The strength of our operating plan and our competitive network advantages leaves the future looking bright for our automotive portfolio
Sales and Marketing is set to grow our topline revenue. Armed with CP’s precision scheduled service, shorter transit times in key lanes and a vast network of transportation logistics solutions, there has never been a better moment to go out and sell CP. Beyond our reliable service, achieving our growth goals requires innovative solutions and a commitment to strengthening our relationships. With that sentiment in mind, Maria Saratsiotis, Director Sales Merchandise, reopened the lines of communication with a former CP customer, Glovis Canada Inc., Setting in motion dialogue that would lead to a $46 million contract and a creative Logistics solution that fosters growth for both companies.
Rebuilding a relationship
Glovis, a third party logistics provider for Hyundai and KIA Motors, moves large volumes of vehicles into the Port of Vancouver for distribution across North America. Fall 2016 marked the last time our companies did business together.
“We both had reasons for walking away,” said Maria. “The previous challenge we had working with Glovis is they operate using a push model.”
A push model describes auto manufacturers who assemble large volumes of inventory and ship them to auto compounds where they wait to be sold by dealerships. In most cases it leads to high dwell and capacity issues at the compounds.
“What this basically does is limit our ability to grow with other customers,” said Maria. “When we sit on large volumes of product, it reduces our capacity and affects our ability to effectively serve our other customers.”
By January 2017, when Maria stepped into her role as Director Sales Automotive & Merchandise, she began reaching out to Glovis in an effort to better understand its challenges and needs. By April, when Glovis approached CP with an idea to ease their continued service issues, we were prepared to listen and offer an alternative solution.
Understanding the Challenge
Having difficulty fitting its products and rail transportation needs in the existing footprint of its service provider’s compounds, Glovis understood that its future would require innovative and well integrated auto compounds with rail access to effectively sustain its business.
“CP was willing to think outside the box in order to address our needs,” said Arnold Kingu, National Manager, Vehicle Operations at Hyundai Glovis. “And in the process, build infrastructure to sustain our long-term plans.”
Glovis came into the discussion having already scouted possible locations, however Maria knew CP could offer more attractive locations closer to the key Toronto and Montréal markets that would have full and seamless access to CP’s rail network. So she took the idea and ran with it, knowing that the right offsite solution would benefit both parties for years to come.
Working with several departments, including Real Estate, Eastern Operations and Engineering, Industrial Development, Marketing and Legal, Maria and her team focused on a few CP properties that had potential and examined everything from an operating perspective. How would these locations be served? What would the operating plan look like? How much capital would both parties need to invest?
“We really appreciate how Maria and her team worked with us to understand our needs and provide a true solution for our challenges.” – Arnold Kingu, National Manager, Vehicle Operations at Hyundai Glovis
“We had a very tight timeline to put this all together,” said Maria. “From our first talks to getting the contract signed, was only five months. We put together comprehensive proposals for each location, got buy-in from senior management at CP and Glovis liked what we brought to the table.”
Selling a solution
In the end, two locations were chosen to support Glovis’ volumes, including one at Wolverton, Ontario and another located in Quebec. For Arnold, working with CP and building the solution together was a refreshing experience.
“CP provided an innovative and forward-looking solution to some of the challenges we were experiencing,” said Arnold. “It would be easy for a rail provider to try to take advantage of our situation by charging us incredibly high storage rates but CP really stepped up, partnered with us on a solution and provided us with quality service.”
Starting this year, CP’s Ayr yard has begun to receive 10 percent of Glovis’ business, a total of 20,000 vehicle identification numbers (VIN) per year. In 2020, when their existing contract expires, CP will carry 100 percent of Glovis’ volumes in Canada. That’s 200,000 VINs, roughly 17,000 carloads and approximately $46 million in revenue.
“We really appreciate how Maria and her team worked with us to understand our needs and provide a true solution for our challenges,” said Arnold. “A solution that is mutually beneficial and ensures we are growing our business together.”
Considered the largest automotive win for CP in the last several years, the Glovis contract sets the foundation for Sales and Marketing to build upon, showcasing CP is serious about its automotive line of business and will continue pursuing growth in this space.
Recently appointed managing director of sales and marketing international/automotive, Jordan Kajfasz sees Glovis as the tip of the iceberg when it comes to opportunities for growth in this sector and has his team focused on rebuilding relationships and examining where opportunities, like the Glovis solution, exist.
“In 2018, we are focused on a combination of going out and selling our service, but also looking at what more we can do and where we can invest to really make an impact,” said Jordan. “We want to leverage existing assets and optimize them for future growth.” Fresh off a day-long strategy session, Jordan and his team are ramping things up for several contracts that will be up for bid in 2018.
“We are going to continue to strengthen our relationships with these customers,” said Jordan. “We can’t just walk into a meeting and give them a good rate and tell them our service is great. We have to build meaningful relationships, ensure they understand the new CP and most importantly, trust us.”
Using our Foundations as a guide, Sales and Marketing is building off this latest win and laying the groundwork today to be successful in 2018 and beyond. They are going one step further when selling our service and actively building relationships with customers, new and old, to provide lasting solutions for their transportation needs. This, combined with the strength of our operating plan and our competitive network advantages, leaves the future looking bright for our automotive portfolio.