P&O Nedlloyd moves to integrated system

P&O Nedlloyd is to establish an integrated operating system throughout the company in the next 15 months.

Haddo Meijer, chairman of the executive committee and member of the board, disclosed this during a visit to Hong Kong last week while travelling to a ship-naming ceremony in South Korea on Saturday.

'The system will include the operational processes and documentation, and the data will be captured and used within the organisation,' he said.

During the P&O and Nedlloyd merger, an integrated system of revenue and booking had already been put into place, he added.

Besides providing ocean transport, the company increasingly is becoming a provider of logistics and supply-chain management.

'Good progress is being made with our new cost savings programme,' Mr Meijer said.

He said savings were expected to reach US$100 million this year, and were targeted to reach US$180 million a year by the end of next year.

Average revenue per teu (20 ft equivalent unit) is up by about 5 per cent despite high bunker fuel prices.

'We are developing ourselves as a smart company,' he added.

Mr Meijer said as the world's second-largest shipping line in terms of standing slot capacity - behind Maersk Sealand - P&O Nedlloyd also was focusing on e-commerce in three areas.

They include Internet products, e-procurement and co-operation with third-party providers.

Remi Speld, P&O Nedlloyd's director for Asia, said that the Asian operations were important to the carrier as the region handled one million teu of exports, representing one third of the total volume of containers handled by the company.

P&O Nedlloyd has more than seven direct calls to mainland ports each week, including those made with the Grand Alliance services.

The other members of the alliance are Hapag Lloyd, NYK, Orient Overseas Container Line and Malaysia International Shipping Corp.

The company has obtained licences to provide logistics services in nine cities in the mainland.

'Basically, we are in full control in the major cities in China,' Mr Speld said, adding the company had come a long way since its vessel made the first call to the mainland in 1896.

He said the biggest challenge in China was to keep pace with the rapid rate of growth.

Asked whether P&O Nedlloyd would invest in warehouses, distribution centres and trucking, Mr Speld said various deals were being negotiated with suppliers and if an opportunity was attractive enough, the company would consider investing in a particular project.

P&O Nedlloyd also is studying - with the Dutch and Chinese governments - the possibility of introducing self-propelled barges on the Yangtze River to transport containers to Shanghai port for connection with P&O Nedlloyd's vessels.

Mr Speld said the project would take time to implement and should be a 'win-win situation'.

One of the major moves made by the company four months ago was to relocate its back-office functions, such as preparing documentation, to Shenzhen to reduce costs.

By doing so, the company is breaking away from the traditional set-up of having both front-end and back-end functions of a shipping company together.

'We may centralise more back-office functions either in Shenzhen or at other locations in the near future,' Mr Speld said, adding that the move was to enable the front-office staff to focus on customer services.

The relocation is part of a programme called Asia 2000, which was started last year.

P&O Nedlloyd is also regularly upgrading and restructuring its services within the Grand Alliance.

The focus for the upgrading involves services to the Latin American east and west coasts.