Shipping companies offloading logistics arms

Shipping companies will be divesting “non-asset-based logistics businesses,” such as logistics companies and terminal operators predicts the AlixPartners 2015 Container Shipping Outlook published in March. “These third-party logistics providers (3PLPs) were natural add-ons to their portfolios years ago, but as the market has matured, preferences for carrier-neutral providers have emerged, leaving 3PLP leadership looking for an arm’s-length relationship with their asset-based parent companies,” says the report. “Combine that with the attractive EBIT multiples that 3PLPs are fetching in the mergers-andacquisitions market, and carriers looking to bolster their balance sheets should be keen to shed these noncore businesses,” it adds. Shipping lines are also moving out of terminal operations. Increased operational collaboration among carriers represents a consolidation of the customer base for terminal operators, and in many ports heightens intra-port competition. “Coupled with competition from hungry and increasingly consolidating independent port operators and financial investors sitting on dry powder, terminal investments may not be as attractive to container carriers. “We expect further divestments in this space, with recent valuations providing attractive incentives to exiting positions. Carriers whose terminal divisions act much like independent port operators would be exceptions to that dynamic,” say the authors of the report.