MAERSK: DIGGING IN FOR THE LONG HAUL

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ABOUTXENETA

At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.

With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.

WE ARE TRANSFORMING GLOBAL LOGISTICS

ARE YOU PAYING THE RIGHT CONTAINER

FREIGHT RATES?

DISCOVER SAVINGS POTENTIAL IN REAL

TIME.

CONTACT US.

INDEED, THE LARGEST CONTAINER LINER,

MAERSK, HAS NOT BEEN IMMUNE TO THE MARKET CHALLENGES BUT CAN IT AFFORD TO DEFEND ITS

POSITION?

FOR THE THIRD QUARTER, PROFIT DECLINED 43%. THE CULPRIT FOR THE STEEP DECLINE WAS LOWER CONTAINER FREIGHT RATES AND DEMAND. MARKET TRENDS SUCH AS LOWER RATES, OIL PRICES AND THE MISMATCHED CAPACITY HAVE TAKEN A TOLL ON REVENUE AND PROFITS FOR THE GROUP.

MAERSK REORGANIZES FOR A STRONGER POSITION

IN THE SECOND QUARTER, MAERSK

ANNOUNCED IT WAS REORGANIZING THE

112 YEAR OLD COMPANY BY

SPLITTING IT INTO TWO INDEPENDENT

DIVISIONS; AN INTEGRATED

TRANSPORT & LOGISTICS DIVISION

AND AN ENERGY DIVISION.

THE TRANSPORT & LOGISTICS DIVISION WILL CONSIST OF MAERSK LINE, APM TERMINALS, DAMCO, SVITZER AND MAERSK CONTAINER. THE MISSION OF THESE BUSINESSES IS TO “ENABLE AND FACILITATE GLOBAL SUPPLY CHAINS AND PROVIDE OPPORTUNITIES FOR OUR CUSTOMERS TO TRADE GLOBALLY”.

AMONG THE GOALS OF THIS NEW DIVISION, INCLUDE:

MAERSK LINE – TO GROW MARKET SHARE ORGANICALLY AND THROUGH ACQUISITIONS

APM TERMINALS - FOCUS ON COST AND UTILIZATION

DAMCO AND MAERSK LINE - COLLABORATE TO DELIVER NEW INNOVATIVE CUSTOMER SOLUTIONS SUPPORTED BY SIGNIFICANT INVESTMENTS INTO DIGITAL TECHNOLOGY

MAERSK CONTAINER INDUSTRY AND MAERSK LINE - COLLABORATE ON TECHNOLOGY DEVELOPMENT AND EFFICIENT PRODUCTION PLANNING

THE GOALS ARE AMBITIOUS BUT ALSO NEEDED IN AN AILING OCEAN FREIGHT MARKET. AT THE SAME TIME, THE GOALS WILL BE COSTLY DUE TO THE ANTICIPATED INVESTMENTS MAERSK PLANS TO MAKE IN TECHNOLOGY AND POTENTIAL ACQUISITIONS.

WHILE CASH ON HAND IS AVAILABLE FOR THESE VENTURES, THE GROUP WILL ALSO NEED TO GROW ITS REVENUE AND PROFITS TO MAINTAIN THE NECESSARY BALANCE ON ITS FINANCIAL LEDGER.

PROFITABILITY WITHIN THE ANTICIPATED TRANSPORT & LOGISTICS DIVISION HAS BEEN A STRUGGLE WITH THIS YEAR POTENTIALLY GOING DOWN AS ONE OF THE WORST SINCE THE GLOBAL RECESSION. EFFICIENCY IMPROVEMENTS WILL BE NEEDED TO FIGHT OFF THE LOW RATES AND CAPACITY IMBALANCE.

MAERSK IN A POSITION TO WITHSTAND THE HEADWIND

THE TRANSPORT & LOGISTICS DIVISION WILL CONSIST OF MAERSK LINE, APM TERMINALS, DAMCO, SVITZER AND MAERSK CONTAINER. THE MISSION OF THESE BUSINESSES IS TO “ENABLE AND FACILITATE GLOBAL SUPPLY CHAINS AND PROVIDE OPPORTUNITIES FOR OUR CUSTOMERS TO TRADE GLOBALLY”.

TESTING THE USE OF BLOCKCHAIN TO REPLACE PAPER-BASED BILLS OF LADING

TESTING DRONES TO RESUPPLY ITS VESSELS WHILE ENROUTE

SIGNED A DEAL WITH BIG OCEAN DATA TO TRACK ITS APPROXIMATELY 630 OWNED AND CHARTERED VESSELS REAL-TIME VIA SATELLITE. MAERSK LINE WILL USE THIS INFORMATION TO OPTIMIZE THE PERFORMANCE OF ITS FLEET.

AS NOTED PREVIOUSLY, EFFICIENCY IMPROVEMENTS ARE A TARGETED GOAL FOR MAERSK.

THE COMPANY IS ALREADY MAKING SUCH CHANGES

INCLUDING:

THE OUTLOOK IS NOT PROMISING FOR THE OVERALL OCEAN FREIGHT MARKET. 2016 GLOBAL GROWTH HAS BEEN REVISED DOWNWARD TO 3.1% AND 3.4% FOR 2017 BY THE IMF AS ECONOMIC UNCERTAINTY REMAINS ACROSS ALL REGIONS.

THE LIKELIHOOD OF ANY IMPROVEMENT WITHIN THE OCEAN FREIGHT MARKET SEEMS DIM FOR THE TIME

BEING. HOWEVER, MAERSK WILL LIKELY BE AMONG THOSE PROVIDERS TO

WITHSTAND THE MARKET HEADWINDS.

HOW WERE OCEAN FREIGHT RATES IN Q3 2016? INDICATIONS

FOR 2017?

WATCH OUR WEBINAR

LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND

INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS

BUSINESS:

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