Streamlining, cost cutting helped company end year in the black
- July 28, 2010
James B. Arnold made the best of a bad environment last year. The senior vice president and chief financial officer of Norfolk-based CMA CGM (America) LLC focused on cutting costs and making operations more efficient, efforts that ensured the company closed its fiscal year in the black.
The company is a subsidiary of Marseille-based CMA CGM, the world’s third largest ocean shipping company. CMA CGM (America) provides sales and administrative services and serves as a shipping agent for import and export cargo.
“I relied on Jim to lead many critical projects last year, and they were all successfully completed,” says Frank Baragona, president of CMA CGM (America).
Arnold was able to maintain a strong cash flow in a year of decreasing rates. “The shipping industry had unprecedented losses in 2009,” says Arnold. “Fortunately, we were able to streamline processes and identify significant cost savings opportunities.”
One strategy was “in-sourcing” some office duties, such as accounting and human resources, at a sister company. Those functions had been handled by outside vendors. The move is expected to result in annual savings of $1 million going forward. “We were able to seamlessly complete the back-office transition and save the company money,” says Arnold.
Enhanced collection efforts also reduced the level of aged receivables from 15 percent to 6 percent, quite a feat given today’s economy. “I thought this was probably one of the most impressive accomplishments last year,” Arnold says. “With companies facing difficult times, identifying and implementing this improvement was a critical achievement for us.”
Arnold and his staff reduced outstanding accounts by implementing a new dispute process, tweaking leadership positions, making customer-focused organizational changes and pushing “old-fashioned phone calling,” he says.
The company is currently working on creating a regional shared services organization in Norfolk. “We recently took on responsibility for the Caribbean activities for the company, and we’re now analyzing the potential to handle the same for Canada,” Arnold says.
Those new duties will involve managing the back office services for both areas.
“This will allow us to accomplish everything with streamlined policies and processes. We’ll be able to leverage our work force in Norfolk, which will ultimately save the company money,” the CFO says. “We will continue to look for opportunities to centralize back office functions to improve productivity.”
As for the future, CMA CGM (America) will look at opportunities to expand offerings to customers when the economy rebounds. “That may be through acquisition like a [third-party logistics provider] or expanding our terminal operations,” Arnolds says. “If possible, we would like to own and operate a terminal on the West Coast.”