Embracing the Rush of Global Project Logistics

By Luke King

In an exclusive interview with Breakbulk, Cyril Varghese, global logistics director at Fluor, reflects on his rapid rise from entry-level forwarder to leadership role at one of the world’s top EPC firms.

From Issue 5, 2024 of Breakbulk Magazine.

(6-minute read)


Global logistics director Cyril Varghese’s induction in the world of transportation came unexpectedly in 2004, when a friend told how her uncle was working for a shipping company in the Middle East, and looking to hire a salesperson.

Brimming with the confidence that comes with youth, the naval architect, who had just finished his MBA, declared himself a perfect fit for the role, assuring his prospective boss that his background allowed him to “speak the same language” as the ship buyers. The only problem? This was deugro, a distinguished German freight forwarding firm – and the role had nothing to do with selling ships.

Nevertheless, Salim Rajan, at that time deugro’s regional vice president for the Middle East, saw potential in the untested Varghese and enrolled him in the deugro Most Promising program – the first time a candidate from India had participated in the development scheme for promising young leaders.

An initial posting in Singapore followed, starting an “exciting and steep” learning curve. “I had no experience in freight forwarding, nothing. I didn’t even know what a bill of lading was,” recalls Varghese. Starting his journey in Singapore, the apprentice forwarder was taken under the wing of David Kwok - then an executive vice president of deugro.

Varghese remembers: “David took a personal interest in me and for the three months I was there, he would carve out two hours with me every day, explaining concepts and nuances related to the industry. From container types to ship types, from Incoterms to target client segments, from pricing dynamics to tender management.

“Every time there was a visitor in Singapore, either from an overseas office, or a client who was coming in, he would ask me to join him for all these meetings, as well as exquisite evening meals. He gave me my first exposure to my professional network - and the dining experiences were a bonus.”


Future Friend and Mentor

One of those visitors – and a future friend and mentor – was Klaus Behrmann, then working for deugro in Malaysia. “We met for dinner and immediately connected over some popular hard rock classics,” recalls Varghese. “He told me – ‘You’re going to be my apprentice and I’m going to be your sorcerer, and I will transform you.’” Behrmann would continue mentoring his protégé until he passed away in 2013.

“After three months, I left Singapore and I had a very basic grounding, at least from a theoretical perspective,” says Varghese.

Subsequent postings were planned for Varghese in Dubai, United Arab Emirates, and then South Africa. But in Dubai, Varghese convinced the management to allow him to focus on generating some revenue before he was moved to the next destination. “We didn’t have LinkedIn, so there was a lot of focus on building client relationships and client referrals to support the sales drive.”

His first break came when Ahmed Al-Bazz, logistics manager at Petrofac, asked him to ship a 20-foot GP container from Ningbo to Sharjah, and “held his hands all the way through” until the shipment was invoiced.

“I still remember the $20 profit I booked on that shipment – my first shipment,” says Varghese. “Later, he would engage me on many more shipments, especially from the U.S., once he realized that the bachelor was happy to stay late and work with the Houston office to get him an update by the time he got to the office.”


Thrill of the Sale

Varghese started “loving” his sales role and invested heavily in building his network. Clients like Siemens, CB&I, ABB, EMAL, Crescent Petroleum, Dragon Oil, Hunt Oil and Alstom kept him busy and learning. Three months became six years. “I stayed put in Dubai and handled many very interesting Middle East projects. I was given management responsibility of the Dubai office in 2008 and was proudly running the company’s most profitable office by 2010,” says Varghese.

When industry veteran Steve Drugan, who Varghese considers “one of the greatest project forwarders of all times,” joined deugro, Varghese started getting exposed to a larger scale of opportunities with the bigger EPCs.

“I always wanted to experience the complex and competitive landscape of logistics in India so took the opportunity to move there, when deugro opened an office in India. We did some exceptional shipments for companies like Larsen & Toubro, Reliance and Siemens during my stint.”

In 2012, Varghese returned to the Middle East and joined Kuehne & Nagel Ibrakom, where he handled project shipments for companies like Technip, DNO, Petrofac and Dragon Oil, among many others.

