Andrew Abbott describes how he and his team carved out a profitable niche in the fast-changing shipping industry.

In shipping, size matters—but it’s not everything. In fact, one of the world’s most profitable ocean shipping companies has successfully navigated a tempest of swift change in its industry and a swell of competition from super-sized, government-subsidized carriers. And it’s done so while remaining a relatively small-scale operation that’s rarely a customer’s least expensive option.

Atlantic Container Line (ACL), an Italian-owned shipping line with headquarters in Iselin, NJ, marks its 40th year in business this year, a rare feat in the fiercely competitive international shipping business. The milestone underscores the merits, clearly visible in hindsight, of a strategic gamble that’s paid off in spades: owning the high-end niche in North Atlantic trade between the US and Europe.

Andrew Abbott, President and CEO

Looking back, Andrew Abbott, president and CEO, remembers how the explosion of large-scale, Asia-based container carriers in the late 1980s put the financial squeeze on ACL. The firm didn’t have deep enough pockets to compete on price with mega-vessels, which catered to high-volume customers by operating ships capable of carrying as many as 7,000 20-foot-long containers. What’s more, this new breed of vessel was often owned, operated, or subsidized by foreign governments such as China.

“We decided we couldn’t compete for the high-volume traffic, the Wal-Marts of the world, because these guys are looking for such low prices that there’s no money in it,” Abbott said. “So we decided to go after the high-service customers who require a more customized approach to their business.”

Fast on and off
ACL recognized that not every company with shipping needs wanted to trust its precious or delicate cargo to a high-volume carrier. The firm then concentrated on long-term goals of providing personalized service and flawless results.

ACL’s cut-above approach is visible at the docks. Longshoremen who serve its fleet of 10 ships, each valued at about $150 million, don’t pack every available inch of these 292-meter vessels with containers, as many mega-carriers do. An ACL ship dedicates only about 50% of cargo space to containers. The rest resembles a vehicle ferry where high-value goods are not lifted but driven on and off the vessel.

Organizing cargo in this manner has multiple implications for the customer. For starters, the ferry-style structure makes ACL the carrier of choice for Volvo, Jaguar, and Saab to transport their vehicles to American dealerships. But it appeals to a wide range of other clients as well. Airbus, for instance, uses ACL to transport multi-million-dollar jet wings from manufacturing plants in the US to assembly facilities in Europe. Caterpillar Tractor and Deere & Co. ship construction equipment and tractors ordered by European customers. Even celebrities appreciate the protective conditions. ACL has shipped a movie trailer for actor John Travolta, as well as helicopters for California Governor Arnold Schwarzenegger and Queen Elizabeth.

A shipper reduces risk to valuable oversized machinery and saves time in many cases, Abbott said, when using the ferry-style method. “If he puts it into a container, he has to take the whole thing apart. Then he has to reassemble the whole thing when he gets to the final location,” Abbott said. “With ACL, he just drives it on. We park it. It’s not on deck, getting wave damage. It’s in a nice, dry garage. When it gets to the other side, we drive it off the ship and deliver it.”

Clients don’t see their cargo while it’s en route, but ACL is well aware that a North Atlantic crossing can be treacherous. Gale force winds and 20-foot waves are common. During the infamous Perfect Storm of 1991, one of ACL’s 58-ton ships steamed westbound into the wind at full throttle. For 24 hours, she didn’t budge.

Wine, cheese, and chocolate
As it turns out, even companies that need their goods shipped via container sometimes need assurance that their products will receive careful handling. This is true for makers of French wine, German cheese, and Swiss chocolate, to name just a few. Makers of high-end products can’t afford to get a call that says everything arrived on time but in poor condition. “What the customer is paying for is no damage,” Abbott said.

To make sure clients get the assurance they need, ACL refuses to steer customers to automated offshore phone operators or self-service Web sites. Instead, ACL relies on well-informed transportation specialists based in each country it operates to answer questions and address concerns. “We’ve kept that personal side, which is rare today,” Abbott said. “It’s a big reason people use us.”

ACL differentiates itself even further by using ports that aren’t common destinations for the bigger shipping companies, such as Baltimore; Halifax; Liverpool, England; and Gothenburg, Sweden. This has advantages when a customer needs to deliver to or from a destination far from a hub such as New York.

And ACL doesn’t simply leave a customer to figure out how to get product to and from its ports. The company handles trucking and rail transport through a network of trucking subcontractors and railroads, both in the US and Europe, to get goods from door to door with minimal worry and hassle for its clients.

For this level of service, customers pay a bit more than they would in a deal with a mega-carrier. But, Abbott said, customers are willing to do so since they receive a number of tangible benefits in exchange for a few extra dollars.

The formula has turned out to be winner. ACL went public in 1994 on the Norwegian Stock Exchange and was so profitable that initial investors who stuck with the firm made a killing. They quadrupled their money over eight years until the Grimaldi Group, based in Naples, Italy, acquired the company in 2002.

Now ACL is taking advantage of Grimaldi’s network around the world, adding more connections, for instance, between the US and West Africa. Still, the core of the company’s business continues to be trade between North America and Europe, a corridor in which ACL enjoys a comfortable 30+% marketshare of oversized cargo and 5% of containers.

With the high-end niche firmly in hand, ACL appears ready for whatever the high seas—or the high-intensity pressures of globalization—might toss its way in the years to come.

G. Jeffrey MacDonald is a correspondent for the Christian Science Monitor. Based in Newburyport, Mass., he can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it