The right side of innovation
Through dedication and commitment to pioneering freight forwarding solutions and the help of its exemplary team, Pentagon Freight Services has grown to become a leader for the oil and gas industry Pentagon Freight Services (Pentagon) is successful because of its people. The business, which specializes in oil and gas freight forwarding, operates across the UK and 72 additional locations throughout the world. “We don’t have a physical product to sell,” begins Michael Stal, the company’s Managing Director UK. “This is why our staff provide quality customer service to our clients, and why we empower them to make real-time decisions by equipping them with the knowledge and training needed to be their best. When the chips are down, our staff know that they can depend on every single person in the office to pull together to find solutions to any situation that may occur,” he says.
Over the years, Pentagon, which kick-started in London during the early 70s, has become the largest privately-owned oil and gas freight forwarder in the world. Almost 50 years on, Pentagon now proudly boasts an expansive business that operates across six sites in the UK – four in England (Dartford, Newcastle, Immingham, and Great Yarmouth) and two in Scotland (Aberdeen and Glasgow). Globally, its infrastructure footprint extends to over 30 countries, and employs approximately 1100 people, with six main hubs in the UK, Norway, USA, Singapore, UAE, and Australia.
“Initially, we started to support the rapidly growing North Sea oil and gas industry, and then opened an additional facility in Aberdeen to be closer to the drilling contractors and their operations,” Michael expresses. “Following that, our facilities in Houston and Singapore quickly grew as demand for expertise increased as well.”
The business has also made a number of acquisitions, which, through strategic partnerships, has allowed for further expansion in line with industry demands. “Our most recent acquisition being Carlbom Shipping in June 2022. Carlbom Shipping, as a leading shipping specialist agent, will provide Pentagon with the platform and expertise to offer a one-stop shop to our energy client base.”
Other acquisitions included Aquatran, a Norwegian and UK haulage company, which took place in 2017, and enabled the business to relaunch as Pentagon Transport, which now hosts a fleet of 250 trailers. The business then bought Rulewave Inc and Rulewave (UK) to further support its involvement in oil country tubular goods. “Then, during 2020, we entered a strategic alliance partnership with TLC, a Swiss-headquartered provider of logistics services in west Africa and the Caribbean, which allowed us to close the remaining gaps in our network,” says Michael.
In terms of Pentagon’s services range, the company realized early on that customers wanted more than a business that simply moved equipment from point A to B. “We found that clients also needed data to identify cost saving opportunities within their supply chain; they needed advice on compliance, and support on everything logistics related. Subsequently, we now offer a range of value-added services, such as dangerous goods services and training courses, customs consultancy and other relevant development opportunities and audits to identify areas of improvement.
“Our experienced project team specializes in oversized equipment, which needs special handling. By regularly chartering vessels or aircraft to meet client-centric deadlines, our project personnel are able to travel the world to ensure that equipment is handled correctly, from start to finish,” he shares with us.
He adds that the company has also incorporated a few technology advancements to assist clients with their freight forwarding requirements. “Our Insight PO Management system was developed in-house and built specifically for our usual customer base. Typically, each vessel or oil rig has its own budget, so visibility on expenditure and inventory is vital. In addition to this, we have developed a vision group to look at how we can harness our skills and experience, and replicate our success in related industry verticals, such as mining, for example, where heavy material movements are common, or aerospace, where complex paperwork may apply and deadlines are critical.
“Our oil and gas expertise has also proven to be highly transferable to the offshore wind sector, where our existing subsea customers have already turned their focus to seabed wind farm requirements, and our knowledge and experience of handling this equipment has allowed us to continue providing first-class services to them,” he says.
In a more recent development, Michael has noticed that the focus for clients has been geared towards the environment, as efforts to decrease their carbon footprint have ramped up significantly. Fortunately, Pentagon already has the means to measure and report on each of its client’s emissions according to their mode of transport, and is currently reviewing options to offer a carbon offsetting solution that supports their sustainability measures. “We have done this by staying ahead of industry trends and thinking outside of the box, which has allowed us to find a niche in a very large pool,” he says.
The business then applied the same level of innovation and agility to the challenges imposed by the pandemic. Michael highlights that during Covid-19, Pentagon learnt to pivot to market fluctuations. “Our operation was initially severely impacted by both reduced demand from clients, and by the limited availability of global transport services. The majority of our operation transitioned to remote working – similar to most businesses. Despite some initial challenges, our team managed to successfully navigate the necessary changes, while maintaining service levels to our clients through the use of our cloud-based IT infrastructure,” he elaborates.
Covid-19 has certainly changed the freight forwarding world. Michael divulges that prior to the pandemic, pricing was a key factor for customers in forwarder selection. Now, however, customers are moving away from a purely transactional model to a more collaborative approach, and the Pentagon team is seeing a demand for superior service levels and value-addition, with less emphasis on lowest pricing. “At Pentagon, we pride ourselves on delivering a high level of service to our clients, and with the change in client mindset, our own customer base is growing rapidly,” Michael expresses.
We then steer the discussion towards the topic of sustainability to highlight the ways in which Pentagon is contributing to the fight against climate change. A few of these measures involve strategic innovation to help steer their clients towards their net zero goals. “We have a diverse renewable clientele already, from large multinational corporations, to a number of UK-based manufacturers and start-up businesses involved in wind, solar and hydrogen. We have also had positive discussions with a number of potential clients in wave and tidal energy projects globally,” he says.
With much of Pentagon’s existing customers transitioning over the last decade, the business has been involved in the movement of goods for the renewable sector for a number of years. According to Michael, the engineering, construction and installation of these projects have a lot of similarities with oil and gas. “The same similarities exist for freight movements in both industries, and the result is that with our experience and skills, we are strongly positioned to support the energy transition.”
The business has taken this one step further by appointing a Renewables Manager, signifying that Pentagon’s energy transition is now firmly under way. “This appointment and the acquisition of Carlbom Shipping, demonstrates our commitment to our diversification into the renewables space. This appointment allows us to have a focal point to drive and grow our renewables products.”
Considering all that Michael has shared with us, the future of Pentagon looks promising. He highlights that a continued focus on service for existing customers will be one of the key goals for the business moving forward. “Consistency is crucial to our long-term associations with our customers. This will involve increasing our footprint across our key hubs to allow the continued growth of the business. With the changing outsourcing trends, we will be engaging with clients to help navigate the difficult waters of compliance, inflation and a supply chain crunch.”
To conclude, Michael strongly believes that the relationship between forwarder and client has never been more important than it is right now. As a result, he highlights that on a longer-term scale, Pentagon will remain committed to offering the highest quality of forwarding services, which will also involve developing the next generation of the company’s logistics talent. “We are determined to develop our trainee program to promote the industry and make the business more attractive to young people who are looking to start their career with us. We are already seeing a steady flow of new talent entering our operation.
“We want to be seen as the preferred name in freight forwarders and shipping agents, as well as a workplace where our team has the opportunity to show their skillsets, and the freedom to deliver a top-class service,” he says. “As long as this remains our core purpose, I believe the company will remain successful for many more years.”
Pentagon Freight Services
Services: Freight forwarders