The Interview: Building with a purpose
Issue 32 - Jul 2007

While proximity to ports and airports is an important criterion when location hunting for a global logistics company, it is people, both clients and staff, that really drive its real estate needs. RFP interviews James Kilpatrick, CEO, Birkart Globistics air + ocean Far East.

Every company has different requirements when it comes to the physical space it uses and inhabits. Birkart Globistics air + ocean Far East (Birkart) is no exception. For its CEO, James Kilpatrick the two most important factors influencing both the physical location of its offices and warehouses are its customers and its people. Where its customers are located and making sure they can have easy access to the facilities strongly influences Birkart’s choice of location, while ensuring employee loyalty, productivity and well-being in an industry that can other wise have high turnover has been the driver behind their fresh, modern office design.

Birkart is a global logistics company headquartered in Germany with currently 87 locations around the world. Birkart Globistics belongs to Thiel Logistik AG,
a corporate logistics group with about 8,000 employees in 42 countries. Birkart in the Far East has regional headquarters in Hong Kong with Kilpatrick overseeing the operations and strategic developments of Birkart Globistics’ interests in China, Hong Kong, Taiwan, Korea, Vietnam, Japan and Thailand. Hong Kong was chosen as the Far East regional headquarters and therefore the regional head office is sharing the same facility with the local Hong Kong branch in Kowloon Bay.

As the name suggests Birkart offers international air and ocean freight forwarding and other customised logistics services. This means that their choice of location for warehousing and collection and distribution points has to be both convenient for customer delivery and well connected to both ports and airports. They also avoid requiring customers to submit to highway tolls and or buildings that pose difficulties in terms of access or egress. Kilpatrick points out the example of one building in Hong Kong that requires a three kilometre drive in an upward spiral around the perimeter to get from the base of the building to get to the top. “We try to pick somewhere more convenient and closer to the ground floor,” says Kilpatrick.

This approach is taken region-wide and on the opening of a new logistics centre for the fashion industry in China, Kilpatrick commented: “Delivering goods to consumers quickly and efficiently is a key concern for all manufacturers, especially in the fashion and textile industry”. Birkart has around 20 centres and branches around China.

office location
As a corporate policy, and particularly in rapidly growing locations such as Asia, Birkart prefers to remain asset light and as such leases all its property. However, it does not have to suffer the blistering rents of Hong Kong’s CBD as their clients are manufacturing and product companies in areas such as fashion, consumer goods and automotive parts. These companies tend also to occupy decentralised premises and often bring goods from manufacturing facilities in China. However, each location is different and poses different
challenges. Birkart occupy a grade A building in a central location in Shanghai but Kilpatrick has found, like many others, that the company is expanding faster than there is space available in its buildings.

office pride
Regardless of location Kilpatrick sees the office environment as a great opportunity to impress and better serve clients in a number of ways. He uses the example of their international grade open-plan office in a modern office tower in Kowloon Bay.

During the day a steady stream of customer and partner representatives come to the documentation delivery window, where bills of lading and all the other official notices required for the international transportation of goods are exchanged. For reasons of speed and volume this window opens directly onto the lift lobby in the manner of a post office or retail location. Next to this, is the formal entrance leading to the reception desk and meeting rooms, where other visitors are treated to views across where Kai Tak airport once stood
– international visitors find it a particularly impressive sight.

space for staff
“If our staff are happy our clients will be better served”, says Kilpatrick, who describes the open office design he oversaw three years ago as being primarily designed around employee needs. He believes that if an employee
is comfortable in her/his surroundings, even if they are only communicating over the telephone, then the client will benefit from their better humour. “They can sense it”, he says.

Kilpatrick describes their old office as dark and with no identity so when he upgraded in the new premises it became the standard for the region. “It is very important for me”, he says. “Work is much more effective” in the new light coloured office with accents in the company’s blue and green. The freight forwarding industry where margins are low and volume high has a reputation of cutting costs on these types of overheads. Kilpatrick didn’t want that “stack ‘em up, bunch ‘em up” type approach, instead he says that the feedback they have got from staff in their spacious office has been extremely positive.

Not that it has to be expensive, as the main decision-maker Kilpatrick set a budget in advance and kept to simple materials, allowing a little more to be spent on the public facing areas. Not only was there no loss of staff after the move (the building was just around the corner from the old office and much nicer), but he attributes Birkart’s low employee fluctuation in part to the office environment. This is despite many of the staff being in their mid-twenties and in an industry where it is common to move about. “Many have been with us for four to five years”, he says.

Kilpatrick sees the office environment as an extension of other policies Birkkart has towards localising its business and being sensitive to the needs of staff. Having an open door policy, keeping noisy printers in another room and having desks twice the size of those in the old office falls into the same category as following local customs and holidays and encouraging company football tournaments. Allowing people to personalise their cubicles or seeking advice from Feng Shui experts is all part of making people feel comfortable, he says.

message to the industry
In closing, Kilpatrick says that while managing the core business is his priority a company’s physical footprint can contribute to its overall success in a number of key ways. He says given the opportunity to make a comment about commercial real estate and its management from an end-user’s perspective, his request would be for landlords and managers to better manage air conditioning temperature. While he does not want to control air-conditioning personally he does think that consistent complaints that the office is too cold is an ongoing problem for which legislation is probably the only answer. Wasted electricity and associated discomfort could be avoided if governments established minimum standards with which building owners had to comply thereby creating a level playing field across the industry. RFP

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