Staff of Nedlloyd and P&O Containers should know within three months how the biggest merger yet in the shipping industry will affect them.
Leo Berndsen, chairman of Royal Nedlloyd, told FTW last week on a visit to Johannesburg that this was the first priority of the task groups that have been appointed to advise the board on a trade by trade basis.
Fourteen hundred out of 9400 jobs in the merged line will be shed. The next priority would be to resolve how existing alliances will be affected. Here the time frame was three to six months.
In addition to the key global and grand alliances, Berndsen said that at this stage all their options were being examined with regard to the South African trade, where P&O and Nedlloyd are both members of the SAECS consortium but in competing marketing camps.
With the SAECS agreement coming up for renewal at the end of the year, the combined line will be a major force on the trade. Nedlloyd also has a strong presence on the Far East trade. Berndsen said that when he took over as chairman three years ago he inherited a line with a great past but with a poor return on capital. Not being a shipping man he took the opportunity to call on competing lines and one of the first fruits was Nedlloyd's strengthened alliance within TGA.
To page 16 From page 1 In three years Nedlloyd had cut its dollar costs per unit by 30 % and it had become clear that further reductions could only be made if the process of alliances was accelerated, or through a merger.
We had doubled the scale of our operations from 500 000 teu a year to one million. Now we need to redouble that figure and we cannot do it on our own, he said.
P&O turned out to be a logical partner. Nedlloyd has been working well with them over the last 25 years with North Sea Ferries, so we know each other, Berndsen said.
The merger is on a 50/50 basis with an equal number of board members and no casting vote. The chemistry between the members of the executive committee is excellent according to Berndsen.
Since the announcement of the merger Nedlloyd's share price has risen 15 %.
