"It is a good time to choose to invest in ANZ freight forwarding and domestic asset carriers."
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.