OSLO, Norway -- Wallenius Wilhelmsen is adding land-based logistics services to expand its deep-sea car-carrier business into a global logistics power.
The company has doubled revenue the last four years by acquiring stakes in the European- and US-based logistics companies owned by Renault and Nissan.
"We see logistics as something we can provide that gives us an advantage," said CEO Nils Dyvik at a press briefing here. "Our goal is to be the global market leader in outbound logistics management and ocean transport."
Wallenius Wilhelmsen expects to generate sales of E2.8 billion this year, said Dyvik. Land-based logistics are expected to reach E1.25 billion in revenue this year, up from about E900 million in 2004.
The joint venture linking the shipping lines of Norway's Wilh. Wilhelmsen and Sweden-based Wallenius Lines has long been a major player in the business of transporting cars. The venture has a fleet of 50 car carriers.
But since 2001, the venture has expanded rapidly into the related business of land-based outbound logistics -- especially moving finished vehicles from assembly lines to ports or dealers.
In 2002, WW spent E80 million for 40 percent of Renault's GroupeCAT. It also got a long-term commitment from Renault to continue to use its former logistics arm.
Shift to land
WW jointly operates GroupeCAT with partners Autologic, which owns 40 percent, and TNT, which has a 20 percent stake. GroupeCAT's operations include 10 so-called short-sea ships to handle intra-European shipments.
"We seek new customers," said Dyvik. "We are currently 60 percent ocean and 40 percent logistics, but we will move toward 50-50."
WW will use its global network of partners to integrate ocean and logistics services for customers, said Paul Weedon, WW chief operating officer of logistics.
"Logistics is a key area for growth and profit long-term," he said. "It's a way to differentiate Wallenius Wilhelmsen from competitors."
WW's strategic shift toward logistics is a recognition that deep-sea growth is slowing while land-based logistics is accelerating and the industry is consolidating.
"In recent years, deep-sea shipments of cars were growing faster than overall global auto production," said Ray Fitzgerald, WW chief operating officer of ocean services.
But over the next five years, only 1 million additional cars will be shipped long distances, he said. WW expects world auto production to increase 10 million to 74 million by 2010, but most of the growth will be within Asia and eastern Europe.
"Eastern Europe production is for local consumption," Fitzgerald said. "But if they look to deep-sea shipments, we will definitely be there."
Dyvik said WW will grow organically in ocean operations, but continue to look for acquisitions in logistics, especially in Asia.
The company is making several expansion moves, such as:
Said Fitzgerald: "It's like getting a new car carrier with no increase in the number of ships."