P&O Nedlloyd

P&O Nedlloyd

Industry	Shipping
Fate	Rebranded as Maersk Line
Founded	1997
Defunct	2005
Headquarters	Rotterdam, Netherlands
Area served	Worldwide
Services	Container transportation
Website	www.ponl.com

P&O Nedlloyd Container Line Limited was an Anglo-Dutch worldwide ocean-going container shipping line, with dual headquarters in London and Rotterdam. The company was formed in 1997 by the merger of the container-shipping interests of the leading Dutch transportation company Royal Nedlloyd (Nedlloyd Line) and the British maritime shipping giant P&O Group (P&O Containers). The company was the first large merger in the fragmented global container shipping market and is commonly believed to have initiated the current industry consolidation. The merger created the shipping equivalent to other large Anglo-Dutch cooperations such as Shell, Unilever and Reed Elsevier.

In 2004 Royal Nedlloyd bought the remaining shares from P&O and the company was listed as Royal P&O Nedlloyd on the Dutch stock exchange. Royal P&O Nedlloyd was acquired by the Danish A.P. Moller-Maersk Group (Maersk) in 2005 and was combined with their existing container shipping business Maersk-Sealand to form Maersk Line. As Sealand was the USA based historic innovator of container shipping, Maersk Line subsequently embodies the Dutch, British as well as Danish and American merchant marine legacy.

History

P&O Nedlloyd's Logo retained P&O's royal blue with Nedlloyd's trademark orange.

The company was formed by merging P&O Containers Limited (formerly OCL) and Nedlloyd Lines, in December 1996 as a 50/50 joint venture of P&O and Royal Nedlloyd representing the liner shipping interests of the two companies. In a 1996 interview Leo Berndsen, chairman of the Royal Nedlloyd board, said: "After a joint trip by speedboat on the Thames, Sterling pointed at the headquarters of Shell and Unilever. Examples of successful Anglo-Dutch companies. This merger gives us the same feeling. We know each other and noticed that we speak the same language. We have a similar business culture.^[1]

The company marketed itself as: "a worldwide port-to-port, or door-to-door, service using an extensive global network." At its height, P&O Nedlloyd had over 70 established trade lanes and provided connections to more than 250 main ports serving 120 countries worldwide. These elements, combined with well-developed feeder lines, extensive inland transport capabilities and port facilities, formed the base of its business, which quickly earned a reputation for being customer-focused.

P&O Nedlloyd was the largest partner in the Grand Alliance, which also included shippings concerns such as OOCL, Hapag Lloyd and NYK Lines.

Expanding in 1998, the line purchased Blue Star's container business. The company also acquired the container business of Harrison Line (based in the UK). Further expansion came with the buyout of Farrell Lines (US-based) in 2000.

In 2001, after three years of negotiations, an attempt to make P&O Nedlloyd, at that time the second container shipping company in the world, totally Dutch failed. Berndsen said: "Probably emotional sentiments that should not have been there and which were never pronounced played a role. Yes, even on our side." With Philip Green at the helm Anglo-Dutch boardroom balancing got a different rational and in April 2004 Royal Nedlloyd purchased the 25% shares of P&O Nedlloyd from P&O and exchange the remain 25% shares holds by P&O with 25% shares of the newly formed listed company, makes Royal Nedlloyd is the major shares holder.^[2]

P&O Nedlloyd containership Barentsz

The company was listed on the Euronext Amsterdam as Royal P&O Nedlloyd NV. Even though this move was heralded as an opportunity for non-organic growth, it in fact also made the company a candidate for buy ins and take overs. On its own, it was already the third largest container transportation and shipping carrier in the world, with routes connecting all parts of the globe. By the end of 2005 Royal P&O Nedlloyd was efficiently operating its worldwide business according to standardised global processes and a single IT application called 'FOCUS', which included all commercial, operational as well as financial activities. At that time every single employee had been trained and engaged in understanding the organisations Vision, Values, end to end business process and core IT tool.

