On 13 December 2016, Maersk CEO (Mr. Soren Skou) announced the new strategy, heading the group towards a new future.
Selected companies of A.P.M. group will be groupped together keeping different brands but one single goal: create a unique value proposition to the customer within the container business.
It might be just a statement? No it is not. Maersk Line is going to open a new era, changing the rules and the value proposition to our industry including freight forwarding business.
If you have spent (writer did) 13 years of your life within the APM Group you might remember the Starlight Strategy and you remember how it went. It is my humble opinion that we should not fall in the temptation to minimize our analysis considering that experience. At the beginning of this century situation was different and market presented an outstanding growth.
2017 is a different story:
· We are crossing a world shipping industry crisis
· Eight top twenty players disappeared in the last 2 years and top 5 share is growing.
· Current Liner capacity is sufficient to satisfy industry demand in the foreseeable future
· Terminal industry overcapacity is emerging
· Digital is changing the industry to the benefit of customer (… do not tell me I did not warn you – see my post on “The Travel Agency Effect”)
· Transportation and logistics market are big and are growing with one exception…the freight forwarding market
With this in mind, Maersk is going to change the offer to the market going “ all in” with 5 aces (Maersk Line, Damco, Maersk Terminal, Svitzer, Maersk Container Industry).
Let’s have a look of the main features/consequences.
THE GOAL: Maersk line will be the global Integrator of container logistics. The meaning of this sentence is quite thrilling. These 5 companies will act as one offering to customer (and when we say customer we should start thinking about all customers) a unique value proposition.
In fact, they aim to increase terminal utilization, improve inland services, optimize hub operations, joint product planning and cross selling. The cross selling within Maersk Line, Damco, Maersk Terminal, Svitzer will be in my opinion second to none.
Step 1: Maersk will separate cntr. biz from other activities (Oil and gas etc.) to create synergy within all related container business companies to offer a single “global integrator of container logistics” to the market.
· Manage and operate as an integrated company
· A one company structure with multiple brands
· Grouping topline, earnings for our owners, an opportunity for our people
To implement that, Maersk Line will group Maersk Line, Damco, APM Terminals, Svitzer, Maersk Container Industry
WHAT MAERSK CONTAINER BUSINESS WILL OFFER?
If the strategy will be well implemented and orchestrated Maersk will be in a position to offer a
· Simple solutions to the customer complex supply chain needs. Think about Damco SCM opportunities linked with Maersk Line customer portfolios.
· Elevating the customer experience through digital innovation. All shippers will have access to the shipping line offers both in terms of price and operation. Send a container to any side of the world will be easier like booking a table in a restaurant.
· With Maersk coverage all customers will benefit from an efficient delivery network in every market of the world.
Yes, freight forwarders will still exists but, once the other 5 top player will join Maersk Strategy (think about CMA CGM LOG, Cosco Logistics etc) the cake will be smaller and for specialized or niche commodity only.
Page 23,24,26 of “The New Direction” speaks louder than 1000 words (please pay attention to “Will be transformed by digitisation vs to be served by Maersk)“:
I personally believe that this document will be remembered in our industry for long time. If the strategy will be rolled out properly we will talk about 13 December 2016 as the date of the “Maersk Asteroid” that open a path to the extinction of 3/pl dinosaurs.
We are witnessing the born of a new player in the logistics & shipping industry: the 5 PL provider.
What is today Amazon for the small items will be tomorrow Maersk for the container BOX.
I’m passionate about this industry and I do thanks in advance any colleagues who will share, comment and confute any post of mine.
About the author. Giorgio Poggio (46) is a passionate freight forwarder and supply chain professional with 25 years experience in general management and sales. He covered several directors roles in APM Group and other italian companies. Today is V.P. Marketing and Sales of Aprile Spa.