SeaLand to re-enter Latin America trade
There are few names in the shipping business as iconic as SeaLand. Recently Maersk Line announced that it had spun off intra-American service to revive the SeaLand brand name and as of January 1st 2015 it will begin operations in Latin America. With refrigerated freight to North American consumers moving upward, SeaLand CEO Craig Mygatt, says “we need to be a part of that trend.” As of January 1, 2015 there will be a new kid in town in the Latin America trade – well not a new kid per se, more like a seasoned adult that is refocused, recharged and rededicated. Maersk Line has announced that it has spun off its intra-America services segment in order to revive the SeaLand brand in full support of this growing trade region. The SeaLand brand previously exited the market in 2006 following its purchase by Maersk Line’s parent company A.P. Moller in 1999, but apparently the brand stayed a memorable one. When Maersk began talking to its regional customers and assessing their market needs, customers kept referring to its former SeaLand subsidiary and thus the brand has been revived. The newly formed affiliate will mirror the structure of the company’s other regional carriers including MCC Transport and Seago Line, which have experienced success in their markets. SeaLand will provide customers with dedicated, local sales and customer service teams but will utilize the resources of parent company Maersk’s operational/corporate services like finance, human resources and land-side operations. It will all be run by Maersk Line veteran, Craig Mygatt, who now serves as SeaLand CEO. “SeaLand has the ability to control its own destiny, focus on its customers and build services,” said Mygatt. “We are here to stay and will be consistent with our services. It’s been a huge decision to invest in these intra-trades but we are putting services in place, sticking by them and will handle the ups and downs of the cycle.” And the cycle appears to be in an upswing. According to Mygatt several major factors played into the timing of the SeaLand revival – the Panama Canal, continued focus on near-sourcing, and a newly found American desire for year round produce. While the canal is currently six months behind schedule and now anticipated to be complete in April, 2015, that isn’t stopping SeaLand from moving forward with its strategic plans to create and grow its north-south network. SeaLand aims to focus completely on the customer and their needs, taking goods back and forth from South, Central and North America (both coasts), and the Caribbean. The completion of the canal will only strengthen the profitability of the service as the company expects to additionally capitalize on the cross-trade coming through the Panama Canal. “We expect the cross-trade to be about half the size of our commercial business,” said Mygatt. Currently the company has about a 6%-7% market share of a 3.2 million FEU market. SeaLand expects that to grow by 4% to 5% acknowledging that while the west coast is strong, there is some struggle on the east coast and neutrality in Central America. In addition to the canal expansion, SeaLand looks to capitalize on the near-shoring focus. “As labor costs in China rise, near-shoring is receiving more focus as customers expand their operations in Mexico, Central and South America,” explained Mygatt. Additionally, Mygatt explains that, “North American consumers want produce year round especially that which is from South America. Since Maersk is a big refrigerated carrier, we need to be a part of that trend.” The company will enter the trade utilizing the 26 ships already in service with Maersk Line, noting that they won’t inject unneeded capacity. In addition to the ships, SeaLand will offer full intermodal options for its customers looking for port-to-door or even door-to-door delivery. The company will also use Maersk Line’s extensive and broad container fleet which Mygatt feels is well-stocked, positioned and readily available to meet customer needs. When asked about any infrastructure improvements required for the service, Mygatt said that none were currently needed from the company, but stressed the importance of the ongoing focus by the ports to ready themselves for the larger Panamax ships headed their way once the canal is complete. “It has to happen on the East Coast,” said Mygatt when referring to the dredging, on-dock rail improvements and additions, truck tunnels, bridge heightening, etc. currently underway or planned in ports like Savannah, Charleston, New York and Miami. Behind the scenes, the company is also working to streamline and automate the booking process for its customers ahead of the service’s go-live date and working to re-launch its sealand.com internet site. Mygatt says that customers will be able to conduct online transactions by December which is the time the company will begin accepting bookings for its January sailings. As of now, the company plans to have one sailing per week between Central/South America and the south Atlantic, one to Los Angeles, Houston, New Orleans and South Florida, multiples from its feeder service in Panama and will continue to use slot charters as needed to additionally meet customer needs. In addition to Mygatt, SeaLand has a number of industry veterans positioned to shape the company. These include: Alfredo Di Palma, chief commercial officer (CCO) who was most recently commercial manager in charge of Central America countries for Maersk Line. He comes with extensive experience including postings in APM Terminal’s Port Elizabeth facility, as well as port manager in Puerto Cortes (Honduras). Maria Batista, head of customer service, has over 20 years of experience with Maersk Line and Safmarine. Shane Sawyer, chief finance officer (CFO), was previously leading regional business performance functions for Maersk Line in West and Central Asia. He has 10 years of experience with Maersk Line, including roles in Dubai, Malaysia, Singapore, Honduras, Panama and Costa Rica. Thiago Covre, chief liner officer (CLO) brings over 10 years of extensive knowledge in line management, having most recently served as Maersk Line’s line manager for East Coast South America to Europe. Timothy Child, chief operations officer is a Maersk Line veteran, with a career spanning 25 years in areas such as trade management, capacity management, and external and inside sales.