OOCL EXECUTIVE SAYS SHIPPING LINES MUST DIVERSIFY

   Container shipping lines must diversify into logistics and move away from basic commoditized transport services, a senior executive of Orient Overseas Container Line said.
    Shipping lines will need to redefine their strategies and move into logistics services, while maintaining ocean carriage as their core business, Jim Poon, managing director of OOCL (Asia Pacific) Ltd., told the Container Shipping Summit conference in Hong Kong.
"By defining ourselves as providers of transportation by ocean, carriers have created a marketing myopia and commoditized their business," Poon said. Logistics service will provide a new source of revenue to shipping lines and help them to differentiate their services.
    Poon said that the traditional business of moving cargo from port to port can be considered as "hardware-based" services. But now carriers are moving into a service industry that will "depend more on information technology and comprehensive service attributes."
    Poon said that logistics has become an important value-added service in both the production process and the marketing channel. It has changed the basic concept of thinking for both shippers and transport service providers, as decisions on transport methods can involve cost trade-offs between expenses related to transport, handling, storage and related administrative work, he added.
    "All of these different functions can indeed be integrated into a series of processes including production, storage of goods, transport of goods, and eventually marketing to the consumers," the OOCL executive said.