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Maersk to Proceed with $500M Investment in Southeast Asia

Maersk containership at berth
Maersk is proceeding with a half-a-billion dollar investment in Southeast Asia (file photo)

Published Dec 4, 2023 5:42 PM by The Maritime Executive

 

Maersk reports it plans to move forward with a more than half-a-billion dollar investment in Asia as part of the execution of its global integrator strategy focusing on an overall logistics solution. The investment, which is expected to span over three years, targets the company’s logistics and services operations as well as its ocean shipping and terminal operations despite the strong financial headwinds the company is currently experiencing.

“Southeast Asia is the fastest growing area in Asia Pacific,” emphasizes Vincent Clerc, CEO of A.P. Møller–Maersk, noting the e-commerce boom, government’s efforts to capitalize on global manufacturing diversification, and rising inter-regional trade spurring sustained growth in the region. “Our investment reflects the commitment to being the global logistics integrator.”

During the third quarter, while reporting a nearly 50 percent decline in quarterly revenues and EBIT income falling from $9.5 billion to just $538 million, the company said it intended to continue to move forward with the investments in its strategy. Clerc however warned investors that with “challenging times ahead,” the company was cutting costs including completing a 10,000-head staffing reduction that was already more than 50 percent completed.

The total investment planned for Southeast Asia will be more than $500 million and will cut across the company’s warehousing and distribution operations as well as air cargo, inland logistics, ocean shipping, and terminal operations.

Maersk reports it will invest in scaling its warehousing and distribution footprint by up to 50 percent across the area to augment its ocean, air, and land capabilities, serving both international and domestic markets and demand. By 2026, Maersk expects to add nearly 480,000 sqm capacity spread across Malaysia, Indonesia, Singapore, and the Philippines creating mega distribution centers that are strategically located.

They highlighted the investments being made at Port of Tanjung Pelepas, located in Malaysia, where it is poised to become a key integrated logistics hub. Furthermore, Maersk is also investing in increasing its landside warehouse capacity at Singapore's Changi Airport, intending to solidify its position as Maersk’s regional air freight hub.

Other investments will include significantly increasing haulage truck capacity in Southeast Asia including a pilot biodiesel-based haulage trucks and the introduction of EV trucks by 2024. In the ocean and terminal segments, Maersk will continue to invest in expanding its infrastructure across the region through APM Terminals. 

Additionally, the company revealed that it is working closely with authorities in the region to explore opportunities in building green fuel infrastructure to support its future green vessel fleet.

Maersk currently has a presence in four markets in Southeast Asia, including Singapore, Malaysia, Indonesia, and the Philippines.