Ocean carriers these days don't want to just sell you transportation service. Since the mid-'80s, shipping lines, especially the big ones, have been holding themselves out as, well, just about whatever you want them to be. "We want to be your traffic department," numerous vessel operators have been telling shippers for nearly two decades.

Natural competition, intensified by overcapacity, isn't the only thing driving the trend, shipping executives say; in many cases, customers are demanding seamless, transparent, door-to-door movement of their cargo. Also, as revenues from transportation service drop along with falling rates, carriers are looking for new sources of revenue.

Predictably, some third-party logistics companies, which have traditionally provided many of these services, aren't too happy about this trend. But others are putting a different spin on things: By design or accident, they report, the trend has given their business a boost.

A number of ocean carriers are offering value-added logistics services these days, among them Crowley Liner Services, P&O Nedlloyd, Maersk Sealand, APL, Mitsui O.S.K. Line, Matson and Australia-New Zealand Direct Line. Take Nippon Yusen Kaisha (NYK Line), a containership operator based in Tokyo, as an example. NYK's value-added services, which are certainly not unique, include warehousing, pick-and-pack, distribution, origin/destination trucking, consolidation/deconsolidation and, through its Yusen Air Freight subsidiary, airfreight forwarding and customs brokerage.

The carrier will also provide door-to-door service—not just the ocean portion of the move—for customers that want it. "There is a lot we can do, in terms of being [our customers'] supply chain partner," says Peter Keller, U.S. chief operating officer for NYK Line. Typical carrier-customer arrangements, he says, "involve taking the cargo from the point of origin—maybe a small factory in China or outside Munich—and moving it with full transparency to the end user."

With this type of door-to-door service, Keller continues, his clients aren't having "to worry about synergies and handoffs, which can be quite an arduous exercise. It enables you to reduce supply chain time, which in turn reduces inventory and that reduces carrying costs. Those are huge issues," he says, "especially for the larger companies, which deal with billions of dollars in inventory."

John Speakman, vice president of Australia New Zealand Direct Line (ANZDL), agrees that shippers are looking for more from their ocean carriers these days. "I believe shippers in the Australasia trade lane, as well as any other, are basically looking for any way to simplify their work processes. This includes eliminating the hassle of calling multiple service providers. ... Many of our customers prefer to make one call and have us arrange for their trucking and rail requirements, in addition to the ocean transport."

What else can ANZDL do for a client? The list is quite varied. "ANZDL has several import customers in North America that require us to be heavily involved with their distribution chain, which includes providing them with strategically located warehousing facilities," says Speakman. A variety of services are offered at these facilities, he says, including inventory management, container packing/unpacking, pick-and-pack and consolidation.

ANZDL also offers special monitoring for the reefer equipment used by customers shipping sensitive cargo like lamb or fresh produce, Speakman says, as well as fumigation service where necessary. "A high percentage of export cargo in this trade requires fumigation so we can arrange for the fumigation of our customers' shipments to save them time," he explains. "ANZDL also provides cold storage facilities at key locations throughout North America, to assist in the storage and distribution of imported beef and related products for large importers."

Yet another example is Mitsui O.S.K. Line, which, like NYK Line, is based in Tokyo. Its value-added services include consolidation/deconsolidation, trucking, pick-and-pack, package labeling and cargo quality/damage inspection at destination, according to Raymond Keene, executive vice president, and Frank Masi, vice president of trade services, both of whom are based at MOL's U.S. headquarters in Pleasanton, Calif. The carrier's MOL Logistics subsidiary offers ocean and airfreight forwarding, they say, as well as cold storage facilities in some parts of the world.

MOL also provides specialized services for individual customers, the executives report. For one retailer, the carrier performs the air- or paper-stuffing process on handbags. For another, it sorts clothing items by color, style, size and shape, and provides store delivery. For a food-products shipper, MOL prepares yakitori skewers of chicken and fish in Thailand before taking the product to Japan.

Though NYK Line, ANZDL and MOL are eager to get the word out about their value-added services, other carriers are not so quick to promote their capabilities. A spokesman for one such line reports that his carrier provides value-added service, "but only if the customer demands it. It's not something we go out and market because we don't want NVOs [non-vessel-operating common carriers] hammering at our door and screaming at us for invading their turf," says the spokesman, who requested anonymity for himself and the shipping line. He acknowledges, however, that the carrier has responded to requests for palletizing, devanning, customs brokerage and delivery to the distribution center upon specific demand or when inventories reach preset refill levels.

In any event, knowing what customers want and delivering it are two different matters. And given the variety of customer requests these days, it's no surprise that most ocean carriers can't meet demands for all of these extras alone. In many cases, they turn to freight intermediaries—NVOs, third-party logistics providers (3PLs), and the like.

"We do a lot of outsourcing," MOL's Masi acknowledges. "We can't blanket the world. Probably the majority [of logistics services] are outsourced today by most people."

Likewise, many of ANZDL's value-added services are handled through partnerships with other companies that are experts in a particular service, says Speakman. "The key for ANZDL is setting up a true partnership to ensure that our customers are getting a high level of service as opposed to simply outsourcing."

For NYK, the decision whether to outsource depends on the particular port pairs involved, Keller says. "In some places, we can provide 100 percent of those services. You try to do as many as you can yourself, especially in the major trade lanes," he says, "because you want to maintain quality control and the seamlessness of the transaction."

Though some intermediaries welcome the added business they've received from ocean carriers intent on expanding their service menus, at least one intermediary truly resents this development. The executive, who requested anonymity for himself and his company, calls the carriers' forays into areas such as forwarding and consolidation "an area of concern. They're starting to compete for our customers. It's not a good idea, especially when they don't do it very well," he says. "They don't have the expertise."

But Jeff Coppersmith, president of Coppersmith Inc., a logistics provider based in El Segundo, Calif., sees it differently. While he agrees that carriers don't always handle ancillary services well, he says that actually works in his company's favor.

"I wind up getting more business [if] they fall down on the job," he says. Companies such as his "are not everything to everybody," he says, "but we can certainly arrange everything for everybody."