Supply chain deals: Brambles acquires LeanLogistics for $45 million
Jeff Berman, Senior Editor -- Logistics Management, 3/4/2008
SYDNEY, Australia and HOLLAND, Mich.—Global support services provider Brambles, announced today that CHEP, its business unit focusing on pallet and container pooling services, has acquired LeanLogistics for $45 million.
The transaction is expected to be completed by this Friday, March 7.
Based in Holland, Michigan, LeanLogistics, is a supply chain software technology vendor that provides Web-based transportation management systems (TMS) for more than 40 major corporations, 4,000 carriers, and 20,000 users, and 2,000 suppliers, processing more than 70,000 shipments per week and $4 billion in annual transportation expenses.
CHEP Senior Vice President, Marketing Brian Beattie told LM in an interview that this acquisition made sense for the company on several levels. Beattie said that Brambles/CHEP worked with LeanLogistics on getting this acquisition locked in for several months.
“We see an opportunity to leverage cross customer supply chain data, which CHEP captures from its pooling business, to help customers reduce transportation costs,” said Beattie in an interview. “We will be working closely with the LeanLogistics team to test the services offer [for shippers] and then roll out further once we validate the savings.”
LeanLogistics President and CEO Dan Dershem noted that leveraging this data will result in services that customers will be able to take advantage of to drive supply chain efficiencies. And a Brambles statement said that this synergy will also help customers reduce transportation costs and operate more efficiently overall.
Other notable benefits, according to Brambles/CHEP, include: enhancing CHEP’s customer service offering in the U.S., the ability to optimize transportation routes; and reducing empty transport miles by leveraging CHEP’s supply chain movement database and LeanLogistics’s technological platform.
“We have cross customer data and a service offer which we concept tested with our customers where we received positive encouragement,” said CHEP’s Beattie. “We needed supply chain experts with a robust TMS to help execute for our customers. The customer vision and expertise at LeanLogistics, is the perfect match. We combine the power of two networks which we see as a powerful catalyst to help our customers and carriers become more productive.”
Beattie also commented that shippers will see transportation cost savings by matching customer loads. The companies will jointly help create continuous moves for carriers, ultimately making them more productive. And he explained that this new service will provide shippers with carbon footprint advantages by reducing empty miles.
Lean’s Dershem added that this pairing is a good fit in light of current market conditions, especially diesel gasoline prices, which the United States Energy Information Administration reported hit a record $3.658 cents per gallon today.
“As diesel prices rise, all parties to the shipment face the need to improve efficiency to offset the cost increases,” said Dershem. “A key source of efficiency may come from managing the overall process more efficiently with information. There are an extremely small number of sources with the critical mass of these data. The combination of Chep and LeanLogistics creates the largest, most viable source of this information.”
LeanLogistics will operate as a division of CHEP, and the company will remain in Holland, Michigan.
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