Hamburg Süd for Sale…?

Die Monte Rosa verfügt ebenso wie ihre 5.550 TEU-Schwesterschiffe der Monte-Klasse über je 1.365 Kühlanschlüsse. Like her 5,550 sister ships of the Monte class, the Monte Rosa has 1,365 reefer plugs.

Source: http://www.hamburgsud.com/group/media/hamburgsd/contentpictures/vessels/Monte_Rosa.jpg

 

 

The family owners of Oetker conglomerate’s German liner, Hamburg Süd, are currently meeting today, November 30th, 2016 to debate whether or not they will be consolidating their 7th largest liner into a bigger company during the brutal wave of liner consolidations that have jarred the liner shipping industry this year. Many media outlets have reported over Thanksgiving weekend that the owners would be meeting this week to discuss the future of the German ocean carrier, with Lloyd’s List and the Wall Street Journal being amongst them. There is an understanding that the meeting between family members are split as to whether or not they wish to retain the carrier. With Hamburg Süd being the 7th largest container carrier and a powerhouse Latin America/Australia trade cornerstone, many have speculated that Maersk Line will be interested in acquiring Hamburg Süd. Both Maersk and Hamburg Süd have declined to comment on the reports when asked.

 

With over 9,500 TEUs per week in North Europe to East Coast of South America trade, the family-owned Hamburg Süd kept tight lips regarding information about profits and losses, yet at a year-end commentary, Oetker mentioned they were able to increase their total revenues to 6.057 billion euros in 2015, which was 16.8% more than in 2014; also increasing the number of containers they carried in 2015 to 4.1 million TEUs, which is 21.5% more than what they did in 2014. With 117 containerships, where 44 are owned and 73 are chartered, totaling an aggregate capacity of 602,908 TEUs, and another 8 container ships on order, this alliance unaffiliated independent line has caught the eye of Maersk Line, whom is allegedly thought to be first in line to consider purchasing Hamburg Süd to expand their presence in Latin America, where Hamburg Süd calls on over 30 ports. Maersk’s CEO, Soren Skou, confirmed in September that Maersk Line was mulling acquisitions in their bid to grow in line with the market and unveiled that their group’s new strategy of acquiring rather than building new ships as part of their overall plan, while splitting their shipping, ports, and logistics operations from their energy division.

 

“We don’t comment on any market rumor,” stated Christiane Krämer, a spokesperson for Hamburg Süd. Maersk spokesperson Mikkel Elbek Linnet echoed the same when asked whether Maersk Line is in talks with Hamburg Süd, simply stating, “We cannot comment on speculation.” Nonetheless, maritime analysist Alphaliner is reporting that CMA CGM has placed a bid for the German carrier, and their bid indicates the French line has high interest in maintaining their growth momentum after completing their acquisition of APL in June, even though Maersk Line’s strong balance sheets make the Danish carrier the blatant courter. With a selling price in the ballpark of $5 billion or so, Alphaliner mentions that CMA CGM’s heavy debt burden of $9.6 billion could limit the price they are willing to pay, especially if it were for a cash deal for Hamburg Süd. But with very little debt on their books, any potential buyer will have to pay cash to acquire Hamburg Süd, an analyst comments, since there will be very little appetite for a non-cash or share offer for the highly independent Oetker Group.

 

Additional Information:

  1. Family Feud: To Sell or Not to Sell? (Port Technology)
  2. Maersk Tipped to Buy Hamburg Süd (Splash247)
  3. Hamburg Süd Rumored to be Put Up for Sale (American Shipper)
  4. Hamburg Sud May Be for Sale, Maersk Line Among Potential Buyers (Supply Chain Drive)
  5. Hamburg Süd Sale Speculation Mounts (JOC)
  6. CMA CGM Throws in Bid for Hambürg Sud, Analyst Reports (JOC)

Amazon Joins the NVOCC Fray

amazon-nvocc-photo-black-frame

Source: http://fullavantenews.com/

 

 

In November 2015, the U.S. Government Federal Maritime Commission received a registration request from Beijing Century Joyo Courier Services to become an ocean shipping provider. The significance of this is that the Beijing Century Joyo Courier Services is a subsidiary of Amazon. Yes. THAT website.

 

With expansions already reaching in air transportation and trucking, the decision for Amazon to enter the trillion-dollar freight industry will have enormous effects on Amazon’s international sellers, importers, and end consumers in America – in essence, changing the very DNA of one of the world’s largest industries. Starting out about 20 years ago as an online retailer when eBay was still to popular “go-to” for many people, Amazon has kept up with consumer demands and changing requests, shifting from online retailer to “Business to Business” service provider, offering a plethora of critical infrastructure as a service to other businesses by creating powerful self-service platforms that allow regular people to experiment and accomplish things that were originally thought “impossible.” Because of this, eBay quickly grew out of favor with many people as they shifted over to Amazon to fulfill their needs instead.

 

Amazon understood that delivery, and the control over the entire process of delivering their product, is one of their most important focuses they would like to overcome as they transitioned into the New Year following the courier shipping delays in the 2014 holiday season. With ocean freight now dropping to record lows as ship owners struggle to raise them prior to 2017 contract negotiations, Amazon has one key advantage over the entire freight forwarding industry right now: automation. Amazon has perfected the art of automation to the point that if you were to compare Amazon to ANY freight forwarding company, or even all of them put together, and Amazon could still easily outperform them all when it comes to automation. By using software to eliminate additional transaction costs associated with government filings, status updates, pricings, bookings, and more, Amazon will be able to cut their costs significantly – and by fulfilling products directly from China to consumers in the U.S. will cut handling costs at U.S. warehouses, which will make it a huge hit with Chinese merchants.

 

This has actually been a long time coming smart move on Amazon’s part. By offering ocean freight services, Fulfillment by Amazon (FBA) is making it easier for their customers to move goods via the company’s own logistic network. Because most of (Amazon’s) Chinese shippers are sending small amounts of freight, “The most striking thing is Amazon’s ability to co-op a lot of smaller Chinese vendors and make one huge vendor.” says Steve Ferreira, founder of Ocean Audit, a Connecticut-based global ocean freight auditing service. Being able to add handling and bill documentation charges, amongst other fees, Amazon can “double-dip” into the revenue stream and have better control of their entire market process from start to finish carrying their own cargo under their own bill of lading.

 

As of now though, with Amazon’s reputation for ruthless competition and their desire to dominate ALL markets on planet earth; based on previous results, we know that once Amazon puts their mind on something, they are set to execute it. With the ability to execute their thoughts cleanly with a well thought out step by step, simple, fool-proof process, perhaps this is something that the freight forwarding industry can learn and take a page from to update ourselves on how we can evolve from our ancient processes to catch up with the world and technology.

 

 

 

Additional Information:

  1. Is Logistics About to get Amazon’ed? (Techcrunch)
  2. Amazon the Freight Forwarder? My Shipping Sense is Tingling! (Universal Cargo)
  3. Introducing Ocean Freight by Amazon: Ecommerce Giant Has Registered to Provide Ocean Freight Services (Flexport)
  4. Amazon’s New Jets Represent a Serious Threat to FedEx and UPS (Updated) (Flexport)
  5. Amazon Considering Options After UPS Delays (The Motley Fool)
  6. Amazon’s NVOCC Status Opens Dorr to New Business, Cheaper Rates (JOC)
  7. Amazon Gets OK to Operate as NVOCC from China to US (JOC)

Japanese Carriers Unite to Dominate

First Container Ship Docks To Unload Cargo At New London Gateway Port...The MOL Caledon container ship, operated by Mitsui O.S.K. Lines Ltd., sits moored to the dock side in this photograph taken with a tilt-shift lens at DP World Ltd.'s newly operational London Gateway deep-sea container terminal port in Stanford-Le-Hope, U.K., on Thursday, Nov. 7, 2013. DP World's London Gateway port received its first ship today following a decade-long project to build a deep-water haven close to the U.K. capital that aims to become one of Europe's busiest container terminals. Photographer: Matthew Lloyd/Bloomberg

MOL’s Caledon shipping vessel operated by Mitsui OSK Lines sits moored at the dock of DP World’s London Gateway deep-sea container terminal.

Source: http://blogs.ft.com

 

 

On Monday, October 31st, 2016, Japan’s three largest shipping companies, Kawasaki Kisen Kaisha, Ltd. (“K” – Line), Mitsui O.S.K. Lines, Ltd. (MOL), and Nippon Yusen Kabushiki Kaisha (NYK), all members of THE (Transportation High Efficiency) Alliance – which begins operations on April 1st, 2017, agreed to merge a major portion of their businesses in order to survive the economic fallout of weakened global trade. The joint venture company plans to be established by July 1st, 2017, with their starting date for new operations planned for April 1st, 2018. This major Japanese merger announcement was made the same day that the three carriers recorded a collective ½ year operating loss of $484 million, bringing to light just how badly the container lines are suffering right now. By merging their container businesses together, they would generate scale and operational efficiency benefits that would allow the lines to save $1 billion per year.

 

Ever since the bankruptcy of South Korea’s biggest container line, Hanjin Shipping back in August, a huge wave of consolidation has been sweeping through the liner industry to minimize supply to be in line with demand in attempts to bring shipping back to profitable levels again. With container growth rate declining, too many newer and bigger vessels being built, super low oil prices, sluggish cargo demand, and an oversupply of trade capacity, most, if not all container shipping companies are now working at a loss every time they set sail in a super soft global market with depressed container rates. With the individual groups facing bleak prospects forging forward on their own, president of Nippon Yusen, Mr. Tadaaki Naito stated at the news conference, “If we don’t want the number of Japanese shipping companies to be zero, we need to create one strong, splendid company.”

 

Through this three way partial joint venture now combining into a single, yet-to-be named company, estimates of business worth hovers around 300 billion yen, or $2.9 billion, according to their news release; and becoming one of the largest Asia’s biggest box carrier movers. The new company plans to operate 256 ships, totaling about 7% of the global market by container volume, with Kawasaki Kisen and Mitsui O.S.K. owning 31% of new company each, and Nippon Yusen owning 38%; with expectations to save about 110 billion yen per year and becoming the world’s 6th largest container line. Nonetheless, transport cargo like grain and iron ore will remain individual entities.

 

With a ship building hay day happening right before this sluggish crisis, the problem has now deeply worsened with an excess of 2 million TEUs. With trade slowing down to a trickle, and shipping companies having far more capacity than they can profitably use, major container lines haven’t covered their operating costs in the last 5 – 6 years. Because of this, shipping lines have explored consolidation and alliances as a result, with many acquisitions and several mergers taking place worldwide. With what seems to be the only viable option of merging, Eizo Murakami, president of Kawasaki Kisen states, “This is a big decision, since it will create what will be the only container shipping company in Japan. But with the European industry consolidating and the business becoming more of an oligopoly, we need the scale that being a single company (in Japan) would provide.”

 

 

Additional Information:

3 Japanese Shipping Companies to Merge Container Businesses (NY Times)

Japanese Shippers to Merge Container Operations; Shares Surge (Bloomberg)

Japanese Carriers to Merge Container Businesses (JOC)

Back Against Wall, Top Three Japanese Liners Take Disciplined Merger Approach (JOC)

Merged Japanese Liners Would Dominate Asian Imports to US (JOC)