To sea for themselves.

AuthorSpeizer, Irwin
PositionSea-Land Service Inc.

Charlotte-based Sea-Land is the last major cargo carrier flying the U.S. flag - "a great company in a crummy industry."

You can't see the ocean from Charlotte, unless you happen to be in the command room of Sea-Land Service Inc.

From there, the $4 billion cargo-shipping company manages its global empire. The world's oceans are mapped out on wall-size screens in what looks like a corporate version of a NASA flight-control center. Routes alternate with charts, graphs and directives, providing a guide to where cargo is and what problems lie ahead. A Tower-of-Babel crew of multilingual logistics analysts in headsets, able to converse in everything from German to Japanese, sit in rows facing the front screens. They furiously click their keypads, relaying information as they try to keep the company's 99 ships sailing on time and under budget into ports from Hong Kong to Houston. If the salmon catch in Alaska is a few days behind schedule, they need to shift refrigerated ships elsewhere so they don't sit idle at Anchorage docks.

This is the Sea-Land the company and its adopted hometown love to promote: the high-tech international shipping wiz with 9,000 employees in 80 countries and territories, including 650 in Charlotte. When the Queen City wooed Sea-Land from New Jersey two years ago it boosted the city's image as a cosmopolitan corporate center.

"World trade rides on our backs," says John P. Clancey, president of Sea-Land. "We certainly are the window on the world for Charlotte. We can provide input to anyone on trade."

It all seems, as business pundits like to say, a great big win-win. But spend some time with Sea-Land and you quickly get an earful of woes that sound a lot more like whine-whine.

Here's its buzz:

There's too much regulation of carriers operating in Japanese ports, and it's hurting Sea-Land's business. The U.S. government needs to teach those Japanese some trade manners.

There's too much cheap foreign competition on the high seas, particularly companies that pay dirt-cheap wages. They're wrecking the cozy cartel system in which shippers from around the world get together to set prices. The U.S. maritime fleet is sinking under the weight of its labor costs. The government must help through subsidies.

And then there's Jesse Helms, who can't see the sea for the swine. North Carolina's senior U.S. senator wants to let foreign shippers carry cargo between domestic ports, trade now restricted to U.S.-owned and -operated ships. He figures hog farmers could cut a better price to ship grain if there was more competition. Can't somebody stop this guy?

After hearing all that, you come away with a new view. The shipping business is no weekend sail, not even for a company with as much high-tech gadgetry as Sea-Land.

International competition is so tough that, one by one over the last two decades, most of the major American carriers - companies such as US Lines, Grace Line and Lykes - have been sold to foreign competitors or gone out of business. In April, Oakland, Calif.-based APL Ltd., the second-largest U.S. container-cargo shipper behind No. 1 Sea-Land, sold out to Neptune Orient Lines of Singapore. That leaves Sea-Land the last man standing, the only major international cargo carrier flying the U.S. flag.

"Sea-Land is a great company in a crummy industry," says Steve Lewins, transportation analyst with Gruntel & Co. in New York. "It is a low-margin business with huge capital-spending cycles. John Clancey has done a terrific job in terms of taking costs out of the company. But this year, he has rate wars in virtually every sea lane."

Sea-Land's revenue per container fell 5% last year, reflecting price competition, mostly from new ships launched by Asian firms. It was edged out last year as the world leader in container-cargo tonnage by a South Korean company, Evergreen Line. Clancey responded to the rate wars by slashing $136 million in operating costs and says he's cutting a similar amount this year. Sea-Land has partnered with one...

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