UTi Worldwide believes its targeted cost savings of $75 million to $95 million are “highly achievable,” as it can control them regardless of freight market activity, according to Stifel Transportation & Logistics Research Group, which hosted the non-asset-based supply chain management company’s senior-level team in a series of investor meetings.
Stifel said the next six months will be “critical” for UTi, as the company boosts its roughly 10 percent of global forwarding transactions on its new OneView system to 70 percent on the new system, creating potential for the cost savings in the next 12 months.
According to UTi, the air freight market is “bouncing along the bottom,” Stifel said, as volumes are no longer worsening, but also not improving by more than just single digits year-over-year. As for UTi’s ocean freight, it is improving “slowly” at about 3 to 4 percent, according to the company. However, the contract logistics and distribution segment at UTi has suffered from poor country concentration and the recent loss of a couple of large customers, although it is seeing more opportunity in China.
Overall, UTi sees South Africa is a significant region for the company, as it contributes 20 percent of revenue and a higher proportion of operating income. The Europe, Middle East and North Africa area, which had been the most profitable region a couple of years ago, is now the least profitable.
Separately, UTi has named Ditlev Blicher as president of Asia-Pacific. Blicher succeeds Brian Dangerfield, who assumed the role in 2010.
Most recently, Blicher was executive vice president of group operations for CEVA Logistics, where he was responsible for implementing the firm’s global freight forwarding transformation to standardized processes and systems. Before that, he spent almost 10 years in Shanghai as executive vice president of North Asia, overseeing China, Hong Kong, Taiwan, South Korea and Japan, as well as several joint ventures.