NOL Possible Buyer for Hapag Lloyd?

"Back in the Day", I used to work for P&O Containers, then P&O Nedlloyd.  After that, I spent some quality time at APL as well.  During those years, I often thought how well matched P&O and APL would have been for each other.

APL had unmatched transpacific presence, where P&O was weak.  Conversely, P&O had great European, African and South Asian markets as well as a very strong share of the Europe-Asia trades.  Alas, it never happened. Too bad because having spent time in both companies, it would've been a good cultural fit. 

Now, due to market forces, two other strong players may consider merging whose footprints could combine with similar market congruence.  APL and Hapag-Lloyd.

Hapag-Lloyd has always been an extremely well run container shipping company.  Hapag has had one of the best yield management systems in the business. This pricing and opportunity evaluation system gave Hapag a unique ability to look at customers from a global P&L perspective. That's something few container shipping lines have the true ability to do.  I recall competing with Hapag and thinking they could be aggressive simply because they knew their costs better than anybody else. They also knew the true value of a deal. 

"Combine that ability with APL's innovative capabilities in the retail markets and technology and you could have a global power to rival Maersk in every way."

What is intriguing is that Hapag has never invested in 3PL logistics services.  It has always deferred to its European forwarder customers for those services and steered clear of that market.  Hapag-Lloyd is a primary carrier for most of the truly global European Forwarders.  In exchange it stays out of the logistics business.   If Hapag gets married to APL, that could change.   Should this merger occur, look for this to be a big factor in 2009 ocean contracting for the big NVOCC's.  Both groups will need to define their turf and working relationships in a revised market.

APL Logistics and Maersk Logistics take two separate views related to their container line brethren.   Maersk Logistics has always been an unabashed supporter of the baby blue ships.  They will book freight as directed if customers have other ocean contracts, but the default answer is always BLUE. Maersk Logistics is a freight trap for Maersk Line.

APLL on the other hand has traditionally been pretty agnostic on this issue. If the customer has a contract and wants the freight split as directed, APLL always has done this based on customer wishes.  That never sat particularly well with the APL Liner management team, but that's how it worked in my time. This stuff will change with a merger with Hapag.

An NOL/HALO merger would strengthen both TUI group and diversify Singapore state investment company, Temasek holdings.  Thats good for the two mother corporations for the liner companies.  How the two companies would get along politically will be interesting indeed.   Hapag Lloyd and APL have unique cultures.  Those cultures don't merge as well as the P&O scenario that once was possible. This one will be interesting to watch.   

clipped from www.seatradeasia-online.com Hapag-Lloyd and NOL in merger talks    Singapore: Singapore state investor Temasek Holdings and German shipping and tourism  group TUI are in talks to merge their shipping operations, the Financial Times reported on Wednesday, citing unnamed sources. Temasek could put its 68 percent stake in Neptune Orient Lines into TUI unit Hapag-Lloyd and take a share of TUI, giving Singapore about 23 percent in the enlarged group, the report cited people close to the talks. Combining Hapag-Lloyd and NOL would bring together the U.S. and African routes of the German group with the Asian routes of its Singaporean rival, the paper said. Temasek could not be immediately reached for comment and NOL declined to comment on the FT report. "NOL 's policy is not to comment on market speculation," company spokesman Paul Barrett said.

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