GAC: MEED Assessment

01 June 2010

The past 18 months have seen GAC trim its costs, but it continues to search for new business opportunities

Last year, GAC saw weak demand for logistics – previously its fastest-growing business – as global movements of traded goods fell. Demand for ship services also fell. By April 2009, more than 10,000 container ships and bulk vessels were laid up worldwide.

In response, GAC launched Ship Lay-up Solutions, a system that helps ship owners identify and cut non-profitable sailings, reduce fuel consumption and minimise insurance premiums and wear and tear on vessels during times of low demand.

The past 18 months have also seen GAC trim its own costs, with job losses in Dubai and across its European operations. And despite early signs the worst of the downturn has passed, GAC looks set to continue improving profit margins and reducing operating costs.

The shipping and logistics industries look likely to be the focus of new cuts, as the threat of oversupply puts all players under pressure. Increased global capacity could also see a new rates wars as carriers try to build market share.

Meanwhile, GAC continues the search for new opportunities, showing particular interest on logistics and supply contracts in the oil and gas industries. Its consultancy wing, GAC Solutions aims to develop new working relationships with long-term customers based on tailored solutions that will save time and money, while addressing environmental issues.

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