T he merger of NFC
Page 59
Page 60
If you've noticed an error in this article please click here to report it so we can fix it.
and Ocean has been heralded in the City as a match made in heaven. Indeed, the two companies comple ment each other perfectly. The extent of Ocean's sea and air freight forwarding combined with NFC's powerful land-based operations create a truly global door-to-door supply service. There has been a trend towards globalisation among the major clients of both companies, and any logistics provider operating on a merely regional basis is in danger of being left behind.
The merger places the newly named Exel plc in the top four companies in its field, with logistics revenues of more than Szbn, second only to Germany's Deutsche Post.
NFC says the new company will be well placed to take advantage of the expected growth of r o-2,o% in the global logistics market. This is being driven mainly by JIT operations, increased outsourcing to global providers and the e-commerce revolution. The explosive growth of Internet tract ignited the parcel delivery and air freigh warding market, and triggered consc tions. In the past two years Deutsche Pos spent $5bn on acquisitions, includini purchase of US company Dq International Corporation, and it is hol merger talks with Lufthansa, a move
0 would create the world's biggest air freight forwarder. The UK Post Office spent boom last year on its takeover of German Parcel, resulting in an increased stake of 23% in USbased General Parcel.
The NFC/Ocean merger is seen by industry analysts as a possible catalyst for further takeovers, as the big operators act to secure their incomes. Likely predators, other than Exel, include UPS, Federal Express, DHL and Deutsche Post. Christian Salvesen and Tibbett & Britten are among the likely prizes; the latter has received a lot of interest, but has so far rejected all approaches.
Although all this is happening at levels far above the everyday experience of the average
UK haulier, it will have an effect, says Dr Mick Jackson, the FTA's head of logistics. "Whether it's a consortium of manufacturers or a global logistics company, it will control the high level of the value-added supply chain and will almost control the transport market," he says.
Global logistics operators employ hauliers of all sizes, and whether or not they get the work will depend very much on quality, Jackson predicts. Now it will go right back to people just bidding for moving things from A to B again. The companies that are invited to bid will have to guarantee quality. This will reduce the transport element right back to a commodity again, which it was in the general haulage days."