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Meli Marine

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by

Allyson Wood

on 25 March 2015

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Transcript of Meli Marine

Meli Marine
Leading carrier in the intra-Asia market, no presence on the major Asia-North America sea lanes
In vessel operations providing actual shipping service it
Business focused on being mainline feeder owning its own fleet of container ships with aggregated capacity of 26,500 TEUs
Have a new CEO David Tian with agressive change policies

Key Case Elemets
Variable costs
come from “bunker cots” or fuel prices - A material increase in the price of oil usually had an adverse impact on the bottom line

Fixed costs
are high averaging about half of the total cost structure. Other fixed costs come from terminal charges and overhead, which was needed to effectively fill capacity.
Teeh-Sah Holdings container business in the trans-Pacific, Asia-North America shipping lanes
selling 16 ships with average capacity of 4,500 TEUs

Rapid business development in focusing business in
niche markets
such as shipping intermediate goods and foodstuffs- also developed its
own freight-forwarder arm
.
Customer-centric model
: Focus on customer satisfaction and customer relationships while providing value-added activities to customers to keep loyal.
Business to
MLOs
continued to grow, by 2007 intra-Asia liner services accounted for approximately
80% of the company’s revenues
.

Recommandation
Acquire Tee-Sah Holdings 16 ships
Move into the Asia-North America shipping lanes
Quantitative Analysis
Meli Marine
Team Boeing
Industry
Founded in 1974 in Singapore
“asset intensive, vessel expenses, including maintenance and financing, were significant.”
Comprised of four major segments
Top 15 players accounted for approximately 80% of volume
Freight-forwarders and major retailers own exporter relationships
60% of volume from Asia to North America or Europe could be attributed to freight-forwarders or major retailers.
Container carriers aggressively compete for capacity
Bigger ships and Cascading/ Threat of Overcapacity

Variable Cost & Fixed Costs
Capacity- high origin volume with low destination density
High barriers to entry
Volatile demand environment
Long lead times/customer-centric business

Issues
Qualitative
Advantages
Increase Market Share
Access Trans-pacific
Growing market
Reduce threat of competition
Create value for customers

Disadvantages
Price pressure
Overcapcity of market
Higher cost of funding
Cyclical downturn




Real-World Example
Evergreen Marine Corpoartion
Joint Venture
Walmart
e-commerce movement
Fed-Ex
Genco Distribution Inc.
Works Cited

"Evergreen Marine Corporation." Supply Chain Leaders -. Transport Intellegence, 2015. Web. 24 Mar. 2015.

"Fleet Management." FedEx Completes Genco Purchase. Truckinginfo, 30 Jan. 2015. Web. 24 Mar. 2015. <http://www.truckinginfo.com/channel/fleet-management/news/story/2015/01/fedex-completes-genco-purchase.aspx>.

Gustafson, Krystina. "CNBC US Home." CNBC. CNBC, 17 June 2014. Web. 24 Mar. 2015. <http://www.cnbc.com/id/>.
Full transcript