A year has passed since the privatization of Zim and the move from being state-owned to its new owners: Israel Corp. Zim has raised lately hundreds of millions of Dollars and experts evaluate that Zim is about to gain new momentum with new purchases and development of new trade lines
It seems that Doron Goder, Zim’s CEO, has promised a lot of activity and now he lives up to his word. Reports say Zim (and SCI) is about to expand its activity in India and is about to launch next month a new service that will connect India to the east coast of USA.
The new service will include 8 vessels with 3,000 TEU each, and it will cost Zim about 30 Million Dollars. The company is also about to make changes on its AMP service and stop calling on its Adriatic sea ports according to market demands.
In addition it plans on launching a new service with Cosco along the Mediterranean – West Africa trade lines. Experts evaluate that Zim is gaining development momentum.
Zim executives believe that today’s customers are much more “spoiled” than before, and they wish to have their container leave the plant and with one logistic company to arrive at the port, being shipped and handled, loaded and unload and reach its final destination. Zim’s new perception, as being led by Goder, is that along this supply chain Zim will be present. Not always as an owner, but by partners and by sub-contractors, but Zim must be there and make the transfer to integrated services. This is also the reason for the name change to “Zim integrated shipping services”.
Privatization is probably the best thing that happened to Zim in the last couple of years. If it weren’t for the privatization, experts say Zim couldn’t have the ability to compete with other shipping companies inlight of last years reality in the business - years that were characterized by mergers and extensive purchases. Major shipping companies have become even larger, and it was very hard for governments which didn’t know how to cope with running a shipping company effectively, especially in light of the fierce competition. On top of that, before privatization, Zim was behind already with its developing process in relation to other shipping companies.
Since the world shipping business has the cycle of high and low tide, the right thing to do in terms of organization is to prepare and reorganize while the tide is low – meaning, ship prices are down and long term leasing prices are down. Zim predicted that the low tide will arrive two years ago, and the company had made arrangements so it can take an advantage of the current situation for re-organization.
Lately Zim has raised 150 Million Dollars (with debenture), and if we add that to that the accumulating profits it made during 2203, 2004, 2005 and early 2006, it is estimated it will enable the company to purchase new ships and equip itself with long-term chartered ships. Since Zim operates today around 95 container vessels, owned and chartered, it is estimated that it will equip itself massively, and will accompany this move with the opening of new services, establishing older services and replacement of ships in major lines for faster ships.
Zim predicts that supply and demand will balance itself towards 2009, a time when the market will be profitable again.
If we can rely on Goder’s speech from couple of weeks ago at the “Cargo Club” event which took place in Tel Aviv, Zim believes that transit time will be one of the major factors in shipping and logistics.
If evaluation will be realized and Zim will equip itself in the next couple of years with new and fast ships, according to Goder the faster the service the higher price it can get for it.
Zim chose not to relate to the content of this article, saying that “Zim does not give away any details on its business”.
