"Names such as DHL and Fedex, synonymous with the speed and reliability that customers seek, are likely to target container shipping lines' customers."
Mumbai, Oct 6
GLOBAL logistics service providers with strong financial moorings are gearing up to foray into container shipping in an effort to complete their end-to-end supply chain logistics.
An interactive session on `Issues and future trends in movement of containerised cargo,' as part of the on-going three-day International Maritime Expo in Mumbai, identified this as one of the challenges that faces container lines today.
Integrated supply chain: With the lexicon of logistics services undergoing a sea change of late and new value-added services being added in the package of offerings, global players are looking at acquiring container lines as a logical extension of their value-chain that will make them integrated supply chain service providers.
Mr. S.S. Ranganekar, Director of Shipping Corporation of India and President of Association of Multi Modal Transport Operators of India, who set the tone for the discussions, said: "Names like DHL and Fedex, synonymous with the speed and reliability that customers seek, are likely to target container shipping lines' customers."
He added that it was expected that these players may even target container lines as potential acquisitions to protect their own products.
Deep pockets: "Service providers like DHL, TNT, and UPS, have deep pockets and are quickly acquiring capabilities to become integrated supply chain providers.
"They can offer existing land-based transport networks and end-to-end shipment visibility."
It is felt that customers will continue to demand greater reliability at lower costs, resulting in a trend towards end-to-end integration and more tightly synchronised supply chains.
Another view is that customers will be laying more emphasis on "shipment visibility," while requiring shipping processes to become "tamper-proof."
Better tracking: This has compelled many container shipping lines to consider investments in better methods for tracking assets from ship to shore and finally to the consignee's door.
Another challenge being faced by container lines is that of infrastructure constraints, which is compounded by poor productivity at several ports and inland bottlenecks.
Consolidation: Mr Ranganekar said that as the industry becomes more consolidated, especially after Maersk's takeover of P&O Nedlloyd and CP Ships' takeover by Hapag Lloyd, the top 10 players would control about 80 per cent of the market, with the next 20 players controlling about 15 per cent and the other players sharing the remaining 5 per cent.
One view that was dominant during the session was that container lines would have to sharpen their focus on customer relationships.
"One thing is certain in the container shipping industry and that is the race to acquire new capabilities, as customers now demand better reliability, visibility, and data integrity, which is bound to intensify. We must start preparing for it now," Mr Ranganekar said.