Ally Global Logistics’ Zambo helps clients thrive in export of lumber, logs
Employing life lessons learned on the hardwood basketball court, Steve Zambo is pressing on as a leader in facilitating exports of lumber and logs. As president of Norwell, Massachusetts-based Ally Global Logistics LLC, Zambo aims to, as he says, “thrive, not just survive,” in a low-margin business where success is anything but a slam dunk. In an exclusive interview, Zambo, once a guard on the Lehigh University hoops squad, offers AJOT readers insights into the exportation of forest products and how his family-owned international freight forwarding organization serves this sector in the challenging era of ocean carrier consolidations. How does Ally Global Logistics provide value to clients in export of forest products? Our company is primarily involved with lumber and logs – which represent the second- or third-largest containerized U.S. export. Most of the companies we serve are not billion-dollar companies. They’re mostly longtime owners of forest land, with most in the $100 million range [in annual sales], and a lot of them are family-operated, led by second, third or fourth generations. We add value by being an extension of their in-house support staff. Most of our customers do not have a traffic department per se; they just have one or two people who are the point people. For each forest products transaction, there are up to 10 different documents or processes that have to be created and adhered to to have the shipment run smoothly. So, with the knowledge we have in lumber and logs and international transactions, we make it easy for our customers to concentrate on their business. Most of our customers are sales-driven organizations – as most companies are – and our focus is to make sure they thrive, not just survive. Of course, by having significant total volumes, we are able to provide better rates. Speaking of family-oriented enterprises, how has Ally Global Logistics evolved as a family business? It goes back to when I was working at Evergreen Line, where I was from 1978 until 1989. After they transferred me from export sales manager in New York to start the Evergreen office in Boston in 1982, I met my wife, Cindra, who worked for a cargo broker, Hub Shipping. I was looking for freight and started finding out there were exports of lumber. That was around the time the transition was just beginning to moving lumber and logs in containers? Correct. When I started, logs were being loaded in open tops. For some reason, there was this perception that you couldn’t load logs or lumber conventionally in a container. So, I was handling a particular account, and he told me he was paying about $150 per transaction with his freight forwarder. Well, my wife and I were talking about how this guy is paying all this money. She had gotten Hub Shipping its FMC [Federal Maritime Commission] license, so she knew how to file the application and go through the steps. I approached my customer, and he was fine with Evergreen charging about $10 per bill of lading, versus the $150 he was paying. I had a particular interest in lumber all of a sudden. My wife and I started a business together called ACES Ltd., an acronym for American-Canadian Export Service, and I left Evergreen. Initially, the business was my wife and myself. The business kept growing, so we added people and opened an office in Mobile, Alabama, and one in Seattle. In 2006, we sold the business to Kuehne + Nagel. I had a five-year noncompete [clause], which I honored, and Kuehne + Nagel had my wife working out of our house. By this time, my son, Stephen, who now kind of runs our business day to day, was going into college at the University of Rhode Island to study communications and indicated he had no interest in being in a freight forwarding business in the future. He was working in IT recruitment out in California, just making ends meet. My wife and I approached my son about us starting another freight forwarding company. In 2013, my son moved here from California and we got Allied Global Logistics going. When we started, there were just four of us – myself, my wife, my son and another woman who is now actually my son’s fiancée, so we’ll soon have another Zambo in the company. We have 20 people now in this office here, and we’re opening another office Oct. 1 in Jacksonville, Florida. We’re continuing to grow. What trends in transportation and logistics are most impacting the forest products industry today, and how is your company responding to such challenges? The most important thing that impacts us are trade issues. For instance, right now, you can’t ship any ash lumber because they’re supposedly infested with some ash borer beetle. Logs are a big export, and they sometimes need fumigation. That’s a problem here in the United States because they’re trying to outlaw the use of ethyl bromide. Probably the No. 1 challenge we have today is related to the consolidations [of ocean carriers]. The problem now is not as paramount as it will be, because the lines have not yet gotten together enough to raise their freight rates, but I’m expecting further consolidation and, when you have five companies controlling all the capacity, freight rates are going to move to a more sustainable level. What we do about that it is, as an NVO [non-vessel-operating common carrier], we increase our volume of shipments, which gives us some better hold on these companies. Also, another recent challenge has been the Hanjin bankruptcy. We had over 200 containers affected, and, at the end of the day, every customer received their cargo and there were little or no financial losses to any of our clients. Another thing is that some of the export market is starting to change now to FOB [free on board] from CIF [cost, insurance and freight], so we now have a lot more direct contact with the customers in places like China. There are a lot of customers that we represent now that are in China that don’t even have a U.S. office. The end buyer is taking a more active role in the transportation, similar to what importers do here. When I started in ’78, a lot of importers left it up to the supplier overseas to ship it to them. By ’88, everything was FOB, controlled by the importer here in the United States. I see that happening with exports, especially with forest products, because the margin is so low. Who do you view as role models, both professionally and personally, and how have they influenced you? Personally, it would be my father, my uncles and my grandfather. Professionally, my role models were some of the people I worked with who helped me succeed. A number of people at Evergreen helped influence my thought processes, most notably Capt. S.Y. Quo, who was vice chairman. What role has basketball played in your life, and do you still find any time for the sport? Basketball played a huge role in my life. Sports give you the will to succeed and try my best within the frame of teamwork. In basketball, you learn basic things in life, like how to get along with other people. Basketball helped me get into a good college – Lehigh University – and I wouldn’t otherwise have been able to go to or afford that school. It paid for my schooling while I learned a lot about life. I started varsity my freshman and sophomore years. Then I tore my knee up, and, at that time [in the mid 1970s], they weren’t fixing ACLs, so I never played again in college. Do I have time for the sport? No. I’ve had four knee operations, had a knee replacement, had two hip replacements... But basketball gave me the window and avenue to go to a good college, meet good people and enhance my personal life and my career. What other nonwork interests occupy your precious off-duty hours? I play golf and do some community service, too. I volunteer regularly at soup kitchens, one through the church and the other through homeless shelters. And three to four times a month I go to a lockdown facility for addicts and alcoholics and talk with them about life after getting out of being incarcerated.