Ocean Carriers Return to Core Competencies

By Patrick Burnson, Executive Editor
October 08, 2013 - SCMR Editorial

According to analysts with Drewry Maritime Resarch, ocean cargo container lines are still being squeezed out of providing “home-grown” integrated logistics services. This is evidenced by Maersk’s news last month that it has entered into an agreement to sell the assets of its U.S. trucking subsidiary Bridge Terminal Transport, analysts add.

“Although partly driven by financial necessity, the ocean carrier trend appears to recognize that one-stop shops are not the way forward,” says Neil Dekker, head of Drewry Container Research. “That expansion via vertical integration should be replaced by greater focus on the provision of core services.”

Industry analysts contend that this is hardly a new trend, but rather one that has only been gaining traction this year. For example, in June Maersk announced the sale of its European railway company ERS Railways to Freightliner. In May Zim Line sold its holdings in two companies that own container manufacturing factories in China. In April MSC announced the sale of 35% of its ports division Terminal Investments Limited to Global Infrastructure Partners, and in January, CMA CGM declared the sale of 49% of its container terminal operating company Terminal Link to China Merchants Holding (International).

Much earlier, in 2010, Maersk already sold its stake in the logistics company Trans Siberian Express Service to InterRail, while others started reducing their involvement in third party logistics services even before then.

The implication is that the provision of “home grown” integrated logistics services by ocean carriers is becoming a distant dream that is unlikely to be resurrected in the near future, says Dekker.

“This will bring a smile to freight forwarders and independent third party logistics companies who have been arguing for years that ocean carriers should stay out of logistics, for which being asset light has many advantages,” he says.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Total POLB volumes dropped 9.1 percent in August at 573,083 TEU, and POLA volumes in August were up 6.7 percent compared to August 2013 at 757,702 TEU.

Following a week in which the average price per gallon was flat, diesel prices resumed their decline, falling 1.3 cents to $3.801 per gallon, according to the Department of Energy’s Energy Information Administration.

Read how others are using Business Process Modeling to implement Microsoft Dynamics AX with reduced risk.

While diesel prices have largely been out of the spotlight in 2014, freight transportation and logistics stakeholders always need to keep a close eye on what prices are doing, as it has a significant impact on transportation budgets and forecasting.

Railroad service issues and rates, which many rail shippers deem as unreasonable, are front and center in a piece of legislation to be introduced soon by Senators Jay Rockefeller (D-WV) and John Thune (R-SD), chairman and ranking member of the Senate Committee on Commerce Science and Transportation.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA