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october 2012

f e a t u re s . . . . logistically Speaking it all adds up! Seeing the Forest for the trees

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Game Changers CHARLOTTE’S

Intermodal Facility and Panama Canal Expansion


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f e a t u r e s cover story

12 22 30 38

Game Changers The post-Panamax-sized passageway of the Panama Canal Expansion Project and the intermodal facility at Charlotte-Douglas Airport will impact global trading patterns, increasing trade to and demand for logistics and distribution on the East Coast. Given Charlotte’s prime geographic location with direct access to deep-water ports and rail, trucking and air freight and intermodal capabilities, will the Panama Canal Expansion be a boost or a boom for Charlotte?


logistically Speaking Bonded logistics, inc. performs services for companies that are looking to outsource their distribution and storage needs; providing secure warehouse space and maintaining staff and equipment to handle distribution or packaging needs.

it all adds up Daniel, ratliff & Company is passionate about being one of the best accounting firms in the Charlotte region. The named founders share their pride in the business with the succeeding team now in place. Their success is mirrored in the success of their clients.


Seeing the Forest Forest2market, inc. describes that they do: “What Bloomberg did really well was develop analytical tools so their users could track the particular metrics that were important to them. We do essentially the same thing but for specific metrics in the pulp and paper, sawmill, timberland and related industries.



o f i n t e re s t …






Performance Data for Better Business Decisions Should You leave Your Business in trust?

october 2012 |

10 11 44


Still not enough to Go around bizxpert

What’s on the minds of Business owners? Solutions! publisher’spost

neW health insurance exchanges!

the performance group

October 2012 Volume 13 • Issue 10 Publisher John Paul Galles x102

Associate Publisher/Editor Maryl A. Lane x104



TO PUT OUR BEST FOOT FORWARD! We actually want to hear from you—about what you like or don’t like, of course—but more importantly about the topics, issues, business matters or specific companies you would like to know more about. Drop us your thoughts in general or on specifics directly to the publisher at We would like to engage more thought leadership in the Charlotte business community and also welcome well written and researched articles or opinions on topics of general concern. If you have a piece of your own making or would like to propose coverage of something in particular, drop us a line.

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Junior Fritz Jacquet On a Roll: The Art of Cardboard Junior Fritz Jacquet is the creative genius behind this toilet paper roll art. Jacquet is an self-taught French origamist that works with all sorts of paper to create awesome renditions of figures, faces, trees and more. Photos: Matthieu Gauchet.

october 2012 |

Creative Director Trevor Adams x107

Business Development Greg Greenawalt x103

Sales Manager Talbert Gray x108

partners Central Piedmont Community College Garfinkel Immigration Law Firm hiSoft Technology International Limited Potter & Company, P.A. Wishart, Norris, Henninger & Pittman, P.A. Contributing Writers Mike Crespo Zenda Douglas Barbara Fagan Gene Stowe Contributing Photographers Fenix Fotography

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2013 SPeAKeR LineuP

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Dr. Derek Raghavan Internationally-Renowned Cancer Researcher, Medical Oncologist and President of Levine Cancer Institute

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Hood Hargett Breakfast Club is a “category exclusive” organization that develops and hosts some 36 events throughout the year for its members and guests. Members include men and women from more than 50 local and regional businesses who have built their companies to become leaders in their respective fields. For more information, contact Jenn Snyder at 704.602.9529 or Visit Accepting New Members Call Jenn Snyder at 704-602-9529 • 


OF Interest: Performance Data

Performance Data for Better Business Decisions Most small business owners and managers are acutely aware of how their company is performing on a daily or weekly basis. In addition to leading the company, many also process customer orders, create invoices, post payments, make bank deposits, and sign checks for employees and vendors. As they perform these tasks, they receive updates about daily sales volume, current cash, accounts receivable and accounts payable balances, inventory levels, line of credit balances, and so forth. This keeps them informed about the company’s overall performance, so they are better able to identify issues and react quickly. As small businesses grow, employees are hired, and owners and managers pass duties to others. As tasks are delegated, however, leaders may also lose their full view of the company’s current performance. They may still receive weekly sales reports or a daily cash balance information, but this information only highlights a few segments of the business. For the full view, the owner or manager may rely on the month-end financial statements, but these provide a historical picture that can be several weeks old. Instead of observing current performance, these managers look backwards. Today, most business or enterprise software systems offer management dashboards or executive summaries to help owners and managers understand current business conditions. These are usually reports or screens within the software that consolidate data and give real time, high level views of important information. These executive summaries can be very useful, but they can also be frustrating if the data is too limited or hard to understand. There may also be important information outside the software that cannot be added to the software-generated dashboard. For a small or mid-size company, building your own executive summary may be a better alternative. You can create a management dashboard, using a spreadsheet, which can be customized for your specific needs. It can be easily updated and provide a full overview of the company’s current performance. Below is an example and several useful tips: Keep the report short and simple. Create a report that fits on one printed page. You should be able to quickly review the report and easily understand the information. Focus on the basics and only include high level data. Include 10 to 25 key items that you need to make good decisions, and exclude unimportant details. If the summary figures suggest a problem then research further. Combine financial and statistical data. Balance sheet and income statement summary data should be combined with other statistical data, for example: number of employees, quantities produced, overtime hours worked, etc.

Compare with past periods. Comparisons show if your performance trend is better or worse. Share the results. Talk about the data and the trends with other managers and employees. Executive summaries should include the company’s most important performance data, so discussing this information reinforces, to everyone, those factors that are important.

Contributed by

EXECUTIVE SUMMARY Month to Date ­ Month to Date 03/16/12 03/18/11

2012 Last year (01/01/12 -­ to date 03/16/12) (01/01 -­03/31)

Sales COGs

430,690 405,860 1,561,240 1,514,600 221,070 243,140 822,990 848,410

Gross Profit Gross margin

209,620 48.7%


136,960 137,750 547,100 544,500

Net Profit Net Profit Margin

72,660 16.9%

162,720 40.1%

24,970 6.2% 03/16/12

738,250 47.3%

191,150 12.2%

121,690 8.0%


Cash Accounts Receivable Inventory Accounts Payable Line of Credit balance

78,330 57,650 675,342 632,745 376,942 425,331 91,820 165,342 273,940 207,112

# of employees Sales per employee

43 $10,016

41 $9,899

5,362 25

4,920 64

Regular hours worked Overtime hours worked

666,190 44.0%

Total paid hours 5,400 5,016 (Total paid hours include 1.5% times the overtime hours) Sales $ per total hours $79.76 $80.91 Total pieces produced Pieces produced/hr

75,982 14.1

83,542 16.7

Figures are not real. For example only.


Executive summaries or management dashboards highlight current business conditions. Unlike monthly financial statements, an executive summary includes only the most important factors driving the business. High level information is gathered, consolidated and shared several times each month. Owners and managers stay informed about current operations and have a real time tool to help manage future business performance. Content contributed by Potter & Company, a locally based certified public accounting firm offering core services of audit, business consulting, tax and financial analysis. For more information contact Michael Waddell, Financial and Management Consultant, or John Kapelar, CPA, Partner, at 704-283-8189 or visit

7 | october 2012

Global Competitiveness Summit II

Save The Date Thursday, February 21, 2013 Harris Conference Center

Help grow a robust and resilient region. Join community leaders to discuss how changes in global commerce will affect your business and impact our region’s training, education and transportation infrastructure. Plan to attend the second Global Competitiveness Summit. Speakers will include:

John Silvia, Wells Fargo Managing Director and Chief Economist

Michael Gallis,

Michael Gallis & Assoc. Consultant and Strategic Planner

To receive more information about this event, send an email to or visit

Presented in collaboration with:


OF Interest: Business Trusts

Should You Leave Your Business In Trust? Team Promotions, Inc. is a family business, founded by Ivan in 1949, currently valued at $10,000,000. The 83-year-old patriarch, Ivan, married with three children, wants to keep the business in the “family.” Two of his children work in the successful college pennant manufacturing enterprise, and the third child is a minister. His oldest son, Lacky, has effectively been running the business for eight years; his daughter, Barbara, is a loyal hardworking employee. Both children are concerned that the demand for college pennants is on the wane.

if the trustee in his discretion deems it appropriate. The trust might even include an exculpatory clause that states the trustee is not liable if he fails to diversify.

Contributed by

Leaving a Business in Trust 1. Determine Control. If Ivan were to leave all of the stock equally to his three children, there could be conflicts among family members as to critical business decisions, including salaries, profit distributions, general debt obligations, capital infusions, and other tax and nontax issues. Ivan has decided to separate control from the ownership of the company by recapitalizing the company into voting and nonvoting shares. For each share of common stock issued there will be issued a small amount of nonvoting shares. 2. Equalization of Estate. After recapitalization, Ivan would own 1,000 shares of voting and 10,000 shares of nonvoting stock. He would then be in a position to devise or gift the voting shares to Lackey, thus determining control. The remaining nonvoting shares could be left in trust for the benefit of all children and their descendants. 3. Asset Protection. The nonvoting shares devised in trust could be protected from creditors of the beneficiaries, including from divorce and bankruptcy. The trust should include a “spendthrift protection” clause, prohibiting the beneficiary from assigning his interest to any potential creditor; a child could even serve as her own trustee provided distributions are limited to a standard such as “health, education, maintenance and support.” 4. Perpetuate the Business. The terms of the trust could restrict the sale of the stock to certain family members, or grant them rights of refusal upon death of the beneficiary. The trust term could be as long as law allows (approximately a century in North Carolina). 5. Save Estate and Gift Taxes. While the present applicable exclusion amount (“credit”) is $5,120,000, it is due to fall to $1,000,000 on January 1, 2013. Nonvoting stock could be gifted (probably at a discount) now in trust that would care for Ivan’s wife for life, and then go to children. The stock in the trust, as well as its growth, would not be included in wife’s estate when she died, and Ivan’s full 2012 credit would have been used. Corporate distributions would benefit wife for her life. The stock thereafter could remain in trust for the lives of children.

