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Brand strategies of container shipping lines following mergers and acquisitions: carriers’ visual identity options

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Maritime Economics & Logistics Aims and scope

Abstract

Brand strategy is a fundamental part of corporate strategy and constitutes a key condition for companies operating in international B2B contexts, enabling them to manage relations with customers, stakeholders and shareholders effectively. Mergers and acquisitions (M&As) are drivers of change in both brand architecture and brand portfolio strategies pursued by B2B companies. This paper aims to investigate brand architecture and brand portfolio management strategies in the B2B domain by focusing on the branding decisions of container shipping lines in the context of M&As. A taxonomy of branding options available to B2B companies is presented and empirically applied to the container shipping industry, which has undergone several waves of M&A activities in recent decades. The brand strategies of some of the most M&A active players in the industry (i.e. Maersk Line, Hapag-Lloyd and CMA CGM) are examined, with a particular focus on corporate visual identity (i.e. the name and visual devices such as logo, typeface and colour) adopted after an M&A transaction. Our empirical dataset on M&As in container shipping includes the names of the acquirer and acquired company or merging entities, the geographical scale of the shipping networks of the acquirer and acquired, the type of transaction, the year of the the M&A’s formal completion, the adopted corporate visual identity after the M&A and the financials of the M&A transaction. Moreover, we propose a conceptualisation of the factors, drivers and impediments that shape ocean carriers’ attitude towards the different branding options and strategies. The results demonstrate two dominant strategies, for example the new entity adopts the visual identity and name of the acquirer (‘backing the stronger horse’), or the lead and target brands continue to exist independently after the M&A activity (‘business as usual’, often as part of a broader multi-brand strategy). These two strategies and the hybrid option of combining them represent 78% of the M&A cases. The remaining M&A cases strongly relied on hybrid strategies involving a change in the adopted strategy many months, or even years after the M&A. We show that the decisions of shipping lines regarding branding in an M&A context are influenced by a complex set of interacting drivers and factors which can differ from one case to another and can change over time. This paper contributes to extant literature by demonstrating a more comprehensive typology of possible brand strategies by providing an empirical analysis in a B2B environment and by presenting a novel conceptualisation of the factors affecting brand strategy in an M&A context.

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Notes

  1. The authors clearly remember the efforts of this journal’s EiC in the early 1990s to introduce the idea of the ‘grey container’, a box that could be used interchangeably by all carriers, thus saving the industry billions of dollars. The idea failed woefully for all the good reasons discussed herein. Containers continue to be used as a way of branding the company name. This observation, combined with the reluctance of shipping lines to share market information on container positions and quantities, makes it very difficult to establish container pools or to widely introduce the grey box concept.

  2. Note that after a rebranding decision related to the acquired, it can take a while until all assets of the acquired show the new logo and colour scheme. Ships might only receive a new colour scheme and logo after the next maintenance in dry dock. In some cases, the appearance of an asset is not changed after an M&A. For instance, 15 years after the take-over of P&O Nedlloyd by Maersk, one can still occasionally spot containers with the colour scheme and logo of P&O Nedlloyd. The same applies to containers with the Maersk SeaLand logo, a brand name that was only in use between 2000 and 2006. Still, container carriers are very attached to the use of their specific colour, logo and name combination. The commoditisation of container shipping and the fierce competition in the market have increased the pressure on cost control also in terms of visual dimensions of branding.

  3. The motives driving M&As differ between boom and bust periods. In a boom period, acquiring firms are typically more interested in creating shareholder value and in spreading the financial risk and achieving financial synergies. In addition, M&As during the boom period can be driven by the will of the acquiring firms to strengthen their competitive position by taking over a company before a competitor. In a bust period, financial motives instead appear to be less significant, whereas the creation of economies of scale is commonly recognised to be equally important in both periods (Papadakis and Thanos 2008).

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Authors and Affiliations

  1. China Institute of FTZ Supply Chain, Shanghai Maritime University, Shanghai, China

    Theo Notteboom

  2. Faculty of Business and Economics, University of Antwerp, Antwerp, Belgium

    Theo Notteboom

  3. Maritime Institute, Faculty of Law and Criminology, Ghent University, Ghent, Belgium

    Theo Notteboom

  4. Antwerp Maritime Academy, Antwerp, Belgium

    Theo Notteboom

  5. Department of Economics and Business, Italian Centre of Excellence for Logistics, Transport and Infrastructures, University of Genoa, Genoa, Italy

    Giovanni Satta & Francesco Parola

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  1. Theo Notteboom
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Correspondence to Theo Notteboom.

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Appendix 1: Slot capacities of the fleets operated by the top 20 container lines (in TEU)

Appendix 1: Slot capacities of the fleets operated by the top 20 container lines (in TEU)

figure a

Source Compiled from Alphaliner, ASX Alphaliner and Containerisation International

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Notteboom, T., Satta, G. & Parola, F. Brand strategies of container shipping lines following mergers and acquisitions: carriers’ visual identity options. Marit Econ Logist 24, 9–40 (2022). https://doi.org/10.1057/s41278-020-00176-1

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