The Japanese owned and globally recognized “K” Line brand was first established in Thailand over 53 years ago. Since then, the iconic red and white “K” logo on the funnels of vessels and on the sides of containers has become synonymous with the company’s strong contributions towards the country’s growth, and led to great partnerships that have stood the test of time.
However, as the world changes around us, so must the approach that companies bring to container shipping and logistics marketplaces. This evolution taking place in front of us now is the overwhelming number of mergers and acquisitions that are changing the face of the industry.
In line with these industry trends, “K” Line recently announced that the container division of their company would be merging together alongside the container divisions of two other Japanese companies, Mitsui and NYK, to form a new company called Ocean Network Express (ONE).
What does this mean in terms of the “K” Line brand, will it disappear? Far from it, the distinctive “K” will still be seen throughout Thailand as the company has many other businesses and divisions that will continue to operate unimpeded. It’s of course a big change for the company, but as nearly 70% of the current revenue for the company comes from landside operations, they will undoubtedly be able to adapt. For a more in-depth explanation about what this means exactly for their business and their customer’s business, we recently sat down with Mr. Yutaka Nakagawa, Managing Director K Line (Thailand).
Mr. Nakagawa’s appointment as MD comes at a time that’s very unusual for “K” Line and other Japanese shipping lines. These next few months will be transformative for the company with the container division moving, but Mr. Nakagawa sees this as an opportunity for the company to harmoniously link all their brands and businesses throughout Thailand together, offering a unified package of services for customers, as well as expanding their reach and partnerships with other businesses.
Mr. Nakagawa comes from a diverse background and his experiences abroad are a sign of “K” Line Thailand’s forwarding thinking approach to the rapidly changing market. His past experiences with the region and his logistics focused background makes him uniquely positioned to lead the office forward. Speaking about his background in the industry Mr. Nakagawa explained, “I first joined “K” Line in 1982, in the sales division in Tokyo. I oversaw exports from Japan to Australia, and then moved to the general affair team in the liner division, and eventually was moved to Ho Chi Minh City. Throughout my time there I was tasked with establishing our own dedicated sales team, which was very important for our company. After a year and a half, I moved back to Tokyo and was charged with overseeing the liner division for African and Australian trade. Shortly after, I moved to Sydney, Australia to handle the trade management there. I spent five and a half wonderful years in Sydney, before I moved back to Tokyo where I spent the next seven and a half years as manager and general manager of the human resources group. In 2010, I moved back to Australia and became the MD for “K” Line Australia. I’ve spent over one third of my career outside of Japan and it has given me a unique perspective into business around the world.”
When One Door Closes Another Opens
“K” Line Thailand has for many years invested into assets and other non-shipping based businesses in Thailand, which has led them to where they are now in an advantageous position to expand upon these investments. Mr. Nakagawa said, ““K” Line Thailand currently provides a multitude of support services to our clients, such as trucking services under BME and KLTL, warehousing and distribution services under KCST, and cold services under BCS. While we will no longer have a container shipping division, we will still be very active with all our other businesses throughout Thailand. A majority of “K” Line is still in the country and these services will continue strongly moving forward.”
Mr. Nakagawa mentioned that, “It remains to be seen, but these companies will currently stay as single entities under the larger “K” Line brand. However, it’s up to the customer to decide in the future if it makes more sense to bring all these services together under one brand name, but what won’t change is the impeccable services they offer to customers currently.”
All this movement has ignited a spark for Mr. Nakagawa that is fueling his drive for innovating on the business model for their business. He said, “We must as a team transition our business model, lest we wait to just fade out. I’m not afraid of the challenge, and am in fact looking forward to the opportunities this transition will bring. More now than ever we need to enhance and grow our logistics and forwarding businesses.”
“Because of “K” Line Thailand’s long history, skills, and facilities, I strongly believe that we should also innovate and transfer our skills to surrounding countries to develop the businesses and also evolve our business model. I very strongly think we need more joint planning, or joint development marketing, towards new businesses. Thailand is in a position to lead, and we need to aggressively go forward when the opportunities present themselves.”
The Path Forward
To accomplish these goals, the mission moving forward for “K” Line Thailand is to establish a strong sales force and integrate all the points Mr. Nakagawa has mentioned. Having a competence sales team that understands the changing nature of what a customer wants, and needs is critical. To truly make an impact, a team that’s able to cross sell all the services that “K” Line Thailand can offer clients is imperative.
“Our new business model must contribute to our clients and should solve their issues. While it’s important for our sales representatives to understand the full suite of our competencies, all staff should understand what our capacities are and what services and skills we have, not only in Thailand, but around the world. We can then better talk to our clients and offer real solutions to customer issues,” said Mr. Nakagawa.
“Shipping is one method we can help customers, but looking after the total transportation is really what we’re after. Examining a client’s supply chain and saving them money is the new way of doing business. We’re not focused on selling the freight, but creating the value first. In the end, we’re in the service business, so you must have a service oriented mind and approach. We need to be a little bit brave going forward with this model, but it’s truly the right way to lead the business forward. “K” Line has been here for 50 plus years and our plan is to stay here another 50. We will continue to provide employment and opportunities for Thailand, and I hope we will find more people that share the same passion for customer service as I do, as this solution driven approach to business is the path forward for our business.”