How to build a world-class, third-party logistics business

According to Jozef Opdeweegh, who has been the CEO of three successful global logistics companies, there are 7 core factors that will determine the success of a third-party logistics business.

1. Customer centricity
At the heart of a successful logistics business is a deep understanding of the needs of the customer and an unwavering commitment to address those needs. Inexplicably, many third-party logistics providers appear to be inwardly focused, without the ability to truly empathize with their customers’ requirements. They lack the natural reflex to think outside the box to bring their customers innovative solutions that will allow them to create a distinctive competitive edge.

2. Quality of operations
At its core, a third-party logistics business is tasked with delivering the right part to the right location at the right point in time, while minimizing any product-damage. Key focal points to fulfill the core mission include:

  • Qualified and well-trained personnel
  • Stringent error-proofing techniques
  • Embedded quality control systems
  • Real-time inventory visibility throughout the supply chain
  • Laser focus on continuous improvement
  • Six Sigma with lean manufacturing

3. Turn-key solutions
Customers increasingly want a provider that can successfully handle any type of end-to-end, specialized value-added logistics services. It is essential for a third-party logistics provider to master a vast array of supply chain optimization tasks, while not being too constrained in its service offerings. A provider should ideally develop the know-how to serve all of its customers’ supply chain needs. These run the gamut from the mundane to the very complex, from straightforward full truckload transportation to complex integrated warehousing and product transformation, as well as much more sophisticated, multi-modal solutions.

By providing the customer with a proven, turn-key solution, a logistics provider will greatly simplify the task of the customer’s purchasing community, which will be able to source with one partner, rather than having to piecemeal different facets. This eliminates the problem of ill-delineated boundaries between different providers
and the inevitable finger-pointing in case of quality issues.

4. De-commoditized service offering
The landscape of logistics companies is very competitive with a direct correlation between the complexity of the task and the number of market participants.
In order to differentiate itself from competitors, a logistics provider should focus on services that are complex and mission-critical to the success of its customers. It is important to crawl up the value chain and embrace complex value chain challenges.

By being a reliable provider that embraces challenges few others will touch, a logistics company puts up barriers to entry, increases switching costs, and enhances the stickiness of the customer base. This is not a suggestion to solely focus on the very sophisticated, but rather to make those mission-critical tasks the heart of an integrated service offering.

5. Pricing
The ability of a logistics provider to master integrated and sophisticated supply chain optimization results in a micro environment with a smaller group of competitors. This should lead to the negotiation of more favorable contractual terms and more attractive margin potential. From the perspective of the logistics provider, the key elements to focus on during contract negotiations are the following:

      • Clarity on scope of service.
        Have a very detailed description of the service offering to minimize future questions about what is inside or outside the contract scope.
      • Duration of the contract
        Longer contract terms provide a sustainable cash-flow profile and allow the logistics provider to invest in innovative technology to better support the customer demands with a long-term view.
      • Protection against fixed costs

    Build in protection, either in the form of a non-volume related reimbursement for fixed costs, or a variable reimbursement per relevant unit of measurement that increases if the handled volume decreases.

  • Performance indicators that are clear and measurable
    Relevant KPIs are customer dependent but would include: (1) number of errors, expressed as a fraction of the number of opportunities to make an error (short, over, damaged), (2) on-time delivery, (3) truck turnaround time, (4) labor efficiency and more.

6. Information technology
In order to effectively run a logistics organization, it is paramount that the company has real-time global inventory visibility to know exactly where different SKUs are stocked. A global logistics company may handle and aggregate millions of SKUs in its warehouses. Without providing access to real-time inventory information, a third-party logistics company cannot satisfy the demands of its discerning customers. Equally, it will not be able to provide meaningful reporting on the KPIs that are relevant to the customer and that have been agreed to in the service contract.

