At Gilead we seldom comment publicly on the vendor's perspective in respect of mergers and acquisitions in the logistics and freight forwarding space. 

Wheresoever Gilead exclusively provide services for the acquirers of those businesses it makes little sense for us to engage on matters of the seller’s side of the ledger, or merger strategy in general. We might, however, reflect upon observations of the vendors' experience in the dozens of M&A processes we have lived through in our career.

In most cases, where we have observed sellers before and after their sale process, the merger & acquisition has involved a private business, moreover overwhelmingly they were tightly held. In addition, the notions that we wish to focus on today are those that are often omitted in the general M&A discourse.  In order to do that we might start with one of those well recognised M&A actor’s lines and talk to the said omissions.”

“Any fool can buy a company”, said Henry Kravis, “you should be congratulated when you sell.”

Well we say “yes, of coarse Henry”; and due to Gilead’s stated mission when serving our clients, we heartily agree.  But where might we discover the omissions?

A glaringly obvious omission is, of coarse, timing.  As we have often said in this blog on other matters, luck features prominently in determining timing.  The principal means of making your own luck as a proprietor, however, is to recognise early (from a realistic review of your own circumstances) that you will inevitably need to dispose of your stake in the business; and to address the timing and means of disposal within your business plan.

Entanglements often represent both risk and opportunity so the path to exit them must be planned carefully.  Where such entanglements are clearly visible to staff, customers, and agents, there must be a finely honed narrative strategy in order to preserve value.  The first thing to recognise in that strategy is the interests of all the parties.  The proprietor that has done the best job in respect of the narrative, that which effectively addresses each set of interests, will see the best value retention.   The buyer has a vital interest in the success of the seller’s mission in this respect and the structure of the sale will, in part, be influenced by it.

The likes of Henry Kravis, Al “Chainsaw” Dunlap and the regular management consultant archetypes have an Achilles heel when it comes to M&A in the people-to-people services industries.  It is plainly the element of legacy culture which retains loyalty, and subsequently, revenue. 

Asset minded capitalists believe that buying something they identify as inefficiently run, and wringing its neck by means of being more demanding – cutting costs, and extinguishing culture, is by rote a value adding exercise.  In a people-to-people business, however, this is not proved in real life retention of relationships and revenues.

For the vendors in our business, the emotional attachment they have for their business sometimes manifests itself in ways that reduces the value in their business during the sale process.  The best way we have seen to ameliorate this negative for both the vendor and the buyer is to identify the right fit correctly in the first instance, and to understand each other’s culture, so that some cohesive narrative path emerges that improves upon the mantras lifted out of a management consulting textbook. 

Some vendors, often those heavily emotionally attached to their business, have difficulty accepting the notion that they should buy into “fit”.  The idea of walking out clean is one bred in their minds of the things they have seen go array in respect of post-sale remittance and warranty outcomes in other businesses.  Unfortunately for them Mr Market with the chequebook has an unequal & opposite view of this proposition, based upon industry m&a process outcomes.  The answer to this conundrum, for the party that for practical purposes will inevitably eventually sell in any case, is to circle back on the “fit”, “culture”, and “narrative planning” issues.  They should work singly, and even at times in conjunction with the best prospective buyers, for your particular business on those issues.

And timing?  One tip is that most of the businesses now coming to market are businesses that should have sold nearly ten years ago.  Many are out there “trying to make it back to what they would have got”.  Usually, however, past time on a tightly-held business is not a circular process, it is just past time.


Note:  Gilead interests extend to research in respect of the vendor market in the freight forwarding, logistics, and transportation market space.  However, we neither represent vendors, nor do we seek compensation from them.

Does your logistics organisation own an item that is yet to have landed?  One that is yet to be counted and stowed in a bricks and mortar location?

If you are inclined to answer in the negative, perhaps you feel that all which comes before and after can be solved by means of optimising supply, purchasing, and vendor management routines.

However, if network design and holistic network optimisation is “not my section”, then whose is it?

There may be few logistics professionals today found reading of the affairs of a 19th century German trading house.  There might, however, be more if they found it useful to reflect upon the then prevailing logistical complexity, risk, and the elasticity in the logistical solutions that sought to bring product to market at the most opportune moment in those times.  It was an era when logisticians were merchants; and warehousemen were warehousemen.

We do not mean to be gratuitous, there are many clever people in our industry today, some bullet proof networks that prove the 80/20 rule, and some Chinese walls that improve supervision and tolerances.

