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NVO share of Asian imports growing post-Covid
There is a growing percentage of Asian imports handled by NVOs versus moved under direct shipper-carrier contracts. In May, NVOs handled 53.9% of US imports from Asia, excluding less-than-containerload volume. Formerly, the NVO share was 46.2% in late 2021.
However, that has not stopped traditional asset-owning companies from attempting to leverage core assets to differentiate themselves. Furthermore, some asset plays have proved to be successful.
Matson Navigation owns its own terminal in Long Beach and offers a tightly integrated downstream logistics business, including chassis. Additionally, the Port of Virginia integrates automated terminal and gate operations with a chassis pool
Doubling down on asset-based strategies
There seems to be a doubling down on asset-based strategies. For example, DP World has made several acquisitions in logistics and shipping in a bid to become a “leading end-to-end supply chain solutions provider.”
Ocean carriers are doubling down on assets. Consequently, they are reinvesting their massive profits to acquire terminals to build synergies with their vessel operations. For example, CMA CGM acquired Fenix terminal at LA and the Global Container Terminal facilities at NY-NJ.
The largest asset play is that of Maersk. The carrier has made acquisitions in warehousing and distribution, customs brokerage, and air freight. Therefore, Maersk is redefining itself from a traditional container line into a global integrator of container logistics.
The large percentage of US ocean import freight still moving under direct carrier contracts is evidence of a bias towards assets by shippers. The logistics director of a large furniture company said, “We would like to have a smaller set of asset-based partners that we invest in, and they invest in us.”
Smaller shippers that don’t have the scale to make themselves appealing to asset-owning carriers have long-relied on intermediaries. That helps explain why Flexport sees an opening to build an end-to-end non-asset logistics network.
About O’Neill Logistics
O’Neill Logistics is a leading third party logistics provider. We operate in California, Savannah, New Jersey. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.
Please reach out to us if you have any questions or need assistance with your logistics solutions!