7. Agility
A successful logistics business can swiftly adapt to changing customer needs, rush orders, seasonal demand, and related peaks in volume. Maintaining the requisite agility requires the provider’s back office to be versatile and capable, yet nimble. By virtue of their business model, third-party logistics businesses manage geographically dispersed warehouses, so it is critical to develop a standardized operating system to guarantee a consistent customer experience across the network. Hand in glove with this is the need to build a fully scalable support infrastructure that can be adjusted up and down based on volume requirements.



About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.


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Jozef Opdeweegh- Why Autocratic Leadership Should be a Thing of the Past

In the HR departments of companies, big and small, the importance of value-based leadership, diversity, inclusiveness and openness is being touted as core to the success of the company and its main asset, its people. Similarly, headhunters sell their services and their candidates with an emphasis on the soft, human side of the management talent they suggest to their clients for leadership positions. Undeniably, this is the right approach to recruitment, talent development and human resources management.

Why then is there such a large gap between theory and practice? Why do shareholders and boards condone authoritarian, Machiavellian leadership to attain their goals? Why do CEOs often engage in behavior that no book about leadership would ever propagate? Why does society view so many politicians as strong, determined leaders, when these politicians in fact lack the capability of self-censorship or empathy, and are probably woefully insufficient for the job at hand?

An autocratic and self-centered person, who views contrasting opinions as a threat rather than embracing them, is a weak and insecure leader who will never attain the full potential of the company and its people. Strong leaders excel at showing empathy, listening, being self-critical and having the ability to change their opinion based on well-founded arguments. They embrace opposing views and are not fearful of showing their human and vulnerable side. They seek diversity in their teams to supplement their own strengths and neutralize their weaknesses. They are humble and understand that they are there by grace of the team who works with them, rather than the other way around.

Everybody’s opinion matters.

Companies spend inordinate amounts of energy and money on attracting and developing talent. The cost of a talent acquisition and development team is significant. The money spent on headhunters and leadership training can be equally large. Unfortunately, the valuable insights and creative perspectives of many of the talented people being recruited and groomed will never see the light of day. A considerable number of them will end up working in a hierarchy that simply does not value their opinion. Is there a purpose to surrounding yourself with talented people, only to then disregard their point of view? Every single soul in an organization has something to add to its success, whether janitor or executive. Modern, value-based leadership creates an environment that entices all of its associates to share their views. It then takes those views into consideration and includes them in decision-making.

Admit when you are wrong.

All of us make mistakes; oftentimes we are convinced we’re moving in the right direction, despite having made decisions in isolation, either in impulse or without full consideration of the facts. A respected leader is capable of publicly changing his or her opinion based on well-founded arguments, which are encouraged in the inclusive and creative environment the leader has helped foster.

Don’t fear your weaknesses, you are human.

When you stand in front of an audience of your co-workers, few things are more endearing than your ability to show your human side. While you may be the last one in the room to come to the realization, you are no superhuman and everybody knows that. What’s more, you are likely not the smartest or most talented person in that room. You are a valuable and integral part of a team, as are your co-workers. So, it is okay to show your weaknesses, to give testimony to mistakes you have made in the past, to talk about insecurities, or to solicit input and help. It will make you look stronger and more approachable.

Embrace diversity, different is good.

So often in corporate life, those involved in recruiting will focus on a very narrow subset of available talent. Shareholders, boards, CEOs and headhunters will tend to look for clones of what is proven and tested: comparable educational background, in-sector job experience, stereotypical personality profiles. Rather than creating an intellectually challenging environment where professionals can learn from one another’s different cultural, ethnical, professional or educational background, these companies cultivate their narrow definition of talent. The most successful companies and the best leaders do not define talent narrowly or even individually; they strive to compose a team of complementary, yet diverse professionals.

Never be a bully.

The ultimate sign of weakness in a leader is lack of containment. Raising your voice, losing your patience, pounding tables? You just lost the battle. Your associates deserve your respect. They deserve a calm and composed leader, who always puts the interest of the company and the associates before self-interest.

About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.


