Reaching Further Shores


INTTRA has more than doubled its global market share since 2008 — and now CFO Valerie Rainey is helping to leverage its dominance

By Alex Palmer

When a cargo ship sets out from any major seaport, chances are better than one in four that the containers it carries were booked and confirmed through one company: INTTRA, the ocean shipping e-marketplace. In just over six years, Valerie Rainey, CFO and senior vice president of corporate development and finance for the company, has been part of the leadership team that helped INTTRA grow its market share from 10 percent to 22 percent of all ocean container trade. That fact alone would mark her tenure at the Parsippany, NJ–based company as a success. But for Rainey, INTTRA’s growing dominance as the largest multi-carrier network in ocean shipping means things are just starting to really get interesting.

“If you are a shipper or a freight forwarder, now you can make one connection to INTTRA and access the major global ocean carriers,” says Rainey. “In a similar way, a global carrier can make one connection to INTTRA, and can accept business from the largest network of forwarders and shippers located around the globe.” More than 50 carriers and some 220,000 shippers have a relationship with INTTRA. With employees across eight offices on three continents, and sales coverage in more than 130 countries, the company has its customers covered wherever their business is being conducted.

That opens up a range of new possibilities for a company that since launching in 2000 has quickly grown atop a firm foundation of simplifying the management of global ocean freight. Now, business intelligence is poised to become a greater source of revenue for the company.

Bumps in the Road

Rainey joined the company in July 2008, from the position of CFO of International Mail Services for Pitney Bowes. There, as manager of a freight forwarder business, she had gained firsthand insight into the needs of a member in INTTRA’s network.

But her charge as CFO of INTTRA was to help the company capitalize as it prepared to expand further into Asia. Rainey began developing a plan for bringing in capital and presenting INTTRA to private equity and venture capital firms.

Then the recession hit.

“I very quickly had to shift from getting the company ready to raise capital to preparing us for the global financial crisis of 2008,” says Rainey.

In the final months of 2008, global merchandise trade dropped 2.8 percent (according to the International Monetary Fund), so rather than growth, Rainey’s focus quickly became ensuring that INTTRA was financially healthy enough to weather the economic storm.

“We took a hard look at our cost structure, and made adjustments,” she says. “We had to continue to comfortably operate the business even if at that moment global trade took a significant downturn, which had a direct effect on our top line.”

Rainey also worked with the executive team to evaluate opportunities for organic growth, third-party partnerships, and initiatives to build the company through its existing client base — along with the best ways to make those investments. She worked alongside INTTRA’s executive leaders and marketing team to leverage the cost savings that its e-shipping solution offered — something many companies were eager to implement as they took a harder look at their own bottom lines.

Emphasizing INTTRA’s position as a hub for global shipping, the company was also able to promote how it could serve as a central link to a sizable share of the world’s market. Rather than shippers or carriers having to manage dozens or hundreds of one-to-one relationships, INTTRA serves that function. INTTRA’s customers use standardized e-booking requests, shipping instructions, and bills of lading across all of their global shipping partners.

“Any time you can standardize a business process and simplify it, you have a mechanism to drive costs down,” says Rainey.

This proved attractive to hard-hit companies. The result? INTTRA not only weathered the recession, but grew its volume and market share.

Once the organization was in a strong position to handle the downturn, Rainey returned to her original project of raising capital.

The effort proved successful and the company moved quickly to expand its global footprint, particularly in Asia. While INTTRA already had offices in the region, newly raised capital helped enable the addition of sales personnel in China, Singapore, and India.

In Europe and the United States, INTTRA’s automated solutions could provide huge savings in manual labor expenses on office staff. “Now that Asia has seen wages rise in certain regions in recent years,” Rainey says, “that same value proposition became more compelling and drives conversion to electronic commerce.”

These opportunities enabled the organization to move quickly to gain a strong foothold in this region and “thereby accelerate our market growth,” says Rainey. INTTRA added new carriers and users to their network, and now, “When I look at the subset of where our growth is coming from, in Asia we’re growing greater than 50 percent year over year.”

Already deeply embedded in the U.S. and Europe, INTTRA will most likely continue to see its highest growth in Asia, says Rainey.

Focus on the Future

As INTTRA’s CFO, Rainey now has her sights set on how to use the company’s strengthened market position and expanded size to its advantage. Its large market share means that INTTRA now enjoys visibility into 35 percent of the entire world’s container shipment business.

“With this significant amount of data on global trade, it’s highly valuable to markets even beyond the industry where we operate,” says Rainey.

In the past year, INTTRA has taken major steps to grow what it calls its Visibility Services and Data Quality initiatives. The company’s Ocean Shipping Information Quality (Ocean IQ) consulting program includes an onsite workshop, as well as ongoing measurement and analysis by data experts who help pinpoint issues in a customer’s shipping process, such as late or incomplete shipment cargo status updates. Each month, INTTRA publishes a list of the carriers that are providing the highest quality in shipping data. Over the last year, INTTRA reported that these efforts have helped to improve the quality of data regarding the status of a shipment by 12 percent across the company’s entire customer base.