During late 2014, Raj Desai, then leading the Supply Chain Commercial Strategies group in Fluor, reached out and asked Varghese to join the company in Houston – the start of what he calls “a great run.” Varghese initially started with global logistics responsibilities, focusing on a commercial and strategy role for the company.

He says: “For the size of the organization, I was genuinely surprised at the speed at which we were able to bring concepts to fruition; from setting up a container negotiations desk, a chartering desk, a module ocean transport desk, our centralized Logistics Competence Centre in New Delhi, Fluor’s Fabrication Logistics desk, our Supply Chain Summit and the Fluor Supply Chain Services portfolio – to name a few.

“The Fluor culture, steeped in integrity, mutual respect, along with an environment that allows us to innovate, is an ecosystem that helps us get exceptional talent to work with us. The quantum and diversity of the transport solutions we manage, from large LNG, chemical and refinery modules, equipment for the largest mining, advanced technology and life sciences projects, keeps our team intellectually stimulated.”


Fair and Balanced Terms

With his background in project freight forwarding, Varghese is uniquely placed to seek value from his logistics service providers, while “always trying to treat them fairly.”

“There is a tendency to look at logistics cost, however loosely calibrated, as a static number,” he says. “People understand that commodity prices change, whether that’s oil, copper, nickel or steel, yet they somehow believe that freight is a fixed number. We’ve been working hard to educate stakeholders around the dynamics of freight, encouraging a shift of mindset from lowest unit price to lowest landed cost, with a focus on schedule and treating freight as a commodity that goes through volatility and cycles.

“Nobody gains by keeping freight rates lower than operating costs. It’s important that the market realizes that these are extremely capital-intensive investments that shipping lines, for example, need to make. The returns should be at a respectable level for investments to continue and for the sectors to retain competition.”


Great Expectations

So what does the Fluor executive expect from his logistics partners?

“A significantly large percentage of the freight forwarders are comfortable pricing for a very well-defined scope,” he says. “So if I send a packing list, they know how to price because they know what the cargo looks like, where it’s coming from, where it’s going and so on, and they can come back with a proposal.

“The problem EPCs have is, when a freight forwarding contract is placed, there are multiple purchase orders for materials and equipment that are still being negotiated. We may not know at that stage where a lot of materials are coming from, the mode of transportation, the stowage factor – there’s potentially a lot of missing information.”

He adds: “A true project forwarder is able to aggregate the intelligence that they’ve gained over multiple years of executing similar work and bring those insights into their pricing, instead of speculating on unit rates.

“For example, when a freight forwarder is pricing for, say, 20,000 tonnes of structural steel or pipe spools, insights around the stowage factor, assumptions on the percentage split between breakbulk and containers, average weight that is typically stowed in a container, optimal bundle, etc, can help build up a landed cost and help the proposal stand out.

“An intentional drive to utilize insights from data may also help them carve out additional scopes that are typically left with other stakeholders, which will help in improving margins, while generating value for the EPC from a landed cost perspective.”

Varghese believes freight forwarders are sitting on a “treasure trove of data based on what they’ve transacted in the past.” He says: “Meaningful interactions that I enjoy with our partners is when they are aware about the projects that we are tracking, are able to provide insights at the early stages, bring sector-specific and project-specific solutions to the table and work their way into a top-of-the-mind recall.”


Global Traveler

Away from work, the married father-of-two enjoys cooking meals with his family – “I try my hand at a range of different global cuisines and different music genres help me unwind.

"I love traveling with my family, interacting with different cultures and savoring diverse cuisines. Every time we make a family trip, whether that’s our recent trips to Japan or Brazil or road trips in the United States, there’s always somebody local from my network, who can share insights and help with the planning,” he says.

As our conversation draws to a close, Varghese touches on the well-documented challenges faced by the sector in finding – and retaining – the talent of tomorrow.

“When we were growing up in the industry, our generation would have been perfectly OK with working on a documentation role for many years, before you got a chance to do something meaningful or impactful,” he recalls. “And then you’d probably start with the, let’s say, ‘low impact’ clients and slowly get experience before you meet face-to-face with a VIP client. But, today, the younger generation needs a little bit more of an instant gratification and recognition – and there’s nothing wrong with that.

