Ship Shape
Wallenius Wilhelmsen Logistics
Text by David McNeill / Photos by Michael Holmes
Text by David McNeill / Photos by Michael Holmes
Not so long ago, there weren’t any foreign cars on Japan’s roads. For decades, the Europeans, too, drove mostly European vehicles.
“It took until the 1950s before somebody thought about exporting and importing cars,” says Axel Bantel, president of Asia Pacific at Wallenius Wilhelmsen Logistics (WWL). Today, the chances are that if you drive a foreign car in Japan, Europe or the US, his company helped transport it.
WWL was formed in 1999 out of the merger of Wallenius Lines (Sweden) and Wilhelmsen Lines (Norway), “two very traditional, old Scandinavian shipping companies,” explains Bantel. It is now the world’s largest logistics service provider for cars, high and heavy construction equipment, and specialised cargo. The group operates 130 ships and moves over 7 million vehicles around the planet every year.
Toyota, Mercedes-Benz and General Motors all have their cars rolled on and off WWL’s vessels at ports around the world every month. WWL also transports buses, trucks and heavy machinery — even yachts, trains and windmill blades. Headquartered in Oslo, Norway, with a regional office for Asia-Pacific in Tokyo, the logistics firm employs 7,000 people in 27 countries.
That kind of success did not come without innovation. When WWL began shipping Volkswagens across the Atlantic in the 1950s, it took several days to load a few hundred units onto a bulk vessel by using cranes. The introduction of ramps in the 1960s allowed cars to be driven on and off the vessel, speeding up the process. And now, ships with a capacity of up to 8,000 cars can be loaded in hours.
Still, it is a tough, complicated business. With the expansion of globalised capitalism since the 1960s, shipping traffic has gone from a few key streams to what Bantel calls “a big spaghetti” of overlapping global trade routes. WWL’s logistics network extends across land, from a factory in one country to a dealer in another thousands of kilometres away.
“The price pressure is fierce,” admits Bantel. The industry has still not recovered from the global financial crisis of 2008 that walloped trade. Transport is also hugely sensitive to fluctuations in oil prices, which have seesawed for years — and roughly doubled after the crisis.
“We need utilisation rates above 98% to be sustainable,” he says.
Then there is the demand to reduce the environmental impact of what is considered one of the dirtier industries. Take ballast water, for example. Ships suck in water in one coastal region after loading cargo and discharge it in another when unloading — a major environmental problem since the water contains bacteria, viruses, plants and animals. Wallenius Water, a sister company, developed a non-chemical solution for purifying ballast water and has helped in pushing for this to become an industry standard.
Ships also use heavy diesel oil known as bunker fuel which contains sulphur and other chemicals that contribute to health problems, climate change and acid rain. Last November, the United Nations’ International Maritime Organization decided to lower the global cap of 3.5% on sulphur content to 0.5% by 2020. WWL has been ahead of them for over a decade, operating on a self-imposed limit of 1.5% and further lowering sulphur content to 0.1% in all ports worldwide last year.
“As a shipping line, we impact the environment,” he explains. “It is only fair that we take care of it. Our approach is, rather than react to new legislation, to be proactive so we can control our environmental footprint and our costs.”
WWL’s ties to this part of the world date to the mid-1960s, when Japanese car companies began exporting their cars to Europe.
“The Japanese shipping lines didn’t believe that Japanese cars could be successful overseas and were hesitant to invest,” says Bantel. The company began rerouting its ships to Asia, and the rest is history. “Today we are still one of the few foreign companies supporting original equipment manufacturers in Japan with their exports.”
Like most companies, WWL is nervous at the whiff of protectionism wafting from across the Pacific. US President Donald Trump has already killed off the Trans-Pacific Partnership (TPP), a giant trade deal that could have given Japanese businesses a shot in the arm.
“The TPP is dead,” accepts Toshifumi Inami, WWL’s Japan president. The Trump effect is already being felt: some Japanese companies have cancelled plans to set up in Mexico, wary of the prospect of higher tariffs across the border to America — meaning potentially less cargo on our vessels.
Yet, Bantel sees no cause for alarm.
“Can you curb globalisation?” he asks. “There might be periods when you can, but on a long-term basis the consumer and economies drive what happens. We don’t think the need for our service will disappear. We will continue to evolve along with new technology, changes in the supply chain and customer demand.”
A much more serious issue, has been adapting to changes in Japan over the last few decades. Exports have shrunk because Japanese companies have built manufacturing platforms in Europe, Asia and America. Combine that with the gyrations of the yen and the shrinking domestic market, and you have a very challenging business environment. So, it is remarkable that Japan is still the world’s largest car exporter — four million vehicles a year. Not bad for an industry almost completely ignored by Japan’s own shipping firms half a century ago.
Technology will help WWL stay ahead of whatever challenges the future brings, say its Tokyo bosses. Software has already dramatically shortened the shipping and delivery time of cars. Ships are better at navigating around bad weather; crews have shrunk to a once unheard of 22 people.
“Maybe in the future, cars might park themselves on our vessels,” says Bantel. It’s a long way from those cranes of the 1950s. •