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Global Shipping Giants Shift Focus to Inland Logistics
Danish shipping giant A.P. Moller-Maersk AS wants to add new capacity on land rather on the seas, the Wall Street Journal (WSJ) reported. Chief executive Soren Skou plans to buy warehouses, container terminals and customs brokerage firms to boost Maersk’s logistics-services capabilities, part of a strategic shift toward a landside business the company hopes will produce half its revenue within two years.
“Today, up to 80% of our earnings comes from container shipping,” Maersk Chief Executive Soren Skou told the WSJ. “Hopefully a couple of years from now will be much closer to a 50-50 scenario between ocean and non-ocean services.”
Skou said the stronger focus on inland logistics occurs as the company continues to experience the after-effects of the 2008 financial crisis, which dealt a blow to global trade, and as the Maersk Line container ship operator faces new challenges from the growing trade dispute between the U.S. and China.
Maersk Line has around 70,000 customers at sea, moving around 20% of all container capacity. Clients range from U.S. retail chains and car makers to furniture suppliers, electronics companies and clothing importers.
However, less than a quarter of those customers use the company to move their goods from ports to warehouses and distribution centers, the WSJ reported.
For Maersk and some of its ocean-going rivals, the business of managing goods before and after they move on ships is looking especially attractive, after several years of sagging freight rates have eroded profit margins.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
