Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about “Major container shipping companies accelerate M&A due to strong performance.”
Daily Logistics Radio by IINO san in 27th Dec. 2021
Shipping Companies, Investment in Non-Shipping Sectors
The current shipping market is experiencing an unprecedented boom and container shipping companies are expected to post record full-year results for 2021. Investment is underway, especially in logistics and aircraft.
The company is aiming to strengthen its Door-to-Door total logistics by enhancing its capabilities in non-shipping areas.
I mentioned that shipping companies are also developing and ordering new bunker ships to comply with environmental regulations, but investing only in new ships may lead to oversupply and choke themselves.
Therefore, they are also making investments in other areas.
Investment by Four Major Companies
I will explain the investments of each of the four major companies in terms of global container shipping market share.
First, let’s talk about Maersk.
Maersk has acquired five logistics-related companies in 2019-2020, including customs clearance companies in the US and Europe, just those that have surfaced this year.
It is noteworthy that it is investing in multiple sales channels, including online and retail stores, and e-commerce related logistics companies.
They are targeting not only major shippers but also the transportation needs of small and medium-sized shippers, and embarking on strengthening its capabilities to cover all the way to final delivery.
Next, CMA-CGM established an air cargo aircraft division at the beginning of the year, and has purchased or ordered 10 aircraft so far.
Furthermore, they acquired the logistics business of a major IT equipment sales company in U.S., and are now handling a series of EC orders and shipments for small and medium-sized businesses.
MSC has stepped in to acquire a company that handles import and export cargo and operates ports and freight railroads throughout Africa, saying that its logistics network is attractive in the growing market of Africa.
Finally, COSCO, China’s largest shipping company, has invested about USD 15,700,000 in the holding company of SF Express, China’s largest express company.
In this way, shipping companies are making diversified investments in more than just ships.
What We Should Do due to Market Changes
As long as capitalism continues, there will be no end to international logistics and trade with cheap countries and countries with advantages.
However, I believe that there will be a certain amount of shakeout due to the introduction of technology.
There will be a certain number of companies that cannot keep up with the times, but forwarders and customs agents will not disappear any time soon.
However, shipping companies are also starting to release API to allow direct booking by shippers.
In this environment, it will be difficult for forwarders to make money from ocean freight alone, and as mentioned in the video, total logistics will become more important.
As I told you earlier, the major company, Maersk, are even expanding into EC logistics. In our case, although our scale is small, we are trying to expand into the HR business of logistics.
I strongly believe that it is important for us to change ourselves in accordance with these market changes.
You should not simply end up thinking that major companies are doing this kind of thing.
Mergers and acquisitions and new businesses are not something that you can manage on your own, it depends on your position.
However, even if you don’t have a position, I think you should understand how the world is moving and think about what you should do.
I hope this will be a good opportunity for you to review this when you have time during the year-end and New Year holidays.