Duty to Diversify Extracting from efforts of scholars (Uniform Trust Code, Uniform Prudent Investor’s Act and Restatement of Trusts 3rd), North Carolina adopted a new comprehensive Trust Code in 2005. This Code provides trust assets should be diversified, and invested in a prudent, businesslike manner considering both risk and growth. But this is a default rule, and comes into play only if the trust instrument does not otherwise provide for how assets are to be invested. A boilerplate provision often seen in trusts that are designed to hold closely held businesses state the trustee may hold one class of investment disproportionately weighted

What happens if the business value drops while owned by the trust? Ivan has insisted on continuing the pennant line, despite his children warning him that college students are now texting and twittering during the games and not waving pennants. Even with mandatory provisions to retain stock coupled with exculpatory provisions in the trust instrument, North Carolina and common law require trusts to “benefit beneficiaries.” Court cases across the country come down on both sides of whether the trustee is liable for failing to diversify closely held business interests, even when there is mandatory language not to sell, despite the opportunity to do so. Even if there are provisions to eliminate the need for diversification and even if there are exculpatory clauses, the trustees must be careful when dealing with a family business.

Conclusion There are many good reasons to establish a trust to own your business, whether a corporation, LLC, or partnership. But unless you are committed to seeking frequent tax and legal advice regarding the administration of the trust, be ready to defend your actions as trustee to beneficiaries. Content contributed by Joseph B. Henninger Jr. of Wishart, Norris, Henninger & Pittman, P.A., which partners with owners of privately held businesses to provide comprehensive legal services in all areas of business, tax, estate planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, contact him at 704-364-0010 or


9 | october 2012


OF Interest: Immigration Matters




Contributed by

colleges and universities turn out more U.S. scientists, engineers, mathematicians, analysts, etc., or until changes are made to U.S. immigration laws increasing H-1B visa availability, we will continue to run out of H-1B visas each year. U.S. employers who need employees in these disciplines will either need to file H-1B petitions earlier and earlier in the filing period (and hope that a visa will be available), hope alternate visa options are available, struggle to find U.S. workers who meet their requirements, offshore jobs to places where qualified workers can be found, or simply do without critical employees.

I-9 Audits

Until American colleges and universities turn out more U.S. scientists, engineers, mathematicians, analysts, etc., or until changes are made to U.S. immigration laws increasing H-1B visa availability, we will continue to run out of H-1B visas each year.



The H-1B visa is often the only nonimmigrant (temporary) visa available to a U.S. company seeking to employ a foreign national in the U.S. To secure approval of an H-1B petition, the company must intend to fill a specialty occupation (a job which normally requires a bachelor’s degree or higher). It must also demonstrate that (i) it will pay required wages, (ii) offer the same working conditions afforded U.S. workers, and (iii) the foreign national’s employment will not adversely affect similarly situated U.S. workers. The H-1B petition may be approved for a maximum initial period of three years and may be extended for an additional three-year period. Issuance of new H-1B visas is limited to 65,000 annually, plus an additional 20,000 for those foreign nationals who have obtained a master’s or higher level degree from a U.S. college or university. The H-1B cap was reached on the very first day of the filing period in 2007. The cap was also reached during the first week in 2008. As the U.S. economy struggled through the “Great Recession,” H-1B usage slowed but the cap has been reached every year since (and every year since the late 1990s following the implementation of a numerical cap in 1990). This year the quota was reached approximately eight weeks into the filing period. With 8.2 percent unemployment in the U.S., many may wonder why the H-1B cap is reached so quickly every year. Surely American companies would rather hire U.S. workers than sponsor foreign nationals (less time, hassle, cost, etc.). Surely there are U.S. workers who can fill the jobs that are being taken by foreign nationals on H-1B visas? The simple answer is STEM (Science, Technology, Engineering and Math). It is occupations in these disciplines that attract the majority of H-1B visa holders. Until American

october 2012 |

Form I-9 Employment Eligibility Verification Audits remain a useful, costeffective tool in U.S. Immigration and Customs Enforcement’s (ICE) efforts to fight against illegal immigration. In addition to its field auditors, ICE’s Employment Compliance Inspection Center (ECIC) is an important resource serving as the centralized point of contact for I-9 audit issues. It is tasked with assisting field auditors in streamlining and reducing the backlog of I-9 audits. As a result, ICE is more current with its inspections and able to “touch more employers and do more inspections.” ECIC is involved in large scale audits (1,000 or more I-9s) and smaller backlogged cases. In determining which employers to audit, priority is given to: employers being investigated for criminal I-9 violations, employers in critical infrastructure or involving national security issues, businesses with “national impact” that are too large to audit at the field level, and employers that are egregious violators. Employers are urged to learn about their responsibilities to hire authorized workers and how to verify employment eligibility to avoid not only sizeable civil sanctions but criminal prosecutions too.

Content contributed by Steven H. Garfinkel, J.D., Managing Partner of Garfinkel Immigration Law Firm and a nationally recognized immigration law specialist with over 25 years of business immigration law experience. For more information, contact him at 704442-8000 or Steven.Garfinkel@GarfinkelImmigration. com or visit


An Opinion: Business Owners

What’s on the Minds of Business Owners? Solutions! Dear Political Hopefuls :

I’m one of America’s business owners. With less than a month to go before the election, we want you to hear something: When you applaud us as job creators, as innovators, as the backbone of the American economy, we don’t feel esteemed. We feel like pawns. Business owners know we’re part of the solution. But when you say it, it feels like lip service. Why? Because most of what you’re saying doesn’t ring true. Most of what you say just convinces us that people in Washington don’t have a clue about the problems business owners face or what we have on our minds. If you believe business owners are such a big part of the solution, why aren’t you really listening to us? That’s why I’m writing. Republican, Democrat or somewhere in the middle, we want you to spend less effort trying to get our votes and more effort on a process for seeking real solutions to the tough reality of business ownership in America today. Sure, that’s an unreasonable expectation. Hey, business owners are an unreasonable bunch. Who am I to speak for America’s entrepreneurs? It’s true, nobody elected me. You could say I nominated myself. I’m just another business owner—a business owner who has worked with other owners every day for almost 20 years. I help owners adapt and build infrastructure and sell their assets and make decisions about capital and other financial issues. How do I help them find solutions? I listen and ponder and seek with them. So if you’re serious about engaging private enterprise to create jobs, then take the time to find out what’s really on our minds. Start acting like you recognize our value as collaborative partners in figuring out how to save this economy. Here are some of the things we want you to hear: Private enterprise is not the same as Corporate America. Imagine replacing the creativity and innovation of entrepreneurship funded by private dollars with corporate thinking

Business owners have been sucking on the vapor of hope and pulling on frayed vision for four years. Those of us who are still here are lean, ornery and aware. We know there’s no easy answer to this crisis. We also know that we want the twin behemoths of Wall Street and Washington to listen to the voice of Main Street shouting across the ravine that separates us.

funded by public investors. Private enterprise grows out of courage, determination and a willingness to risk everything for the freedom to innovate and create. Corporate America is organized around practices designed to squeeze every dollar out of every product and service in order to maximize profits for stockholders. What’s good for corporations is not necessarily good for private companies and the communities they serve. Listen: Men and women who own businesses generating a quarter million…a million…$10 million in revenue a year can tell you what conditions we need in order to adapt, survive and regain our footing on Main Street, not Wall Street. We don’t expect you to save us, but you can strangle us. We’re not looking for bailouts. Stimulus money has contributed to a lowest-bidder mentality that hasn’t helped owners whose margins are already too low. Regulations? Their impact makes doing business more costly for us every day. And your blame games focusing on greed versus entitlement alienate us; both greed and entitlement work against us. Listen: We disengage a little more every time you take an action that throttles us. Our confidence has taken a beating. Our businesses have lost disproportionate value on our balance sheet. We feel vulnerable. Many of us have adapted by letting employees go or contracting them or selling equipment or moving back into home offices. We feel poorer today—hardly the mindset of an investor. Listen: Don’t expect us to create jobs or reinvest in our businesses when our risk tolerance is shaken to the core. We’re cockroaches. You can stomp on us, but you can’t kill us. We may shrink or go quiet, but we will regain our footing and gather influence again. Listen: Don’t count us out. The only question is how much will be lost before we regain our strength. Business owners have been sucking on the vapor of hope and pulling on frayed vision for four years. Those of us who are still here are lean, ornery and aware. We know there’s no easy answer to this crisis. We also know that we want the twin behemoths of Wall Street and Washington to listen to the voice of Main Street shouting across the ravine that separates us.

