We recently sat down with Erik Hansen, VP Sales & Marketing, Intermodal for Kansas City Southern Railway and the newly elected KC SmartPort Board Chairman, to learn more about his professional experience, trends in the intermodal/rail industry and his goals as the KC SmartPort Chairman.
Tell us about your background in the supply chain/logistics industry.
EH: I grew up in transportation. It was not my first job but my first real career. I am originally from Denmark, close to Copenhagen, and I joined the Danish Army after high school. After roughly two years in the Army, I was recruited by a retail chain in Europe looking for leadership talent, and I landed a job as a department store floor manager in electronics. I only stayed for a little over a year, as I wanted to see the world and broaden my horizons. So, I began looking for job opportunities with companies that had an international presence, which led me to Maersk. My first role with Maersk was in their oil company, but I eventually moved to Maersk’s transportation and logistics division With Maersk, I was able to get an executive university degree that helped open up international opportunities. After graduating, I held multiple positions with Maersk on the financial side in Asia, moving between Japan, Singapore, Philippines, and back to Japan where I became CFO for Japan and Korea. After being in Asia for 14 years, I moved with Maersk to Panama City to become the CFO for the region comprising Mexico, Central America and the Caribbean
While in Panama, I took the opportunity to learn Spanish (Erik is fluent in 3 languages and semi-fluent in 2 others). After being in Panama for a year and half, I got the opportunity to move to Mexico to become the country’s Managing Director for Maersk, which shortly thereafter transitioned to Managing Director for both Mexico and most of Central America. After 5 years in Mexico, my wife and I decided to return to Northern Europe to give our kids an opportunity to live in Denmark. However, I was not able to find a position with Maersk in the region, so I ended up leaving the company. For two years, I worked as a consultant for start-up companies in Denmark, including being a CFO for a small start-up that was trying to launch a tech-based approach to manage and market capacity for trucking - like many companies are doing today – not unlike Uber for Freight. Then after close to two years in Denmark, I contacted KC Southern, who I had developed a relationship with while in Mexico. They were looking for a leader for the intermodal business unit, so my family and I moved to Kansas City, which was the first time we had lived in the US.
What do you like most about living in Kansas City?
EH: Kansas City is a great place to live. The climate is ideal. The people have a Midwestern easy-going culture with a good work ethic and are very friendly. Kansas City is a medium-sized city with a “big city feel”. It has everything you need with sports, museums, entertainment, food, and other activities. The former CEO at KCS told me I was going to enjoy moving to KC. He said the city has everything except the traffic, which is true. I am never more than 30 minutes from Downtown, which has a very well-developed city center. Being on the border between Kansas and Missouri, you have many options of where to live based on what is important to you and your family, including schools, entertainment, and transportation.
Can you describe a typical day as VP Sales & Marketing, Intermodal for KCS?
EH: As the head of a business unit, I try to set time aside to think strategically. Travel and time on airplanes actually help give me time to do this. I travel 100 + days a year. Meetings take a big portion of the day, as there are so many things to talk through including strategy, technology development, more efficient processes, and problems that need to be resolved quickly. Transportation is an outdoor sport – things go wrong daily and we need problem solvers that can address issues at the customer level as well as the overall network level.
What are KC Southern’s 2018 initiatives?
EH: KC Southern has three overarching themes for 2018.
- Continue to extend our geographic reach. A key aspect to this is working with partners. We have come a long way working with other class one railroads. This includes interchanging with BNSF in Robstown, TX, Union Pacific in Laredo, Norfolk Southern in Meridian, MS, and others. Operations in Dallas and Mexico will continue to be an important aspect of extending our reach.
- Enhance Service Offerings. We will be focusing on continuous improvement initiatives to reduce bottle necks, improve processes, identify quick fixes on process and technology. We try to solicit as much market and customer feedback as possible to ensure we are being proactive.
- Enhance technology.Railroads are not often on the forefront on technology utilization. We are looking to find ways to be more efficient and easier to work with. One area we are exploring is BlockChain.
