More than just public warehousing
Metro-Canada Logistics grew by offering paper companies transport, IT services

Hanif (Chico) Nangi, comes across as one of the nicest guys you'll ever meet. But if you want to change his smile into a more serious demeanor, just refer to Metro Canada Logistics as a public warehousing company.

"We are not in the real estate business," said Nanji, the company's president and sole owner. "We did get our start in public warehousing. But today, anyone can buy a building and rent it out. We do a lot more to add value."

Nanji would prefer to describe Metro Canada Logistics, as one of Canada's most successful suppliers of custom third-party logistics services, and the only one that has niche in the forest products industry.

True its 700 employees manage 35 facilities comprising about 7 million square feet of warehouse space. But the company also provides customers with in-bound and out-bound transportation booking, inventory management, custom brokerage and engineering services. Clients include grocery, consumer, and industrial products companies.

But most of its revenues, about 45 per cent, comes from the paper and newsprint industries, where Metro Canada Logistics' client list reads like a whose who, including Abitibi-Consolidated, Uni-Board Canada Inc., and Kruger Inc.

According to Guy Hébert, editor of Logistics Magazine, many Canadian businesses, including forest products companies have increasingly focusing on core operations outsourcing whenever they can.

As a result, "the third-party logistics industry has grown considerably. Many universities now offer specialized training in the field," said Hébert. "During the 1990s, companies mostly focused on public warehousing and transportation as the main outsourcing options. But they now offer a much wider range of services."

To better serve the paper industry, on January 16th Metro Canada Logistics opened a monster 650,000 square foot, $35 million logistics center in Concorde Ontario. The center will enable forest products companies to reduce rail transit times in the greater Toronto area by up to three days, by making it easier for them to transfer containers onto trucks.

Metro Canada Logistics teamed up with CN, to build the facility, located on the railway's MacMillan yards, in Vaughn Ontario. It is designed to serve as a transportation hub for Canadian forest products throughout Canada and the U.S.

The opening caps a huge period of expansion that began when Nanji bought the company from his father in 1988. Since then, the amount of warehouse space the organization manages has grown more than twenty-fold. Revenues have close to doubled in the last five years, to more than $85 million in 2001, and are projected to pass $100 million this year.

Much of the growth was internally generated, but the company did acquire a smaller competitor -- BWW Warehousing -- in Toronto last year, and is in the process of negotiating another deal.

Nanji attributes the company's success to its ability to integrate a variety of technologies into operations and its willingness to offer client's flexible terms. For example some of the warehouses Metro Canada Logistics manages are company owned, some are leased, and some are joint ventures.

But the real value added services are in computer operations, such as inventory and transportation management and optimization. As a result, the kinds of people Nanji tends to hire are increasingly well educated, and often include engineering and information technology professionals.

For a typical outsourcing assignment, Metro Canada Logistics engineers will go into a company, study its supply chain, determine the client's needs and plot the optimal warehouse locations. These can vary depending on the type and frequency of traffic, and the preferred shipping methods such as boat, truck, train or a combination.

Another key to Nanji's success is his company's tight internal controls. These enable Metro Canada Logistics employees to calculate with great precision the cost of each operation, such as loading and unloading, merchandise, paperwork and computer data-entry.

Despite the company's promising growth in the forest products industry, the sector is highly volatile, and Nanji has taken pains to stay diversified. Metro Canada Logistics also has a toehold, in the grocery products field, which now comprises 30 per cent of its business.

With all this success, you'd think that Nanji would want to take it a bit easy for awhile. So how about cashing in some chips by going public? "I'm not interested," said Nanji. "I'm only 41, and I have a lot of projects ahead of me."

 

Photo caption: Hanif (Chico) Nanji, has grown Metro Canada Logistics into one of the country's largest providers of third part logistics services, and the only one to build a niche in the forest products industry.

E-mail can be sent to Diekmeyer at: peter@peterdiekmeyer.com

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