IPS Logistics Group has transformed itself from a regional agricultural products packer into an international logistics company capable of managing a client’s entire supply chain, bringing their products from Australia to any location on earth or from any place on earth to all locations within Australia.

FROM AGRIBUSINESS TO GLOBAL LOGISTICS

IPS Logistics began as a cotton packing business, Inland Packing & Storage, founded by eight share holders in 1997. Situated in Narrabri, it was founded to service the rich agricultural region of northwestern New South Wales. Within a few years, the company had established facilities at the ports of Brisbane, Sydney and Melbourne.

In 2005 the company’s founder, Harold Horne, passed away. To fill the void left by his passing, the then non-executive chairman John Cooper and most of the senior management team purchased all of the shares in the company. As the new owners of IPS Logistics, these leaders now had a very personal stake in the success of the company. Led by Cooper, who took over as CEO and Managing Director, IPS Logistics began implementing an aggressive plan to expand the operations and put the company on a much stronger footing that would remain stable well into the future.

GEOGRAPHIC AND FUNCTIONAL EXPANSION

One immediate change was to expand into other market sectors such as mining and resources, timber and construction, furniture and print media. Diversifying the product mix enabled IPS to mitigate the risk they experienced depending wholly upon agribusiness. Now that they had carved out new niche markets, they would be insulated against a severe drought or low yielding harvest.

IPS already operates the largest warehousing facility at the port of Brisbane—a facility that IPS is currently expanding. The Brisbane facility, which is the closest warehousing complex to the docks, will be double its current size when work is completed. In addition, IPS provides services through state-of-the-art facilities in Perth and Melbourne. Further, its facility in Narrabri has recently been expanded and updated. Many systems have become fully automated, reducing IPS’ dependence on transient labour and enabling it to handle greater volumes. A dedicated rail line brings the goods from the Narrabri facility directly to the port of Sydney for export.
Freighting within port precincts and to all points within Australia is handled by a combination of contractors and IPS’ private transport fleet including Super- B trucks.

All of these improvements have enabled IPS to undertake a functional expansion as well. Where they once focused on warehousing cargo at port, now they have become experts at exporting and importing that cargo to all corners of the globe. They have expanded their business to cover international sea and air freight forwarding, customs broking, container packing and unpacking, and road and rail transport. Basically, says CEO John Cooper, “We are able to partner with our clients to manage their entire supply chain.”

CUSTOMER RELATIONSHIPS

At IPS the focus is always on developing a great relationship with customers. In fact, they dedicate a senior executive to liaise with each client. This executive will establish and consistently invest in a personal working relationship with a key leader in the client’s organization. According to Cooper, “That enables good communication and the ability to solve any problems that may come up.” Furthermore, continues Cooper, “Since the management owns the company, they have a direct stake in the quality of our customer service.”

The focus at IPS is not just on service, but rather partnership. IPS works to manage their customers’ supply chains not only for efficiency of logistics services, but also to consistently help them to save money. According to Cooper, the goal is to become a trusted and essential partner to their clients. “Once you’ve established a good relationship that’s the key. Customers today are savvier on how they purchase their logistics services. You must have good communication, and constantly help them to save money or improve the efficiencies in their supply chains. When we do that consistently, then we become a partner and not just a service provider.” This strategy is definitely working. Recently one of IPS’ large high-profile clients invited the senior management of IPS to participate in its executive leadership planning retreat.

PEOPLE MANAGEMENT

Employee turnover at IPS is very low. Says Cooper, “We have a fairly flat organizational structure where leaders are very close to what happens on the ground. Our employees don’t feel like a number, they feel valued and have a great relationship with the owners.”

The strategy for managing employees is as unique as it is successful. First the organization looks at the needs of the customer. Then together, the people in each business unit figure out how to fulfill those needs and hit the company’s goals. When these targets are hit, the entire team or division draws a bonus. This approach facilitates a stronger teamwork ethic and helps individual employees to see how their efforts support the success of the company.

THE FUTURE OF LOGISTICS

So far the strategic plan of Cooper and his leadership team has been effective. The company has moved from a situation where at the time they purchased the company in 2006, it experienced a A$2M loss to achieving more than triple that amount in profits just three years later, despite the global financial crisis. Looking toward the future, IPS Logistics is focused on leveraging its successful geographic and functional expansions to create new strategic alliances with companies that need to move significant container volumes.

According to Cooper, IPS Logistics is unique in its industry. “We are not a one-size-fits-all company. We have a relatively small customer base. We work hard at understanding our chosen industries. We customize our solutions to the needs of our customers. Key managers are the company’s share holders. Our size and management model is perfectly suited to serving our customers. The enormous companies have leadership that is often not connected to what’s happening in the business, and at the other end of the spectrum you have very small companies that can’t handle the volume.”

Indeed, IPS Logistics appears destined for continued success. Dynamic, agile, and able to respond quickly to customer needs, IPS is managing risk through diversification, functional growth, and capital investment. Concludes Cooper, “We’ve been smart about how we managed our risk and have employed good strategic approaches to driving our business forward. We’ll continue to grow and profit from helping our customers to achieve their goals.”