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Freightos lands $25m in funding

The freight rate marketplace and management software provider’s venture capital investment has now topped $50 million as it seeks to digitize the freight rate environment.

By Eric Johnson |Wednesday, March 29, 2017

Online freight rate marketplace and rate management software provider Freightos has secured $25 million in venture capital funding, the company said Wednesday.
The new investment, led by GE Ventures, is Freightos’ third major round of funding (technically referred to as a Series B extension round) since launching in 2012, and brings its total investment to more than $50 million.
The funds will be used to scale Freightos’ Marketplace globally while continuing development of Freightos’ software suite of global freight pricing, routing, and sales automation for freight forwarders, the company said.
The rate marketplace is targeted primarily at small and medium-sized enterprises seeking price discovery for forwarding services from Asia to North America and Europe.
“The age of digital logistics has arrived and with it easier importing and exporting for businesses worldwide,” Freightos Founder and CEO Zvi Schreiber said. “This once-neglected sector is ripe for digitization. Freightos’ unique technology enables instant freight routing and pricing for top forwarders worldwide. This same technology powers the Freightos Marketplace, where service providers can sell services online and import/export companies can compare, book and manage shipments instantly. This capital raise will help to continue Freightos’ rapid expansion.”
Freightos technology already digitizes freight operations for more than 1,000 logistics providers and global supply chain companies, including Nippon Express, CEVA Logistics, Hellmann Worldwide Logistics and Sysco Foods.
The company recently launched its free Freightos International Freight Index.
“Logistics digitization is a strong strategic complement for General Electric’s role as the world’s leading digital industrial company,” said Jonathan Pulitzer, GE Ventures’ managing director of Israel.
In August 2016, Freightos acquired WebCargoNet, a Barcelona-based technology provider of air cargo rate management and e-bookings.
Other investors in Freightos include Aleph VC, Annox Capital, Gold Lion Holdings Limited, ICV, Master (HK) Toys, MSR Capital, OurCrowd, Sadara Ventures and others.

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Source: cntracking

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FMC GREEN LIGHT FOR 2M ALLIANCE CO-OPERATION WITH HMM ON TRANSPACIFIC

The US Federal Maritime Commission (FMC) has approved the Maersk Line and MSC (2M Alliance) cooperation agreement with Hyundai Merchant Marine (HMM), effective tomorrow, but with a proviso on shipper safeguards.

Commissioner William Doyle said: “Maersk confirmed this week it would honour its commitment to shippers as to having a say on the vessels their cargo will be loaded onto. I expect MSC to afford some measure of protection for its shippers as well.”

After signing the strategic cooperation agreement with HMM in December – which is still subject to creditor restructuring – and following shipper concerns, Maersk said 2M cargo would only be loaded onto HMM vessels “with customers’ express agreement”.

I added this would be “only on the HMM-operated service that is part of the Asia to US west coast slot swap agreement. These HMM services are not part of the 2M network today”.

At the time MSC issued a statement which said: “The agreement primarily sees Hyundai purchasing slots on 2M vessels with the 2M partners also purchasing a number of slots with Hyundai on selected routes… the detail of the agreement, its structure and guarantees have been carefully considered with this in mind.”

Mr Doyle said: “Maersk’s statement was widely interpreted as a response to shippers’ concerns in the wake of the Hanjin insolvency – meaning that having shippers take affirmative action on which carrier is ultimately used was viewed as a safeguard for those wary of having containers on a HMM vessel.

“MSC’s statement provided no shipper option to exclude carriage on the HMM services.”

In allowing the agreement, just ahead of the formation of new alliance structures on Saturday, Mr Doyle said the FMC would “continue to have the authority to monitor this and other agreements for compliance with the law”.

Maersk, MSC and HMM signed a cooperation agreement on 16 March for an initial two-year period, although it is understood that the 2M partners can terminate the agreement without cause before 1 October 2018.

At the signing ceremony in California, HMM chief executive Yoo Chang-keun said: “We believe that all three partners will strengthen competitiveness through this strategic cooperation.”

He added that through the cooperation HMM could “acquire a more stable basis of profit improvement by utilising 2M’s competitive networks and mega-vessels”.