The company is also working to supplement this data with “door-to-door visibility,” rolling out a platform that gives shippers and forwarders a window into INTTRA members’ entire shipment supply chain. In April, INTTRA announced a partnership with rates and contract management provider Catapult International that will allow shippers and freight forwarders to view their privately negotiated rate agreements, schedules and contract details, and then book shipments using the INTTRA e-shipping platform.

“After laying a strong foundation in the e-shipping arena, INTTRA is strongly-positioned to leverage our dominant market position going forward and open new avenues of innovation,” says Rainey.

The CFO’s Changing Role

Valerie Rainey, CFO and senior vice president of corporate development and finance for INTTRA, Inc. believes that the “accounting-type individual” who has long been ideal for CFO roles now needs additional skills and experience. Today, a CFO has a more strategic position.

“A significant part of my role is helping the CEO set the strategic direction for the company, by bringing an understanding of where we need to make future investments to drive enterprise value,” says Rainey.

Second, Rainey points to the CFO’s increasingly operational role.

“Over time, many companies have moved away from having a COO role,” she says.

Increasingly, to be a CFO requires a global outlook. Rainey currently serves as chair of the American Institute of Certified Public Accountants (AICPA)’s Business & Industry Executive Committee, and has been a member of that committee for the past four years. The committee focuses on CPAs working in industry rather than public accountancy.

As chair, she has helped the organization to understand what is going on in the business world both nationally and internationally. And, she has helped develop a partnership between the AICPA and the Chartered Institute of Management Accountants (CIMA), which together rolled out the Chartered Global Management Accountant (CGMA) designation.

“The CGMA designation is a global designation making it easier for employers to ensure the highest caliber of accounting and financial professionals in every country,” says Rainey. “So a company can feel comfortable when they hire a CGMA that they are getting a certain caliber of professional.”

Talking Strategy with Atlantic Health CFO


By Julie Barker

Atlantic Health System’s CFO Kevin Lenahan says he spends most of his time “developing where Atlantic is going for the next five years.” Putting numbers on a strategic plan is only part of this. The face-to-face is crucially important: “Continuing to meet with other systems, with other partners.”

Tellingly, Atlantic Health System expects joint ventures, not mergers, to be the best way forward. In September 2013, Atlantic Health System and six other major health care systems in New Jersey and Pennsylvania jointly created AllSpire Health Partners, a consortium of 25 high-performing hospitals, to address saving money and improving quality by sharing best practices. Morristown Medical Center, for one, will be sharing its clinical practice knowledge in gynecology, cardiology, and geriatrics — areas where it ranks in the top 50 hospitals in the nation.

On the savings side, Lenahan hopes to see AllSpire make a commitment to, for instance, selecting a designated lab corporation as a single provider to which AllSpire members would send all their specialized pathology (called reference lab work), resulting in a good-sized discount. Lab costs can be very high; lowering them would serve the goal of making health care more affordable overall.

Says Lenahan, margin pressure caused by reduced reimbursement from Medicare is not going away. As it continues, “we’re going to have to find a way to reduce our costs. So if we can do it on the supply side, that is always the most ideal.”

The Next Wave in Health Care


Atlantic Health System’s Kevin Lenahan gets creative as the day-to-day realities of the Affordable Care Act emerge

By Julie Barker

Managing finance in a changing environment is like riding a wave. “You don’t want to hit the wave too soon or too late and get washed out,” says Kevin Lenahan, Atlantic Health System’s vice president of finance and CFO. Amid the opportunities and potential perils facing a large hospital system today looms a large question: just when to take on additional risk in negotiated insurance contracts.

Since the Patient Protection and Affordable Care Act (also known as the Affordable Care Act) was signed into law in 2009, hospitals have been on a journey from the old way of handling patient care and making money to a new way. As Lenahan navigates familiar waters of the fee-for-service model, he is also watching for the right moment to take on the monster waves of risk-bearing contracts. Meanwhile, he’s making deals to share knowledge and costs.

“Regardless of any changes that may happen to the law going forward, I think the model is going to change,” he says. “We need to be smarter about how we do things. Size and scale are going to matter, and that’s why we continue to grow.”

Including Morristown Medical Center, Overlook Medical Center, Newton Medical Center, Chilton Medical Center, and Goryeb Children’s Hospital, Atlantic Health System is one of the largest non-profit health care systems in New Jersey, and arguably the best run, having received the highest ratings by Moody’s (A1) and Standard & Poor’s (A+). It’s a testament to Lenahan’s and CEO Joseph A. Trunfio’s leadership that Atlantic Health System has stayed financially strong despite losing about $11 million a year due to Medicare Sequestration cuts. Lenahan, who has been with Atlantic Health System for 18 years and became CFO in 2010, oversaw the various negotiations, two of which led to mergers.

