DC Velocity - March 2013

inbound
Mergers ahead for
ocean carriers?
Canadian architect designs “palletial” office

The ocean shipping industry appears to have survived the Great Recession. But with most container lines still unprofitable and “undisciplined pricing” continuing to plague the industry, some consolidation is likely in the next five years, predicts John G. Reeve, a longtime maritime industry consultant.

In a November presentation at the Coalition of New England Companies for Trade (CONECT) Northeast Cargo Symposium, Reeve noted that consolidation has slowed from the torrid pace recorded between 1995 and 2005. But today’s difficult times might provide new incentives and opportunities for companies with stronger balance sheets to engage in strategic mergers, he said. And if Europe’s economic uncertainty continues, “there may be some forced marriages to keep carriers alive,” he said. Furthermore, if downward pressure on rates persists while trade growth fails to keep up with capacity increases, “we may see some government intervention,” particularly in Asia, he said.

Carriers that are subject to shareholder pressure may be pushed into mergers, Reeve said. Cosco, once a Chinese government entity but now a private enterprise, is under the gun to find ways to further reduce costs, and a merger is one possible way to do that, he said. Another development that could lead to fewer container lines down the road: A.P. Møller-Maersk, a semi-public shipping conglomerate, is rumored to be considering scaling back or selling off its container business. Speaking to speculation about Maersk Line’s uncertain future in the container trades, Reeve noted that former CEO and chairman Maersk Mc-Kinney Møller had championed the company’s container business, but his death in 2012 could prompt management to “take a more rational look” at that business. ;

We’ve reported on a lot of unusual uses for old pallets over the years, including
the construction of holiday lawn ornaments and large-scale models of famous
buildings like the White House and Buckingham Palace. Now comes word of
yet another use for “retired” platforms … creating the “Pop-Up Office.”
The Pop-Up Office, designed by the Toronto-based firm Dubbeldam
Architecture + Design, consists of a series of flexible, narrow modules made
from reclaimed wooden pallets. Each module includes a wall, ceiling, and
floor, plus varying furniture and accessories, such as a desk, seating, and
shelves. To assemble them, the user slides each segment into slots, with no
hardware or glue required. This flexibility and simplicity makes it possible to
quickly reconfigure a work or meeting space as needed.

Dubbeldam says the modular office, which was on display at the recent Toronto Interior Design Show, could be useful for temporary installations, such as outdoor festivals and disaster relief situations. It strikes us, though, as something a warehouse or DC manager could definitely appreciate.

To view photos, see the article on Pop-Up Offices at Gizmag, a website devoted to invention and technological innovation: www.gizmag.com/ reclaimed-pallets-pop-up-office/26182/. ;

Good deeds

Here’s our monthly roundup of charitable works by companies in the logistics and material handling industries:

▪ Werner Enterprises presented the keys to its new Operation Freedom truck to David Conkling, a U.S. Army veteran and seasoned professional driver who has achieved 1 million miles of safe operation. Conkling will drive the truck on his regular freight routes. The truck will also be showcased at truck shows, recruiting events, and veterans’ ceremonies to raise awareness of Werner’s military apprenticeship program. Werner hired 1,389 veterans in 2012 as part of its pledge to hire 5,000 veterans over five years.

▪ Ifco, a supplier of reusable plastic containers, including products designed for the food-service industry, has donated a salad bar to the San Diego Unified School District, helping to provide students with a variety of fruit and vegetable options. Ifco’s donation supports the United Fresh Foundation’s goal of donating salad bars to 350 California schools.

▪ The Raymond Corp. has donated $26,000 worth of nonperishable food items and paper supplies to the Addison Community Switchboard in Addison, Ill., a nonprofit that helps underserved families and senior citizens. The items were part of Raymond’s booth display at ProMat 2013, which included a mock warehouse stocked with pallets of product.

▪ AK Material Handling Systems has released a video of employees performing the viral dance phenomenon Harlem Shake “material handling style.” The company has pledged that if the video gets 10,000 views, AK and its employees will donate 1,728 meals to Feed My Starving Children ( fmsc.org), enough to feed a family of five for a year. To view the video, go to www.youtube.com/watch?v=tn_FUxhwVzo. ;