Further, in respect of the contrarian case, we have evolving in-transit regulatory complexity issues challenging the prospects for the full or partial implementation of virtual warehouse solutions.  Such network solutions normally require transportation supply diversity and a tactile approach in order to achieve economy and reliability.  And so, in the coming week, I am scheduled to meet an old friend, one who is struggling with the effort of promoting a solution to what is fast becoming an old problem – promoting electronic commerce for international transportation transactions.

The principal issue in respect of the lack of progress, as I see it, lies in the displacement effect brought on by regulatory agency activism and their responses to fears expressed in the political sphere.

In the surveillance and information age, regulatory agencies desire everything.  Yet such agencies can usually only effectively physically control and intervene at hub points where shipments are often already consolidated with others or else submersed in sortation process. So we see here yet another form of hop scotch, and regulatory agencies supervising the international trade and transport industry having eventually become committed to making international carrier manifest the determinant point of intervention from which to affirm regulatory compliance.

In a week where we have seen publicity surrounding Japan and China’s adoption of inbound (in-advance-of-arrival) cargo manifest filing regulatory procedures, it is worth the pause to get a fuller understanding of the direction in which cargo manifest surveillance & regulation is heading.  The jurisdiction that has sourced the funding and political inertia to lead such security related initiatives, describes their work here:

www.itds.gov/xp/itds/toolbox/background/

Scanning the details and noting the complexity of the US system may be sufficient for your purpose today.  It may suffice here for us to note the 48 separate agencies involved, and the grand impression and carefully expressed hopes sold to the US Congress - but we will also provide the link to the latest report released this January:

www.itds.gov/linkhandler/itds/news/2013_itds_report.ctt/2013_itds_report.pdf

The US Congress may proudly declare that they are overseeing the implementation of the world's most interventionist export port controlled cargo manifest approval system.  But what is really up for grabs here?

Well, there is the prospect of fluidity being promoted by some players in the transportation industry– if there is an agency red flag on a component subject to agency control – it should not, under an integrated system, make it to a cargo manifest, right?  Well regulators and industry may say “perhaps”, or “well, sometimes” – and “we reserve the right to change our minds” – and perhaps they may change their minds for some, while recognising the “practicalities” of not decisively changing it for others…

Moreover the reality is that it is not unusual for merchandise to already be in motion and consolidating with other orders, or shipments, prior to a conceivable flag related process intervention – which in turn may have other consequences.

On the sunny side, however, we see before us the long desired (for some) prospect of a system of legislated export & import permission requirements finally coming into force at the time of cargo manifesting the exporting vessel from the port, airport, or land vehicle terminal.

Congress may believe they are getting something that may, on one day in the future prove to have prevented a brown bomb being loaded onto a ship sailing to a US port, and “domestic” minded international transport operators who believe that time lost (and the lack of certainty for planning purposes) arising at import ports is the overarching issue of merit,will best see their interests prioritised by means of the US government being more absolute and resolute, in the first instance, “over there”.

Of course, the supply chain process might be tracked all the way back to the material components incorporated prior to, or after, manufacture; and before packing and consolidating those packages for export.  And such components or accessories could, perhaps, be absolutely material in an ultimate security & surveillance sense and less than well identified. 

Ultimately, unless all componentry and materials are tracked from supply chain source by regulatory authorities, we will usually have relied upon general intelligence, the faithfulness of what is declared at shipment dispatch, and the faithfulness of the party that chooses and processes what is to be loaded or packed in the shipment. 

We occasionally wonder how many that have either prodded or designed regulatory solutions for Congress might be saying “not my section” when it comes to the more meaningful matters related to trade compliance.

And, as for the impetus for the universal adoption by carriers and shippers of electronic commerce?  Calling Congress is a complicated process.

It wasn’t so merry a Christmas for many in either the B-2-C (Business-to-Customer) or traditional bricks and mortar channel this season just gone.  January reports on the wash-up unveiled a widespread dearth of joy:

http://washpost.bloomberg.com/Story?docId=1376-MZK92B6JIJV001-6NM5PNBC0CNU89IF3NDQTK27QC

The immediate attention of those in transportation industry was naturally drawn to the volume surge effect on UPS and Amazon in particular:

www.bloomberg.com/video/ups-profit-fell-8-5-after-holiday-shipping-snafu-Yb12CVm6RbSbMK1avQp2Yw.html

However, as already noted in our opening comments, the spread of concern was far wider.  In short, the “market failure” pejorative scenario started to lurk behind the narrative coming from noteworthy commentators.