With a close eye on costs and opportunities and the will to eliminate such redundancies as multiple payroll departments, Atlantic Health does make money. Margins, says Lenahan, are 2 to 3 percent, which is “consistent with the major hospital systems in New Jersey.” Every dollar earned is reinvested in the organization. “We spend over $100 million a year in capital, a lot of it going for new technology and upgrading our facilities,” he says. As an example, Lenahan has just approved about $18 million for new electronic medical records (EMR) for physician practices.

Working Smarter

Bringing new physicians into the system is one of Lenahan’s focuses, as the physician practices department reports up through him. “It gives me the complete understanding of how the operations work. I’m not in a finance ivory tower two miles from the hospital. I’m meeting with physicians every day.” He negotiates their contracts, including benchmarks. He aligns physician and hospital incentives. And he keeps an eye on the results. “The value of care will trump the volume of care eventually,” he says.

Through mergers, Atlantic Health System set out to not only expand the organization, but make the care it provides more effective. Big enough now to purchase in bulk, the health care organization is looking to buy direct, cutting out the middleman in many situations. A year ago, it created an off-site central warehouse, which not only freed up space at the individual campuses, but enabled Atlantic Health System to expand bulk purchasing initiatives. “We probably saved about $2 million with that central warehouse,” says Lenahan.

As each acquisition closed — the most recent was the Chilton merger last January — Atlantic Health System’s leadership took steps to reengineer processes. Layoffs are not countenanced, so retooling is the answer.

On the patient-care side, similar scrutiny of processes is resulting in better financial outcomes and better quality of care. Atlantic Health System is set on reducing the overall cost of care for New Jersey’s Medicare population through its Accountable Care Organization (ACO), one of the largest in the country, says Lenahan, who is CFO of that business entity. If Atlantic Health System is successful in this, the government will share some of the savings with Atlantic Accountable Care Organization, which in turn will share the savings with the physicians, who are thus incented to make smart choices. The total spend for Medicare would be reduced by achieving a lower readmission rate, for example. Medicare is not a money-making proposition for the hospital system, paying about 95 to 96 cents on the dollar, and thus, there’s no incentive for providers to try to keep Medicare spending high.

Although it is in name and in fact a hospital system, Atlantic Health System does not need to keep patients in hospital beds to earn income. Atlantic Home Care is the arm that provides follow-up care and, not incidentally, helps keep patient insurance costs down. Atlantic Health System also owns a patient transportation company and a durable medical equipment company providing items such as respirators and oxygen.

In the new environment created by the Affordable Care Act, “your size gives you some ability [to make money], but you have to do something with that ability and I think we’ve been successful at that,” says Lenahan, who credits his mentors Kevin Shanley — his predecessor as CFO — and Trunfio. From the latter, he learned “to try to understand the big picture.”

“Patients have options and choices,” he says, but as the organization moves toward the implementation of electronic medical records, “we can more quickly and efficiently get the health care information to each of their doctors, and to the right specialists.” And after leaving the hospital, patients in Atlantic Health’s system can opt to use Atlantic Home Care, which is aligned with the hospital network’s physicians to ensure a quick recovery and minimize the necessity for readmissions. “So we’re controlling the care continuum.”

Looking to the Future

A three-year goal of Atlantic Health System, articulated in 2013, was to reach $2 billion in revenue, and according to Lenahan, the organization will likely achieve that goal in 2015, a year ahead of schedule. The purchase of Hackettstown Regional Medical Center, which, if given state approval, should be completed by the end of Q1 2015, achieves that objective in Atlantic Health System’s planned growth.

And what’s the next goal? Because Atlantic Health System has infrastructure in place, a large pool of high-quality physicians experienced with accountable care, and enjoyed good outcomes, Lenahan feels that the time is nearing to become aggressive and negotiate risk-bearing contracts. “My team and I are spending a lot of time analyzing the implications and helping our sites and our operations staff understand the impact of [that] change.”

A risk-bearing contract with a payor, whether Medicare Advantage or a commercial insurance company, would essentially state, “We’ll take upside-downside risk that we can manage the overall cost of care.” Atlantic Health System might have to discount some of its rates in such a negotiation, and “as you do that,” says Lenahan, “you’re going to need a certain amount of volume — new volume — to make up for it.”

Lenahan, who counts as one of his biggest pleasures visits to Long Beach Island with his family (two sons: one in college and one beginning his last year of high school), finds a natural metaphor in ocean waves. “Do you jump in with two feet, or do you ease your way in?” he asks.

Presently, he is anticipating the moment when all conditions are right for a smooth ride on a big wave, ahead of the curl and ahead of the competition.

Copyright 2017