Ocean Carriers Reduce Secondary Services, Focus on Growing Core Operations
NEWARK, N.J., Aug. 10 /PRNewswire/ -- Ocean carriers looking to recover from the worst year in the 54-year history of containerization are slashing value-added services and returning to their core operations. In the latest industry-changing move, shipping lines are stepping away from the business of providing the chassis used to carry containers away from port terminals, forcing supply-chain interests from trucking companies to shippers to adjust. The message is clear: ocean carriers are focusing on what they do best — handling the international trade that drives revenue and profit — and shedding the secondary services that drive up costs.
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(Photo: http://www.newscom.com/cgi-bin/prnh/20100810/NY48691 )
As container lines have grown, chassis services have become an expensive and time-consuming aspect of their business, and unique to the U.S. market. New federal maintenance requirements are likely to increase the headaches. Last year, Maersk Line changed the game by establishing a new entity, Direct ChassisLink, to provide neutral chassis for a fee. The success of the model laid the groundwork for six other global carriers — Cosco, CMA CGM, NYK Line, Orient Overseas Container Line, Atlantic Container Line and Evergreen Marine — to announce their withdrawal from the chassis business in recent weeks.
With leverage created by equipment and shipping capacity constraints, this may be the perfect time for shipping lines to make such a large-scale change. In this week's Cover Story, The Journal of Commerce examines this critical link in the global containerized supply chain, its potential to disrupt the flow of goods and how it will impact trucking businesses and reshape the industry.
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SOURCE The Journal of Commerce
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