The downstream effects of Amazon Prime’s offer of “free shipping” has come under increasing scrutiny, with the implication often being that it is solely responsible for the mass of late peak orders, and the fractionalisation of orders (smaller individual consumer purchases) that is reducing shipment sizes. 

www.minyanville.com/sectors/technology/articles/Amazon-Prime-Amazon-AMZN-Amazon-Prime/2/10/2014/id/53695?camp=syndication&medium=portals&from=yahoo

The fact that “shipping costs” have now reached 9% of Amazon sales revenues is only one part of the “market failure” rubric mentioned in the article.  The fact that transportation company operating costs are rising well above CPI, as are their shipping prices, and the rate of climb of Amazon’s shipping costs from 7-9% in a zero interest rate economy, should be noted.  

In writing his article above, Mouton has picked up opaque industry jargon such as “due to a more adverse mix of packages” to explain past increases in UPS and Fedex rates.

However, I spoke recently of matters concerning Amazon's order pre-distribution and demand planning situation and perhaps this is more notable.  Given what happened at Xmas perhaps the associated media at that time reflected some externalisation of general angst in that business in those respects.

Despite Mouton carrying negative testimony in his article in respect of the local stocking of inventories, there is no necessary causal link to lower yield potentials for carriers.  Conjecture, however, may focus on three possible scenarios emerging downstream from the same observation:

1.      Poor pre-distribution and demand planning by retailers can see the wrong levels of inventories arrive, short of, or in the wrong consumer location – and that high priced, long distance, premium priced transport necesarily employed may still not meet delivery deadlines in such circumstances due to the surge effect.

2.      Bulk shipping to regional DC’s ahead of peak demand will see existing high rigid-cost centralised parcel hub operations of major express transportation companies being defrayed over a lesser volume of shipments outside of peak periods.

3.      When demand planning fails to locate inventory according to the overall plan, and excessive levels express hub transport is employed at peak in a crisis, that both the shipper and the transportation company may be complicit in “market failure”.

Bear in mind that UPS and Fedex operate both regionalised ground package service hubs for economy package services; and large centralised air hubs for premium overnight long distance express transport.  The latter dominate the cargo volumes moved through the general airports of their two major air hubs (Fedex - Memphis; UPS - Louisville), and we leave you to ponder the variation between the two sets of airport statistics that were reported for December:

www.bloomberg.com/news/2014-01-27/memphis-airport-december-cargo-statistics-summary-table-.html

www.bloomberg.com/news/2014-01-24/louisville-airport-december-cargo-statistics-summary-table-.html

note: this is a revised version of the original blog post which includes minor text changes.  An unedited version was mistakenly originally published.

On a day where all roads seem to have led to issues concerning the appropriateness of hubs and spokes we find ourselves returning in a general sense to matters we have raised in earlier blog posts.

During the day we have engaged on logistics issues related to order aggregation, logistics network optimisation, unforeseen distribution complexities in the single sourcing model, and the fragility of the air cargo market.  On each and every matter we were drawn to comment on the nature of problems derived of hub and spoke operations raised by inventory managers and transportation industry executives.

While we may disappoint the supply chain professional with our priorities today, we will start today with the air carriers.  We hope supply chain and logistics professionals will bear with us, however, and in coming posts we might uncover some method in our madness.

Air freight markets, and more importantly the underlying networks supporting them, are not strong currently.  We wrote recently of supply and demand, and implied that we saw weaknesses in the dominant supply siders’ business models.   We believe we see this reflected in the reported mood that came out ahead of the Singapore Air Show last Sunday, where International Air Transport Association (IATA) director general Tony Tyler “cautioned that weakness in cargo markets is the airlines’ biggest worry for the new year.”

http://finance.yahoo.com/news/air-cargo-weakness-threatens-airline-174149733.html

The article cites weaknesses across both the passenger carriers (primarily employing combination passenger and freight carrying aircraft) and dedicated cargo aircraft operating carriers.  As in all communications of this nature, it is important to take note where the comment was made.  In this case it is Singapore, which happens to be a nation long at the forefront of supply side investment in the hub and spoke model (by means of airport infrastructure & terminals, and the national carrier’s investment in freighter aircraft).