However, according to Alphaliner, the deal “will impose restrictions on HMM that will limit the carrier’s ability to grow on east-west routes”.

The consultant said HMM was required to consult with the 2M partners “prior to introducing any new services or cooperating with other carriers” on the transpacific, which included slot sales or exchanges.

Saturday will see HMM launch three standalone transpacific services, deploying 6,600 teu ships on which the 2M partners will have an allocation.

Elsewhere, after the supply chain chaos caused by the sudden receivership of Hanjin Shipping last August, THE Alliance has built into its vessel-sharing agreement a contingency fund to be triggered that would enable ships to be berthed and cargo to be discharged in the event of the bankruptcy of one of its members .

According, to alliance member Hapag-Lloyd’s chief executive, Rolf Habben Jansen, the safeguard was included “in response to customer feedback”.

Mr Doyle concluded: “Shippers should review their options with all ocean carriers: make sure you know which actual ocean carrier vessel will carry your goods.”

Source: Loadstar

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Source: cntracking

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NYK, K LINE AND MOL PASS FIRST MARKER BUOY EN ROUTE TO THE MERGER

The Competition Commission of Singapore (CCS) has become the first jurisdiction to approve the container divisions merger of deepsea Japanese shipping lines MOL, NYK and K Line.

The CCS said the joint-venture would not contravene its anti-competition rules where a merged entity controls more than 40% of a market – in this case the intra-Asia and East Asia services that converge on Singapore.

It said the merged entity would break market thresholds; industry barriers to entry are not especially high in the region; barriers to expansion remain low with continuing shipboard overcapacity and that “container lines are able to include Singapore as a port of call without incurring substantial cost”; and that a significant number of freight forwarder and beneficial cargo owning customers “demonstrate bargaining power through their procurement processes”.

The three carriers are to merge their liner and container terminal activities outside Japan as a response to the merger and acquisition activity sweeping through the liner industry.

During the recent TPM conference in Long Beach, Jeremy Nixon, chief executive of NYK line, defended the elongated time frame of the merger, which had been announced at the end of October, but was not set to be completed until April 2018.

Such a timescale, the longest of the mergers currently underway, has led some to argue that it is adding to market instability. Hua Joo Tan, executive analyst at Alphliner, said it was “the longest merger process” he had ever seen.

“This means there is a lot of pre-merger manoeuvring – somebody has to take the lead but nobody has, which has led to some aggressive price moves, and this will cause some uncertainty in the run-up to the merger.

However, Mr Nxion claimed there were legal reasons preventing a quicker process.

“We are now in the regulatory phase and we have to get clearance in 96 countries, that is why there is an 18-month timeline.

“I have been through two major mergers and acquisitions in my career, and I know how important planning is. We want to go through this very carefully as we put the network together – THE Alliance will effectively produce our east-west network.

“In July we will announce the name of the new company – and it’s going to be a good name – and start setting up the staff and the systems. But the three companies will continue to serve their respective customers until April 2018.

“However, the new company will begin to take bookings in the new system from February 2018.

Mr Nixon said the new firm would have $3bn in assets – $1.5bn in vessels and $1,5bn in terminals – and argued that it would be big enough to compete in the new era of consolidated liner shipping.

“We still think there is room in the market for a new brand: big enough to be sustainable and small enough to care about customers. For example, there are lines’ terminals in North America which will become part of the service, so we will focus on the whole end-to-end service.”

Ron Widdows, chairman of the World Shipping Council and a 40-year veteran of the liner industry, applauded the deal as something “really remarkable”, but argued the lines would need to find a new value proposition for shippers.

“This creates an animal that will have better cost and efficiency, but it is still in the order of magnitude that makes it smaller rather than the largest. The Japanese are going to have to find a way to compete, because if it is just about cost the big beasts will crush them.

“But these [Japanese] carriers, along with Hapag-Lloyd, have always been at the upper edges of service levels, so in all the uncertainty there’s an opportunity for someone to stand out and say that it isn’t all about cost.”

