Last week GlobalTranz (GTZ), a top 10 third-party logistics (3PL) and transportation management system (TMS) provider in North America, announced that it appointed Eric Kirchner to its Board of Directors. From 2009 to 2014, Kirchner was the chief executive of UTi Worldwide Inc. (UTIW), a global asset-light supply chain management company with 21,000 employees, operations in 59 countries and $4.5 billion in annual revenue. Danish transport and logistics company DSV bought UTIW for $1.35B in 2015.
Last summer, private equity firm The Jordan Company acquired GlobalTranz; since then, former CEO Bob Farrell transitioned to executive chairman of the company, while CFO Renee Krug moved to the CEO role. FreightWaves spoke to Kirchner by telephone.
“I had a relationship both with The Jordan Company and subsequently with GlobalTranz, and as we got to know each other, it was obvious that it would be a good fit,” Kirchner said. Kirchner pointed to the recent progress in growth GlobalTranz has made – seven acquisitions since 2017 took GlobalTranz north of $1.5B in revenue – and said that he wanted to help GTZ scale its software business.
“2019 will be yet another year of strong growth for GlobalTranz,” Krug said in a statement. “Having someone of Eric’s caliber on our board improves our ability to create strategies that keep us on top of the market. I am thrilled to have Eric join our board.”
“There are strategic considerations revolving around adding additional scale to the company as a multi-modal TMS provider to the industry,” Kirchner said, “and also taking a look at where we might extend capabilities into other areas, or additional modes.”
Kirchner said that GTZ’s technology, built by a team of 140 dedicated developers, provides a base that allows the company to extend more aggressively into different types of transactions, potentially including freight forwarding. He also anticipated a changing landscape for mergers and acquisitions in 2019 driven by monetary policy.
“As credit becomes more restrictive and interest rates go up, these factors will likely change the multiples you see across the board,” Kirchner explained. “The value of any individual acquisition has to be considered on its own merit based on how it can help the company. Is there a strategic advantage that is different for GTZ than a competing bidder?”
Still, Kirchner said that quality technology companies should be able to continue to differentiate themselves in the market.
“[Companies can differentiate] if you have the right technology and a compelling message to take to market and add organic growth – you want to be a company of choice,” Kirchner said.
Kirchner also spoke about current freight markets. “I saw that in November, air freight did not grow for the first time in 31 months,” Kirchner said. “Big swings in demand affect how capacity is utilized and play havoc with the asset-based carriers.”
Economists and industry observers seem to expect a freight slowdown or sectoral recession in 2019. Kirchner said that a volatile demand climate would “put a premium on flexibility.”
Kirchner concluded by saying, “I believe in GlobalTranz and feel positively about where it’s headed. The commitment, the passion, and the energy that’s there is exciting. There’s a bright future for the company, and so much addressable market.”