Burgoyne tackles terminal operator challenges in heading Ceres, Yusen

Armed with an undergraduate degree in organizational behavior and a master’s in business administration and more than two decades of industry experience, W. Patrick Burgoyne is well-equipped to take on the challenges facing the two terminal operating companies he leads. As East Brunswick, N.J.-based president and chief executive officer of NYK Group sister companies Ceres Terminals Inc. and Yusen Terminals Inc., Burgoyne deals with such fine balances as saving steamship lines money while ensuring corporate profitability and implementing automation while keeping labor satisfied. Burgoyne shares his business approach and some personal insights in an interview with the American Journal of Transportation. These certainly may be viewed as challenging times for terminal operators. What do you see as the most significant challenges facing US terminal operators these days, and how are your companies addressing them? They are indeed challenging times in North America, both U.S. and Canada. I think, primarily, earning the cost of capital to reinvest in terminals is a large part of our strategic focus. That is coupled with recognizing that our customers are facing severe market headwinds. Our role is to attempt to address this by discovering ways to help the ocean carriers save costs. One way for us to do that is through quicker vessel dispatch, and, then, obviously, within our own business, for those items that we control, lowering the breakeven point through cost reduction. At the end of the day, the hope is that we’re able to retain some value for our shareholders after all those things have been accomplished. And that’s not always easy… No, it is not always easy. There are tremendous challenges in terms of addressing the needs of our customers to keep costs down in the face of increasing per-hour labor rates. So we need to be more productive, but we also need to be in a position to pass on some of that cost so that we’re able to retain some value and, again, obviously, be able to continue to invest in the business so that we can have the larger cranes and invest in our berths and deal with the bigger vessels as they come online. Automation can be a sensitive issue, particularly vis-à-vis labor, yet it seems essential that marine terminals have increasingly automated operations. How are you handling that balance? If you’re in the terminal operating business, the first thing that one has to do when considering automation is to recognize that the industry has an obligation to the existing ILA [International Longshoremen’s Association] and ILWU [International Longshore and Warehouse Union] workforce, which cannot be forgotten as terminals automate. On the other hand, automation is inevitable, and it will become commonplace in the coming few years. So the balance here is really enabling, on one hand, the terminal operators to increase density and save costs through automation while, on the other side of the ledger, ensure that labor feels included as part of the process. In April, you added the positions of president and CEO at Ceres Terminals Inc. to your similar roles already at Yusen Terminals. What synergies do you see in heading both of these NYK Group sister companies? The No. 1 thing, really, is leveraging the opportunity to share knowledge between the two companies. We’ve got talented and capable people at Ceres Terminals and at Yusen Terminals, and so what we’re trying to do, to the extent we can, is cross-pollinate and really leverage that terminal operating capability so that, when we combine the two companies, we have something better than we have with two individual standalone entities. And I’m confident that’s starting to occur. Additionally, there is the ability to cross-sell. Many of the customers we have at Yusen Terminals are customers we have at Ceres, and so, using that, and having a strong combined North American presence, wherein you have Ceres and YTI with pretty good density in the United States and Canada, puts us in a stronger position in terms of understanding the business, dealing with labor and working with our customers. I notice that you hold a bachelor’s degree in organizational behavior from Seattle Pacific University in addition to your MBA from the University of Southern California. How do you apply your knowledge of organizational behavior in improving effectiveness of business operations? On any given day, there are approximately 5,000 workers conducting the business of Ceres and Yusen Terminals in the U.S. and Canada. We can never forget that we are in a service business. While technology rules operations, most of what we do takes place with interactions between people. There’s a lot of technology and hardware moving around, but, at the end of the day, it’s people dealing with people. Firstly, it is strengthening our customer relationships. Then it is management dealing with labor, forging relationships with the ports, and, finally, cooperating with industry stakeholders and government agencies. So every day we have a chance to learn how to interact with people better. I would hope that some of the things that I learned in that undergrad program enabled me to earn trust and deal with the stakeholders with respect and recognize that common interests must be achieved for everyone to feel like they’re part of the puzzle. No doubt you find yourself traveling a fair amount between the U.S. East Coast and Asia. How do you cope with those long flights and the guaranteed accompanying jetlag? There really is a lot of wear and tear in travel. It’s only when you travel extensively and over prolonged periods of time that you really begin to recognize it. But what I essentially do is I try to get some good sleep, I try to eat well and exercise as much as possible. I don’t always get to do all of those things, but, to the extent that I can, that sort of takes the edge off the wear and tear from travel. When you do get time away from work, what do you find to be the most relaxing things to do? I really have three things that I enjoy doing and take most of my time when I’m away from work. I love to hang out with my wife, Dolores. I enjoy taking my two girls – Hannah [10] and Sarah [6] – out on bike rides. And the other is to play golf with my son, Ryan [15]. And, hopefully, over time, I’ll get the girls into golf as well. So that’s how I like to spend my time. Does Ryan beat you? He has, twice, but the baton has not been permanently passed, and that will take some time and effort on his behalf, I hope.