Sincerely, An American Business Owner

Content contributed by Sam Frowine, a coach and consultant for business owners who are adapting for today’s marketplace, and author of Lifeblood: How Successful Business Owners Achieve Wealth. Participate in his sur vey of business owners at www.Sur, visit his website at, or email him at

Author of


11 | october 2012

Panama Canal Expansion 2014


Game Changers CHARLOTTE’S 


october 2012 |

Intermodal Facility and Panama Canal Expansion


Charlotte Intermodal Facility 2013

Norfolk Southern


Roughly 100 years after the completion of the Panama Canal, the Panama Canal Expansion allowing for post-Panamax ships to transit, is nearing completion in late 2014/early 2015. Some say that this will be a global trade route game changer, and that inland ports such as Charlotte with connections to a deep water harbor and truck, rail and air freight services stand to benefit from the expansion and ensuing trade. Others speculate that any boost in trade will at best be temporary with no real long-term benefit or change to trade, transportation or distribution. Undoubtedly, the synergy with Charlotte’s new intermodal facility will magnify any such gains, elevating Charlotte onto the global stage.

The Power of Place

Chase Saunders, a former Superior Court judge, community activist and noted historian of Charlotte, introduces the vision for Charlotte in a recent piece he put together for a creative summit: “Charlotte owes its existence to its location at the intersection of two local, ancient trading paths. Through time, the intersection gained prominence in the region, then the nation, and now the world. That location is going to leverage Charlotte into one of only a handful of global intersections of commerce. “Charlotte is located at one of those pivotal global intersections. Here, you can create, import, manufacture, assemble, ship, handle, and deliver just-in-time any thing. And you can do it more economically and with a better margin of profit than anywhere else. Charlotte offers fertile soil in which business can grow and prosper.

13 | october 2012

“The basic concept of that strategic plan was pulling together all four major modes of transportation on one coordinated site under the assumption that doing that would be the pinnacle of efficiency and therefore costeffectiveness for all four. If we were able to do that, it would place us as one of those intersections of the rivers of commerce that would distinguish us in the future and build the opportunities for business here.” ~Jerry Orr


october 2012 |

“The economic vision for Charlotte’s future is one of a global commercial hub, a great inland port city leveraging its manufacturing and logistical resources to world prominence. Charlotte is a place where your business must be located if you want to be relevant in the 21st century.” In Create It Make It Move It; Charlotte 2030; a Global Intersection of Commerce, Saunders describes an economic vision and essence of Charlotte: “The world is connected by commercial trade lines on land, sea and air. Where those lines intersect, commerce thrives. Those commercial lines intersect in Charlotte and allow it to move anything with mass to half the United States within 24 hours or less. That is the power of place.” Saunders was the scribe for a joint endeavor including Dr. Tony Zeiss, president of CPCC and champion of workforce training and education for economic development, and Michael Gallis, a regional and global planner with a truly visionary understanding and appreciation of how things change and the effects of change on populations and on regions, in preparing the Create It Make It Move It manifesto. Saunders touts his case for Charlotte: “Charlotte will be the significant beneficiary of unprecedented commercial events taking place thousands of miles away. In 2014, a huge number of Chinese trading ships will stop visiting ports in Southern California. Instead, they will are arrive at newly furbished ports along the Gulf Coast and Atlantic Coast as a result of the opening of wider Panama Canal locks. It will be a ‘gone tomorrow, here today’ economic scenario. Some estimates place the number of additional passages through the Panama Canal to reach 15,000 carriers! “In 2014, huge amounts of cargo will be taken off Chinese Panamax freighters hauling 16 train loads of goods into ports including Mobile, Jacksonville, Savannah, Charleston, and Norfolk for distribution and assembly or manufacture. And Charlotte will be ready to take that cargo and insert it into the streams of commerce in a freight handling terminal capable

of handling tens of thousands of containers. “Huge amounts of cargo will move by rail and truck throughout the Southeast. Charlotte will be in the center of much of it, an inland port. “And Charlotte is the best placed city to do things with that cargo because we will have the only fully functional and operational intermodal center on the Eastern Seaboard. And it is located at the airport. The airport is already the least expensive location to move people in the world. Add to that the relocation of the Norfolk Southern Rail Yard between two runways with adjacent bays to ensure adequate truck access, and you will have the most efficient place to move freight by air, land, or sea, on the Eastern Seaboard.”

Intersection of the Rivers of Commerce The opening of a major intermodal facility at Charlotte-Douglas International Airport in late 2013, coinciding with the expansion of the Panama Canal, promises a sea change in greater Charlotte’s global status. Charlotte will be ready. The new facility, under the decades-long leadership of Jerry Orr, is the result of more than 15 years’ planning, the assembling of acreage at the airport about as large as HartsfieldJackson Atlanta International Airport, and a novel strategy that provided both dirt for an elevated runway and space for a Norfolk Southern rail yard. Orr recalls the beginnings of the project about 1990, then working with Gallis and devising a plan by the mid-1990s. “We started looking at strategic planning and what some regions were doing—particularly in Asia where there were massive projects based on communities integrated and growing up as part of an airport complex,” Orr says. “We needed to understand the global issues so we could focus our limited resources on strengthening our strengths and disguising our weaknesses. The basic concept of that strategic plan was pulling together all four major modes of transportation on

Railroad Map to North Carolina Ports

one coordinated site under the assumption that doing that would be the pinnacle of efficiency and therefore cost-effectiveness for all four. If we were able to do that, it would place us as one of those intersections of the rivers of commerce that would distinguish us in the future and build the opportunities for business here.” They began to look for ways to boost air freight business at the nation’s seventh busiest airport when they recognized an opening to broaden the freight sector. They figured the city could attract traffic by drastically reducing the cost, called the dray charge, of transporting goods from a rail center on the north side of the city to the airport on the west. The co-locating of the activities also brings significant reductions in energy use, traffic crowding, and environmental damage. “We began to realize that freight centers attracted enormous amounts of business,” Gallis says. “With the way the world was going with e-commerce,

companies were looking for efficiencies. The world trade lanes were shifting and we wanted them to come through Charlotte. “If the world recognized Charlotte as a freight center, then businesses connected with the movement of goods would all be attracted to the airport area,” says Orr. “We took that up as our assignment and figured out how to co-locate a freight rail intermodal yard on the airport and began talking to Norfolk Southern about that. About 15 years later, we did the deed.”

Charlotte’s New Intermodal Facility / Inland Port The new intermodal facility being built and managed by Norfolk Southern will be capable of 200,000 lifts per year, transferring containers between trucks and trains. Ultimately, it is designed to handle 600,000 containers, equal to the two largest U.S. centers in Dallas-Fort Worth and Chicago. “This facility will be state of the art here. The containers can move by either truck or rail, but they could move from the dock at the port by rail to this yard, be re-sorted and picked up by Norfolk Southern. We happen to be lucky to sit on their main line,” comments Orr. “Charlotte is a key hub on the Norfolk Southern intermodal system and on our Crescent Corridor, a new rail intermodal network under development stretching from New Jersey to Memphis and New Orleans,” according to Norfolk Southern CEO Wick Moorman, describing how the facility will greatly expand their ability to handle intermodal traffic. Increasingly, inbound cargo is transferred directly from an ocean vessel to railcars and then transported to an inland location, away from the more congested port itself, for further processing and distribution. These inland locations, or intermodal centers, serve as “inland ports,” with some handling as much cargo volumes as their coastal counterparts. Charlotte is already on the relatively short list of current areas widely recognized as full-fledged inland ports. Though the inland port concept is not new, these

CHARLOTTE’S NEW INTERMODAL FACILITY Construction is already underway on Charlotte’s new intermodal facility at Charlotte-Douglas International Airport, scheduled to be completed in late 2013, linking air, rail and truck to East Coast seaports. Under agreement with the City of Charlotte, the property is leased to and the facility is being built and managed by Norfolk Southern. The 200-acre intermodal facility will sit along the southern of Charlotte’s center parallel runway and 40 feet underneath two taxiway bridges. The tracks will extend a mile along the airfield. Initially the facility will be capable of 200,000 lifts per year (the transfer of containers between trucks and trains), projected to reach 600,000 in the future.

15 | october 2012

GLOBAL TRADE ROUTES The Panama Canal expansion is expected to affect global transportation trade routes. The Panama Canal’s main competitors for shipments from Asia to the U.S. East Coast are the U.S. Intermodal System and the Suez Canal. The Suez Canal route competes with the Panama Canal in the Asia–U.S. East Coast route, especially in cargo originating in South and Southeast Asia, due to its shorter navigation time of 21.1 days and its capacity to handle post-Panamax vessels. The U.S. Intermodal System is a complex of three distinct transportation modes: ocean shipment, movement by rail, and truck transport. The U.S. Intermodal System has the shortest ocean navigation time (Asia to U.S. West Coast) of 12.3 days. Transit time from the West Coast to the East Coast is another 6 days, for a total transit time from Asia to the East Coast of about 18.3 days. However, the reliability of ports and railroads frequently is compromised by labor problems and capacity expansion challenges. Only a few U.S. East Coast ports at present can receive the post-Panamax vessels (Savannah, Norfolk, and Charleston) and the efficiency of these ports is reduced by congestion caused by inland rail and road chokepints.

“You’ve got to have a vision to get there— whether you’re an individual, a community, a state or a nation.” ~Tony Zeiss

locations are becoming increasingly critical to the global supply chain, affecting logistics decisions ranging from shipping routes to warehouse locations. In building the intermodal facility, Gallis says, “What we had was a great opportunity to do something that the other metropolitan areas could not do. Atlanta, nor New York, had the opportunity to build a connection point for rail, for trucking and air at a single location.”