Long term trends had come to fruition by 2012 for Singapore Airlines, who are among the largest tonne/km operators of dedicated freighter aircraft on international routes, when cargo losses had reportedly tripled and they reduced their capacity by 20%: 

www.businessweek.com/news/2012-11-02/singapore-air-posts-lower-than-estimated-profit-on-cargo-slump

By mid 2013, the underlying result was hardly better when it was reported (see URL following) that Singapore Airline’s “Cargo revenue was affected by lower loads (-5.3%) and yields (-5.5%) with overcapacity in the market as well as the weak global economic situation.”  Moreover, that the overall airline operating result was affected by further measures including “A restructuring impairment cost of $293 million was booked on four surplus SIA Cargo freighter aircraft that have been removed from the operating fleet and marked for sale.”

www.virunews.com/singapore-airlines-net-profit-sale-freighter-aircraft/

We mention again today the fragility of the proposition, absent of supply sider political and capital intervention, that operating efficient primary transportation hub ports primarily supporting efficient aircraft or vessels necessarily represents the optimal channel (in supply chain engineering terms) to support the majority of world merchandise trade.

In respect of the similarly poor results for the combination passenger-freight aircraft operators we should start by speaking of fleet transitions both in freighter and passenger aircraft markets.  As discussed in an earlier blog post, the supply side interventions into the second hand aircraft owner-operator and leasing markets were important elements in the development of network models that came to incorporate a majority of the world’s fleet of wide-body freighter aircraft.  

Without the resale potential made available by means of freighter conversion of older wide-body passenger aircraft market and the lifting of prices of those second-hand aircraft, many new wide-body passenger aircraft sales in the 1980’s and 1990’s would never have materialised.  Moreover, many less aircraft engines and spares would have circulated during the period.   Hence, it should be less than surprising that engine maker GE features so prominently in past share registries of aircraft leasing and freighter aircraft operating companies.

The consequences of cheap supply derived of the “old banger” freighters kept in the air well past what many were saying at that time was their “use-by-date” was a tide of both revenue and market share growth for international air cargo which conveniently married with a technology boom.  Once the market was established, noise regulations surfaced that disappeared the old aircraft and engines, and replaced them with brand spanking new ones purchased by those with liquidity (capital or debt) and convinced by supply side theory. 

These developments mentioned above attracted both new entrants and expansionists into the new air freighter market; especially prominent were Asian carriers.  In the background we imagine the notion of their essentiality to the growth of hub port operating revenues being front-of-mind with the usual state corporatists.  New entrant express cargo carriers concurrently appeared to strategise that their ambition to grow the size of their international shipments meant growing the size of their aircraft, their networks, and their fleets; and a step along that path was the defraying their transitional network cost by selling off the back of their newly acquired wide-body cargo aircraft to subsidiaries, or the general market.   In the face of this, some of the longer lived combination carriers in Europe either trimmed their dedicated freighter capacity or allowed their freighter sector market share to decline.  Perhaps the thinking was that we live to fight another day? 

Despite market volume growth and artificial cost suppression, several ill-fated strategies and enterprises were already washed up before the end of the dot.com era.  Even so, the impetus derived of questionable capital investment led gambles returned to bolster the system during the noughties, while the underlying receding tide from a previous era played out. 

Absent continuous growth of air cargo market volume and revenue, the scenarios underwriting two generations of investment and the shape of infrastructure development come into question.  If the idea that past demand growth was built of unsustainable price subsidies, and supply growth was built of some peculiar strategies that anticipated demand without thought of what might underwrite it, then we are right to be concerned about market prospects.

The worry now is that with supply-sider network operating costs locked, economies of scale growth at both port and in the air stagnant, and the nature of markets altering, the Singapore Airlines experience will become the fate not only of aircraft operators, but also the capital intensive primary hub developments that sit behind them.

The upside, however, is the same as always for the air cargo market.  This is an industry built upon opportunism and innovation from its earliest days.  In the Yahoo report above we see the recent poor cargo revenue results of the passenger airlines, but we do not have a handle on the underlying movement in the aircraft types operated or the split between international or domestic derived volumes.  We know that the delivery cycle of the hub busting B787 aircraft and the A350 to follow are still to rotate into the schedules of the passenger carriers.  The cost of running cargo through three cargo terminals via the primary hubs and the employ freighter aircraft, when compared to the alternative consisting of two terminals and a cost sharing with passenger derived revenues while employing hub busting aircraft represents opportunity.

I hope the supply chain managers reading this long post will see jumping off points where we may continue to delve into downstream hub and spoke systemic issues; and their relation to evolving sourcing, aggregation, and network optimisation logistics organisational issues.  Have inventories hubs followed the freight hub capital investment?  How smart has that capital been?  Does political risk and labour cost/quality follow capital investment, or lead it, in respect of locating regional DC’s?  Is the warehouse vs transport decision paradigm moving as we speak?  How do we retain control of inventory moving around traditional hubs?

