Maersk Seeks to Become More Like FedEx
Maersk Group wants to unify its transportation services into a seamless global network for shippers, from pickup to dropoff, in a bid to become a sole-source provider of logistics solutions.
"We want our customers, the people who ship goods from one end of the earth to the other, to be able to do that while just dealing with Maersk," said CEO Soren Skou at an investor presentation. "We want to be able to carry the box from one port to the other, we want to be able to provide the inland service, customs house brokerage, finance the goods, insure the goods, and any other relevant services." Ultimately this business model would look much like the logistics service that consumers get from UPS or FedEx, he suggested.
Maersk also hopes to improve the bottom line by generating synergies of $400 million over the next two years. It foresees increased utilization at its APM Terminals division by directing more business from Hamburg Sud and Maersk Line. (Recently-acquired Hamburg Sud will operate on a joint network, but it will remain a separate brand.) Maersk Group will also combine the warehousing and depot infrastructure for its freight forwarder, Damco, with facilities for APM and Maersk Line.
APMT will not expand
At APM Terminals, revenue has been falling since 2015, and Maersk reported that some of its 74 terminals are financially weak. APMT has five new facilities under development - Moin, Costa Rica; Tema, Ghana; TM2, Tangier; Vado, Italy; and Abidjan, Ivory Coast - and it noted that these investments are not yet generating income and are weighing on APMT's return on invested capital. "We are working to complete the terminals that we have ongoing," said APMT CEO Morten Engelstoft. "We have no plans to initiate new greenfield projects anytime soon, and we are serious about our commitment to reduce the [capital expense] in our business."