Sunday, December 12, 2004

Wal-Mart to Take Over the World?

Last Wednesday, David Sanders, columnist for Arkansas News Bureau and sometime contributor for NRO, reported that Wal-Mart, already the world's largest retailer, may be looking to step it up a notch...a big notch.

Speculation is that the company is looking to acquire a major container shipping company. If this story has legs...check that, a rudder, it may "make some waves" as it filters out. KPIX-TV, a CBS affiliate in San Francisco has already picked up the story and reported how such a development would affect the Bay area.

In addition to the rumors coming out of Northwest Arkansas, as evidence of plans to increase current shipping operations, the company plans to open a major distribution facility at the Port of Houston in 2005. The Port of Houston is ranked #1 in the nation in foreign tonnage.

Now, a major corporation does not undertake such a major move without ample planning and often years of consideration. If Wal-Mart does have an eye toward the sea, they will need someone who knows how to manage a maritime fleet operation. Of course, the shipping company would have its own expertise, but they will surely want someone with such knowledge in addition to that of their own company’s inner workings. Possibly, the crucial piece of this puzzle is the fact that in 2001, Wal-Mart hired J. Paul Reason as a Director on their board. Admiral Reason is a former Commander-in-Chief of the U.S. Atlantic Fleet. Naturally, he knows a thing or two about maritime logistics.

The company rumored to be under consideration is American President Lines, currently owned by Neptune Orient Lines of Singapore. One of the largest shipping companies in the world, APL has offices in over 80 countries. Their sister company, APL Logistics, a global supply-chain management company has offices in over 100 countries. APL also has extensive trucking and rail networks, which Wal-Mart would need for such an expansion.

Wal-Mart is in no danger of losing its status anytime soon. In some respect, their ascendant climb seems to have just begun. (Even with their expansion overseas, the 42-year-old company is still building stores in this country).

The company is coming on strong in online retailing. They are working to develop a profitable urban format, and have sought a piece of the financial services pie for years.

If Wal-Mart does follow through on this shipping deal, the world will be watching. Wall Street's jaws will drop, their competitors will wince, and no one will be able to touch them.

UPDATE: Thanks to Instapundit for the link.

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