“It is for the industry to take cognizance of the fact that the dynamics are different. You cannot expect a youngster to come to an office at nine in the morning, leave at five and just do paperwork for the next 10 years. They want to see the purpose of what they’re doing.”


A Seat at the Table

Varghese expands: “The younger generation needs to have visibility, recognition, appreciation and affirmation. A seat at the table with their senior leadership, visibility in front of peers and clients, continuous opportunities to learn, innovate and challenge, and an organizational willingness to look at learning as a two-way street will assist in retention, once we have talent on board.

“As an industry, we have not socialized the appeal of a career in project freight forwarding, nor have we collectively invested in an infrastructure surrounding training and development for the stakeholders that join the industry. Fluor is currently conceptualizing a number of initiatives to address this gap.”

The logistics veteran’s advice to the younger generation is to “network, to genuinely show interest and to use the tools which are available to build a meaningful network, so that you can help people and also receive help when you need it. Integrity and transparency are key to success, as you build up your subject matter expertise that will propel you into leadership roles.”


Hour of Need

Varghese would also like to stress to the younger generation that the breakbulk industry “runs on personal relationships, and comes together at the hour of need.” One such example is the passing of his mentor, Klaus Behrmann, in 2013. Varghese recalls conversations with well-wishers like Fuat Miskavi, another project logistics professional, who offered to pay for overseas treatment when Klaus was on his deathbed.

Varghese says: “During one of our trips to Turkey, Klaus passingly mentioned to me that, when he died, he wanted his ashes to be immersed somewhere in the Mediterranean Sea. After the cremation, I consulted with his wife and daughter and they entrusted me to make the arrangements.

“Not knowing where to start, I called my friend, Dennis Geertz from SAL, who called back shortly confirming that MV Trina was loading in Jebel Ali and was scheduled to discharge in the UK. The family and I met Captain Matthias Pfeiffer and he hosted me and the family on board the ship and told us that he will support us in fulfilling Klaus’ last wishes.”

A few weeks passed and Varghese received a parcel from Capt. Pfeiffer, with a photo book of the ceremony at sea, including handwritten letters to Mrs. Behrmann and a large copy of the captain’s logbook, stating the exact coordinates where the ceremony was conducted. In his photobook, Capt. Pfeiffer explained how this was a first for him, and that he had to read up on age-old maritime customs for burials at sea.

“In a solemn ceremony, he waited for calm seas, summoned the crew, by ringing the bell nine times (signifying the end of one’s shift), after which he officiated a prayer, used sacramental oils for the ceremony and climbed down the gangway to respectfully immerse the ashes,” says Varghese. “He then recorded the coordinates in his logbook and did three rounds around the coordinates to form a circle of foam (signifying the circle of life), before he proceeded to his destination.”

Varghese admits he still gets “tears and goosebumps” when he sees the photobook.


Creative Logistics Solutions

But what of the future? “The scale of some of the capital investments that we see on the horizon require extremely creative logistics solutions, to the extent that clients agree to design modules that fit our recommended ship types,” says Varghese.

“The diversity of these projects, the focus on global sourcing and modularization will all ensure that logistics will continue its stride from the back-end to the driving seat. We are also excited about the interest that our clients are showing in our supply chain services portfolio, where we can utilize our organizational intelligence, global reach, market relationships, volume leverage and data-driven market insights to generate value for our clients.”

Summing up his career to date, Varghese concludes: “I’ve never had a dull day in my working life in terms of content. Every day is different. There are always new and interesting challenges and opportunities and I get an adrenaline rush when we’re able to utilize our organizational intelligence to find innovative solutions.”


Varghese will be moderating the “Big Tech, Chips and SMRs: A New Ecosystem of Project Opportunity” main stage panel session at Breakbulk Americas 2024 on Wednesday, Oct. 16 from 3:10pm-3:55pm.

TOP PHOTO: Cyril Varghese at Fluor HQ in Houston. CREDIT: Hyve
SECOND: Fluor/JGC Corporation delivers module for the LNG Canada project. CREDIT: Fluor
THIRD: Cyril with his family enjoying Houston. CREDIT: Varghese