The AP Møller Maersk Group has 20 Triple-E Class ships in service or under construction. They’re enormous – the biggest container-transporting vessels on the planet. Unsurprisingly, their efficiency is tremendous, giving the lowest shipping-mile cost per twenty-foot-equivalent. Each successive class of tanker released onto the waves has followed the same trajectory.
Between 1980-2010, the market share of the top ten cargo conglomerates increased from 40% to almost 70%, according to Dr Martin Stopford. This consolidation has been absent of M&A activity in recent years and appears to be founded on offering increasingly efficient and cost-effective product (in this case the carriage of goods) and secured by economies of scale. This has supplied – and helped to lead – the expansion of trade exponentially and in all directions by fewer players. Over the same thirty-year period, the tonnage of products moved by sea has grown twenty-fold.
I’m not an expert on maritime logistics. My interest is to explore consolidation as a concept regardless of industry, what this could mean in social terms and how this creates or destroys opportunities. Similar developments have happened in pharma, finance, retail, recruitment… the list goes on. Take the landscape of the latter sector, for example. In Britain’s pre-Thatcher world, the unions and the ‘job for life’ ruled commerce. (Only die-hard Panglossians, such as Unite during talks with Ineos at Grangemouth, believe that this still exists under capitalism.)
Now, most large employers (also accumulating) have framework agreements for all their recruiting needs, while supplier representatives may sit permanently at their client’s sites. This makes it impossible to send in your CV for the attention of the HR manager, regardless of your ability to deliver a useful service and better performance than another provider.
In an era of unprecedented change – at least in terms of scale and geographical coverage – what does consolidation mean for the mobility of people and ideas? In the way that supertankers can’t react quickly enough to the ‘man overboard’ alarm, big businesses struggle to incorporate new designs, hire the right resource to do a quick job or negotiate on the fly for something a little different.
Perhaps your own formula will come down to strategy, the ability to hold that course and the wherewithal to self-correct according to the prevailing weather and any unforeseen storms. Principal tools might include ongoing analysis, mindful action and intelligent communication. As we move increasingly towards a society where automated (and incredibly rapid) processes decide the next steps of any particular situation, results are leveraged much more quickly. This can turn in either direction – positive or negative. As examples, we only need to see the requests for funds by the Disasters Emergency Committee (DEC), which raised £1.5m in 15 hours after Typhoon Haiyan, or the destruction of middle-class capital seen during the financial meltdown of 2008-09.
Going back to shipping, the 1980-2010 tonnage increase cannot be accounted for solely by a growth in population (4.45bn to 6.9bn) or the movement of people into cities (39.4% to 51.6% - both figures from the UN DESA), nor can it be explained by a shift in transportation type. It’s simply that more is being created and moved to take advantage of the others' vertical and horizontal strengthening, of raw material producers, manufacturers and markets. Components are shipped around the world for one small value-add step in a process, before being moved somewhere else. It’s a new order based on the massive and the streamlined. We’re all playing a part in this by our everyday actions as consumers and, by not thinking about it very hard, and our inaction to do things differently.
It’s very painful to get to the point at which those driving the change are satisfied. The end result will be okay for those who are lucky enough to be included in the hierarchy, but could be disastrous for those excluded altogether. To paraphrase Martin Luther King, the less privileged will be judged by neither the colour of their skin nor the content of their character, but because they don’t make the list of preferred suppliers.
Finally, this takes me to the point about opportunity. Exclusion creates stress, which leads to change and motivation. We don’t have to look much further than animal adaptation or the success of entrepreneurs from humble beginnings. In a world where it’s not easy to break in or break out, not everyone will succeed, but be limited to individuals, organisations and nations who use their heads, appreciate the climate, work intelligently together and put in the hard work. For those who aren’t afraid of challenge to take to the high seas in small craft, the possibilities are boundless.
Images
RRS Discovery and the V&A Museum, Dundee
Fishing Boats on the Beach at Saintes-Maries, Vincent Van Gogh
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