Hapag-Lloyd lays out UASC integration timeline

Germany’s largest ocean carrier, Hapag-Lloyd, said it is confident it will be able to ensure a complete integration with Kuwait-based carrier United Arab Shipping Co. (UASC) by the fourth quarter of 2017.    Germany’s largest ocean carrier, Hapag-Lloyd, issued a transition timeline Thursday for its merger with Kuwait-based ocean carrier United Arab Shipping Co. (UASC).
   The two companies officially merged May 24 after signing a business combination agreement in July 2016, which resulted in roughly a dozen competition authorities across the world having to grant their approval.
   “We will not only merge our offices across the world, synchronize our IT systems and bring together our fleets, but we will also merge our sales activities and booking channels to offer you a combined service as soon as possible,” Hapag-Lloyd said. “We are confident that we will be able to ensure complete integration by Q4 2017.”
   This month, booking channels are opening for the first joint sailings, while mid-July will mark the beginning of the departure of the first joint sailings under Hapag-Lloyd’s bill of lading only, according to the company’s “rough” guideline. The transfer of services will be concluded in October.
   Hapag-Lloyd will also establish a “Region Middle East” division, which will be headquartered in Dubai. It will complement Hapag-Lloyd’s existing regional centers in North America, Latin America, Europe and Asia.
   Current registrations on UASC’s e-Commerce portal, including schedule subscriptions and alerts, will automatically be transferred to Hapag-Lloyd’s system, ensuring no business disruption, Hapag-Lloyd said. UASC’s customers that use portals such as INTTRA, GT-NEXUS or CargoSmart will automatically be transferred to Hapag-Lloyd’s system.
   “Customers with a direct EDI connection will be contacted individually to set up a connection with Hapag-Lloyd. If different e-channels are used with UASC and Hapag-Lloyd, the e-channel with the higher volume should be the preferred channel,” Hapag-Lloyd said.
   In regards to Hapag-Lloyd’s integration with UASC, one analyst told American Shipper, “A wrinkle to these carefully laid out plans could be the latest political developments in the Middle East, where several Gulf States have severed diplomatic ties with Qatar and blocked its airspace and seaports to Qatari companies.”
   The Qatari sovereign wealth fund was UASC’s largest shareholder, and is becoming a 14 percent shareholder in Hapag-Lloyd.
   “Having an entity from a state that has been branded a sponsor of terrorism could be uncomfortable for Hapag, unless the Middle East impasse is resolved swiftly,” the analyst said.
   He also noted that UASC’s new 15,000-TEU and 18,000-TEU vessels do not fly under the Qatari flag, but if they did, that would have posed an imminent short-term problem for Hapag-Lloyd.