This was a long day, we will return to this matter on another one.

Transportation carrier supply & demand reports and market prognoses are featuring prominently in the logistics and financial news wires in recent times.  
As usual, the narrative employs standard rhetoric in respect of supply and demand, and of surveyed market confidence.  

www.forbes.com/sites/robertbowman/2014/01/21/air-and-sea-freight-carriers-plagued-by-low-rates-weak-markets/

The obvious framework of neo-classical liberal economics flutters through these reports, and the surveyed voices are sometimes said to have it that simple pricing solutions at the user interface will move the market forward.

http://theloadstar.co.uk/air-freight-survey/

But can we find a new way to approach the subject of carrier and transportation economics?  And, is there an acceptable manner of public speech that doesn’t lead the market audience towards false easy-fix market prognoses?

Unfortunately, the answer at this time is likely no. 

To understand this we might compare the neo-liberal market narrative with the supply-sider controlled realities that turn out market consequences for capacity (or supply). 

In the ocean containerised trades, capacity is ruled by supply-sider ideas: ocean carriers strategic desire to maintain or expand shares in trades and alliances, corporatist government views of shipyard and hub port unit capacity as strategic assets, the market in scrap metal that both lubricates new orders when it is up - and keeps old vessels in trades when it is weak, and that all important magic dust called financial market liquidity and funding.   We start our ocean container capacity forecasting from this base and ride the effects of new building programmes downstream of a game locked in years before in another market.

Citing a reality case-in-point close to home in the air carrier market (ie: QANTAS - a combination passenger and freight carrier) why would we be surprised when there is a neo-classically inclined led attack upon QANTAS’s objective of maintaining a 65% domestic market share.  

www.afr.com/p/business/companies/gobsmacked_at_qantas_market_share_v3zODox9752ibVRfUfdM1O

And why would we be surprised when such a contention is batted back by QANTAS at financial market and media critics by means of citing earlier published reports such as the one concluding that they have lost 15.5% market share in the past decade on international routes to Australia by failing to match competitors capacity increases (…and as a consequence their international airline business is a basket case)?

www.theaustralian.com.au/business/aviation/qantas-blames-rivals-for-market-share-drop-on-routes-to-australia/story-e6frg95x-1226784446855#

So both ocean and air carriers acknowledge, by means of order book action and reaction to financial market commentators that the reality is they surrender market share at their peril.  We deal with markets that are, in part, a product of that capacity reality in a supply-sider world.  If investors have gone along for the ride they might care to look at the daylight between their narrative and world views, and market reality.

Ahead of us are the issues of the fragility of the mega-hub and spoke models of global transportation systems, the fragility of air cargo freighter and engine economics, and the limits and dangers presented by “domestic mindedness” in the global commercial trade and transportation industry. We will return to these issues on another day.

Many among the general populace have recently been distracted by a proposition raised by Amazon.  Amazon have conceived what they say they believe is a patentable system, one whereby orders are generated based upon “anticipating” customer purchases & there is an implied automatic process of shipping to the customer.  Amazon claims that they have, in turn, based that “anticipation” upon their profiling of that customer.

As far as we know at Gilead, this was first covered in the media by the Wall Street Journal:
http://blogs.wsj.com/digits/2014/01/17/amazon-wants-to-ship-your-package-before-you-buy-it/

The fragility of the story, however, is given the rub by a flowchart diagram provided in a subsequent article released by GeekWire:
www.geekwire.com/2014/anticipatory-shipping-amazon-wants-package-purchases-even-buy/

Eventually, the more astute may determine that the Amazon patent application, if correctly reflected in the diagram presented by GeekWire, relates not to the process of “anticipatory” shipping to specific customers at all, but rather is limited to an order routing process called pre-distribution. This involves the delivery of orders to regional warehouses rather than to customers; and the “anticipated” re-order weighting factor is rather a common place forecasting element of the demand management rubric.

For many seasoned logistics industry veterans, the recall of programmes run by the likes of Sears-Roebuck for many decades will be front of mind, and the shape of the Amazon programme more than familiar. 

Given such market wide familiarity with these demand planning techniques, and the related method of the offshore consolidation of orders that are shipped direct to regional warehouse locations, we would be doubtful of the chances of success of such a patent application in any credible legal jurisdiction. 

Perhaps, however, the patent application’s limited prospects are a lesser issue.  One must also consider Wall Street perceptions and the gains that have been achieved for Amazon’s brand identity.

