While news that APL Logistics –the flagship freight management and logistics business of Singapore’s Neptune Orient Lines Ltd. — is on selling block has been public since last summer, a new published report indicates that three firms may be ready to make an offer.
According to the website JOC, the Journal of Commerce’s site that chronicles the shipping and sea freight industry, the companies looking at APL Logistics include CJ Korea Express, South Korea’s largest transport and logistics company; KKR & Co., a New York private equity firm; and XPO Logistics, a third part logistics provider based on Connecticut.
APL Logistics is expected to fetch about $1 billion, according to the Journal of Commerce report. It is separate from NOL’s shipping container business, which is named APL.
APL Logistics accounted for about 18% of Neptune’s total revenues in 2013. But selling it off could help NOL’s cash flow, according to Andy Lane, a partner at Container Transport International.
“APL Logistics is a very successful company if you benchmark it against other shipping lines’ forwarding arms,” Lane said. “It is way ahead of Damco, for instance. It doesn’t make enough to balance APL’s losses, but it is profitable.”
NOL reported a $23 million loss during the third quarter of 2014 due to weak freight rates and lower volumes on its APL container shipping division. Also contributing to the losses were chronic port congestion on the US West Coast.