Digital Edition

Sept.5, 2016

Issue link:

Contents of this Issue


Page 9 of 71

Photo: DiegoMariottini / 10 THE JOURNAL OF COMMERCE SEPTEMBER 5.2016 COVER STORY MARK YOUR CALENDARS. Come late Septem- ber, the container shipping industry — and logistics in general — could be in for one of those landmark events that come along every several years. Like so many times before — dropping of inland intermodal point pricing, launching of ever-larger vessels, slow-steaming, customer service charters and manifestos — Maersk Group, owner of the world's largest container shipping company, could turn the industry upside-down with a strategic review that has European and global transportation interests buzzing about a possible breakup of the Danish conglomerate. The outcome of that review will come in the wake of a series of events that have decimated European transportation inter- ests struggling with a mix of overcapacity and sluggish demand at sea, in the air, and on the road that is squeezing freight rates and savaging balance sheets. Even Maersk, a paragon of excellence in an otherwise sea of container shipping red over the past fi ve years, has been swept under, reporting a sec- ond-quarter loss of $151 million after a $507 million profi t in the same quarter last year. And that's just the beginning of the ugli- ness sweeping transportation providers: ● Lufthansa Cargo, which has generated more than $1 billion in profi t over fi ve years of consecutive growth, will close 2016 in the red. ● German ocean carrier Hapag-Lloyd col- lapsed to a fi rst-half loss of 142.1 million euros ($160.6 million) from a 157.2 million- euro profi t in the same period last year. ● Deutsche Bahn, the biggest pan-Euro- pean rail cargo operator, blamed its domes- tic freight business for a 1.3 billion-euro loss in 2015, its fi rst in 12 years. ● Deutsche Post DHL had to squash spec- ulation that it's looking to junk its troubled global forwarding division. If this sounds worrying to shippers and other customers, it should, because Europe and the companies that support it are critical links in their supply chains — the continent's domestic market alone comprises a single, 14 trillion-euro market of 28 nations con- nected to the global economy. And while European importers and exporters are enjoying lower rates, they're growing frustrated with a lack of reliability and the inability to forecast just where their budgets need to be. Facing broadly muted economic growth, warning signs coming from industry leaders only serve to further rattle logistics directors of major European importers and exporters. On the surface, the outlook for ship- pers and carriers appears pessimistic: The eurozone is growing at a snail's pace, Italy is teetering on the verge of a banking crisis, and the U.K., Europe's third-largest econ- omy, is leaving the European Union. Yet the domestic market is holding its own despite the uncertainty. Consider, for example, that: ● Finnlines, the largest Baltic Sea roll-on, roll-off ship operator, posted its best-ever second quarter this year. ● Copenhagen-based DSV Air & Sea had record second-quarter profi t as it offset the losses at new acquisition UTi Worldwide and integrated the U.S. freight forwarder ahead of schedule. ● Swiss global logistics giant Kuehne + Nagel's ocean container volume jumped 5.8 percent, helped in part by European shipments and outpacing market growth of just 2 percent. ● Denmark-based short-sea operator DFDS cited moderate growth in most parts of Europe as it boosted second-quarter E U R O P E I N

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - Sept.5, 2016