The global demand for container and other forms of storage and transportation modules has continued to rise despite the slump, which was witnessed during, and after the 2009 economic recession. The 2009 global economic recession was deeply felt within the container-manufacturing sector. This economic slump saw the demand for new containers drop from over 3 million TEU per annum to a mere 450,000 TEU over a similar period (World Shipping Council, 2011). The economic recession resulted in a reduction of 1.4% of the global container traffic. However, the post-2009 recession period has seen a general growth in the level of global trade coupled with an increased level of freight distribution. According to Rodrigue (2013), these two factors are responsible for an increase in the demand for new containers and shipping modules. Every year, close to 2-2.5 million twenty-foot equivalent units (TEUs) are manufactured, with a large majority of these in China in order to take advantage of the nation’s surplus of containerized exports. The production rate reached an estimated about 4 million TEUs in 2007 while the global inventory of shipping containers was close to 28 million TEUs (Foxcroft et al,2010; World Shipping Council,2011). It is this demand that companies like Modex Energy aim at satisfying. In order to realize its objective and remain competitive, it is necessary for Modex Energy to form a strategic partnership with a suitable partner like TOSL Engineering. This strategic partnership would allow the company to strengthen its collaborative advantage and synergy (Lasker,Weiss,Miller, 2001). In this paper, we present a strategic analysis of Modex Energy by means of market analysis tools like SWOT, BCG, PESTLE, GANTT chart and otherwise. A summary of our findings is also provided at the end of this analysis.
Modex Energy is a Norwegian corporation that belongs to a category of companies classified as managed manufacturers of top grade DNV 2.7-1 oilfield equipment for both the global offshore oil as well as gas industry (Modex, 2013). The company designs and manufactures a wide range of containers, offshore cabins, offshore tanks, baskets as well as various kinds of service equipment. The company runs a manufacturing facility in Taicang that it uses in supplying its global customers. It offers its clients a chance to rent or even purchase its products from its multiple regional locations in China, Singapore and Australia. Modex Energy has its headquarters in Shanghai, China and its sales as well as rental operations concentrated in Pert, Singapore and Dubai. The company was founded in 2003 by a management comprising of individuals with over ten years in the container as well as module industry (Modex, 2013). Modex is very keen on the quality of its products as evidenced by its tightly controlled quality assurance and timely delivery philosophy. The company has a diversified client base comprised of international oil service, oil explorations as well as oil production firms. In this paper however, we concentrate on its container-manufacturing operations.
TOSL Engineering is well-known provider of top grade Engineering Services as well as Products and Equipment for the Energy, Steel, Petrochemicals, Steel, Utility, Cement, Aluminum as well as Manufacturing sectors in Trinidad and Tobago (TOSL, 2013). The company provides various principal technical as well as quality related products and services necessary for developing, managing, engineering, building as well as operating to the requirements of its clients within the Engineering Services as well as Products and Equipment sector. Currently, the company serves the main industry sectors within Trinidad & Tobago as well as the Caribbean Region as it goes on with expanding its operations into the global marketplace.
China accounts for more than 90% of the global production of containers, which is the outcome of several factors, particularly its export-oriented economy and its lower labor costs. Considering that China has a positive trade balance, notably in the manufacturing sector which highly depends on containerization, it is a logical strategy to have containers manufactured there. This enables a free movement since once produced a new container is immediately moved to a nearby export activity (factory or distribution center), then loaded and brought to a container port. A long distance empty repositioning is therefore not required for the newly manufactured container. Every container utilization strategy must thus take into account production and location costs. The great majority of containers are either owned by maritime shipping companies or container leasing companies. With the beginning of containerization in the 1970, a container leasing industry emerged to offer a flexibility in the management of containerized assets, enabling shipping companies to cope with temporal and geographical fluctuations in the demand. Following a period of growth correlated with the ebbs and flows of global trade, the leasing industry went through a period of consolidation in the 1990s, on par with the container shipping industry. An important trend in recent years has been the growing share of container ownership attributed to maritime shipping companies, which reached 59.8% in 2008. This growth can be explained by the following:
About 60% of the equipment available for location is controlled by five leasing companies having fleets exceeding 1 million TEU each. If the 13 largest leasing companies are considered, they account for 90% of the global container leasing market and controlled the equivalent of 10.7 million TEU. Shipping and leasing companies often have contradictory strategies in the usage of their container assets. From the point of view of shipping companies, their containers are assets enabling a more efficient usage of their ships through a higher level of cargo control. They consequently maximize their ship usage, which are their main assets and the container a tool for this purpose. From the point of view of leasing companies, containers are their main assets and the goal is to amortize their investments through leasing arrangements. These arrangements come into three major categories that differ in terms of length of the lease and who is responsible for the repositioning of empty containers. In the past, maritime shippers relied extensively on leasing but recent trends underline their more active role in the management of container assets, particularly because a container spends a large share of its life span idle or being repositioned. Chassis fleets are also an important element of the market as they are necessary to carry containers by road and sometimes within terminals, particularly rail. A breakdown of the chassis ownership reveals that shipping lines (70%) and leasing companies (10%) have the bulk of the assets. What remains is owned by railroads (8%), truckers (8%), and terminal operators (4%). The high share of chassis ownership by shipping companies is related to their high share of container ownership, particularly if they are as well involved in terminal operations. In this case a chassis pool enables to offer intermodal services such as moving containers in and out of stack and providing drayage operations for their customers.
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