Once again, the foyer of the Tivoli Hotel in Copenhagen was decorated with a seven-pointed star against a blue background – the familiar Maersk logo.
Only one month has passed since the hotel set up rooms for Maersk Group's presentation of the future Maersk at the annual capital markets day, which had previously been held at the hotel in the old freight area.
This week, analysts and journalists from around the world have been denied access to the event, where, according to sources speaking to ShippingWatch, attendance counted 500 managers from the executive level and up within Maersk Transportation & Logistics.
This is the first time that so many directors have been assembled at the annual seminar, which until now had been held separately by Maersk Line and APM Terminals respectively. In this way, this year's management seminar is a clear sign of the changing times at Maersk, where the companies, which will carry Maersk into the future, have not just come under the same division, but will work yet closer together.
The timing and the task at hand are also critical for the many managers. Although Søren Skou, CEO for both Maersk Group and Maersk Line, took the stage at the investor meeting Dec. 13 and explained in broad terms how Maersk is concentrating its business on the container-related companies, it is not until now that the colossal task of operating simultaneously and creating synergies between the companies can be launched.
Therefore, all relevant managers from Maersk Line, APM Terminals, Damco, Svitzer, and Maersk Container Industry have gathered in Copenhagen to kick-off the largest 'rethinking' effort taken on by a Danish company in a long time.
Short and long term strategy
According to ShippingWatch's information, the event revolves around vital discussions on short and long term strategy, including the growth goals which the new Maersk will strive for.
Two companies – and their impending closer collaboration – will end up defining whether Skou and the Maersk board's decision to bet on transport and divest of the energy arm was the right one. Because ultimately, the new and closer collaboration between the world's largest container carrier Maersk Line and the world's third largest port and terminal company APM Terminals, that the synergy effects should shine through.
This is also the concern of the new management team at APM Terminals set up by the new CEO, Morten Englestoft. These include one of the top executives in Maersk Line, Keith Svendsen, who from mid- February will serve as COO of APM Terminals. Also one of the former regional managers, Peter Søndergaard, APMT's former head of Africa and the Middle East, has taken a new leadership role after Engeltoft's accession.
He will be responsible for joint ventures, including the major Russian port company Global Port. This means that management will no longer maintain the geographic focus and responsibility that it used to, but will instead be organized according to the most important and fully-owned ports making up the backbone of Maersk's global network, and then followed by the other ports.
The reorganization of management in The Hague and the adjusted business focus makes sense in light of the fact that a consolidation of Maersk Line and APM Terminals will allow the two companies in particular to profit on the most important port hubs.
CCO Jakob Just-Bomholt resigned in response to Maersk group's strategy shift, taking up a CEO position with Danish emergency services organization Falck, and has since been replaced by Henrik L. Pedersen, the company's former CFO. Meanwhile, Joe Nicklaus Nielsen has left his role as head of port investment to join Maersk's holding company, A.P. Møller Holding, so altogether there is a new management to deliver the goods.
There is also a rather new executive team, particularly if looking back at Maersk Group's history. The same team greatly influenced the capital markets day in December, while a few days prior the team delivered its pièce de résistance – the acquisition of Hamburg Süd, considered a rather expensive deal but ultimately so attractive that Maersk Line, rather than a competitor, ended up with the German carrier.
Besides Skou as the figurehead, Maersk Line's executive team consists of CFO Jakob Stausholm, COO Søren Toft, CCO Vincent Clerc, and Head of Corporate Affairs Caroline Pontoppidan.
Five areas of effort
Maersk itself estimates that the synergy within the transport company could raise returns on the invested capital by two percentage points, in the following ways:
- Maersk Line and APM Terminals need to integrate their network more closely
- Damco's inland services must be utilized more
- In the future, Maersk Line and APM Terminals' activities in transshipment ports need to be combined into one company.
- MCI's finances need to be improved
- Cross business sales need to be strengthened in general
In an interview with ShippingWatch in December last year, Engelstoft explained that he will go through the entire portfolio of ports and side activities and that full ownership shares are not sacred to him. Divesting of non-strategic activities and reducing ownership shares in ports could be possibilities.
"It is positive that APM Terminals has built up a broad portfolio of activities over the years. Some are good business and some of the ones which are losing money today were once good businesses. Now it is about optimizing the palette, we have. We should look into whether the non-strategic activities we have, should be cut. However, I am also open to looking at the joint ventures we have around the world and whether it makes more sense to reduce a minority stake, if it creates the opportunity to invest money in those places we are banking on. This is definitely something we will start work on and which we will be more active in," said Engelstoft to ShippingWatch.
The Maersk Group will publish its annual report on Feb. 8.