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“Nothing is made in any one place any more. Things are made everywhere today. The pieces and parts move through the world transportation grid, and as they move they get assembled in what’s called subassemblies, shipped on to other subassemblies, finally getting to the point of the final factory and the final product.” ~Michael Gallis The benefits of concentrating the connected modes of transportation in one place, so obvious in hindsight, were not under consideration in the haphazard development of cities in the United States. Ties among the different kinds of infrastructure are so little recognized that they are not even all overseen by the same congressional committees. But in Charlotte, the collaboration of public and private civic leaders seized the opportunity years before the Panama Canal expansion was planned and maintained the effort as part of a broader economic strategy ready to remake the city after the recession. “There is an intermodal yard being built at the airport, but it’s not about an intermodal yard at the airport,” says Gallis, whose remembers the airport’s dreary resemblance to a bus station when he first arrived in the early 1970s. “There has been an incredible transformation.

“Now we see it not as an airport any more, but we call it a multimodal hub. It’s going to become something different, something we’re not used to seeing.” The intermodal facility offers new opportunities for export as well as import and distribution. Emptied containers need to be returned for refill, and local goods, including farm, forest and factory products, could fill them. “The backhaul business will provide an opportunity,” Saunders says. “The ship’s here. It’s got to go back. Things you could not otherwise send cost effectively become cost-efficient because you’ve got the containers. There’s a new big market to open up.” Gallis points out that the intermodal center also will make Charlotte attractive to the international supply chain.

PANAMAX AND POST-PANAMAX VESSELS The “Panamax” size limit for ships has been in effect since the opening of the Panama Canal in 1914 and describes the maximum size of vessel that is able to pass through the canal’s lock chambers. Ships larger than the Panamax sizes are called post-Panamax or super-Panamax. The canal now accepts vessels that draft to 39.5 feet, but it will take vessels that draft to 50 feet. Ships now can be no larger than 965 feet long and 106 feet wide, but the new lane will take ships up to 1,200 feet long and 160 feet wide. With the completion of the Panama Canal Expansion Project, canal management has published the “New Panamax” sizes that will be in effect when the third lane of locks, larger than the current two, are operational in 2014. Post-Panamax vessels move approximately 27 percent of the world’s containerized maritime shipments.

17 | october 2012

“It will become a huge magnet,” he says. “Nothing is made in any one place any more. Things are made everywhere today. The pieces and parts move through the world transportation grid, and as they move they get assembled in what’s called subassemblies, shipped on to other subassemblies, finally getting to the point of the final factory and the final product.” Orr says the facility will reduce costs for companies that use it.

“People ask what an intermodal center is. It is the equivalent of a gigantic commercial circulatory pump. It allows all of the business sectors to then plug in, and in particular the business sectors associated with manufacturing.” ~Chase Saunders “Once you have one of these gigantic circulatory pumps, you immediately have a profit margin that works to the benefit of anybody that’s plugged into it.”


“It’s obviously cheaper to move containers across the ocean on container ships than it is to fly them on an airplane, by a huge spread,” Orr continues. “It is cheaper to move containers by rail than it is by tractor-trailer, and it consumes about 10 percent of the energy.” “People ask what an intermodal center is,” Saunders says. “It is the equivalent of a gigantic commercial circulatory pump. It allows all of the business sectors to then plug in, and in particular the business sectors associated with manufacturing.

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Impact of the Panama Canal Expansion The Panama Canal Expansion will bring ships three times the size to the Caribbean Sea and the Gulf of Mexico—ships filled with containers of goods bound for ports on the Atlantic Ocean and potentially through Charlotte. The expansion involves the building of two new sets of locks and the widening and dredging of the canal lanes at various locations. For the first time in history, inland ports—such as Charlotte’s intermodal facility—rather than seaports will be the

hubs of trade and commerce, eliminating the advantage enjoyed by water-accessed cities since ancient civilizations. Asian goods once unloaded in California for the cross-continent trip to population centers in the East now will move by water to Norfolk, Wilmington, Charleston, Savannah and Miami. Crowded docks will require quick relief, so the thousands of containers per ship will be lifted onto trains and sped inland for breakdown and further distribution. “We’re a distribution center. We always have been,” says Saunders. “Now we’ll be able to tap into what the Panama Canal is going to do when it opens up. There are going to be at least 7,500 passages of post-Panamax ships. “The logistics companies are putting out reports on what the impact is going to be, and there’s no doubt the Southeast will benefit as some of those ships no longer dock in California. They will come into the Southeast and the East Coast ports.” Norfolk already has the 50-foot depth required to receive such ships, and this year the federal government approved funding to provide such depth at Charleston, Savannah and Mobile. When the canal expansion is complete, ships that can carry the equivalent of more than 12,000 20-foot-equivalent units (TEUs), the measure of typical containers, can pass through, far more than the present 4,400 TEU limit. “We’re getting ready to have a trade route shift,” Saunders says. “Certain cities will be able to take advantage of it.”

THE PANAMA CANAL The Canal System The Panama Canal involves a lock system that lifts a ship up 85 feet to the main elevation of the Panama Canal and down again. It has a total of six steps (three up, three down for a ship’s passage). Two artificial lakes form key parts of the canal; Lake Gatun and Miraflores Lake. Four dams were constructed to create these lakes at Miraflores, Pedro Miguel and Gatun. There are three sets of locks in the canal. A two-step flight at Miraflores, and a single flight at Pedro Miguel, lift ships from the Pacific up to Lake Gatun; then a triple flight at Gatun lowers them to the Atlantic side. The total length of the lock structures, including the approach walls, is nearly two miles. The locks physically limit the maximum size of ships which can transit the canal; this size became known as Panamax.

The Panama Canal Expansion In 2007, the Panama Canal Authority (ACP) approved the expansion of the canal (Third Set of Locks Project) to double its capacity by 2014 allowing more and larger ships (“post-Panamax”) to transit. It involves: •Construction of two lock complexes— one each on the Atlantic and Pacific sides—each with three chambers, which include three water-saving basins; •Excavation of new access channels to the new locks and the widening of existing navigational channels; and •Deepening of the navigation channels and the elevation of Gatun Lake’s maximum operating level. The expansion offers an alternative trade route to the Suez Canal and is expected to create demand along the U.S. Eastern Seaboard for ports able to handle post-Panamax ships.

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Fueling the Economy; Becoming a Global City

“We’re the new global city on the East Coast. Let’s build relationships with every major trading bloc and say to ourselves ‘How can we then capitalize on those trading relationships and bring other companies to Charlotte?’” ~Michael Gallis


october 2012 |

However, it’s not just that Charlotte’s concentration of air, rail and land resources ready to receive and distribute shipments of goods from around the world will be the largest on the East Coast. “It’s about anchoring Charlotte in the new pattern of global trade and determining how Charlotte can best compete with centers like Miami, Atlanta and New York,” says Gallis. “The big economic centers of the world are the centers that are trade network hubs. The fact that they’re trade flow centers and passenger flow centers fuels a huge part of their economy.” Leaders say the intermodal project is part of an even larger strategy to reposition the city economically in ways that will impact every area of life, from education to employment and infrastructure to culture. “Around the world, there are certain locations that are emerging as places where you’ve got to be,” asserts Saunders. Saunders predicts “intermodal Charlotte” will be the region’s next boom. “You’ve got to have a vision to get there—whether you’re an individual, a community, a state or a nation,” affirms Zeiss. The launch of a global trade hub in Charlotte offers an opportunity to elevate the city’s international stature in fields far beyond transportation and logistics, leaders say. “We’re the new global city on the East Coast. Let’s build relationships with every major trading bloc and say to ourselves ‘How can we then capitalize on those trading relationships and bring other companies to Charlotte?’” says Gallis. The change will also require a new mindset for city leaders, who typically have looked to Europe for international relations, to leverage and enhance existing elements of global-city life, Gallis says. Gallis says the city must continue to address three categories required for top-tier status: “The first is, ‘How are you connected to the global network?’ The intermodal facility provides a giant step forward. “The second is, ‘What size and type of economy do you operate?’ That’s really a question of the degree to which you’re part of the innovation economy or you’re part of the traditional economy. “The third is, ‘What competitive resources such as medical centers, universities, cultural attractions and other amenities are available for quality of life?” While the region has abundant water, relatively economical energy, high-quality health care and a rapidly-growing research university, UNC Charlotte, some sectors require significant improvement.

