NNR Global Logistics Continues its International Expansion
Los Angeles, CA USA Site Visit
October 9, 2014
By
Evan Armstrong
Key Personnel:
Shinji Kitamura – Managing Director/CEO
Masahiko Gotoh – Executive Officer
Ravi Dosanjh – Director Global Sales
John Berry – Director Global IT
Yuji Hiya – Director & Managing Executive Officer
Terry Matsuda – Los Angeles Branch Manager
NNR Global Logistics Overview
NNR Global Logistics is part of the $4.4 billion Nishitetsu Group headquartered in Fukuoka, Japan. Nishitetsu grew out of Nishi-Nippon Railroad, one of 16 private Japanese railroads, and is made up of a wide array of companies in multiple industries from Bus and Taxi Services to Leisure and Hospitality. Over 40% of its revenues come from third-party logistics (3PL) activities marketed under the NNR Global Logistics brand.
NNR Global Logistics’ service offering emphasizes international transportation management with integrated value-added warehousing and distribution capabilities. In 2013, it generated gross revenue of $1.7 billion and estimated net revenue of $450 million. NNR Global’s staff of over 4,750 manages operations in 55 countries on six continents.
It was the first IATA (International Air Transport Association) licensed international air freight forwarder in Japan. With 2013 freight forwarding volumes of 252,068 metric air freight tons and 120,137 ocean freight TEUs, we rank NNR Global as the 20th largest global freight forwarder and 18th largest global air freight forwarder. NNR Global’s container freight station (CFS) and warehousing network is comprised of 91 facilities totaling 22 million square feet of space.
NNR Global has grown within an established continuous improvement culture. It has international management teams focused on key operating and performance metrics rolled up into global quality standards. It believes in employee empowerment and engineered operations process management.
Strategically, NNR Global targets customers in the Aerospace, Automotive, Chemicals, Consumer, Healthcare, High Tech, and Telecommunications industries. Its 3PL customers include ASML, Citizen, Eastman Kodak, IMAX, and Motorola. NNR Global is in the middle of a planned network expansion focused on increasing its global operating network and the overall revenue portions derived from ocean freight forwarding, and value-added warehousing and distribution activities.
To support its operations, NNR Global has built a proprietary international transportation management and warehouse management system dubbed “PowerNet” and an add-on application “Videre” for advanced purchase order management and supply chain business intelligence. It has adopted Manhattan’s SCALE WMS (warehouse management system) for customer operations requiring higher-level WMS functionality.
PowerNet offers NNR Global’s customers order and shipment visibility information via custom online portals. Customers can search shipments by:
- Bill Number / Partial Bill Number
- Booking Number / Partial Booking Number
- Master Bill Number / Partial Master Bill Number
- Customer Reference Numbers / Partial Customer Reference Numbers
- Shipper & Consignee Name / Partial Shipper & Consignee Name
- Departure & Arrival Airport / Port Codes
- By Date or Date Range
- Pieces and Weight or Pieces and Weight by Range
There is also functionality to monitor and report on inventory in the NNR Global network and to support VMI (vendor managed inventory) programs.
NNR Global Logistics USA and LAX Logistics Center
In 1972, NNR Global Logistics established its U.S. operating entity NNR Global Logistics USA Inc with headquarters in Chicago. Its U.S. operations have grown substantially and in 2013 represented 21% of total company gross revenues. Air freight forwarding represents 65% of its domestic revenue, followed by ocean freight forwarding at 15%, customs brokerage with 11%, value-added warehousing at 7%, and domestic transportation management and IT solutions making up the remainder.
In the U.S., NNR Global holds both domestic air freight (IATA) and ocean freight forwarding/NVOCC licenses. NNR Global has grown its domestic operating network to 19 locations in the U.S. with a staff of over 450. It manages 540,000 square feet of warehouse space and has eight TAPA (Transported Asset Protection Association) certified U.S. locations:
Albuquerque, Los Angeles, Miami, New York, Phoenix, Portland, San Francisco, and Seattle. NNR Global Logistics utilizes its Atlanta, Chicago, Los Angeles, New York (JFK), and MIA operations as freight forwarding container freight station (CFS) gateways.
On a recent visit to L.A., we had the opportunity to visit NNR Global’s LAX logistics center. Located in Carson, California just 15 minutes from the port of Long Beach and Los Angeles airport, NNR Global Logistics’ LA Logistics Center (LAX) provides customers with international transportation management and value-added warehousing and distribution services. LAX supports 25 primary customers with a transportation management/customs brokerage staff of six and a warehouse staff of 10. It’s a C-TPAT, ISO 9001:2008, and TAPA “A” certified operation.
The LAX warehouse has 84,000 square feet of space with 13 dock doors, 33 foot high ceilings and a cadre of CCTV security cameras. It has a fenced off 5,500 square foot CFS operation for import/export shipment deconsolidation/consolidation and customs clearance, and 5,000 square feet of bonded/foreign trade zone (FTZ) space. Forty percent of the warehouse is racked to support better cube utilization and longer-term storage.
For international transportation management, LAX processes customs entries for over 1,000 air freight shipments and manages approximately 1,000 metric tons of air freight forwarding activity per month. Its ocean freight forwarding volume is over 425,000 kilos per month and approximately 155 import house bills. Approximately 60% of the ocean imports managed by LAX are from China.
Outside of the LA Logistics Center
CFS warehouse operation
Shipping and receiving area
Below is a detailed list of LAX’s service offering.
LAX customs brokerage operations provide the following services:
- Air and ocean import management
- Customs entries (local and remote filings)
- ISF (10+2 Importer Security Filing) with U.S. Customs and Border Protection
- Duty draw back processing
- Full container drayage from port
- Container devanning and transloading
- CFS handling of air freight pallets (ULDs) and ocean containers
- Domestic transportation management
- Bonded transfer of goods to the U.S./Mexico border
- Bonded warehousing and distribution
Air and ocean export services are as follows:
- Regular consolidation service to major destinations
- Screening of air shipments according to TSA regulations (CCSF-Certified Cargo Screening Facility)
- Full pallet x-ray scanning for shipments loaded in passenger aircraft
- Air pallet/ULD building
- Full container vanning
- Container drayage to port
- AES (Automated Export System) filing capability
Value-added warehousing and distribution services at LAX include:
- Storage – 1,500 pallet positions of capacity
- Pick/pack order fulfillment
- Product repacking
- Inventory management and cycle counting
- Bonded and FTZ storage
- Labeling, barcoding, and other value-added services
NNR Global Logistics Operations Summary
NNR Global is strategically growing it global and U.S. operating network and has developed high-quality, integrated international transportation management and value-added warehousing and distribution capabilities. Its continuous improvement culture and overall skill set make it a natural partner for companies with international transportation management and warehousing needs. NNR Global’s LAX Logistics Center provides a good example of its overall supply chain management capabilities.
Sources: A&A Primary Research, http://www.nnrglobal.com/