Christian Salvesen

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Question:
Why use logistics rather than transport to describe your business?

Answer:
Transport implies trucks and trailers whereas Logistics involves the total control of the supply chain: so it is everything from raw materials to finished goods and the coordination of all the processes involved. It also involves a lot more brains and technology than the basics of operating a truck. That is why logistics is a truer definition.

Question:
What is the edge that you have over the competition?

Answer:
I believe the edge falls into a number of categories. The first is that we are specialists in operations where we combine clients’ products together within vehicles. This optimizes the service the clients can get and also optimizes the utilization of the asset. We apply the same logic to our warehousing operations as well where we share the space inside warehouses. The second advantage we have is the IT systems that are in place and capable of driving that process. This requires complex IT for clients products to be merged and then demerged. Finally we have the management expertise that allows us to control our operations with key indicators that our competitors do not have.

Question:
Is there any significant difference between the nature of the business in the UK and in Europe?

Answer:
We do not believe there are in essence. We have people fool themselves that there are – there are certainly cultural differences. But the same business model works here as on the Continent. The only difference is that you deliver with some degree of local adjustment. So people sell business in a different way. But filling assets is filling assets it does not matter where you are.

Question:
Would it be better for you if Britain joined the single currency?

Answer:
I think it does not make any difference whatsoever in terms of how we do our business. But if you look at investment levels in Britain they are ten times the external levels in France or Germany. Clearly those who invest in Britain feel that membership of the single currency is that urgent. On a personal level I am against the single currency on the basis that Britain’s economy operates to a different rhythm to the Germans, French or Dutch. But I think that we should be active in creating a free market economy.

Question:
Where is the main focus of the business?

Answer:
We have said that we are going to focus the business on Europe and the logic behind that is that first of all if we were to replicate our market share in the UK we would already be a business with sales of £3bn. So there is lots of room for us to grow our market share. The second side is that the EU has in principle agreed to 12 new member states to join and they will increase the population from 350 million to 500 million – twice the size of the USA. If we were to replicate our market share in an enlarged EC our sales would be nearer £5bn. So this would give us 4 / 5 times the growth potential and that will keep us sufficiently interested for the foreseeable future.

Question:
I.T. is very expensive – have you completed the upgrade of your systems and is this a drain on resources?

Answer:
I would not describe it as a drain. We have about 100 people in our I.T. department and spend around £10m a year on it. We have four core systems that have been developed in-house, which are constantly being upgraded. They form the backbone of what we are doing and are being rolled out elsewhere. In relative terms we are more cost efficient in the provision of our I.T. than other people. All of those elements of what we do have resulted in the fact that we have a margin of between 6 and 6.5 percent, which is significantly higher than any of our competitors.

Question:
What has been the effect of the economic slowdown on your business?

Answer:
We were actually among the first to identify the slowdown back in October 1999. Because we move goods we are best placed to fell the effects of any slowdown. It originated in the industrial area and will translate itself into the rest of the economy at some point. We have not been affected by the September 11th events – unless that causes a huge slowdown in the US that will affect everyone. We just reflect what is going on in an economy and transportation moves what is produced or consumed. If they slowdown it is reflected in transportation. We should be more attractive because unlike the e-commerce model, for instance, we produce profits and cash. Cash is king in this environment and therefore our cash performance is very strong indeed.