SLH silk logistics holdings limited

Ann: Silk enters into Scheme Implementation Deed with DP World, page-11

  1. 136 Posts.
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    hi stayer

    DP have a stated ambition to control more of the volume of freight that goes through their terminals. Hence the reason they have started DP Logistics as a freight forwarding business. They control the customer from origin to destination means they control which vessel the container travels on to ensure that vessel is one calling their terminals and not Patrick in Australia.

    Once you control the freight coming in you have an opportunity to control the wharf transport and warehousing on the landside. The silk business fits into this part of the equation as they now have a much larger importer / exporter customer base through which to target services via the Logistics freight forwarding arm and control the landside delivery of that freight.

    The issue i think they may come up again as DP owning Silk is an ACCC issue along with a channel conflict issue with their current global freight forwarding customer base. If DP as a terminal give either preferential treatment or access to Silk as a wharf carrier there will be possible ACCC actions as this would be anti-competitive. If DP give the end customer discounted access rates for container bookings (time slot, infrastructure charges etc) their will possible ACCC actions as this would be anti-competitive behavior. Current Silk customers that are global freight forwarders will not want their customers sitting openly under the gaze of another freight forwarder in DP Logistics and this channel conflict will cause some of these to move their business elsewhere quite quickly.

    Only my thoughts based upon quite a few years of experience and the history of similar deals in the past.


 
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