Shipping alliance size advantage is facing challenges?

Recently, the four major alliances in the Asia Europe routes or tide, causing the industry alliance reflection, the scale advantage of facing the challenge? McKinsey (McKinsey) in the latest report, when the ship arrived at the port, container shipping alliance in the scale advantage of the sea came to an end, to expand cooperation in land and thus improve efficiency and profitability, is an important step in the future.

The report shows that by integrating the operations of alliance members, to reduce the overall cost of the basic cost and the complexity of the land based work. In the United States on the cost of land costs, for example, the integration will be a member of the mid sized alliance to save $one hundred million per year.

Analysts have found that the size of the shipping alliance has reduced the cost of the unit, and has saved the Union's cost savings on the sea, but even if they are bundled together, they are running separate. Each liner company and the terminal have their own agreement, freight contract and scheduling arrangements, railway agreement and operation management.

Mccann tin report said that although the union allows the larger liner companies to allocate resources reasonably, but the main beneficiaries are smaller liner companies, smaller liner companies do not spend billions of dollars on the large fleet, you can provide more for the purpose of service. These smaller shipping companies have the advantages of large boats on the major trade routes, 1.4 million TEU ships fuel efficiency than a 7000-teu vessel per box 30% higher, and this part save soon many a little makes a mickle.

However, the recent financial results show that the largest liner shipping companies are still the industry's surplus. McKinsey found that the benefits of the shipping alliance did not make the alliance member's financial performance better, and by expanding the alliance of land operations cooperation, its members will have the ability to get the most real cost savings in the economies of scale, which will benefit all alliance members.

So how to integrate the operations of the alliance in order to reduce the total cost of the basic cost and solve the operational complexity? To achieve this goal, the company has to make an alliance with the need to become a single one, in the land operations to overcome obstacles, and to take action. The joint venture will provide the actual value of the liner, the value will be reflected in the alliance to manage multiple terminals as a single terminal, which will mean adhering to a management team to lead a business system. A single multimodal transportation companies will be integrated management in railway freight, and American railway connection, improvement of the freight and logistics in, union company will save cost. If the union can integrate truck freight to get lower road transport prices, then truck freight is another manifestation of the value of joint operations. Each alliance can establish a centralized truck freight planning, and to mobilize every truck, thereby reducing the empty the idle, and the cost is reduced. Mccann tin believes that by taking these steps, the union members will greatly save the cost.

But analysts also outlined obstacles to the joint operations, including regulatory issues, as well as liner companies to comply with the applicable regulations, how to seek ways to make the alliance more closely work. Another obstacle is the complexity of the contract. Members of the Union have been signed contracts with the port authority and the workers, some liner companies will be operated as the profit center, some liner companies have sold shares, the use of continuous treatment of freight as a commitment to private equity investors.

McKinsey believes that there are different priorities among the members of the alliance, not all the liner companies want to immediately implement the joint operations. In the union, the union of two or three liner companies can achieve most of the cost savings.

The report also said that the intention of implementing the joint operations of liner companies, the next step is to set up a good clean group, for the collection of information on each liner company in the terminal, multimodal transport, cost, financial performance and the terms of the contract. Then, the team assessed the opportunity in the case of no reservations.

Once the possibility of cost savings is clear, liner companies can begin to re negotiate contracts to build new, enabling terminal operations and multimodal transport companies.