Blockchain is a vehicle for transferring secure data between organizations involved in a process. Data is only entered once in a secure manner, and the data can’t be changed once it is in the platform. This allows for full traceability between all organizations involved. We see this as an opportunity to bring supply chain and logistics operations to the 21st century. Many, including Maersk, have been looking at technology to accurately and securely transfer data between multiple parties for the last 20 years. There is hope BlockChain will be become the standard to help simplify the process, cut out middle men, reduce time, capture accurate information and track documents. It is automation and some people believe automation will eliminate jobs. In the end, it should result in better paying jobs and more data security.
What are you watching in the intermodal/rail industry? Anything companies should be aware of?
EH: Trade policy is critically important to any logistics company in the world, the US certainly. Free trade, in our belief, is what has driven economic growth for all communities. This has never been timelier than the ongoing NAFTA negotiations. For a railroad that is both a US and Mexican company, any changes to NAFTA will likely impact our operations and that of many of our customers. Unlike a manufacturing company that can move their location in Mexico to another country based on trade policy, KC Southern is not able to move our railroad infrastructure elsewhere. Interestingly, we have a higher % of volume going southbound export to Mexico than northbound to the US. So, this means we are very engaged in the NAFTA negotiations. Our CEO is the US co-chairman of the U.S.-Mexico Strategic Trade Task Force of the U.S.-Mexico Business Council. He has spent a lot of time in Mexico and Washington, D.C. to share why NAFTA is a positive thing for the US and North America.
Where do you see the intermodal/rail industry going in the next 5 years?
EH: Needless to say, technology will be a very important component of the industry’s future. Many technology developments will follow what is happening with the workforce. If you look at the trucking industry, they are experiencing a driver shortage due to many factors including a retiring workforce. The driver shortage may push the need for technology developments including autonomous vehicles, but it is uncertain when we will have the technology and regulatory framework to support this for the entire industry. We will most likely see pockets of implementation for autonomous trucks as this technology gradually matures.
For KC Southern, there could be opportunities to use autonomous vehicles to help move freight within a private facility, like drayage from a rail yard to a facility or inside an intermodal facility. While this is on our radar, we have not taken any major steps yet.
In addition, with the trucking capacity crunches and heavy road traffic in metro areas, we are seeing rail transportation provide capacity the roads cannot support. The sweet spot has shortened to the point where 500 miles (or less is some instances) is now considered a regional intermodal move.
Why did KC Southern decide to get involved with KC SmartPort?
EH: KC Southern has been involved with KC SmartPort for many years. The first chairperson from Kansas City Southern was KCS EVP administration and corporate affairs, Warren Erdman. There are two main reasons for our involvement. First, KCS wanted to be involved in the freight industry development in the KC region. The company has been in the area for 130 years and Kansas City remains our headquarters. We want to help develop the economy in the region where we are located, resulting in a good place for our employees to live. Transportation infrastructure is a big part of attracting companies in which transportation is a key component of their business to the region. Second, workforce development is important to support and maintain our operations in the area. Attracting and keeping people here is very important. We see KC SmartPort’s efforts to help elevate workforce development as a crucial part of the ongoing growth of the Kansas City-area.
As the incoming KC SmartPort Board Chair, what are the three top initiatives you would like to focus on?
EH: First of all, we need to make sure the KC SmartPort team has the frame work to continue the great job they have been doing under Chris Gutierrez‘s leadership. KC SmartPort is a nationally recognized economic development group, and we want to continue those efforts.
Second, workforce development has been and will continue to be a main focus for KC SmartPort. One key element of this is mobility. The workforce for the supply chain and manufacturing industries depends so much on commuting. We need transportation solutions to help the work force get to jobs in an efficient and effective manner or we won’t be able to attract and retain talent. We are seeing progress on this and hopefully the RideKC initiative from Kansas City to Johnson County will pass, as just one potential improvement.
Lastly, we need to better communicate the Kansas City story. This will help attract working talent to the region, which again will attract investment. I believe there is a common misconception on KC. Much has changed in the last 10 years. Kansas City is a modern big city, and many new things coming that will help attract additional investment and business, including the new airport, the new convention hotel, help foment that image and the big city feel. This story needs to be shared where it will resonate with people looking for an attractive place to live, raise families, and build careers.
Kansas City is just a great place to live and do business!