atans1

Why NOL was sold/ S’pore missed a bullet

In Shipping, Temasek on 30/11/2016 at 6:04 pm

We damned lucky that a 2008 deal to make it bigger failed:

Amid the structural changes in world trade, the driving forces behind industry consolidation have also changed. U.K. maritime and shipping industry research company Drewry said that consolidation before 2008 was driven by “a desire for growth.” But mergers in the past few years have been “more about survival and the need to address structural industry problems.”

The best example is Singapore’s Neptune Orient Lines, which was sold earlier this year to France’s CMA CGM, the world’s third-largest shipping company.

Until 2008, NOL was expanding fast. It acquired American President Lines, the biggest operator in the Pacific container trade, in 1997. In 2008, the Singaporean company made a serious bid for Germany’s Hapag-Lloyd, another major container transporter.

After eight months of talks, NOL walked away from that deal as the economic outlook darkened. But NOL failed to maintain cost competitiveness against other major lines, which reaped economies of scale by investing millions of dollars in huge new containerships. The company’s acquisition by CMA CGM underscores the difficulties facing midsize container lines in the current protracted downturn.

 http://asia.nikkei.com/magazine/20161124-S.O.S/On-the-Cover/Shipping-lines-plunge-into-a-war-of-attrition
Advertisements
  1. Btw, APL (formerly American President Lines) was the one who sailed into Xiamen & HK with 9 SAF Terrex’es. Maybe ship captain du-lan & wanted revenge after being under clueless paper generals & admirals running NOL for so many years.

  2. How do you know the failure of the 2008 deal was “damn lucky”. May that acquisition would have brought much economies of scale and enabled NOL to survive.

    It’s always easy to be a pist- fact armchair critique.

    • Even Maersk Line says that downturn is a lot worse than it ever imagined would happen lah. And NOL and the German line didn’t have super ships on order unlike Maersk etc.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: