Alliances in Container

Shipping Industry
Prepared By:
Aswathi Unni (06)
Baiju Desai (08)
Karan Vashee (24)
Ravi Thakkar (34)
Sanyam Sanghavi (35)
 Industry Overview Compaund Annual Growth
Rate
6.00%
• TEUs of global container fleet (Jan 2017): 20.26 million (21% increase) 5.50%
5.00% 4.40%
• Global container-shipping trade grew (2015):1.9% 4.00%
3.10%
• Containerized cargo accounts for about 60% of all world seaborne trade 3.00%
2.00%
• Two forms of contemporary container liner shipping organisation:
1.00%
• Liner conference
0.00%
• Shipping alliances 2005-2010 2010-2015 2015-2018
Compaund Annual Growth Rate

APM-Maersk
Danish Company
• Economic crisis effect:
World’s leading Mediterranean Shg Co • Price competition
container shippers Swiss Company • Orders for new and larger vessels
• Overcapacity
CMA CGM Group
French Company
Alliance Shuffle Over the Years:
Consolidated Into Three Large Alliances
 Attractiveness of Overall Industry:
Strategic Groups in the Industry: Low
• Market- saturated, in a race for market share
• Pricing at their marginal cost
• Innovation in service offering is sporadic
• Fleet changes
• Conflicts between asset managers and companies
• No real growth of demand- global scale
• Containership demolition activity increased (2006): 4.2 times

Industry Issues to be Considered

• Environment
• Security
• Safety
• Transportation Infrastructure
• Cargo Liability
Driving forces
Internal Industry as a whole

Freight rate Climate change

Operating cost Infrastructure

Environment Trade

Frequency Government policies

Support service

New vessel (scale)

Business strategies
Transport and Logistics businesses four “Strategic
Blades”
Growth Cost Leadership
• Organic • In everything we do.
• Inorganic growth • In all businesses “Lowest Cost,
Lower every year” culture.
• New Products
• Exploit synergies.

Great Consumer Experience Competitive Pricing

• Leverage insights across the
business.
• Superior Products.
• Digital Interfaces
• Providing value to the customers.
• Enabled by cost leadership and
low cost to serve.
Financial Details
Firms Resource base

A robust resource base From 2010 to 2011,

• Resources increased 12%

• In this, Post-2017 Qatar reserves or resources not included
• (mmbbl) End-2010 End-2011
• Reserves & resources 1,237 1,384
• Proved reserves (1P) 515 443
Leadership & management issues

• Key elements:
1. BU Positioning
2. Customer and competition focus.
3. Business opportunities and value creation Continued cost and
efficiency pressure.
Leadership & management issues
• The old management process.
• Initiating the new planning process.
• The new management process.
• Strategy, capital allocation & target setting.
• Reporting & forecasting.
Recommendations
• Integrating businesses and extracting synergies
• Implementing cost leadership.
• Development of digital solutions
• Monitoring strict capital discipline
• Providing visibility and improving margins through procurement.
• Strong development in supply chain.