Conclusion Asked about the future, Saunders enthusiastically responds. “In Charlotte, you can create, manufacture, assemble, or make and then move anything with

mass to half of the United States within 24 hours by truck. This production can be done faster and cheaper than in any other location on the East Coast adding a competitive profit margin. “The huge airport intermodal complex is comparable to that of Houston in its ability to handle the large TEU containers and rail cars developed for use in the regional seaports of Mobile, Savannah, Jacksonville, Charleston, and Norfolk. Raw materials, parts, and finished goods can move in and out efficiently and economically via air, rail, truck, or ship. “The region surrounding the intermodal center is the East Coast hub for manufacturing, warehousing, and assembly complex extending into adjacent counties in both North and South Carolina. “This integration of logistics and manufacturing gives the region the same edge which the Chinese in the Pearl River Basin recognize and are using to provide additional profit margins and gain international market share. Charlotte has a similar advantage because of her location at the junction and pivot point of two high-skilled and creative manufacturing regions in North and South Carolina. “The best manufacturing companies in the United States, Europe, and Asia will locate branches here. “By 2030, Charlotte will realize its destiny as the center of the most economically diversified manufacturing and distribution economy on the East Coast with strong manufacturing, distribution, energy, health care, biotech, and financial services,” Saunders concludes. Others in our community are not so confident. According to UNC Charlotte Belk Professor Doug Cooper, “While the expansion will offer the opportunity for improved global flow of goods, it comes just about as the global flow is about to undergo a rather profound and significant change. The coming rebalance of flow between the U.S. and China may actually imply less movement of canal flow rather than more. “While much of the Walmart/China flow will be retained,” Cooper continues, “much of that relationship will be moved back to the North American region with less need for the canal. Also various other things are happening …transportation rates are going up; there are growing shortages in container port capacities. “In the short run with the transportation hub and the relationship with Charleston, Charlotte will likely feel a small positive. In the long run, in my opinion, it’s not going to have much impact.” While there may be some debate as to whether the Panama Canal Expansion is a boom or boost to Charlotte, the new intermodal facility will most definitely confirm our status as a prominent inland port intent on becoming a global city. Thanks to some Charlotte visionaries who are making the right connections, Charlotte is well on its way. Interviews conducted by Gene Stowe, a Greater Charlotte Biz freelance writer.


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For Bonded Logistics, It’s All in the Family

Bonded Logistics, Inc. is celebrating its 40th anniversary this year. While it has steadily progressed into the 21st century, keeping pace with the many changes in the logistics industry and new developments in technology, there is one thing that remains the same: Family. “We’ve always been a family business,” says Barbara Carr Woodall, executive vice president and co-owner, who works alongside brother Scott Carr, president of the company. “This company is an extension of us. We have always had one mission: To make sure that everything we do is handled with the highest quality and service level.” The two are the second generation operators of this Charlotte-based global, third party logistics (aka 3PL) outsourcing company for warehousing, shipping and packaging. Their parents, Jim and Robin Carr, started the business in 1972 under the name Bonded Distribution, Inc. “We primarily perform services for companies that are looking to outsource their distribution and storage needs. We provide secure warehouse space and maintain staff and equipment to handle any of our clients’ distribution or packaging needs,” explains Carr. “Ours is a true outsource model. Our customers pay for only the services they utilize in either labor or space.”

23 | october 2012

“We primarily perform services for companies that are looking to outsource their distribution and storage needs. We provide secure warehouse space and maintain staff and equipment to handle any of our clients’ distribution or packaging needs.”

Bonded Logistics operates out of 1.2 million square feet in Charlotte at several different locations. The company also has contract warehouse space in South Carolina and a 4PL relationship with a warehousing group in Los Angeles.

An Extended Family “On any given day, we will receive product, process orders and ship product out to our clients’ customers.” The company doesn’t take title to any product but, rather, is the contractual steward of it. Product generally arrives in full truckload quantities and is shipped out in less than pallet quantities or case pick. “There is a lot of labor involved,” emphasizes Carr. With its own full-fledged transportation brokerage and close proximity to the ports of Charleston and Savannah, Bonded Logistics guides 80 to 120 trucks including 20 to 30 sea containers in and out of warehouse properties during a day’s activity. “We believe the expansion of the Panama Canal will only increase the number of containers we handle in any given day as more product is shipped directly to the east coast ports,” Carr highlights. “Some customers have their own means or trucking fleets but when they don’t, we coordinate an alliance with local area companies such as Epes Transport or Cargo Logistics to serve them,” adds Woodall. The company also coordinates movement of product by ship container and air freight. “We have a footprint in the global market with clients from all over the nation and some in Europe,” says Carr. “We also ship to Europe as well as to South and Central America.” A west coast alliance advances Bonded Logistics’ shipping capabilities. The company sets up fourth party logistics groups (or 4PLs) to distribute across the country. “Collaboration is key in this industry,” notes Carr. “It might not make sense to go to another city and open up a building or a smaller account, but we can still contract with a peer group that is a good partner


october 2012 |

Scott R. Carr President Bonded Logistics, Inc.

and can provide services at the same level we can. We’re very particular about those we partner with, and in those instances we maintain total management of the client account.” Carr adds, “Not only are we a regional and national presence, but we also do things locally as we are plant support for local factories, storing raw materials coming in from overseas and holding them until needed for plant production. We see the expansion of the airport as an opportunity to capitalize on Charlotte’s location and really make this a premier distribution hub for the eastern region of the United States.” Bonded Logistics’ clients come from many different industries including consumer packaged goods, food grade goods and home construction. It is most heavily vested, however, in medical devices and supplies. It services business-to-business (b2b) and business-to-consumer (b2c) needs for clients. Additionally, it ships to all of the major retailers and has staff members trained in the retailer compliance vendor guidelines. “Once you establish the stringent controls required to bring in medical devices, we can apply those lessons learned to all clients,” emphasizes Carr. “There are a lot of guidelines and regulations.” There are regulations at the federal level including those of the Food and Drug Administration and the National Fire Code, the state level including the N.C. Department of Agriculture, and the municipal level—for example, Charlotte/Mecklenburg for hazmat concerns. Sanitation audits are conducted by the American Institute of Baking. Additionally, in order to handle medical devices, strict inventory controls are in place including lot control and recall capability. Security also demands constant vigilance. Entrance onto company premises is through a monitored gate. Everyone on site must wear identification badges. Staff members are well trained in inventory risks, particularly because of the high resale values for electronics and pharmaceuticals.

“There is a crime component out there,” says Carr. “We are in our eighth year of ISO 9001: 2008 certification.” Bonded Logistics packaging division, Bonded Pac, is a contract packaging group which has been part of the company for 19 years. Workers there package bulk quantities using manufacturer’s specific requirements for individual store displays. Bonded Pac provides POP design services— including display design, product sourcing and display building—and dedicated staff to manage each project from concept to final design and product delivery to the store. In addition, Bonded Pac provides liquid fill and shrink wrapping, sleeving and bagging.

“Technology is a huge part of the business now. We’re automating as much as we can. Clients have secured Web access to their inventory and can watch its movement in real time. Companies can predict with much greater accuracy their need for safety (back) stock, so they are not storing more than is needed at a given time.” “Technology is a huge part of the business now,” says Carr. “We’re automating as much as we can. Clients have secured Web access to their inventory and can watch its movement in real time. Companies can predict with much greater accuracy their need for safety (back) stock, so they are not storing more than is needed at a given time. “We’re really focused on exchanging information and data. This is more and more important out in the market place because expectation is very high and time is a very important commodity.” Carr describes how off-site servers utilizing cloud computing are monitored 24/7. Redundant backups assure performance in


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Family Logistics The siblings’ father, Jim Carr, started the business in 1972 under the name Bonded Distribution, Inc. He had been working in distribution for General Foods in White Plains, N.Y., and was sent to Charlotte to set up a distribution center. He liked the South so well, he took a job with Jack’s Cookie Company as director of distribution and moved his family to Charlotte. Soon an opportunity presented itself to purchase a small warehousing group off Palmer Street and he decided to establish his own distribution business in a 30,000-square-feet building. He subsequently built his first building on Graham Street in 1986 and the second in 1996. Then, in 2002, he turned ownership of the business over to his son and daughter. Scott Carr was 10 when the family moved to Charlotte and warehousing became his ongoing part-time job throughout his teen years. “I started at the bottom— swept floors, drove trucks,” remembers Carr. After graduating from Western Carolina University in 1981 with a degree in marketing, he returned to work in the family business. “Part of it was timing. When I came out of college, there was opportunity here. I’ve now been here for 31 years,” he says. Carr is married and has three daughters and a granddaughter which he touts as “the focus of my personal time.” Carr is also very involved in his church. Another family tradition—tennis—is one that he likes to pursue as time allows, but admits, “It’s a challenge with trying to grow a business.” Woodall was born in Charlotte and she, too, spent many weekends at the warehouse. As an adult, it was not her intention to work in the business, opting instead for a career in travel. But, after years as a travel agent, she came to work with her family, starting in the warehouse office in 1986 as a clerk. “From there it was on to customer service; then to computers. I was doing a little of everything. That’s what I saw my mother doing,” Woodall remembers. “Our parents instilled a good work ethic in us,” Woodall says proudly. “Both of them still come into the warehouse once or twice per week. They built the basics; we hope we have moved it along.” Woodall has one son attending Clemson University, and enjoys baking and keeping up with her tennis.


BizJun12.indd 1

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6/21/12 3:02 PM

The Company Family More than 140 permanent employees, most of them cross-trained for different functions, call Bonded Logistics their workplace. An additional 60 to 70 temporary employees are present at any given time.

Barbara Carr Woodall Executive Vice President Bonded Logistics, Inc.

