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P&O Nedlloyd Container Line Limited was an Anglo-Dutch worldwide ocean-going container shipping line, with dual headquarters in Londonmarker and Rotterdammarker. The company was formed in 1997 by the merger of the container-shipping interests of the 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. P&O Nedlloyd Ltd. was acquired by the A.P.marker Moller-Maersk Groupmarker (Maersk) in 2005 and was combined with their existing container shipping business Maersk-Sealand to form Maersk Line.

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.

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 UKmarker). Further expansion came with the buyout of Farrell Lines (USmarker-based) in 2000.

In April 2004 Royal Nedlloyd purchased the remainder of P&O's share to make it a wholly owned division of Royal Nedlloyd, and the company was listed on the Euronext Amsterdam as Royal P&O Nedlloyd NV. On its own, it was the third largest container transportation and shipping carrier in the world, with routes connecting all parts of the globe.



A.P. Moller Acquisition

In May 2005 Maersk announced plans to purchase P&O Nedlloyd 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.. 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 .

In the three years following the acquisition, there has been an exodus of the majority of P&O Nedlloyd's customers from Maersk Linemarker, as well as a decrease in the customer-satisfaction at the combined company's liner operations.Wright, Robert. "CMA CGM chief looks forward to smooth sailing" - Financial Times - July 1, 2007 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.

References

  1. [1] Notes of the P&O Nedlloyd shareholder meeting 27 July 2005
  2. Urquhart, Donald. "Maersk Line's market share declines in 2006" - The Business Times - Marshall Cavendish - 29 January 07
  3. "Liner Shipping Report" - AXS-Alphaliner - January 2007 - (Adobe Acrobat *.PDF document)
  4. Kennedy, Frank. "Shipowners order new vessels worth record $105.5b in 2006" - Gulf News - 12/02/2007
  5. [2] Interview with CEO December 2007


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