NVOs expand in Asia

NVOs expand in Asia More shippers use LCL services to North America and Europe.

By Chris Gillis

   Not everyone in the freight transportation industry has curtailed expansion activities during the economic recession.
   Many large neutral and forwarder-affiliated non-vessel-operating common carriers are opening offices and adding services aimed at less-than-containerload freight originating in Asia and bound for consumer markets in the Americas and Europe.
   LCL has picked up during the past two years, especially as more shippers forego moving full containerloads for smaller volumes. Through the first half of 2010, inbound LCL volume to the United States on the transpacific route was 456,486 TEUs, or 7.73 percent of the total container market in that lane, according to statistics provided to American Shipper by The Datamyne Inc., a Miami-based provider of international trade data.
   To embrace these favorable NVO market conditions, New York-based Ocean World Lines will open offices in the Chinese cities of Ningbo, Xiamen and Shenzhen in the first quarter of 2011. OWL will continue to expand throughout China and the Far East with plans to open offices in Dalian and Tianjin, China; Korea; Vietnam; the Philippines; and Bangladesh by the end of 2011.
   Hoboken, N.J.-based Shipco Transport has similarly increased its footprint in China during the past two years. The company opened its first office in China at Shanghai in 2002, opened a facility at Shenzhen in April 2009, and followed seven months later with the announcement of an office in Dalian. From its offices in China, Shipco offers 55 direct services worldwide. This is complemented by another 64 direct services offered by Shipco's partners in Ningbo, Qingdao, Xingang and Xiamen.
   While China has quickly become the top outbound LCL market for NVOs servicing the Americas and Europe, other Asian countries are emerging as outlets for this cargo. Shipco, for example, set up shop in Ho Chi Minh City, Vietnam, in 2009.
   Most recently, OWL opened an office in Singapore. 'We move a large amount of import and export cargo through Singapore and we wanted to take 100 percent control of our own operations,' said Eric Seamon, OWL's vice president for Asia, in a statement.
   Earlier this year, Vanguard Logistics Services, a Carson, Calif.-based NVO, increased its presence in Asia with an office in Johor Bahru, Malaysia.
   Vanguard's operation in Johor Bahru will initiate a number of trade lanes aimed at linking the local freight forwarding industry into Vanguard's large global network. The first set of services include a three-times-weekly direct sailing from Pasir Gudang-Johor Bahru to Singapore, where freight can continue on to the 70-plus direct service destinations Singapore will offer this year.
   Twice-weekly services into Hong Kong will allow freight to connect through to Hong Kong's many direct port pairs in Latin America. In addition, Pasir Gudang-Johor Bahru offers weekly sailings to Jakarta, Bangkok, Tokyo and Shanghai, the NVO said.
   In September, Vanguard announced plans for a major expansion of its services in the intra-Asia region.

Brennan

   'Today, Vanguard has over 770 weekly services in the region,' said Charles Brennan, Vanguard's chief executive officer. 'We want VLS to be the most comprehensive intra-Asia service provider with the most direct points between Asian origin and Asian destination services.
   'This means we will provide enough services into the main ports like Shanghai, but also means the company must connect the less traversed origins and destinations, like Haiphong in Vietnam to Bangkok in Thailand, and Port Klang in Malaysia to Muara in Brunei,' he said.
   Vanguard has identified 45 points within intra-Asia to build on its expanded point-to-point network. 'Essentially, we want to bring the service expansion strategy that we have implemented globally to the intra-Asia service,' said Owen Glenn, founder and executive chairman of the NVO.

Glenn

   'The aim of VLS is to connect these ports with direct services, all while simultaneously increasing the volume and frequency. This initiative will provide forwarders more options, for example if they miss the cutoff for a service, they will have another option soon after,' he added.
   Swiss forwarder-NVO Kuehne + Nagel in September introduced 18 LCL services linking Asia with Europe and North America. The new services, the company said, complement a raft of new LCL services that the company started in mid-April, and bring its total number of direct services to 276.
   Express carriers have also used their NVO services to further penetrate the Asia LCL market. DHL operates more than 45 direct LCL services, with 1,500 weekly point pairs, between 24 Asia-Pacific port terminals and 63 North American destinations. FedEx Trade Networks offers LCL services from nine Chinese cities, as well as Singapore, Taiwan, Vietnam and India.
   The express carriers' LCL services have some similarities to the time-definite LCL services offered by APL Logistics-Con-way Freight, Old Dominion Freight Line-Hanjin Logistics, and Averitt Express.
   In mid-September, UPS started a new faster transpacific LCL service. Initially available between Japan and the United States, UPS's Preferred LCL Ocean Freight combines its North American ground network with containerized ocean services to provide delivery from container freight stations in Japan to consignees' doors in the United States in 11 to 18 days, depending on the destination. It said the service will be 'up to 20 percent faster than other LCL services on the market.'
   After arriving at a West Coast port, preferred LCL ocean shipments will move to a trucking network operated by UPS to support air freight, ensuring faster transit and day-definite delivery to more U.S. destination points than competing services, the Atlanta-based company said. For U.S. East Coast destinations, the preferred service will cut five to six days of transit time off the current standard service.
   UPS will extend the service to other Asian countries during the next six months. 'With our Preferred LCL service, companies can bridge the speed and economy gap between air and ocean freight services,' said Jimmy Crabbe, vice president of ocean freight services at UPS.