Asia SPLASH 247.com - Shipping Media Interviews Euro MD.

Quick Introduction to Richard Butcher, European MD for BCG

1. Could you tell me a bit of your background?


Richard Butcher has been involved in the maritime sector for over 35 years, during which time he has been engaged with some leading Organizations holding senior executive positions, Butcher has also been engaged on many consulting assignments on all aspects of the container and technology sectors. He has had a number of provoking Industry White papers published and is a regular speaker at leading container conferences. Butcher established his consulting firm Kale Europe Ltd last year after coming out of a senior Executive role @ Wipro Technologies where he successfully ran and developed a portfolio of technology services to the container port and terminal sectors. Butcher focus was to develop a digital consulting practise and technology brokerage practise. In July of this year talks were successfully concluded to merge his consulting practise with the Wisconsin based “Bulk Container Group” the synergies between the management and the focus of BCG made a lot of strategic sense. The deal has allowed BCG to establish a European base and to tap into Butcher’s extensive global network. It was clear that this alignment guaranteed the future success and natural growth of our consulting practise. Butcher will take up his new role within the company as Senior Adviser to the Companies Management Team and take the responsibility as BCG’s European Managing Director.


2. What do you mean "the world’s leading carriers and leasing companies have no real logic in where and when to off hire their old containers"? What are the major issues the owners facing when dealing with container disposal?


The Global Container sector is still a fairly archaic business model – as Container leasing and Ocean Carriers continue to see their equipment fleets grow – the life of their box fleets average around 120 months – when they are taken out of service and come off their master lease agreements and approach there final “off Hire” the fleet disposal teams get engaged and the this is where many groups suffer trying to assess where in the world these boxes should be off hired. In most cases its based-on assumptions and past success in selling the equipment, the Fleet Disposal teams will try and sell equipment to the depots where these are off hired, they will sell units to traders, but in many cases the units end up sitting in a stack incurring storage costs. Of course, these units have been fully depreciated at around 60 months and have some intricate monetary value which will sit on the CFO’s books as company assets. But the value of these units will soon evaporate if the sales are not conducted quickly. These costs will include:-

ü Container Drop Off Charge

ü Depot (Lift off Charge)

ü Storage Charges

ü Insurances on the Equipment

ü Potential damage to the box whilst in the depot waiting to be sold.

ü The leasing company will have a lot of internal administration costs

ü If the boxes need to be repositioned to a demand area internal transport / shipping costs will drive costs higher.


The Fleet Disposal teams will become under pressure from the CFO’s as these assets soon become a financial liability, and when the boxes are finally sold, they deliver a negative contribution and often sold at a much lower price just to move these units. The issues stem from not having the visibility of where and when to off hire and with the end consumers being fickle and buying patterns can shift – it proves very difficult for the sellers to assess where and how many containers should be dropped off at which geographical locations. Most Operators will spread their off hired equipment across a wide area knowing that they will sell some and thus trying to mitigate their financial exposure. But they have no proven logic or automated processes to track these trends!


3. Tell me about how Bulk Container Group operate and how would BCG tackle these mentioned issues? What are the company’s major achievements so far?

This is where BCG steps into the mix, the companies Founder Mr Ian Zaretsky developed the company after identifying the gap in the sector – Zaretsky’s first trade was for a leading Mining Company that required 150 pre-owned containers to be delivered to one of their large Copper facilities – these boxes were ultimately filled with concrete and used to create a physical barrier to prevent rock slides. During this transaction it became clear that the sourcing, and transportation of these unit highlighted the inefficiencies within the market. BCG focused its attention on the Buy side of the market developing strong ties with many large Global consumers that have demand for units but struggled to locate equipment and didn’t want the issues involved in the physical moves. BCG ethos has been to focus on the buyers with over 250 (+) large consumers we can identify all of the key areas :-

ü Type of Equipment needed

ü Buying Patterns

ü Volumes Required

ü Locations where equipment is required

ü Gauging Market Prices

Without giving away all the companies secrets we can approach the Container Leasing Companies and Ocean Carriers and provide accurate projections on key demand areas – we are whole sellers and ensure that the electronic payment and ownership transfers are processed -we then wrap up a range of services from repairs, transportation, customization, container tracking and buy back policies for clients that need these units for short time frames. It’s a win-win service the Sellers get a quick turn round on equipment sales, improving cash flow and reducing the risk, while our buyers are provided a better buying experience – without all the hassles and stress associated with sourcing equipment.


4. Do you believe the digital platforms will completely change the container trading modes? What are the major challenges during this transformation?

As the container industry is dragged into the digital era many operators are seeking ways to streamline their business and this is driving the demand for collaborative platforms, the ability for companies to list their inventory in a highly secure environment, and being provided with critical information on off hire demand locations, we reduce their administrative process. On the Buyers side we provide them with a single point of contact, our modelling and analytics will start to predict market trends and will allow us to corner the second container trading markets.


5. What's BCG's medium-term target?

BCG’s strategy is simple we are at the fore front of a rapidly changing market, we want to become that “Go to Platform” for buyers and sellers to trade, we already have a very solid order book from our Buyers community and we are seeing a major traction from the main Container Leasing Companies that have expressed considerable interest and have been testing the model – as our trades continue to grow we shall also start to look at additional services that will be offered via the Trading platform as we are also getting traction and interest from some of the large Chassis Leasing Companies that seek to sell of aging equipment. The company’s organic growth has generated significant interest from the Venture Fund markets and our goal will be to achieve an IPO within a 3-year period.

6. Anything you want to add?


BCG is at the forefront of change our objectives are clear we want to provide that digital window for container trading, and we are already seeing the number of users growing on a daily basis.


For more information on BCG - please visit our website - www.bulkcontainergroup.com

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