We see, and hear, more and more that the project freight forwarders industry is changing. Changes are good and should always be welcomed with open arms, but what are these changes and where does the project freight forwarding industry go to?
We have been talking to Mr. Wieland Risse, Executive Vice President Business Development for XELLZ Operations who has been talking to shippers regarding these changes. To find out the details we asked Risse a few questions.
Is Project Freight Forwarding changing and how do you see this?
Yes, there is a change in the industry and after a year on the road for XELLZ I can confirm that there are many customers and or cargo owners out there who are for a number of reasons looking for changes. Sometimes it is a pure internal resource issue, or traditional project freight forwarders do not fit into the established procurement and operational processes anymore. These are just two examples of what we learned while talking with our customers.
So, explain how XELLZ is dealing with this?
XELLZ is a Project Logistics Management company. With many years of experience in the global project logistics business, we decided that the traditional relationships between customers and project freight forwarders needed to be changed and adapted into today’s time. We have also noticed that the number of global operating EPC companies and major manufacturers has reduced their internal logistics resources following a number of tough years in their industry.
This is where XELLZ comes in, as an internal resource adding project logistics functions to our customers. Together with their logistics, supply chain and project teams and our project logistics managers, our online IT system, in combination with our processes building the ideal project logistics setup, ensuring 100% transparency, 100% cost and operational control for our customers. This leads to at least 25% costs savings on the overall project logistics costs.
How are you different compared to project freight forwarders?
We do recognize that projects change all the time, so traditional RFQ and pricing models are mostly transaction-based models that hardly take the constant changes into consideration. Almost from day one, these models create commercial conflicts that do not benefit from the project. Our new remuneration agreements eliminate these conflicts so that the whole project team can focus on getting the job done jointly within budget and project timeframe.
What is the particular benefit for the cargo owners?
Shippers (cargo owners) who have had to reduce their in-house logistics resources during the slow economic years can now depend on us, as part of their in-house team to get the job done and when there is no more work they do not have the cost of the resource anymore. In slack seasons this saves costs, but we will still be there when a project starts, doing the necessary groundwork and being paid once the material starts to move. This again saves costs.
The biggest benefit for the customer, however, is the fact that we eliminate the commercial conflicts so that all parties can focus on getting the job done.
What is your experience after one year with XELLZ, selling this innovative and disruptive concept?
As XELLZ we have made inroads with numerous major EPC companies and global manufacturers. We are managing projects and are moving cargo through our operational XELLZ units. I have to admit however that the first year has been harder than I thought. XELLZ offers a great product and yet we have noticed that our customers do “love” their established procurement processes and the huge loads of legal contracts that go with it. I would have thought that a new process, reducing administrative workload, cutting duplication of work, would be easier to sell, however, we are on the right track and are moving forward.
What is XELLZ’s plan for the future
At this point, we do have our own offices in the Netherlands, Ireland and the United States. We are extending our network to Singapore and of course, Germany is in the making as well. We will make the official announcement about these new offices in the near future. We are excited about these new offices in our network and are working very hard to expand into Africa, India, the Fareast as well as South America. We can then offer our customers our innovative products in their time-zone at their convenience.
The contact details of XELLZ are:
