Lines between ocean and land transportation continue to blur. The latest evidence: a new service by OD Global and Hanjin Logistics to move less-than-containerload service from China to the United States.
OD Global is a division of less-than-truckload carrier Old Dominion Freight Line, and Hanjin Logistics is a subsidiary of South Korean ocean carrier Hanjin Shipping. It's the latest in a series of pairings between providers of U.S. domestic services and the logistics units of container lines. Other recent collaborations have included Con-Way with APL Logistics, and J.B. Hunt Transport Services with Matson Integrated Logistics. Averitt Express, YRC Worldwide and Schneider Logistics are among other companies with U.S. trucking roots that offer international LCL service.
This development is not entirely new. U.S. trucking companies ventured into international service in the 1990s, establishing non-vessel-operating common carrier units that contracted with shipping lines. Results were mixed, for a variety of reasons, but the basic concept was sound: many domestic shippers were entering international markets for the first time, and they were comfortable dealing with a domestic carrier whose trucks backed up regularly at their plant or warehouse. For ocean carriers, the trucking companies provided an additional sales market.
Lately, these partnerships have become more formal. With the increased emphasis on cost control and inventory management in today's tough economy, the combined services' time-guaranteed LCL services are attractive to many shippers. Rates are slightly higher than standard LTL but much cheaper than airfreight. Chances are that we'll see other land-ocean partnerships like the one between Old Dominion and Hanjin.
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