A journey well under wayJesper Toft Madsen, Key Publications Manager & Editor
Phillip Edward Lewin, Communication Advisor & Editor
Jesper Toft Madsen, Key Publications Manager & Editor
From sea and air to terminals and land, A.P. Moller - Maersk is made of many well-run parts. But it is the synergies between these parts that create the real firepower.
The progress Maersk has made since 2016 on its transformation journey towards becoming the global integrator is an important dimension of how they create value today.
This progress includes the transformation of Ocean business, the foundation of the company, from an asset operator and capacity player in a highly commoditised market to a customer-centric leader in differentiated solutions. It includes the transformation of their APM Terminals business from a greenfield developer into a world-class operator. Finally, it includes an organic and inorganic build-up of their Logistics & Services capabilities - from the transformation of their legacy Damco freight forwarding business into a profitable and scalable air cargo offering and the acquisition of new warehouse, distribution and customs services.
The heart of the value creation framework is built around Maersk’s leadership position in Ocean - the broad reach of our global network and the highly qualified seafarers who run these vessels.
The framework logic around how they create value looks at the synergies between this Ocean core and Logistics & Services that create value for customers, and the synergies between Ocean and APM Terminals that create financial and operational efficiencies in how we deliver that value.
The common enabler between all of these elements is digital. Maersk is also undergoing a massive technology transformation, not only in terms of developing data-empowered solutions but becoming a truly data driven and integrated organisation. This means standardised processes for speed and efficiency and one single source of truth instead of data scrambled across many formats and standards.
One illustration of the way these synergies bring all elements together is their current product portfolio. Maersk is now able to introduce products and services that help customers connect and simplify their supply chains with speed and a seamless, end-to-end experience on proven platforms.
“We’ve added global capabilities to provide customers with comprehensive logistics services along their supply chains, and the ability to integrate those services with our core Ocean product to create integrated solutions; essentially redefining what we sell to our customers at a very critical time for the world’s supply chains,” says Aymeric Chandavoine, Head of Logistics & Services.
Changing the conversation
The left-hand side of the framework is all about customer synergies, Maersk’s aspiration to continue disrupting the industry and create better customer outcomes as an integrated logistics supplier. Much of this comes from moving beyond their historic core in Ocean to help customers confront the complexities of running a global supply chain – from trade wars and weather disruptions to better matching production and demand in rapidly evolving markets.
These challenges existed before the COVID-19 pandemic. But in 2020, the entire industry was turned on its head as manufacturers scrambled to keep their supply chains running, despite lower capacity, border closures and unprecedented restrictions. 2020 served as a wakeup call for many who realised their supply chains were too fragmented and vulnerable to disruptions, and that they lacked the flexibility and ability to cope with relentless change.
Traditional supply chain performance drivers like speed and cost are still key today. But the pandemic and the ripples it sent through the industry have brought new players like accountability and resilience to the forefront.
“These newer value drivers present a significant opportunity for Maersk to change the conversation with our more than 70,000 customers about the role we play in their supply chains. The synergies unlocked by combining Ocean and inland Logistics & Services into integrated solutions will help customers tick all the boxes – predictability, reliability, simplicity, flexibility, speed and cost,” says Kim Pedersen, Head of Sales & Marketing at a. P. Moller - Maersk.
Digital naturally has a critical role in this conversation, as companies fast track new technologies to boost resilience and flexibility. This has resulted in a massive increase in the flow of end-to-end data in supply chains, as companies look to make better use of data from demand forecasting and inventory management to logistics scheduling. Platforms that can provide standard and granular access to all this data across integrated solutions - yet at the same time do so with simplicity - will be a major disruptor in the world’s supply chains. Maersk’s ambition is to lead these conversations.
With the acquisition of Visible Supply Chain Management and the intention to acquire B2C Europe, Maersk has set out to quickly build strong E-commerce Logistics capabilities that expand its offering and complement its existing end-to-end supply chain offering. It is about addressing customer needs and unlocking a growth and earnings potential.
Big opportunity to accelerate
Customers face inefficiencies and complexities every day. They are subject to different regulatory regimes, bottlenecks, weather disruptions and trade tensions. The longer the supply chain, the more loss of control and things that can go wrong.
Too often, customers’ supply chain is subject to inefficiencies, waste, and complexity that they cannot control, created by their partners. Customers tell us that their main problems are manmade, and therefore, Maersk’s ability to solve them through integrated logistics presents a huge opportunity.
“Our right to win begins with our 70,000 customers. The trust and the relations we have with them is our foundation and biggest asset to build a customer-centric global integrator at scale. Success will be defined by our growth and profitability as proof points that what we do for customers meets or exceeds their needs and creates value,” says Vincent Clerc, CEO of Ocean & Logistics.
While customer needs are evolving rapidly, the importance of agility, operational excellence and technology has been reconfirmed. The challenge remains to increase quality and stickiness in Ocean, and how to differentiate through the Logistics & Services offering.
“Taking on this challenge represents a huge opportunity for us. By creating value for our customers through differentiated value propositions, we will see a ripple effect that will change our customer experience and relationships, make us more reliable in our delivery, and enable us to grow and create a stable and profitable business,” explains Vincent Clerc.
Maersk is not the only one on to it – but none has yet built the customer relationships, the presence along the supply chains, the people, the technology and the resources to capture it, at scale.
“We stand in an enviable place to capture this. That is the journey we are on, the company we are building for the future. We have a lot to be proud of, and a lot to look forward to for the journey ahead.”