East Coast Seafood Group, one of North America’s largest lobster wholesalers and exporters, on Wednesday confirmed that it has sold Canada’s largest freight forwarding operations, Worldwide Perishables, to Kuehne + Nagel, the world’s second-largest freightforwarder.
The Topsfield, Massachusetts-based seafood company asserts that the deal will have “no impact” on its existing logistics operations in the US.
It’s a story of the big getting even bigger.
Kuehne + Nagel, a nearly 130-year-old transportation company, based in Switzerland, already handles 1.6 million metric tons of air cargo and 4.4m ocean TEUs (20-foot equivalent units) per year, according to an article published late last year by Logistic Management using data provided by the consulting firm Armstrong & Associates. Forbes identifies the over-the-counter traded firm (ticker symbol: KHNGF) as having a market capitalization of $21.2 billion and being the world’s 838th largest company.
The only freight forwarder that’s larger is Germany’s DHL Supply Chain & Global Forwarding, according to Logistics Management.
Now Kuehne + Nagel can also boast a significant presence in Canada. The combined volume of both companies will account for more than 17,000t of air export of perishables in the country per year, according to a press release. For Canadian seafood companies, this means “Kuehne + Nagel can now offer its customers an extended service offering”, the Swiss freight forwarding giant said in a press release.
Neither Kuehne + Nagel nor East Coast Seafood have yet to identify how much was paid for WWP.
It was Michael Tourkistas, the founder and CEO of East Coast, and Doug McRae, with Canadian Gold Seafood, a division of East Coast, that started WWP in Halifax, Nova Scotia, in 1999. Canadian Gold was then a 2.3m pound per year lobster wholesaler and exporting company that needed to overcome transportation challenges, McRae explained to Undercurrent News during an interview at his Halifax office almost a year ago. It was driving live lobsters and other seafood 15 hours to an airport in New York City.
Today, WWP, which employs seven and relies on perishable seafood as 100% of its cargo, is the Canadian lobster industry’s most relied upon agency for getting its product into a multitude of Asian countries. Demand in China for lobsters alone has grown from about 10t per week roughly seven years ago to roughly 500t, McRae told Undercurrent earlier.
WWP relies on airports in Halifax, Montreal (Quebec), Toronto (Ontario), Boston (Massachusetts), New York (New York), Miami (Florida) and Philadelphia (Pennsylvania) to name a few, McRae noted at the time.
Put simply, “Worldwide is a travel agent for seafood,” he said.
Tourkistas has since left East Coast Seafood and described his role with the company to Undercurrent on Wednesday as that of a consultant. East Coast is now one of the projects being held by Forum Capital, a Jacksonville, Florida-based investment group.
US freightforwarding operation, Halifax terminal not part of deal
One thing that will not be part of the deal, according to East Coast Seafood, is the US freight forwarding operation.
“The sale has no impact on the company’s existing logistics operations in the U.S.,” East Coast stressed in the statement sent to Undercurrent. “Worldwide Perishables Enterprises, in Chelsea, Massachusetts will remain a separate but wholly owned subsidiary of East Coast, with a the new state-of-the art facility offering 40,285 square feet of combined cooler and freezer space.”
It added: “Worldwide Perishables Enterprises is located minutes away from Logan airport and will continue to offer land, air and ocean logistics services worldwide.”
Another thing that will not be part of the acquisition of WWP is the cargo terminal started by McRae and Tourkistas in Halifax, three miles from the city’s Stanfield International Airport, sources confirmed to Undercurrent.
WWP put together the deal to create the Gateway Facilities Cargo in 2007 and opened it in 2010 with 19,800 square feet of cargo build space and an additional 7,000 square foot cooler, capable of holding 100,000 lbs of lobster. The terminal, which employs 50 and accommodates 747 freighters along with 757 and 767 aircraft, continues to undergo enhancements.
In 2017, Gateway reports to have moved 14.7m metric tons of cargo, much of it lobster headed for overseas markets, the company notes on its web site. Its cargo clients include Korean Air, Qatar Airways Cargo, Condor, Iceland Air, British Airways, WestJet, Air Canada, Air Transat, CargoJet, ATLAS and DHL.
Unlike the US cities of Boston and New York, Halifax’s commercial airport didn’t have the volume of flights needed to handle the growing demand for lobster in Asia, in particular, McRae told Undercurrent in the earlier interview.
‘Perishables logistics is one of our strongest growth drivers…’
Still, Kuehne + Nagel are excited to have bolstered their presence in North America. According to its press release, the combined company now maintains the industry’s largest perishables network worldwide.
“Perishables logistics is one of our strongest growth drivers at Kuehne + Nagel,” said Greg Martin, Kuehne + Nagel North America’s regional airfreight manager. “Thus, we have been continuously investing in the expansion of our dedicated network: through selected acquisitions and by connecting key production countries to major markets.”
Jamie Wood, Kuehne + Nagel Canada’s national manager, added: “Acquiring a specialized player in seafood logistics, Kuehne + Nagel consolidates its leading position in the market. Using the network and experience of both companies, our customers can benefit from an enhanced offering and the best possible solution to their needs.”
“We are looking forward to joining the Kuehne + Nagel Group. Combining the strengths of both companies, we will add outstanding value in the regional and international perishables business. For both, our customers and our employees this will generate growing perspectives and services,” said McRae, now identified as WWP’s chief operating officer.