Hellmann Perishable Logistics (HPL) is the first global multi-modal freight forwarder focused exclusively on the perishable goods sector. The company, headquartered in Bremen, Germany, has grown rapidly since its inception six years ago through partnerships with incumbent market leaders around the world.
Its latest working partnership with Berkshire-based Philpot’s was revealed in the Journal in January. Philpot’s is a specialist fresh produce packer and a leading raspberry producer.
With this new partnership the two companies together aim to offer a fully integrated logistics service to fresh produce and flower importers, from the country of origin through to delivery at retail depots and wholesale markets in the UK.
Philpot’s business development director Johnnie McMillan says: “We have recognised that significant synergy exists between HPL and ourselves. HPL operates a global freight network and UK perishable clearing and forwarding house. At Philpot’s we provide packhouse management expertise and specific product knowledge, as well as in-depth understanding of UK multiple retailers’ standards and expectations.”
McMillan believes that combining the skills and capabilities of the two companies puts both businesses in a stronger position. “We will be able to offer a fully integrated service from source to shelf. Many companies that have outsourced some or all of their logistics find that they are more able to focus on supplier development, marketing and innovation, which are core business and can be a source of competitive advantage. We anticipate that the trend of outsourcing will continue, particularly in light of what we can offer the market,” he says.
The vision of Christian Helms, HPL’s worldwide managing director, is to create a global HPL network through which any perishable product can be transported from any origin to any destination in the world, whether by air, sea or road. With 39 HPL offices in 19 countries around the world and the network still growing with astonishing pace, it seems his vision may become reality and Philpot’s will have an important role in developing the services at destination points in the HPL network. Commenting on the partnership with Philpot’s, Helms says: “We will now capitalise on the opportunity to extend our supply-chain model by combining the core local skills of two market leaders and as a result, create a door-to-door service which adds greater value to our customers.”
The HPL network is supported by a sophisticated bespoke software system, which will soon allow shippers to track and trace a consignment’s location around the clock from the origin to the retailer’s distribution centre. Customers are also able to access storage temperatures at HPL facilities on line. This is an important area to HPL as it is one of three founder members of the Cool Chain Association (CCA). The CCA is a non-profit making organisation set up at the beginning of 2003. It aims to set out a road map to improve global logistics standards for perishable and temperature sensitive products. Its recommendations are expected to improve temperature control within the supply chain, which in turn will benefit product shelf-life.
One of the CCA’s underlying philosophies is a better understanding of the needs and criteria of successful cool chain management. It also hopes to bring benefits from sharing ideas and industry technology, besides partnership possibilities with other members.
In the UK, HPL partnered with Kensington Freight five years ago and the company has a significant share in both sea and air freight handling and clearance. Colin Wells, managing director of HPL UK, says: “Our product is differentiated from the competition in that we are the only multi-modal service provider across air, sea and road and these can be linked to deliver a least-cost logistics solution. In addition, we offer a choice of carrier rather than being locked into one. However, we also have critical freight mass which gives us significant global freight buying power where we need it.”
It is hoped that HPL’s operational partnership with Philpot’s will be long and fruitful, capitalising on the expertise available within both organisations. Philpot’s has been delivering quality assurance, labelling and packing services to large and small importers serving the multiple retailers throughout its 10-year history.
Its founder and managing director Simon Philpot, has been successful in this competitive industry by delivering a high quality and competitively priced service. He has built a skilled management team to meet ever increasing technical standards including accreditation to the standards of BRC (Higher Level), Soil Association and ETI. Philpot believes his company’s role in the imported produce sector is becomingly increasingly important. He says: “There has always been a need for the services we provide from importers lacking their own facilities, or expanding businesses with lack of capacity but we believe that the ongoing rationalisation will result in growing demand for outsourcing of packing services. There was a time when a company’s packhouse could differentiate it from competitors but businesses cannot afford to build new facilities to accommodate new business. Competitive advantage lies in procurement expertise, innovation in new product development and excellence in marketing, not in packhouse bricks and mortar.”
The technical expertise in the company is clear to see. Philpot has a degree in mechanical engineering with agriculture, while operations director Angus Douglas-Hamilton holds a degree in environmental biology and has held a number of senior management positions in international farming enterprises. He has managed Philpot’s business operations for the last five years and is experienced in managing the complexities of imported freight operations and the implementation of relevant industry technical standards. McMillan, also qualified in agriculture, has eight years of international fresh produce experience. Six of these years were with Vegpro in Kenya, where as general manager, he was responsible for the financial performance and business development of the company’s premium and prepared vegetable export divisions. He complemented his management experience through the completion of an MBA in Sydney, Australia, last year and returned to the UK to the fresh produce industry six months ago. He feels that the partnership with HPL can provide a host of opportunities. McMillan says: “Together, we are able to offer a fully integrated supply-chain solution to the perishable sector with one company accountability from origin to retail depot. Our packing services extend the HPL supply-chain and it is intended that this model will be rolled out across the HPL global network where customer needs are identified. This is a powerful proposition.
“The relationship with HPL increases the scope of Philpot’s business. HPL could have bought the skills it required but there would still have been a steep learning curve which Philpot’s has already been through. This business is too competitive for costly mistakes and retailers do not forgive easily. We believe in the synergy between both companies and that opportunities will present themselves across Europe and further afield.”
Philpot’s has also seen the rise in IT standards in the industry. McMillan explains: “An important element to our business now and in the future is IT systems. We have recently committed to deploying Affinitus software throughout our business operations. The Affinitus Freshware package is perfect for our packhouse operations because it is user friendly and able to cope with complexity in conversion from arrival formats to different outloading formats while keeping full traceability intact. Customers will benefit from online booking of anticipated consignments and access to real-time stock positions, quality control reports and in depth reporting on product usage and key performance indicators.”
McMillan also believes the entrepreneurial style of HPL is a good fit for Philpot’s. “The development of the HPL group through partnerships with existing market leaders has created a dynamic senior management team who are all entrepreneurs in their own right. This gives the business tremendous drive and we are excited to work with such an enthusiastic team that are striving to set new standards in perishable logistics,” he says.
Fruit Logistica presented an ideal opportunity to pitch the ideas of the partnership. McMillan says: “It was of course invaluable in ascertaining potential customers and the response from industry players in the UK and Europe has been very encouraging. It was also great to meet HPL management from around the world and strengthen our relationships.”
HPL has invited Philpot’s to work with them on an exciting new project in Europe. McMillan adds: “Provided un-met industry needs are identified, we will have the opportunity to develop our services within a planned perishable centre that HPL are in the process of developing at a major European airport. Christian Helms is driving the project with the airport management which is expected to be completed by the beginning of 2006.”
The partnership is likely to present many more opportunities. Wells feels that the arrangement with Philpot’s is strategically important. He says: “Philpot’s technical expertise and packhouse management skills enable us to improve the HPL customer value proposition and further our point of difference against our competitors. We are looking forward to implementing the strategy and to stripping cost out of the supply-chain wherever we can.”
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