P&O Nedlloyd
Encyclopedia
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.
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.
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.
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.
s. 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. 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"
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 . 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. 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%.
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. The well-publicized problems caused the Financial Times
, in a July 2007 article, to label the transaction a "botched integration".
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.
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.
in Rotterdam
and the National Maritime Museum
in London
.
Containerization
Containerization is a system of freight transport based on a range of steel intermodal containers...
shipping line, with dual headquarters in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
and Rotterdam
Rotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
. The company was formed in 1997 by the merger of the container-shipping interests of the leading Dutch transportation company Royal Nedlloyd (Nedlloyd
Nedlloyd
Nedlloyd was a Dutch shipping company, formed in 1970 as the Nederlandsche Scheepvaart Unie in a merger of several shipping lines:*Stoomvaart Maatschappij Nederland *Koninklijke Rotterdamsche Lloyd...
Line) and the British maritime shipping giant P&O Group
Peninsular and Oriental Steam Navigation Company
The Peninsular and Oriental Steam Navigation Company, which is usually known as P&O, is a British shipping and logistics company which dated from the early 19th century. Following its sale in March 2006 to Dubai Ports World for £3.9 billion, it became a subsidiary of DP World; however, the P&O...
(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
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
, Unilever
Unilever
Unilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products....
and Reed Elsevier
Reed Elsevier
Reed Elsevier is a publisher and information provider operating in the science, medical, legal, risk and business sectors. It is listed on several of the world's major stock exchanges. It is a FTSE 100 and FT500 Global company...
.
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
A.P. Moller-Maersk Group
A.P. Moller – Maersk Group , also known as Maersk , is a Danish business conglomerate. A.P. Moller – Maersk Group has activities in a variety of business sectors, primarily within the transportation and energy sectors. It is the largest container ship operator and supply vessel operator in the...
(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
Overseas Containers Limited
Overseas Containers Limited was a container shipping company formed by a consortium of British shipping companies in 1965. It is not to be confused with Orient Overseas Container Line .-History:...
) and Nedlloyd Lines, in December 1996 as a 50/50 joint venture of P&O
Peninsular and Oriental Steam Navigation Company
The Peninsular and Oriental Steam Navigation Company, which is usually known as P&O, is a British shipping and logistics company which dated from the early 19th century. Following its sale in March 2006 to Dubai Ports World for £3.9 billion, it became a subsidiary of DP World; however, the 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
Jeffrey Sterling, Baron Sterling of Plaistow
Jeffrey Sterling, Baron Sterling of Plaistow, GCVO, CBE , is a British businessman. He was executive chairman of the shipping line P&O from 1983 to 2005, having joined the board as a non-executive Director on 6 February 1980...
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.
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
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
). Further expansion came with the buyout of Farrell Lines
Farrell Lines
Farrell lines Incorporated was named in 1948 after James A. Farrell Jr., and John J. Farrell, sons of James A Farrell Sr., president of US Steel. The company was previously known as American South African Lines . It was a passenger/cargo line in regular service from New York to South Africa...
(US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
-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.
The company was listed on the Euronext Amsterdam
Euronext
Euronext N.V. is a pan-European stock exchange based in Amsterdam and with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services...
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 for 2.3 billion euroEuro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
s. 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. 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"
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 . 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. 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
Mediterranean Shipping Company S.A.
Mediterranean Shipping Company S.A. is the world's largest shipping line in terms of container vessel capacity. MSC operates 469 vessels and has a capacity of...
went from 8.6% to 9.5% and CMA CGM
CMA CGM
CMA CGM S.A. is a French container transportation and shipping company, headed by Jacques Saadé. It is the third largest container company in the world, using 200 shipping routes between 400 ports in 150 different countries...
from 5.6% to 6.5%.
In an article published Tuesday, July 3, 2007 in the Danish business daily Dagbladet Børsen
Dagbladet Børsen
Børsen is a Danish daily newspaper specialising in business news....
, 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. The well-publicized problems caused the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, in a July 2007 article, to label the transaction a "botched integration".
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.
Three years after the take over of P&O Nedlloyd the Maersk Line corporate streamline strategy, based on the Lean
Lean
-In business:* Lean Startup, how to start a company in a lean way* Lean manufacturing, process improvement discipline* Lean construction is a translation and adaption of lean manufacturing principles and practices to the end-to-end design and construction process...
Six Sigma
Six Sigma
Six Sigma is a business management strategy originally developed by Motorola, USA in 1986. , it is widely used in many sectors of industry.Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and...
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 MuseumMaritime museum
A maritime museum is a museum specializing in the display of objects relating to ships and travel on large bodies of water...
in Rotterdam
Rotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
and the National Maritime Museum
National Maritime Museum
The National Maritime Museum in Greenwich, England is the leading maritime museum of the United Kingdom and may be the largest museum of its kind in the world. The historic buildings forming part of the Maritime Greenwich World Heritage Site, it also incorporates the Royal Observatory, Greenwich,...
in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
.