“We’ve always been a family business. This company is an extension of us. We have always had one mission: To make sure that everything we do is handled with the highest quality and service level.” “We can’t determine what the workload will be until at most the night before, so our relationships with staffing companies and temporary workers are very important,” says Carr. “We’re fortunate to have a fairly stable temporary workforce so we don’t have to train each time.” It’s not unusual for the company to transition temporary employees to permanent ones when there is a predictable steady workload, according to Carr. Inside the warehouse there are management positions, IT workers and developers, clerical staff, warehousemen and packers. With an average tenure of 10 years, the company has enjoyed excellent employee retention. Carr and Woodall attribute this

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to Christian ethics. “We are very committed Christians and we try to run our business with Christian ethics,” says Carr. “We treat our employees and our clients fairly.” “It’s not just a statement. We keep a mindful eye toward treating our employees well. Working through Corporate Chaplains of America, the company provides a chaplain to every employee on a weekly basis, although being Christian is not a requirement for employment. “We have employees of other religions and we don’t discriminate in any fashion,” says Carr. “Everybody understands humanity and ethics.” Because of its age, Bonded Logistics is currently transitioning through a relatively high number of retirements among

“Not only are we a regional and national presence, but we also do things locally as we are plant support for local factories, storing chemicals coming in from overseas and holding them until needed for plant production.”

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key positions. “We’re bringing new people into the business to work in areas of demand to accommodate growth and technology. It’s a time of both challenge and restructuring.” Carr and Woodall have seen more than their share of industry challenges. “In our business, a recession has a big effect,” says Carr. “In commercial warehousing, we get paid to bring product in and move it back out; what we call cycles or turns. When the economy recedes, we are hurt when there is little to no movement with the products. This is what we saw in 2009,” Carr explains, and says that Bonded Logistics guards against this by working with industries that are recession-resistant like food stuffs and medical supplies.

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“Our parents instilled a good work ethic in us.”

“Nothing is absolutely recession-proof,” he admits. Surprisingly, Carr says the company was fortunate during that time to actually expand. “It wasn’t dramatic growth but it was growth,” says Carr. “Our attention to detail and the reputation we have for matching our clients’ sense of urgency and compliance paid off. Our staff goes above and beyond.” Both Carr and Woodall predict that as the economy rebounds, there will be increased need for warehousing logistics. Carr acknowledges, “Charlotte—which is a great place to do business—is growing and the need for logistics is growing nationally, as well.” Carr and Woodall give serious attention to finding ways to give back to the community. Carr serves on the board of Samaritan’s Feet. The company also works with A Child’s Place, an organization that assists homeless children. Charlotte/Mecklenburg School System, Salvation Army, local food banks and Susan G. Komen are all examples of organizations which the company supports. “We’ve created our own in-house angel tree during the holidays to anonymously help employees who may be dealing with a hardship,” says Woodall. “We’re just getting started,” she says with a smile. “In terms of the future, our mainstay

is setting our infrastructure for growth, making sure we have the right people, and making sure that as we grow we continue to service our clients very well,” says Carr. “We just want to be recognized as a very competent, premiere company for warehousing and packaging. Zenda Douglas is a Greater Charlotte Biz freelance writer.

Bonded Logistics, Inc. 5709 North Graham Street Charlotte, N.C. 28269 Phone: 704-597-9638 Principals: scott r. Carr, President; Barbara Carr Woodall, executive Vice President Established: 1972 as Bonded Distribution, Inc.; under current name as of 2002 Employees: 141 permanent; 60 to 70 temporary Facilities: Approximately one million square feet of public, contract and leased space in nine locations; operations in north Carolina, south Carolina and California. Business: Global, third party logistics outsourcing company for warehousing, shipping and packaging.



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(l to r) Brian E. Huber, CPA President S. Ann Clausen, CPA V.P. Marketing and Tax Services Matthew P. Miller, CPA V.P. Finance and Assurance Services Daniel, Ratliff & Company

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Daniel, Ratliff & Company provides business consulting, auditing, general accounting, and tax services. Its mission is to provide innovative solutions for financial and business success for its diverse client base. Since its founding by Debbie Daniel, John Ratliff and Terry Corriher 16 years ago, the firm has always striven to be much more than just accountants that file tax returns. And to this day, the company continues to thrive, even in this economy. It is due, in large part, to their current management team of Brian Huber, Matt Miller and Ann Clausen.

Brian E. Huber, CPA President

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Brian E. Huber, CPA, is president and leads the management team, but he’s also a team player. He gets to know every client and ensures that they are in good hands and that “top-drawer” services are being delivered directly to each one. Huber came to Daniel, Ratliff & Company with a passion for client service. After moving to the Charlotte area, he worked for Gleiberman, Spears, Shepherd, & Menaker, which merged with Grant Thornton in 2002. Huber preferred working with small- to medium-sized client firms, though, and when he discovered Daniel, Ratliff & Company, it was a perfect fit. He brought his client base to the firm and became a member of the ownership group in 2007. With more than 25 years of experience in public accounting, he was the perfect candidate to become

october 2012 |

Daniel, Ratliff & Company is passionate about being one of the best accounting firms in the Charlotte region. The named founders share the pride in the business they started with the succeeding team now in place. The firm’s success is mirrored in the success of their clients. And the firm is rewarded by adding value to those they are privileged to serve.

(l to r) John G. Ratliff Deborah A. Daniel Founders (Retired)

the new president of the firm in October 2011. Huber also oversees Accounting and Business Services. “By coaching and partnering with our clients, they are better equipped to grow their businesses. And when clients grow, we grow,” says Huber. As a QuickBooks Pro, he assists clients with QuickBooks software setup and training. He also helps clients understand their financial statements in order to have a better understanding of their business activity. Many clients have profited from the application and implementation of financial planning software that Huber uses to show the effects of management decisions. When Huber isn’t working with clients, he can be found at CPCC where he educates the next generation of QuickBooks experts. He also serves as Treasurer of Temple Kol Tikvah of Lake Norman. Matt Miller, CPA, is vice president of finance and assurance aervices within the management team. Miller graduated from UNC Charlotte in 1993 and began working for the Charlotte office of Coopers & Lybrand, a national public accounting firm. He then moved to the large local Charlotte accounting firm, Hunter & Hunter, P.A., before joining Daniel, Ratliff & Company in 2001 to focus on smaller businesses. Miller became a member of the firm’s ownership group in July 2006 and is responsible for the firm’s financial management plus oversees all assurance and audit services. His personal involvement with client audits allows him to develop an indepth knowledge of client operations and forms close working relationships. This knowledge is very valuable when helping clients meet their goals. When Miller is not working with clients or attending to firm administrative duties, he can be found at Camp Care, a nonprofit organization that provides summer camp experience and other activities for children with cancer. Miller serves as the treasurer on the non-profit organization’s executive board. Ann Clausen, CPA, is vice president of marketing and tax services. Clausen began her career managing the accounting functions of two department stores. After a few years, Clausen migrated to academia to teach college accounting courses. In 1988, she relocated to the Washington, D.C. area and worked in the tax software business which provided the opportunity to work closely with the Internal Revenue Service.

Daniel Ratliff & Company has been a genuine partner in maintaining the financial health of my practice. Like good physicians, the team at Daniel Ratliff listens, cares and promptly responds to my needs. That allows me to focus less on business and more on what matters most…my patients.” ~Dr. G. Adam Shapiro Foot and Ankle Associates In 1990, Clausen formed her own public accounting practice providing tax and accounting services for her entrepreneurial clients. Ten years later, Clausen moved her practice to North Carolina and joined Daniel, Ratliff & Company in 2009. She manages the firm’s tax department which prepares individual, partnership, LLC, corporation, non-profit, and fiduciary tax returns. When Clausen is not managing the tax department, she can be found networking with various groups in Charlotte. In addition, she serves on the board of Midweek Business Connections and the NCACPA local board.

A Passionate Culture The founders of Daniel, Ratliff & Company knew small businesses would benefit more substantially from an accounting firm that did more than just prepare tax returns. The Charlotte market provided opportunities to support their motivation and growth in this direction. They wanted to be more than just accountants; they wanted to be business partners to their clients. Each and every day, Huber, Miller and Clausen and their staff make conscious efforts to further those partnerships. Huber explains, “Just the other weekend a client emailed me with an urgent question. Instead of waiting to reply on Monday

morning and knowing an answer would provide peace of mind, I called the client. That saved our client the anxiety of waiting and we addressed their issue immediately. But more than that, it showed that we are there when they need us the most.” As confirmation, Craig Cass, of Cassco, Inc. adds another endorsement, “I have worked with Daniel, Ratliff & Company since their inception in 1996. They have been integral in the growth and success of our business, and have been with us every step of the way!” The trio believes in building their

business with all employees being involved. A good example is heard on the telephone. Brandon Ratliff’s voice is the first one to greet current and potential clients. He makes it a point to go above and beyond being friendly. “In fact,” Clausen commented, “we recently acquired a new client because of the manner that Brandon exhibited on the phone. The client said, ‘It’s not often you hear a young man answering the phone, but if he’s any indication of how we’re going to be treated as a client, we’re all in.’” All the employees are very dedicated

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Daniel Ratliff & Company have been an integral part of my life for over 10 years. As a physician, I rely upon them for everything financial for my practice. Whether it’s taxes, profitsharing, mergers and acquisitions, or buying office equipment, they have been there every step of the way. ” ~Dr. William Mitchell, M.D. Southern Oncology Specialists

Growing the Right Way While the past three years have been

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and experienced. Many have been with the firm in excess of seven years and several have over 20 years of accounting and tax experience. From the administrative staff to the CPAs, the common theme is providing the best client service possible. Every employee is committed to providing exceptional accounting and consulting services, with integrity and mutual respect for each other. We are determined to be the trusted advisor and champion to the clients we serve. We even provide a customer bill of rights. Huber talks about one of the firm’s success stories: “One of our clients had accumulated a large amount of unpaid payroll taxes and was suffering monthly net losses. We worked with the IRS to set up an installment arrangement to satisfy the tax liability. But we went further and helped the client better manage their business on a daily basis. Now the client is making a profit, planning to stay in business, and consequently 150 jobs have been saved.” Recognizing the need to balance work and family, Daniel Ratliff & Company provides a very liberal vacation policy and even provides an extra eight days of leave during the summer. “Family is very important to us,” explains Clausen. “And we want our employees to spend time with their families and relax.” This balance makes the firm a better place to work. Daniel, Ratliff & Company also believes in giving back to their community and especially to those who need it the most. Each November, the employees volunteer to help decorate a local senior citizen community for Christmas. “The residents are always very appreciative. This experience enriches our lives and makes us feel more like a family,” remarks Miller. “We are also involved in gathering food for local non-profit groups, participating in golf tournaments to raise money for charities, and volunteering for non-profit leadership roles.” “We strive to place the important priorities in life first,” adds Huber. “Being involved in the community is one way that we build long lasting relationships. Creating a great work environment and paying attention to the needs of our staff help us deliver superior customer service to our clients.”




