People - June 2006
The business Chuck Raymond is in is on the sea. But the president and chief executive of Horizon Lines Inc. has spent much of the last three years on the road and in meetings. Since 2003, the Charlotte-based container-shipping and logistics company has been through two leveraged buyouts and an initial public offering. “It’s been a pretty exciting 31 months.”
The Carlyle Group, a Washington, D.C.-based private-equity company, bought Horizon from Jacksonville, Fla.-based transportation giant CSX for $300 million. A year later, New York-based Castle Harlan, another private-equity financier, bought it for $650 million. Horizon went public last September. Castle Harlan, its largest shareholder, owns about 37%.
Founded in 1956 by Tar Heel trucking executive Malcolm McLean, Horizon is a remnant of Sea-Land Service, the company that pioneered container shipping. Horizon carries more than a third of the container cargo shipped between ports in the lower 48 states and Hawaii, Alaska, Puerto Rico and Guam. It has 16 ships, owns or leases nearly 23,000 containers, employs about 1,800 and reported about $1.1 billion revenue last year. Customers include Wal-Mart, Lowe’s, Toyota, U.S. Postal Service and Procter & Gamble.
Raymond, 62, earned a bachelor’s in marine transportation from the U.S. Merchant Marine Academy in 1965. The Providence, R.I., native started at Sea-Land as a deck officer in the North Atlantic, then moved to warmer waters as a vessel superintendent in San Juan, Puerto Rico, in 1967 before going into management. Winston-Salem-based R.J. Reynolds Industries bought the company in 1969 and spun it off in 1984. CSX bought it two years later. When the company sold Sea-Land’s international business to Denmark’s Maersk in 1999, he became president and CEO of domestic shipper CSX Lines. He kept the job after Carlyle bought the business and changed its name to Horizon.
Raymond says his biggest challenge is maintaining growth. Horizon has had 17 straight quarters of increased earnings. In April, it signed a 12-year lease on five ships twice as large as and a little faster than its current craft. They’re what he wants the rest to look like within 10 years. “Today, we’re operating about eight different kinds of ships: different sizes, different years, different capacities. We want to look a little more like the Southwest Air model, get our costs down and operate with a standardized fleet.”