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Jozef Opdeweegh and Leadership- What Makes a CEO Successful

No two business leaders or executives boast the same leadership style. Because circumstances always vary, there is no correct, one-size-fits-all way to lead. Nevertheless, there are certain traits excellent leaders share. Not only do these traits drive the company forward, they also foster admiration among employees.


Jozef Opdeweegh, known as Jos, has served for over 17 years as CEO of public and private companies in global technology, distribution, and supply chain optimization. Opdeweegh has extensive experience leading different groups of people and teams of varying size in multiple industries.

His long career as a leader has provided him with intimate knowledge of the traits a good executive should display. These traits or attributes are not only crucial for the success of the company, but also to assure employees are inspired and empowered by the CEO.  Such an environment results in positive growth.

Opdeweegh has outlined 5 traits that make for a successful CEO, and he has included observations from former employees.

1. Makes Decisions Decisively

CEOs, like most leaders, must make numerous daily decisions, both large and small. A great leader can make tough decisions and take accountability for subsequent consequences. According to the Pew Research Center, “Intelligence and decisiveness are considered ‘absolutely essential’ leadership qualities by at least 8-in-10 adults.” The same study goes on to note how men and women both agree that being honest, intelligent, organized and decisive are also integral qualities. The capacity to make decisions, especially tough ones, is seen by employees as a trait of a strong leader.


2. Engages People

The ability to engage people is an imperative trait for a CEO, and it is one well-recognized by people who have worked with Opdeweegh. Former employee Tim Oglesby says,

“One of the key things you need in a leader is the ability to be engaging. Jos is very engaging with people in various roles. It could be the associate driving a forklift in the warehouse, all the way to the top including team leaders, the executive team, shareholders, and potential investors. Jos is able to engage a broad team and get everyone on the same page, moving forward in the same direction.”
Oglesby has worked with Jos in different capacities for over 10 years. He first worked with Jos at Syncreon as CIO, at Americold as CIO, and then at Neovia as CTO. At each company, Jos presided as CEO.

3. Puts Employees First

Typically, when thinking about the hierarchy of an organization, the CEO is at the top, followed by the management team, and then come the rest of the employees. Opdeweegh focuses on flipping that pyramid upside down and putting employees at the top. Doing so puts more emphasis on employees who have direct contact with customers. Putting employees first also makes for a better communication flow. Not only does this leadership style empower employees, but according to former employee Carey Falcone, it can create a completely different environment.

“When you flip that pyramid upside down, it starts to seed a different culture. Jos truly created an environment where people were focused on a common goal but not limited by the traditional way of getting there. He encouraged people to think outside the box and to speak up. Jos fostered an environment where everyone started to think about how they could drive the business forward,” says Falcone.

Carey Falcone was recruited by Jos to come work with him at Americold. He credits Jos’s leadership style and the culture Jos created as key things that attracted him to the role and working relationship. Falcone served as the EVP and Chief Customer Officer at Americold for over two years. When Jos left to become CEO of Neovia, Falcone went with him and worked as the EVP and Chief Commercial Officer for three years.

4. Communicates Clearly

Leaders and CEOs must have excellent communication skills. They have to be able to communicate clearly and effectively, not only to their management team, but also to the broader organization. A study by Navalent found that “top executives are consistently transparent and balanced in their communication. They effectively translate their view of business potential and challenges, as well as expectations for action using succinct, direct and readily understandable language in doses that are easily digestible. They devote time to their connections.” Communication is invaluable in the world of business, especially between a CEO and his or her team.

5. Inspires People

Employees will be more committed to the success of the company if they feel inspired by leadership. A successful company generally boasts a roster of employees who enjoy working there. For example, employees consistently rate Google as one of the best places to work. Giving employees a voice, equipping them with the knowledge they need to succeed, and inspiring them to drive the company forward is beneficial to the company at large. Carey Falcone agrees, saying, “The most important people were the people who actually touched our customers. The senior leadership team was truly there to empower, support and enable people who were customer-facing to really do their jobs. Management supported them and showed them they had everything they needed to be successful.”


About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.

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