head office and 10 sites in total.
That’s a big change from 1958 when Schenker of Canada was incorporated with a staff of three, offering ocean, air, and customs services. And while its first president Dieter Moeller had been sent by Schenker (Hamburg) to set up an export business (to help bring German products into the True North), today Schenker Canada offers the full portfolio: supply chain management services, including contract warehousing/distribution, ocean freight, air freight, land transportation, and customs brokerage and consulting.
“We tend to mix and match elements of those products to suit your tastes,” says Executive Vice-president and Chief Operating Officer Claude Germain.
Their business is driven by a core of about 300 customers, including many Fortune 500 firms. About 60 per cent is done internationally, and 40 per cent within North America.
Germain notes that with the global market and the advent of “offshoring” of products over the past decade, “distribution and logistics have never been as important to many people as they are today.”
“Folks are realizing the sheer power of focusing on supply chain management as a source of differentiation,” he says. “In this kind of market, people like us, because we’re global and have a very strong purchasing power and operating efficiency, tend to do well.”
More than anything, he attributes its success to the culture within the company.
“Clients are changing to start with, they’re way more sophisticated. And with that came a change in our industry,” he says. “The key to staying on top of an industry, which is not asset-based, is people. The ability for us to attract and retain the best in the industry is critically important.”
“We try to find a balance between entrepreneurship and operating efficiency. We have to be fairly decentralized, and that attracts a lot of go-getters.”
“It’s finding the top people and spending a lot of time on the recruiting side. I’m interviewing all the time,” he says. “Why not? My job is to put the right people in the right place.”
Being fast on your feet is a prerequisite.
“It’s definitely a knowledge and information-based business. Information is critical to us,” he expounds. “If it’s late we need to know that, so instead of putting it on rail, we can put it on a plane. You’ve always got to be on top of the shipment.”
“It’s a fast-paced business. That’s what makes it addictive for so many employees.”
Germain himself has been a logistics specialist for the past 15 years. An MBA from Harvard Business School, he was CEO and co-founder of both Cube Route (an on-demand software firm focusing on last mile logistics), and Grocery Gateway (named Canada’s Top Logistics Company in 2002), president of the operating division of PEP International Logistics, and a management consultant for The Boston Consulting Groupwhich specializes in distribution.
“I jumped at the opportunity to be a company manager with Schenker,” he says. “It has been like the BMW of the business. It offers a really, really quality service, it’s well-known [within the industry] and it’s all class.”
“We’ve got global reach, we offer every conceivable product, we have the best people in the industry.”
But while his company generally keeps a low profile – working behind the scenes for its customers – Schenker of Canada has just put its name out for a good cause, embarking on a nationwide food drive, working with food banks across the country. During this campaign that ran from June 16 through July 4, food collection bins were placed in all 40 Schenker sites. The company is hoping for support from its employees, customers, and suppliers.
“Since our inception, our organization has become an integral part of various communities across Canada, and in honour of our corporate milestone, we feel this is just one of the ways we can give back,” Germain says.
“Canada is a great nation with a wealth of resources. No one should go hungry.”
He says the impact of the high currency rate, huge fuel costs, and economic slowdown in eastern Canada and the U.S. have forced his firm to, “be particularly diligent and tough-minded on operating discipline, and focusing on value.”
“The biggest concern we have going forward is inflation – the whole notion of having a stagnant economy, with inflation,” he comments. “I wouldn’t be surprised to see interest rates start to go up.”
He notes with gas prices escalating across the board, and the cost of shipping an ocean liner from China to Canada having doubled over the last five years, “we’re trying very hard to offset that with greater efficiencies.”
“We’ve got to make sure we minimize service errors and disruptions for our clients, just redoubling our efforts to improve service,” he continues. “And to hold our employees accountable for service -- on time delivery percentage, full rate, picking errors. You’ve got to put everything under a microscope.”
A boon for Schenker of Canada was its April 1, 2007 acquisition of the Mississauga-based BAX Global which “improved our purchasing power and added a lot of sites to Canada.” The two companies merged in several countries across the globe.
“It really improved our overnight product delivery. They had very good people in Overnight. It offered an expedited heavyweight domestic capability,” he says. “That delivery overnight is something new for us. Customers appreciate that.”
