In business, tough times can call for tough measures. But for Richard Phillips, CEO of Pilot Freight Services, a global full-service, third-party logistics (3PL) and transport company headquartered in Lima, Pennsylvania, the worldwide recession has meant one thing: opportunity. “The biggest challenge companies have faced during these economic hard times has been a sense of instability,” says Mr Phillips. “We have taken a different approach. We have expanded aggressively.” 

The company may have cut its teeth doing high-value, expedited freight within the US, but today its strategy is one of global expansion.


“We look for opportunities – sometimes with existing customers, sometimes to attract new ones with overseas needs,” says Mr Phillips. And despite the global recession, Pilot did not pull back. Its corporate executives made consistent and constant decisions to stay committed to the company's customers on a personal level. “We provide highly customised shipping that needs real customer service, 24/7, with a live voice on every call, every time you call,” adds Mr Phillips.

Pilot also provides customised IT solutions, something the company has spent a lot of money investing in. Providing such a service is a tough task, particularly given that Pilot responds to client needs in any country and tracks shipments in whatever way a client wants to receive their data. “In fact, we decided during these tough times that we were going to step up our hiring,” says Mr Phillips. “We knew really good people were being laid off by other firms, and that those people were available to us in what was a once-in-a-generation opportunity. We hired them, and we are reaping the benefits.”

A flexible approach

Pilot is aggressively expanding worldwide. Mr Phillips says that the company's decision to enter markets is based on a number of factors, one being employing a mixed strategy between opening an office with a local agent and opening its own station. In most countries, the company has been able to find an outstanding local partner that share’s Pilot’s model of customer service.

“It’s a great solution for our customers, both in terms of providing someone who has local knowledge and years of experience,” says Mr Phillips. The company brings the agents into Pilot, integrates their IT systems, and then monitors their operations. “We can offer ways in which [agents] can improve their operations and give our customers a great experience,” he adds.

The key, according to Mr Phillips, is to be customer driven and totally flexible. To demonstrate this point, he reveals that Pilot was recently asked to open a logistics facility on the east coast of Saudi Arabia. “The client does not want to hear that I have an office in Riyadh,” he says. “They do not care. We are able to respond because we retain that flexibility. We found the right provider on east coast of Saudi Arabia. If you have a solution, then the customer is very happy.”  

Aggressive expansion

Pilot is also expanding its own operations internationally. In July 2011, it opened an operations and administration office in Amsterdam – the company’s first company-owned station in Europe. From there it offers a full suite of transportation and logistics services, including air, ocean, ground and logistics capabilities services for new and existing customers sending shipments anywhere in the region.

“Amsterdam was a logical choice for our first European station,” says Mr Phillips. For one, Amsterdam Airport Schiphol and the Port of Rotterdam are, respectively, among the largest cargo airports and ocean ports in the world. While it took the company some time to retain the necessary regulatory licences needed to open the station, Pilot Air Freight was able to have its operation up and running in less than a year.

The following year, in February 2012, Pilot opened its second international operations and administration centre – this time in Toronto, its first in Canada. The new location handles shipments into and out the provinces of Ontario and Quebec, working in conjunction with the company’s Canadian partner, Concord Transportation. “The nice thing about opening that office is it allowed us to offer inter-Canada and 3PL solutions,” says Mr Phillips. “A lot of existing customers take advantage of it, and we have been able to pick up new customers as well.”

There are specific reasons Pilot executives selected Toronto. For one, Canada is the largest trading partner to the US. Toronto also has a huge manufacturing base, making it one of the largest import/export markets in North America. “We are more likely to locate where we see an opportunity,” says Mr Phillips.

Most importantly, however, Pilot opened the office to service an important customer that needed 24/7 high visibility to its supply chain and expedited deliveries made on time. “[The customer's] needs are for very specific since they involve highly sensitive material,” he says.

Mr Phillips says that Toronto’s transportation infrastructure is phenomenal. “It just made sense to be there,” he adds. He reserves particular praise for Toronto Pearson International Airport and its impressive cargo lift. “We are starting to look at Toronto as a gateway for US traffic heading to Europe or elsewhere overseas,” he says. “The fact that our transport business has grown has allowed us to sell much more business there. It makes even more sense to have Pilot people there.”

Further afield

Mr Phillips expects the company will open more locations in the near future and even alluded to another location farther afield in Europe and in Canada, possibly Vancouver. “We are also looking at the Americas,” he adds. “We have a logistics operation in Mexico City, but we are considering another location in Mexico.”

As a 3PL company, Pilot is able to open and run logistics operations for companies such as value-added warehouse, or distribution centres. It is doing just this in Dubai, Santiago and Saudi Arabia, among others. “We are looking at Australia right now,” adds Mr Phillips.

In Mr Phillips' mind, Pilot’s flexibility to respond to customer needs is what makes his firm unique. He sees Asia as continuing to offer Pilot opportunities, although he admits he prefers that the company goes to where the rule of law is stable and investments will always be secure. “Asia’s manufacturing base is moving extremely fast and hard to pin down,” he says. “Ten years ago people would have said you have to be in Shanghai. Five years later, the manufacturing has moved west, chasing cheap labor across China, and today it is further afield, in Vietnam and Bangladesh.”

He adds that US companies make their shipping decisions in the US for goods being imported from China. “So your presence for this business is primarily in the US,” he says. “You need good people with great operations there, but the relationship is still going to be a US relationship.”

Mr Phillips is particularly bullish on his company’s prospects. “I don’t want to see economic uncertainty, but we see great opportunity in Europe right now,” he says. “Europe is hurting. Labour and real estate there is cheap. It’s a great time to invest.” Following the next opportunity, and staying flexible and customer driven, is what Pilot is about, and it will remain the model the company follows in every expansion plan it makes.