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We enjoy working with Daniel, Ratliff & Company because they have always taken a great interest in helping our business in any way they can, including bringing excellent resources to the table for all type of services, not just financial.”

Matthew P. Miller, CPA V.P. Finance and Assurance Services

~Jacqueline Ford Co-owner and President of Great Food Services, Inc


october 2012 |

challenging to many local businesses, Daniel, Ratliff & Company continues to thrive, acquiring new clients and discovering more ways to be helpful to their existing clients. “We are especially proud when our clients grow as a result of our advice and hands-on assistance. We make a point to show our clients every advantage they can use to lower costs, increase revenues and save money. When they do well, they have even more need of our services,” boasts Miller. Clausen elaborates on this point: “We have helped many of our clients reduce their taxes through cost segregation studies. We work with experts who perform these studies for our clients. The studies are fairly inexpensive and yet can save our clients thousands of tax dollars. In fact, one client saved $75,000 in taxes as a result of one study. “We expect to grow and expand this practice. Growth ensures the continued health of the firm,” Clausen continues. “We work to keep great people. They are our most valuable asset.” Miller adds, “We want bright young professionals who want to be a part of this company and make a career with us. Down

the line, we expect to offer ownership opportunities to those who have proven their management and technical skills ensuring the continued success of the firm.”

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Adding Value With a combined staff experience totaling more than 100 years, Daniel, Ratliff & Company has a proven track record helping clients grow their businesses the right way. They keep their commitment to do more than just prepare financial statements and tax returns—their services are strategybased and designed to add value. “At this level, you can work with the owners and decision-makers and make a significant difference in their business,” attests Miller. And Clausen adds, “Our clients are looking for advice and strategies. We will do all we can to be helpful to them.” Dr. William Mitchell, M.D., of Southern Oncology Specialists, comments, “Daniel Ratliff & Company have been an integral part of my life for over 10 years. As a physician, I rely upon them for everything financial for my practice. Whether it’s taxes, profit-sharing, mergers and acquisitions, or buying office equipment, they have been there every step of the way. I highly recommend them for all your accounting, financial and tax needs.” Daniel, Ratliff & Company is passionate about being one of the best accounting firms in the Charlotte region. The named founders share the pride in the business they started with the succeeding team now in place. The firm’s success is mirrored in the success of their clients. And the firm is rewarded by adding value to those they are privileged to serve.

Daniel, Ratliff & Company 301 S McDowell St., Ste. 502 Charlotte, N.C. 28204 Phone: 704-371-5000 Principals: Brian E. Huber, CPA, President; Matthew (Matt) P. Miller, CPA, V.P. Finance and Assurance Services; S. Ann Clausen, CPA, V.P. Marketing and Tax Services Employees: 15 In Business: 16 years Business: Business consulting, audit and general accounting services, tax compliance and research procedures; providing innovative solutions for financial and business growth.

 Charlotte 6100 Fairview Rd. Suite 330 Charlotte, NC 28210 Phone: 704.554.4112

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Fenix Fotography

Peter J. Stewart Founder, President and CEO Forest2Market, Inc.


october 2012 |



Seeing the Forest for the

Forest2Market Provides a Canopy of Market Information

by barbara fagan

In business, innovation is a good thing—a pathway to growth, a doorway to progress and possibly even a trajectory to industry leadership. But while innovation may be good for business, Pete Stewart found that being a business innovator wasn’t always easy. Stewart admits that his career in forestry began as a high school toss-up between oceanography and forestry, which he jokes is proof that “17-year-olds should never make decisions that affect the rest of their lives.” A couple of college career days later he was studying forestry, eventually earning a bachelor’s degree from Texas A&M University and a master’s degree in forest economics from the University of Georgia. No matter how casually made, the career choice turned out to be a smart one. According to the American Forest & Paper Association, the forest products industry accounts for about five percent of the total U.S. manufacturing GDP, producing approximately $175 billion in products each year and employing close to 900,000 people. It was also a good choice for Stewart who found that he enjoyed the business and its surprisingly mathematical and statistical bent. His first job as a consultant in the industry moved him from his native Texas, where he was a wood buyer for a large forest products company, to Charlotte. It was not long before Stewart first noticed a systemic problem. “About 30 percent of all timberland is owned by pension funds,” Stewart explains, “and I was in charge of valuing it. But I could never find good data. It was nearly impossible. “I began thinking that there’s got to be a better way to collect, handle and distribute this data. At the time I worked for a company of about 50 people and we would literally spend hundreds of thousands of dollars trying to figure out the market. If a company our size was spending that kind of money, I could only imagine what the largest forest products companies were spending to get good market data. Billion dollar companies like Weyerhaeuser and International Paper had to be spending just tons of money.” Based on that premise, Stewart went to New York and pitched an idea to some private equity groups, raised some capital and started Forest2Market, Inc. in 2000. Stewart, president and CEO of Forest2Market, likens the company to a Bloomberg-type news service specifically for the forest products industry.

39 | october 2012

“What Bloomberg did really well was develop analytical tools so their users could track the particular metrics that were important to them. We do essentially the same thing but for specific metrics in the pulp and paper, sawmill, timberland and other related industries. “It’s all about the data, and what’s different about our data is that we collect the actual transactions as they come across the scales so we know where the trees came from on earth, how far they traveled, who hauled them—every last detail. I know it sounds like a lot of minutiae, but we’re the only ones who do that. There’s no other company in the country with that level of detail.” The scale of data is also notable. Forest2Market collects a mass of 30 million transactions a year across all its product lines. In its most prominent markets, this equates to 92 or 93 percent of all U.S. transactions. Data is collected from both buyers and sellers to confirm its accuracy and all the participant companies, including Forest2Market, are subject to independent audits. “Our goal is to ensure that our data is always true to market,” says Stewart. “Our next best competitor just collects survey data. They call people in the marketplace and ask them the price of wood. That just doesn’t cut it when you’re relying on this data to make business decisions.”

Barking Up the Right Tree


Stewart began collecting data by building a stumpage price database—that is, the price of trees in the forest still connected to the stump. Forest2Market now offers a suite of products that includes price reports for timber and lumber, price forecasts, wood basin supply and demand assessments, and benchmarking services for delivered wood raw materials and lumber. Their newest product is a benchmarking service for recovered or recycled fiber. They also offer syndicated studies that identify, evaluate and quantify industry

october 2012 |

“What Bloomberg did really well was develop analytical tools so their users could track the particular metrics that were important to them. We do essentially the same thing but for specific metrics in the pulp and paper, sawmill, timberland and other related industries.”

trends and proprietary studies that answer a particular customer’s specific questions or address a company’s individual business needs. Customers use Forest2Market data to set benchmarks, price contracts, value assets and make many other decisions to enhance everyday business performance. But the data is also vital in decisions with much higher stakes. “If a company’s putting in a new mill, they need to know that there’s enough raw material in the area to support it and at what price,” Stewart explains. “That’s not something you can determine by a casual assessment of the local area. We have the sophisticated mathematical models that allow us to simulate the growth of the forest. And since we have data about the transactions coming from the forest, we are uniquely positioned to help our customers in ways others cannot. “If a CEO wants to shut down a billion dollar pulp mill or, conversely, expand a mill, that CEO takes comfort in the fact that Forest2Market can provide a complete picture of market conditions, including price, supply and demand for trees—not only locally but across the country. We can go to the CEO and say that we can take the guesswork out of this critical decision. With our transaction-based data, CEOs can confidently and unequivocally know how their costs stack up to their competitors’. That’s extraordinarily valuable to them.” Stewart recalls one client situation where the stakes were particularly high. “We had a customer with a real cost issue. They couldn’t figure out why their costs were out of line and it was causing serious financial difficulties. “They asked us to look into it and we discovered that they were hauling their timber 15 miles more than the norm; this translated into a cost eight or nine percent higher than the market. That’s a big deal when 65 percent of your costs are the raw materials coming in. “As a result, they re-engineered their supply chain and saved about $5 million a year. And since this happened during the

economic slump of 2008 through 2010, it helped them hang on till things improved. They didn’t have to layoff their employees or go out of business. “That’s the sort of detail that we work with to find and improve those gaps in costs. These mills deal in $150 to $200 million worth of raw materials, so a savings of a half or a quarter of even one percent matters.� David West is general manager of fiber supply at Longview Fibre Paper & Packaging in Longview, Wash. Before becoming a Forest2Market customer in 2010, he used public and survey data for market information. “That kind of data may have helped in seeing trends, but it also allowed companies to influence the market,� West says. “Forest2Market gives a true representation of what’s actually going on in the market. And the information is timely. Within 10 days, you know the data from the last month.� Steve Smith, managing director, forest management, for Timberland Investment Resources in Atlanta, uses Forest2Market data for appraisals and valuation purposes. He says he renewed their contract with the company because of the scope and breadth of their product across the Southeast.

