Industry Interview: APL Maritime Ltd/APL Ltd.
MLF 2010 Volume: 4 Issue: 7 (August)
Eric Mensing, president and CEO of APL Maritime Ltd and vice president of government affairs/trade for APL Ltd., is the company’s senior executive in Washington, D.C. A 30-year veteran of the ocean transportation industry, he manages APL’s relationship with the U.S. government, all of its business with the U.S. military and their U.S. flag fleet of 20 vessels. Mensing is a graduate of the U.S. Merchant Marine Academy and has held several senior management positions for the company in the U.S. and abroad, including Canada, Europe and the Middle East.
Q: Please provide some background on your company and the company’s work with DoD in the logistics arena.
A: APL, a vessel operating common carrier and the world’s fourth-largest container shipping line, has a long and storied history with the United States government.
We have been in business for over 160 years and were the original cargo carrier for the U.S. Postal Service. Our legacy and partnership with the Department of Defense began with World War II and doing business with the DoD is part of every employee’s DNA.
Q: Please indicate the primary business areas of your company and briefly explain the functions of each.
A: APL revolves around several key markets, the Asia-North American market, the Asia Europe market, and the intra-Asia market. APL along with its sister company, APL Logistics, provides full logistics services across the supply chain.
Ocean container shipping is our core business; however, we also offer consolidation, deconsolidation, truck load and services. We operate a total of 20 ships under the U.S. flag, and all are deployed to support the primary ocean routes as necessitated by the DoD. We have five ships in the Pacific sailing from the U.S. West Coast hitting primary bases in Korea and Japan, including Okinawa where we have a direct linehaul service.
We have a total of nine ships that sail from the U.S. East Coast to the Persian Gulf plus Karachi, Pakistan, to support Operation Iraqi Freedom and Operation Enduring Freedom.
Our feeder services include one in the Baltic, two in the Persian Gulf and one in the Eastern Mediterranean. All of these U.S. flag services carry essential food and supplies to the troops.
Q: As a major player in the military logistics arena, how does APL meet key DoD logistics objectives in today’s tough operating environment?
A: APL currently holds an Alpha carriers status with the DoD and is cleared to carry unit moves in addition to regular sustainment cargo.
We have exceeded the DoD objectives by building the only Priority I Northern Distribution Network service on the market today. This means that 100 percent of the ocean service between the U.S. East Coast and the port of discharge is manned by U.S. flag crews, many of them with security clearances.
APL also developed the hidden in the open concept with trucking in Afghanistan and Pakistan. At the start of Operation Enduring Freedom, the U.S. military did not have an efficient way of getting supplies to its troops via cost effective surface carriers. Since APL has worked in Pakistan for quite some time, we asked the military to allow us to bring in supplies via Pakistan. It was our intention that security would not be needed because the local landscape was used to seeing APL containers in and around the city.
The experiment worked and the PAKGLOC, short for Pakistan ground lines of communication, has been the primary route ever since.
Q: What are the main challenges in facing your company in meeting the needs of the of 21st century warfighter?
A: The primary challenge is keeping a viable enterprise despite the inevitable drop in overall cargo volumes after the conclusion of Operating Iraqi Freedom and Operation Enduring Freedom, and the retrenchment of many overseas troops back to the U.S. As troops withdraw and cargo volumes recede, we will backfill the military slots with commercial cargo. This will allow us to keep the U.S. flag ships in service in a ready state to redeploy and ready to support the surge in military business virtually overnight in the event of another conflict.
We will always be challenged with the higher cost of U.S. flag crews, but will continue to receive the Maritime Security Program [MSP] subsidy, military cargoes and other cargo preference cargoes that will help defray those costs.
APL is planning to invest nearly half a billion dollars in the next three years to recapitalize several of our U.S. flag ships. Spending that kind of money when the current MSP program ends in 2015 presents significant challenges when talking to the investment community. We’re hoping for an early reauthorization of the program for another 10 years to 2025 to insure a return on this investment. ♦
