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CLIPPING - BRANDS MUST EARN THEIR KEEP - 06 JUNE 2011
.... by Janet Porter - Lloyds List journalist - Monday 06 June 2011
Regional lines can compete well against the heavyweights, but sometimes the costs of maintaining a separate brand inside a group outweigh the benefits
IN SOME parts of the world, shipping line brands clearly deliver real value, Africa being a case in point. For all its global might, AP Moller-Maersk has retained the Safmarine name and allowed the company to operate fairly independently of its much larger sister line. That has clearly been the right strategy, with Safmarine allowed to preserve its identity in a region where it has a strong following.
Other Africa specialists, such as NileDutch, have also managed to keep going in a cut-throat and increasingly globalised marketplace, thanks to their knowledge and understanding of a particularly difficult trading area, and customer loyalty.
Recognition that regional lines can compete well against the heavyweights is one reason why CMA CGM has acquired a number of local operators over the years and allowed them to keep their own logos. OT Africa line, the small former UK-owned Africa specialist, was allowed continue after it was acquired by CMA CGM six years ago.
CMA CGM boss Jacques Saadé said in 2006 that the Otal name would be phased out, but then had second thoughts. Now though, the name is to disappear from the container shipping scene, but why the change of mind?
Obviously, maintaining separate brands within one group brings costs as well as benefits. There may be separate front office staff and local branches, as well as other duplications of overheads. Where those costs bring in additional revenue, the brands are likely to be protected, but in CMA CGM's case, it owns two Africa specialists, having bought Delmas as well as Otal from Bolloré in 2005.
Otal, originally set up by a small group of British entrepreneurs in 1975, was clearly the junior partner and the fact that the name managed to survive for so long after the line lost its independence in 1998, when Bolloré acquired the carrier, is testament to the solid customer base it built up in West Africa.
However, brands have a limited life, and many that have disappeared in recent years — think P&O Containers, Nedlloyd, Sea-Land, Lykes, Canada Maritime — are hardly missed these days.
COPYRIGHT AND DISCLAIMER NOTICE:
This article is copyright Informa and is reproduced with permission. Reproduction, retrieval, copying or transmission of this article is not permitted without the publisher's prior consent. Informa does not guarantee the accuracy of the information contained in this article nor does it accept responsibility for errors or omissions or their consequences.This article appeared in Lloyd's List on the 6 June 2011 . For more information visit www.lloydslist.com
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