WSJ on AAPN Member Maersk’s Aggressive Logistics Growth Strategy

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Here's a great piece of reading for your downtime, WSJ on Maersk's move into landside investments.

Maersk CEO Wants Half Its Earnings to Come From Inland Logistics
Danish shipping giant is looking at supply-chain investments to boost its sagging revenue
WSJ: June 26, 2019

The world’s biggest commercial shipping operator plans to add extensive new capacity—but it won’t be on the water.

Danish shipping giant A.P. Moller-Maersk AS instead wants to buy warehouses, container terminals and customs brokerage firms to boost its logistics-services capabilities, part of a strategic shift toward a landside business the company hopes will produce half its revenue in two years.

“Today up to 80% of our earnings comes from container shipping,” Maersk Chief Executive Soren Skou said in an interview. “Hopefully a couple of years from now will be much closer to a 50-50 scenario between ocean and nonocean services.”

Mr. Skou’s plan would extend a transformation of the 115-year-old maritime business that began when he became CEO in 2016. Since then, the sprawling Danish conglomerate has disposed of its oil and tanker businesses to focus more closely on building a singular company with container shipping at its center that provides transportation and logistics services to big customers like Walmart Inc.

Mr. Skou said the stronger focus on inland logistics comes as the company continues to feel the aftereffects 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. “To put in perspective, in 2011 our turnover as a group was around $60 billion and in 2016 our turnover had declined to around $35 billion, so we were not in a good trajectory,” he said. Read More