Return of the Sea-Land

Maersk Line last week announced the revival of the SeaLand brand as an intra-Americas line serving the Caribbean, North, Central, and South America.

SeaLand, according to the company, will build on the existing network Maersk has in the region and launch on 1 January 2015 after a phased transition throughout 2014.

Maersk Line’s Craig Mygatt will take the top job as CEO, serving out of the company’s headquarters in the USA and backed by a team of 240 personnel.

Maersk acquired the “Sea-Land” name along with container terminals and 70 vessels when it bought Sea-Land Corporation in 1999. With the acqusition, Maersk’s liner outfit was renamed “Maersk Sealand” and remained as such until 2006 when the company was rebranded Maersk Line upon the purchase of Royal P&O Nedlloyd and its 162-strong fleet.

Sea-Land Service, Inc. (often referred to by a variety of variations on its name, including: Sea-Land Services, Sea-Land Corporation, or Sea-Land Industries,) was a pioneering shipping and containerization company founded by American entrepreneur Malcom McLean in 1960, out of the operations of the Pan-Atlantic Steamship Company, which McLean acquired in 1955. It existed under various changes of ownership (passing from R. J. Reynolds to CSX Corporation, until it was split by CSX into two liner companies and a terminal operator. The international liner company and Sea-Land name was acquired by, and formally incorporated into, the operations of the A. P. Moller-Maersk Group in December 1999. The domestic liner company was sold by CSX in 2003. In 2005 it went public and now operates as Horizon Lines, Inc. using a modified Sea-Land logo.

Sea-Land became notable for its instrumental role in the U.S. military in the Vietnam War, delivering as many as 1,200 containers a month to the Indochina peninsula; total revenues from the U.S. Defense Department would amount to $450 million between 1967 and 1973. Later, it drew attention for being the registrant of the ill-fated SS Mayagüez, which was seized by Khmer Rouge forces on May 12, 1975. The Mayagüez incident provoked the last armed confrontation of the war.

In 1964, Sea-Land moved from temporary quarters at Port Newark, New Jersey, to permanent headquarters at Elizabeth, New Jersey. This headquarters, on 98 acres (400,000 m2) of a 203-acre (0.82 km2) harbour area, was developed by the Port of New York Authority. Sea-Land was the harbor’s first tenant. The original structures (all unified by a horizontal theme in aluminum and white brick) included a three-storey General Office Building; a Truck Operations Building, where the movement of any trailer in the system could be plotted by, the then advanced 1440 computer; a Marine Operations Building overlooking a berthing channel with berths for six vessels; a Truck Maintenance Garage and an 1,100-foot (340 m) General Cargo Warehouse. A 61-acre (250,000 m2) marshalling yard that could hold 2,600 trailers and which could be maintained at daylight brightness around the clock was also part of the original construction. Later, a special terminal for handling perishable cargo was built. This terminal had its own marshalling yard, wired with special outlets to maintain refrigeration in parked trailers.

In March 1999, wanting to return to its core business and raise capital for the recent purchase of Conrail, CSX split Sea-Land into three companies; an international liner service, a domestic liner service and a terminal operating group. This was done to facilitate a sale to AP Moller – Maersk, with whom Sea-Land had been in a vessel and equipment sharing agreement with since 1995. Maersk already had a world wide terminal infrastructure and only certain properties would be needed. Fifteen properties were to be added in the sale and the balance of the properties not purchased would stay with CSX World Terminals. The Sea-Land domestic liner service could not be purchased by Maersk due to the Jones Act provisions prohibiting a foreign owned or operated shipping company operating between domestic ports.

In July 1999, CSX announced the impending sale to Maersk of Sea-Land’s international services and the right to the “Sea-Land” name. The sale was completed in December 1999 and the new combined company was named Maersk Sealand, which, in 2006, dropped the word Sealand and became known simply as Maersk Line.

The former Sea-Land domestic service was sold to the Carlisle Group in 2003 for approximately $300 million and its name was changed to Horizon Lines. Just over a year later Carlisle sold Horizon to the Castle Harlan Group for $650 million. In 2005 Horizon Lines went public with its original Sea-Land management team intact and now operates as Horizon Lines, Inc, which accounts for approximately 36% of the total U.S. marine container shipments between the continental U.S. and the markets of Alaska, Hawaii, Puerto Rico, Micronesia and Guam.

“We heard from our customers that they value Maersk Line services but they required greater service stability and commitment. That’s one of the key reasons why we’re responding with an improved, restructured solution for the Intra-Americas,” Mygatt said, “We look forward to developing strong, enduring customer relationships as the new SeaLand organisation.”

Robbert Van Trooijen, Maersk Line Latin America and Caribbean chief executive said the “new Intra-Americas commitment will meet the needs of Latin American customers that ask for local, customer specialists that are empowered to act quickly and respond to changes in the market.

“We have a long history in this region that will set the foundation for future growth.”

Analysts believe the return of the pioneer container operator is startegic to the future growth of the world’s largest shipping company.

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