Joint venture offers combined global transport and logistics network
in the UK that combines the companies container transport and
supply-chain logistics capabilities.
Third-party logistics, as a sector within the transportation industry, is growing exponentially as manufacturers try to cut supply chain costs, according to InboundLogistics.com.
Food processors and other industries contract 3PL providers to broker transportation and other supply chain management services. As such it is a form of outsourcing supply chain management so that the processor can concentrate on in-plant operations.
The APL-Salvesen joint venture is an attempt by the companies to offer an integrated service for their customers, who include food companies. The two companies said the UK partnership, whose name and structure will be announced in the coming weeks, is a direct response to the globalisation of supply chains.
" Our own land-based expertise, coupled with the intercontinental reach of APL Logistics, provides customers with new solutions to their increasingly complex supply chain needs," stated Christian Salvesen's chief executive, Stewart Oades.
The joint venture will use APL Logistics' worldwide network and Christian Salvesen's European operations to create an international logistics and container transport provider. APL Logistics is a subsidiary of the NOL Group, a Singapore-listed global container transportation company. Christian Salvesen is a European logistics company listed on the London Stock Exchange.
NOL Group's European president, Dave Appleton, said the venture is a result of demand from customers.
"Many of our customers are telling us there is a need for a truly integrated demand and fulfilment service," he stated. "Through this joint venture, we have brought our respective companies' core skills, capabilities, assets and technologies together, enabling us to broaden the choices available to customers and this will translate to increased flexibility and efficiency."
In its interim results published this week Christian Salvesen said it would focus its operations on its core activities of transport, food and donsumer logistics.
The company also runs a UK vegetable processing operation. The operation generates substantial volumes for the company's cold storage and logistics network.
During the six months to the end of September the company said its cold storage operations continue to suffer from reduced prices due to market overcapacity.
There are signs that the industry is consolidating and the pricing may rebound the company stated. Tougher refrigerants legislation is also likely to remove capacity over time.
During the six months the the company opened new UK service centres for Asda and Tesco, extended its relationships with the Federation of Bakers in the UK, and opened a new dedicated depot in Paris for Carrefour.
In the Benelux region the company is fighting fierce competition in the fast-growing chilled logistics market. In response it is centralising transport management to increase efficiency and build a capillary network with frozen, chilled and ambient capacity.
It has won new business from Nestlé Ice Cream. Turnover in France grew substantially, through a combination of new business wins and expanding volumes from existing customers such as Agapes, Metro and Masterfoods. In Iberia the company's joint venture with Danone continues to prosper in a market growing by about 10 per cent a year.
According to World Trade Magazine the third-party logistics market grew by about six per cent in 2003 to an estimated $80 billion.