“Our goal is to ensure that our data is always true to market. Our next best competitor just collects survey data. They call people in the marketplace and ask them the price of wood. That just doesn’t cut it when you’re relying on this data to make business decisions.�

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“I would never have imagined how hard it would be to get people to believe something different. Change comes hard, and being a change agent, isn’t for the meek. You need money and patience. You need five times more money than you think and at least as much patience. When I started, I didn’t appreciate the inertia that’s out in the marketplace.”


october 2012 |

“They’re in all the regions we are,” Smith says. Stewart’s vision for Forest2Market encompassed timely, accurate, unbiased data gathered from the majority of U.S. transactions at a level of detail never captured before combined with analytical tools and industry experts to interpret that data for widespread industry or specific company use. Given the industry’s need for reliable data to be competitive and successful, it seems like it would be an easy sell—but Stewart tells a different story.

Out on a Limb “I would never have imagined how hard it would be to get people to believe something different,” says Stewart. “Change comes hard, and being a change agent, isn’t for the meek. You need money and patience. You need five times more money than you think and at least as much patience. When I started, I didn’t appreciate the inertia that’s out in the marketplace. “When you start a new business, you better be ready to throw away your business plan every three months if you want to survive. You envision a grand plan, but the market will tell you what the market wants to buy and you have to react to that or you’ll be out of business.” Stewart admits that his choice of business model also contributed to early challenges. “I started Forest2Market as a subscription business because it’s a solid, repeatable business model, but the first company in really gets no value because it’s only their data in the system. You’ve got to build momentum. It was 2003 before we could pay all our bills all the time.” Even with the inherent early problems, Stewart is happy with the subscription model. “We’ve found that many of our customers use our data for something critical in their business—they use it to price a contract or the data is injected into their compensation plan. When the subscription is tied in that way to a customer’s

business, the customer is very loyal. Our customer retention each year is close to 100 percent.”

Branching Out Stewart’s premise starting out was that data detail would be of paramount importance to a Forest2Market customer. That turned out to be a winner. “Yes, we have insane detail,” says Stewart. “I’m the first to admit it, but there’s real value in that level of detail. The market has really responded to it. We’re definitely more expensive than our competitors, but we’ve found that with the right quality of data, there’s little price sensitivity.” Stewart agrees that codifying the massive data gathered by his company is less than glamorous. He even likes to tell the story of a customer who teases him by saying that Forest2Market is a success because no one else would want to do something that boring. But he balances that with the knowledge that what he does makes a difference. “Our data and techniques solve important business problems for our customers,” he touts. Stewart began Forest2Market by himself and made his first hire a month later. Forest2Market now has a main office in Charlotte and regional offices in Appleton, Wis., and Eugene, Ore., employing 25 people company-wide and currently serving 1,200 customers. Over the last 12 years, Forest2Market has helped over 100,000 landowners ranging in scale from individuals owning 50-acre tracts of timber to companies owning several million acres. They also count as clients giants with commonly recognized names like Potlatch on the forest and wood products side of the business and Duke Energy on the bioenergy side. Currently, the company is experiencing 30 percent annual revenue growth, and expansion is on the horizon.

“I’m traveling down to Brazil this month,” Stewart says. “We’re looking at extending our wood raw material data services to South America, principally Brazil and Uruguay. The economies of both those countries are growing and their forest products industries are booming. “We’re also opening an office in London to serve our European bioenergy clients and specifically to develop a business to meet European Union sustainability regulations required for EU utility companies. “The utilities need to have a measurement of the amount of carbon used in their process, so they need to determine how much diesel was used to cut down the trees and to haul them to the mill, all the energy used in the manufacturing process and transporting materials to port, and finally, the fuel used to ship it to Europe. “Forest2Market has a way to track all of that so we believe we’re in a unique position for this business. That would be a whole new customer base for us. A number of our customers are also suggesting we develop a pricing system for northwest Russia and Eastern Europe. “Our growth strategy was to spread across the U.S. and then expand across end product lines (lumber, for example). We’ve pretty much accomplished that. It’s a natural progression to expand to overseas markets now that the company is big enough to support those sorts of operations. “Still, it’s a lot easier to envision it than actually do it,” Stewart says with a smile. It’s a lesson he’s already learned—business innovation isn’t always easy.




(architects, engineers, and contractors)

Barbara Fagan is a Greater Charlotte Biz freelance writer.

create today? what will you

Forest2Market, Inc. 14045 Ballantyne Corporate Pl., Ste. 150 Charlotte, N.C. 28277 Phone: 704-540-1440 Principal: Peter J. Stewart, Founder, President and CEO Employees: 25 (18 in Charlotte) In Business: Founded 2000 Business: Offers subscription-based forest products market information; provides market price data, supply chain expertise and other decision support services to participants in the forest, wood and paper products, recovered fiber and bioenergy industries.

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New direction of health care

NEW Health Insurance Exchanges!

John P. Galles Publisher

One year from now, on October 1, 2013, you should be able to choose your health insurance plan under the NEW federal rules from a Health Insurance Exchange. While you may not be able to choose from a North Carolina Exchange, you will be able to choose from a federal exchange. Under the Affordable Care Act (ACA) and the portions of the act found to be constitutional by the U.S. Supreme Court, individuals and employees of small businesses will have access to affordable coverage through a new competitive health insurance market—state-based Affordable Insurance Exchanges or the federal exchange. These will be one-stop shops to find and compare affordable, quality private health insurance options available to you and your families. Exchanges will bring new transparency to the market so that Americans will be able to compare plans based on benefits, price and quality. It is hoped that by increasing competition between private insurance companies and allowing individuals and small businesses to band together to purchase insurance, exchanges will help lower costs. Unfortunately, the State of North Carolina and the State of South Carolina have yet to begin to set up their own exchanges. In the event that they fail to form statewide exchanges, citizens of those states will be given the option of signing up for insurance coverage from a federal insurance exchange. States will be allowed to establish exchanges in the future should they choose to do so on their own timetable. In 2007, the first exchange was launched as the Massachusetts Health Connector. Ada May Roberts was among the first to sign up for health insurance. She recounts her experience: Ada May Roberts worried each year about renewing her health insurance. She feared being told the price had doubled or the insurance company would not renew her policy. So every fall, the Massachusetts innkeeper spent hours with insurance salespeople, reading the fine print and filling out medical forms. Then she prayed she’d be covered. All that changed three years ago. On the first day the Massachusetts Health Connector opened, Roberts typed her name, birthday and zip code into a website. In five minutes, she had a list of 22 plans—rated gold, silver or bronze. It took her only 10 minutes to buy health insurance. Since then, her rates have dropped $300 a month, and she never fears being kicked off. “I’m happy, happy, happy,” says the 59-year-old. “The weight of uncertainty has been lifted. Massachusetts got it right.”


Utah has the only other operating exchange at this time. Regardless of the politics and threats of repeal, the ACA law is the law and the act is being implemented. In 2014, every individual will be required to purchase health insurance coverage. Many individuals and employees of firms with fewer than 50 employees will qualify for subsidies to make the coverage affordable through an expanded Medicaid program. Subsidies will be available for individuals and families through a cost sharing program under Medicaid up to 400 percent of the poverty level or about $88,200 for a family of four. The law specifically exempts all firms that have fewer than 50 employees—96 percent of all firms in the United States or 5.8 million out of 6 million total firms—from any employer responsibility requirements. These 5.8 million firms employ nearly 34 million workers. More than 96 percent of firms with 50 or more employees already offer health insurance to their workers. Less than 0.2 percent of all firms (about 10,000 out of 6 million) may face employer responsibility requirements. Many firms that do not currently offer coverage will be more likely to do so because of lower premiums and wider choices in the Exchange.

october 2012 |

Status of State Exchange Implementation

Hopefully, states will choose to form their own health insurance exchanges. States have been given greater flexibility to set up exchanges under the rules established by the Health and Human Services Department. Exchanges will provide access to Qualified Health Plans (QHPs). These plans will be subjected to a specified list of requirements including marketing, choice of providers, plan networks, essential benefits and other features and be licensed by the state. QHPs may provide coverage at Bronze (60%), Silver (70%), Gold (80%) and Platinum (90%) levels paid by the insurer. Included in the benefit packages will be essential health benefits (EHBs) defined as ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health, substance abuse and behavioral treatments, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness and chronic disease management and pediatric services including oral and vision care. We look forward to action by North Carolina and South Carolina that will establish consumer friendly exchanges within their state boundaries soon. Until then, we will choose from the federal exchange.


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Greater Charlotte Biz 2012.10 October 2012  

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