China syndrome

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The surge in trade with the Asia Pacific region, and specifically China, has led to a boom for shipping lines, air cargo carriers and freight forwarders with operations in the region. In the first half of the year DHL Danzas Air & Ocean, Schenker and Exel all saw improved performances on the back of a rise in volumes. Kuehne & Nagel’s sea freight traffic grew by 25 per cent with container volumes to and from Asia increasing by over 40 per cent.

However the increase in sea freight volumes is not good news for everyone. It has resulted in bottlenecks at many of the major European ports, impacting severely on associated intermodal barge operators and road hauliers. The problems, which are most critical at Rotterdam and Antwerp, are caused directly by a 14-15 per cent year-onyear increase in container throughput at the ports in the first half of 2004. This has led to many operators introducing congestion surcharges.

In other news, consolidation in the freight forwarding industry continued. Swiss giant Panalpina acquired a Scottish company, Grampian International, with air, sea and road operations in the UK and Netherlands. It also bought International Aero-Sea Forwarders. (IAF), one of the leading Korean airfreight agents. Caterpillar Logistics Services (‘Cat Logistics’), the logistics subsidiary of the US multi-national manufacturer, acquired outright the spare parts business of UK car manufacturer, MG Rover. The deal is worth in excess of e150m in cash with an on-going profit share agreement.

Following its purchase of Wilson Logistics, TNT Logistics and DSV (owner of the DFDS brand) announced that their joint venture in the Nordics logistics market, TNT DFDS Transport Group, has come to an end. DSV has acquired all of TNT’s stake in the company and is now once more the sole owner. The move comes directly as a result of TNT’s recent acquisition of Wilson Group which already has significant operational capacity in the region. As DSV is a direct competitor with Wilson Logistics, continuation of the joint venture would have led to a clash of interests.

TNT has also bought the remaining 50 per cent of shares in its Turkish joint venture with Koç Group. TNT entered into a relationship with the Turkish Group in 2000 and since then the company has grown to become one of the leading logistics providers in the country. A change of strategy by its joint venture partner presented TNT with the opportunity to take 100 per cent control of the company.

John Manners-Bell

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