Source: Loadstar

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MAERSK SETS SAIL FOR LOGISTICS ON LAND AS SHIPPING RATES SLUMP

Maersk Line, the world’s biggest shipper, is planning to expand into the Australian logistics market and add other services to its port calls as it battles low freight rates and financial losses.
“We’ve got a vision to be the global integrator of container logistics,” Gerard Morrison, managing director of Maersk’s Oceania business told The Australian Financial Review.
“Shipping and logistics can be quite fragmented – multiple parties, multiple documents, multiple invoices – but we’re hoping to find ways to simplify that.”
Maersk, like other shipping lines, has been struggling with falling freight rates, reporting a net loss after tax of $US376 million ($493 million) in 2016 despite slashing costs and increasing volumes by around 9 per cent. Its average freight rates dropped around 19 per cent over the year. Some competitors could not cope with the pressure on prices, with Korean shipping group Hanjin collapsing into bankruptcy.
In June, Maersk’s owner, Copenhagen-listed conglomerate AP Moller-Maersk, which reported a net loss of $US1.9 billion for 2016, put the shipping line’s CEO, Soren Skou, in charge of the global group and ordered a strategic review. In September, AP Moller-Maersk, which had previously operated several different businesses, said it would split into two groups: energy, and transport and logistics.
The energy group includes Maersk’s oil, drilling and tanker businesses, while the transport and logistics group includes the shipping line and several other businesses – APM Terminals, which operates in 36 countries; freight forwarding group Damco; towage and salvage group Svitzer; and a container manufacturing business.
Mr Skou wants the businesses to work closely together instead of operating as silos. In Australia, Maersk is thinking of how the shipping line and Damco “could help each other”, Mr Morrison said, adding that bundled services could be offered to customers such as retailers and produce exporters.
“At the moment, shipping is ‘shipping from port to port’ and the thought is, how can we help our customers deal with other parts of the supply chain?”
Offering logistics services such as container storage, customs clearance and trucking in Australia could involve making acquisitions, although purchases of other companies are unlikely in the immediate future, Mr Morrison said. “If the right opportunity was there, we wouldn’t look away from it.”
Maersk has been expanding its services in Australia, sending a container ship, the Searuby, to Tasmania for the first time in February. The ship will call regularly at the port of Bell Bay, enabling Tasmanian producers, including seafood exporters, to send products around the world on Maersk ships via connections in Melbourne and New Zealand.
The line is calling more frequently at Adelaide, which is shipping more wine to China, and is “keeping a close eye” on Darwin to see if starting services to the northern port would be worthwhile, Mr Morrison said. “It’s a very small market but it’s growing really fast … geographically-speaking, Darwin would be a fantastic place to be able to get in and out of.”
Maersk, which has a 15 per cent share of the global container shipping market, is also targeting acquisitions to boost scale, announcing a deal in December to buy German container shipping line Hamburg Sud. If the deal is approved, Maersk will be able to expand its range of shipping destinations.
Global shipping volumes are now improving, partially driven by strengthening economies in Europe and Latin America, Mr Morrison said. “Australia and New Zealand are doing very well, there’s very steady growth out of both markets …customers are asking us to carry more and more cargo.”
To keep costs low for customers, Maersk is trying to transform what Mr Morrison describes as an “antiquated industry” by investing in technology. In December it announced a partnership with Chinese e-commerce group Alibaba that will allow users of the site to book space on Maersk ships.
Traditionally Maersk has dealt with big companies, with smaller and medium-sized businesses finding difficult to get direct access to shipping services. If trials with Alibaba go well, Maersk will consider forming similar partnerships in other countries, he said.
It is also collaborating with IBM to digitalise the paperwork associated with shipping contracts, so it can reduce costs and enable goods to be processed faster by regulatory bodies. And last year it put digital chips inside refrigerated shipping containers that are tracked by satellite, allowing customers to monitor the temperature of the containers.

 
Source: Australian Financial Review

Sourced from Cntracking

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YANG MING LOSSES CONTINUE TO MOUNT AFTER 2016 REVENUE SLUMP

Taiwanese ocean carrier Yang Ming has added a 2016 US$492m loss to the net deficit of $258m the previous year.

Revenue plunged to TWD115.4bn, from TWD127.6bn in 2015.