Meanwhile, some first class wits have engaged this scenario, and we can enjoy their work despite the fragility of the proposition:

Note:  Among Gilead Logistic Service’s core competency is the design and implementation of offshore pre-distribution systems. 

In my view, to describe the Australia and New Zealand (ANZ) international transportation trades as typical of north-south markets is both apt and misleading.

In respect of the dominance of the commodity trades in export tonnage it is apt, but in respect of the lack of distinctiveness of the ANZ mercantile markets, it is misleading.

The case I provide here is that, based upon that distinctiveness, strategically it now is a good time to invest in the ANZ transportation market

The ANZ mercantile goods markets have always appealed to EU and US mercantilists seeking low risk markets for high value products; it is a market where tariff and non-tariff barriers do not significantly deter trade. 

Traditionally, other north-south trades have involved increased political and transactional risks that at various times have manifested themselves in capital controls and other barriers, or risks, to the continuity of trade.

In many ways, the Australian international maritime container and air freight trades have, in the past decade, become more sustainable.  For asset owning international carriers, in particular, the lessening of inbound vs outbound volume imbalances, and the greater availability of vessels, has made it especially so for the Asian trades.  

The lesser volume imbalances in trades has largely been brought about by the more innovative employ of unit loaded niche commodities that are moved more deeply and directly into foreign consumer markets than can be achieved by bulk transportation. 

At this point, however, to address challenges to the significance of the ANZ markets as seen through western eyes, during the past 3 decades in particular, it is necessary to engage the broader subject of freight management perspectives among global industry players that evolved during the period. 

The first perspective to engage is that of those freight companies that have come to regard themselves as more global in their orientation, and look at the world differently than they did when their performance in their home country market ranked first in their management collective’s imagination.

In earlier times, mercantilist home markets demanded mercantilist minded, and hence export centric, freight executive managements.  With the advent of the offshoring of consumer goods production, and the globalisation of such sourcing, the increased prominence of inbound and east-west trades brought about a subsequent dominance of central management’s attention directed toward those primary east-west trade lanes, and to the import-distribution oriented global customers supporting them in those trades.

Global customers, typically, have introduced global service requirements; and increasingly have sought to employ global contracting in freight bargaining that focuses on the value achieved in primary trade lanes.  The ANZ market is heavily represented among global customers, being among the most open markets for direct representation by global merchandising and consumer goods companies, so it has tended to be heavily influenced at the customer interface downstream of these events.

Given the above, there has been a corresponding local ANZ transportation industry tendency to focus on the negative downstream effects perceived as arising from lesser levels of influence; such sentiments finding expression when ANZ freight and import-distribution industry executives lament the rise of a global transportation industry attention deficit in respect of the ANZ freight trades.

It is also important to recognise the evolved perspective of the Asian theatre regional freight manager fulfilling their strategic role for contemporary global freight companies.  It is difficult for those managers operating in a highly engineered environment to move beyond the view that they should leave well enough alone in a small volume corner of the Asian theatre called ANZ, one that bears little resemblance in trading patterns and style to the far larger east-west trade Asian export markets.  Consequently, any subsequent attention deficit generated might be expressed as a natural consequence of ANZ as a market being limited to the level of priority displayed by their global customers’ voices.

This perception changes fundamentally, however, when the rise of the intra-Asian trades as a whole is contemplated.  If the freight decision and the nurture of essential customer support is regarded as emanating from within the Asian-ANZ theatre itself, where a multiplicity of trade lanes of distinct characteristics are meaningful and material to decision makers, and where a more traditional mercantilist sentiment is recognised, then the freight management support task must be upgraded and decentralised in order to support it.  

In respect of the Asia-ANZ maritime trades, this view is nothing new, and has long been recognised as the prevailing commercial environment by the most successful and longstanding shipping lines.  Among most global freight forwarders and global airlines, however, such a view generally diminished, or perhaps can be appropriately expressed as having been buried by the significance of global managers being distracted when serving the European and American consumer trade prerogative. 

Hence my contention is that the rise of the intra-Asia trade lanes generally means consequential change for the ANZ transportation industry, and more so for the freight forwarder than for the carriers that have long spread the burden of customer engagement in these trades, those that were perceived to have diminished on a global scale during the growth of the east-west trades.

For ANZ, the negative point of reference of being absent from participating in the dominant Asia-EU and Asia-NAM consumer goods trades is likely to be removed with the rise of the intra-Asia trades.  It is a good time to choose to invest in ANZ freight forwarding and domestic asset carriers.