Meli Marine Essay

5017 words - 21 pages

44 2 6
APRIL 19, 2012


Meli Marine
It was past midnight, but David Tian, CEO of Singapore-based Meli Marine, could not sleep. The
next board meeting was just two weeks away in early February 2008. Edwin Chang, the founder of
the company and chairman of the board, had called earlier to hear Tian’s assessment of a potential
acquisition. “This could be the biggest turning point in Meli’s history,” Chang had said. “Are we
ready to become a global player?” Tian had to admit that he had not yet reached a conclusion.
The acquisition under consideration was of the vessel assets of an indirect competitor, Teeh-Sah
Holdings. Teeh-Sah operated a container ...view middle of the document...

Container shipping, provided by Danish giant
Maersk, France’s CMA-CGM, and many other firms, can be used for any cargo that can be boxed into
a shipping container: consumer goods, food products, industrial machinery, intermediate goods, and

1 TEUs is the industry acronym for “twenty-foot equivalent units” and is the unit of measurement for vessel capacity. FEUs

(“forty-foot equivalent units”) is commonly used to measure shipment volume. Both TEU and FEU refer to standard container
sizes of 20’ and 40’, respectively.
HBS Professor Richard G. Hamermesh and writer Sunru Yong prepared this case solely as a basis for class discussion and not as an endorsement,
a source of primary data, or an illustration of effective or ineffective management. This case, though based on real events, is fictionalized, and
any resemblance to actual persons or entities is coincidental. There are occasional references to actual companies in the narration.
Copyright © 2012 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

4426 | Meli Marine

The shipping container first came into use in 1956. The innovation provided shippers with a
standardized steel “box” that kept goods sealed and secured. Furthermore, it was intermodal,
meaning it could be quickly unloaded and easily transferred between ship, rail, and truck. The trend
towards “containerization” accelerated in the 1980s and 1990s, and by the early 2000s, approximately
90% of general cargo was shipped via container. As more Western producers shifted a greater share
of their manufacturing to Asia, the flow of containerized goods increasingly reflected trade
imbalances (see Exhibit 1 for an overview of global flow).
There are five key segments in the container-shipping value chain: container delivery, shipment
origination, vessel operations, terminal operations, and inland delivery (see Figure A for an
Figure A

Container Shipping Value Chain


• Ownership of
• Storage and

• Shipment routing
• Capacity


• Terminal control
and operations

• Control of trucks
and railroads

• Maintenance and
sailing of vessel

• Container handling
and transshipments

• Container handling
and transshipments

• Third-party
terminal operators

• Railroads

• Customer service,
billing, and

• Manufacturers

• Freight forwarders

• Container carriers

• Leasing companies

• Container carriers


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