• 2003 Revenue $5.51 billion U.S. Dollars
• 2004 Revenue $6.71 billion U.S. Dollars

A.P. Moller Acquisition

In May 2005 Maersk announced plans to purchase P&O Nedlloyd^[3] for 2.3 billion euros. As P&O Nedlloyd was consolidating its achievements in industry-leading process excellence and superior global system implementation, which was reflected in a share rise from 9 euro to 57 euro in only 2 years, the shareholders felt bereft at the take-over plan.^[4] At the time of the acquisition, P&O Nedlloyd had 6% of the global industry market share, and Maersk-Sealand had 12%. The combined company would be by far the largest shipping company in the world with about 18% of world market share. Maersk completed the buyout of the company on 13 August 2005, Royal P&O Nedlloyd shares terminated trading on 5 September. In February 2006, the new combined entity adopted the name "Mærsk Line"

The Willemswerf building, the old Nedlloyd and P&O Nedlloyd corporate headquarters in Rotterdam. Currently the home of Maersk Lines local Dutch operations.

At the time the company was folded into A.P. Moller, it owned and chartered a fleet of over 160 vessels. Its container fleet, consisting of owned and leased vessels, had a capacity of 635,000 Twenty-foot equivalent units (TEU). Royal P&O Nedlloyd N.V. had 13,000 employees in 146 countries..

In the three years following the acquisition, there has been an exodus of the majority of P&O Nedlloyd's customers from Maersk Line, as well as a decrease in the customer-satisfaction at the combined company's liner operations.^[5] By the end of 2006, Maersk global market share had fallen from 18.2% to 16.8%, at the same time, the next two largest carriers increased their market share, MSC went from 8.6% to 9.5% and CMA CGM from 5.6% to 6.5%.^[6][7][8]

In an article published Tuesday, July 3, 2007 in the Danish business daily Dagbladet Børsen, writer Birgitte Dyrekilde writes that 18 months after the acquisition, Maersk Line was left with a 14% share of the global market, having lost 4% of the combined global market share, or about 22% of their customer base.^{[citation needed]} The well-publicized problems caused the Financial Times, in a July 2007 article, to label the transaction a "botched integration".^[5]

In January 2008, Maersk Line publicly acknowledged their inability to consolidate market share and their decline as maritime industry leader and announced drastic reorganisational measures that are estimated to result in more job losses than during the P&O Nedlloyd takeover or at any other time in the company's 104 year history.^[9]

Three years after the take over of P&O Nedlloyd the Maersk Line corporate streamline strategy, based on the Lean Six Sigma process excellence principles, is following the best practices of the P&O Nedlloyd legacy, which at the time of its take over already had a system of globally standardised business processes and one single IT application to support this.

Heritage

Items of P&O Nedlloyd and its predecessors historical heritage are displayed at both the Maritime Museum in Rotterdam and the National Maritime Museum in London.

Gallery

• 

  P&O Nedlloyd 9'6 container in a Freightliner well wagon at Banbury station in 2001.

• 

  P&O Nedlloyd Unity in Suez Canal.

• 

  P&O Nedlloyd Vera Cruz outbound Santos/Brazil in 2000.

• 

  P&O Nedlloyd Tasman in 2000.

• 

  P&O Nedlloyd Barentz.

References

1. ^ NRC handelsblad interview 1996
2. ^ MacAlister, Terry (2004-02-03). "P&O casts off container unit". The Guardian (London). http://www.guardian.co.uk/business/2004/feb/03/4. Retrieved 2010-03-21. 
3. ^ MacAlister, Terry (2005-05-113). "Maersk and Nedlloyd in bid talks". The Guardian (London). http://www.guardian.co.uk/business/2005/may/11/1. Retrieved 2010-03-21. 
4. ^ [1] Notes of the P&O Nedlloyd shareholder meeting 27 July 2005
5. ^ ^{a b} Wright, Robert. "CMA CGM chief looks forward to smooth sailing" - Financial Times - July 1, 2007
6. ^ Urquhart, Donald. "Maersk Line's market share declines in 2006" - The Business Times - Marshall Cavendish - 29 January 07
7. ^ "Liner Shipping Report" - AXS-Alphaliner - January 2007 - (Adobe Acrobat *.PDF document)
8. ^ Kennedy, Frank. "Shipowners order new vessels worth record $105.5b in 2006" - Gulf News - 12/02/2007
9. ^ [2] Interview with CEO December 2007

External links

• Official website
• P&O Nedlloyd Heritage Website
• P&O Nedlloyd Videos
• Maersk Line Website