Tag Archives: supply chains

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Shipper hackles rise as Hong Kong box terminals announce operating alliance

Sam Whelan penned a report on the alliance of four companies managing terminals at the Kwai Tsing terminals in Hong Kong.

Apparently shippers are furious. They believe there will be collusion and rates will rise as a result.  Rates are already higher in Hong Kong than the mainland, and the Hong Kong fees add more cost.

The firms say it’s only to make the port more efficient and gain higher throughput.  Volume handled has been declining in 2018 compared to the prior year.

It’s true that greater cooperation would most likely improve port throughput.  Coordinating yard movements and berth use would offer possibilities for gains. I’m not sure it would have to be at the level of fixing prices.   Improving port and yard bottlenecks is an important activity for firms in port management today.

But you can bet shippers will be on their guard for any collusion on pricing, especially when there’s a falling need for services.  And since it’s China that is involved– these are Chinese firms– we can’t rule out geopolitical considerations that would be collusive.  WE need to watch this one and see how the volumes and prices play out, just like the shippers will.

logo  via Shipper hackles rise as Hong Kong box terminals announce operating alliance – The Loadstar

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Posted on January 10, 2019 by in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains

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CMA CGM and CEVA detail tie-up

Chris Dupin has an interesting article in the most recent American Shipper.  CMA/CGM is trying to buy a majority interest in CEVA, the 3PL firm based in Switzerland.   CEVA has been the target of another buyout effort by DSV, another 3PL.  the time was certainly ripe for a consolidation in both the 3PL and the maritime transport space.  This merger or combination is another attempt to deepen the reach of a maritime company into downstream supply chain management.

Like all of these mergers, we’ll have to see if it works out, and if the combination succeeds in improving results for shippers and receivers of goods.  But for me it is  a step in the right direction for a maritime company.  If you try to tackle the downstream problems, you will start to understand how to improve and deliver more value.  Whether a purchase is the best route is an open question, but it is certainly a good try.

The article also points out that CMA/CGM is innovating in other ways now.  It has an in-house incubator, ZeBox, of small concerns that have ideas for improvements. It’s moving ahead on tracking containers and monitoring some of the risk conditions they face while traveling; and it is making some investment in bill of lading improvements through a blockchain technology project with BuyCo, another startup.  These are certainly ways to get innovators thinking about the maritime supply chain problems.  Who winds up with the rents is yet to be determined.

 

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via CMA CGM and CEVA detail their tie-up

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Posted on November 26, 2018 by in Leadership, Logistics, Shipping, Strategy, Supply Chains

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Six operators join to form the UK’s largest logistics company

Alex Lennane has written in the Loadstar about the merger or assimilation of six UK diverse logistics firms under one management.  Perhaps this is what’s necessary to get firms to work together– a bigger hammer.  If they cannot learn to do it on their own, let’s put them together under one management.

However, this approach is fraught with issues. Most mergers do not reach the state of grace they envisioned, because of resistance to change within.  And much of the value of a firm is in its people, and their skills at dealing with the countless exceptions that mark any business.   Another is the heterogeneity of the businesses– every firm in a merger thinks their way of doing something has to work that way for them.  It might not be true, or it might, but even thinking it draws boundaries that can take considerable effort to crack.

We will have to see if this new management structure generates rewards the size the PE firm expects.  Of course if they just make something big enough to sell publicly with temporary results, that will be enough for them to make their money and pass the risk on.

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via PE firm puts six operators together to form the UK’s largest logistics company – The Loadstar

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Posted on November 23, 2018 by in Logistics, Production Operations, Strategy, Supply Chains, Trucking

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