Lars Jensen, chief executive and partner at SeaIntelligence Consulting, today described Yang Ming’s financial performance as “very negative”.

Although all deepsea carriers had suffered a “bad year” in 2016, Mr Jensen said Yang Ming’s result compared unfavourably with its peers.

“To put the result into perspective, Maersk Line lost $384m and CMA CGM lost $452m. But it should be noted that CMA CGM is almost four times larger than Yang Ming in terms of capacity and Maersk Line is almost six times larger.”

Hapag-Lloyd, approximately twice the size of Yang Ming, had “only” lost $103m in the same period, he added.

“It is clear that major changes must be implemented in Yang Ming if the recapitalisation plan is to be more than temporary salvation in the face of competition from the very large carriers,” said Mr Jensen.

In January, Yang Ming sought to reassure customers and suppliers of its solvency after being identified by Drewry Financial Research Services (DFRS) as a “red flag risk”.

A research paper published by DFRS suggested that Yang Ming, the world’s eighth-largest carrier, had “taken the slot left vacant by Hanjin Shipping” as “the company with the most leveraged balance sheet in the industry”.

However, the carrier published a robust response and said: “Yang Ming has never approached its creditors with any demands to restructure any part of its debt, and has no intention to do so going forward.”

it continued: “Yang Ming has never failed to deliver in difficult times, even in the wake of the largest carrier bankruptcy.”

It advised that it was to raise $54.4m through a privately placed rights issue with six Taiwanese investors, including the state-owned National Development Fund of Taiwan. This increased government-owned stock to 36.6%.

Yang Ming alluded to a bigger stake being held by the Taiwan government as being part of “the company’s financial recovery plan”.

In November the Ministry of Transportation and Communications created a $1.9bn fund, available to the country’s shipping groups in case of financial hardship.

Since then, in an attempt to cut overheads and help make the container line more competitive, Yang Ming has slashed the pay of its senior executives by 50% and the salary of its line managers by up to 30%.

But shippers remain nervous after the sudden crash of Hanjin Shipping last year – not least because that carrier’s biggest creditor was also a state-owned bank. Indeed, several shippers have told The Loadstar  they had decided not to book with Yang Ming, due to its perceived dire financial position.

Nonetheless, Yang Ming will now need to regroup again as it prepares its exit from the CKYE alliance to join THE Alliance from Saturday.

THE Alliance has set up an independently managed trust fund to safeguard cargo operations should a member go bankrupt. It said customers had shown “a clear demand for such a safety net”.

Source: Loadstar 

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Globalization

The decades-long rising wave of globalization that remade the world economy is receding. The recent rise of nationalist politicians and protectionist trade rhetoric is the culmination of a broader push against global business since the financial crisis, the WSJ’s Bob Davis and Jon Hilsenrath write, that’s left global trade barely growing when compared with overall economic output, international capital flows pulling back and managers of multinational companies starting to dismantle the sprawling supply chains that they’ve built up over decades. The overall picture, from Brexit to Beijing, shows a trading world undergoing fundamental, long-term change—Maersk Chief Financial Officer Jakob Stausholm calls it “a deflationary mindset.” That’s left merchandise exports contracting and global supply chains no longer growing. China is helping drive the trend with its push to produce more goods for domestic consumption, and big industrial players are following. General Electric Corp. is among many looking at a “localization” strategy, which would result in more factories that serve local demand rather than the export markets that have fueled global shipping.

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Nafta After All
The Trump administration is signaling to Congress that in coming negotiations with Mexico and Canada it will seek mostly modest changes to the North American Free Trade Agreement, a deal President Donald Trump called a “disaster” during the campaign. An administration draft proposal being circulated in Congress by the U.S. trade representative’s office would keep some of the most controversial provisions, including one establishing an arbitration panel that investors in the three nations can use to resolve civil claims, bypassing local courts. The document appears to represent a compromise between trade hawks and moderates. We also report that expectations are fading of a rapid rapprochement with Russia, as the White House pushes off Kremlin proposals for a meeting with President Putin and takes an increasingly skeptical view of reaching a grand bargain with Moscow.

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