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Maersk Line power struggles impacted customers

The Maersk Line streamlining process was opposed by leading employees, according to a new book by SeaIntel partner Lars Jensen. "It had serious negative consequences," says Tomas Dyrbye, former Area Manager at the carrier.

If one thinks the streamlining process that has taken place at Maersk Line in recent years passed without much notice, or that the carrier's employees worldwide stood at attention when orders came in from the headquarters in Copenhagen, then one should read the new book "The Culture Shock in Maersk Line."

The book is written by Lars Jensen, CEO and partner at SeaIntel, and an employee at the Maersk group for 12 years. He has interviewed more than 100 employees, all of whom provide their views on how major acquisitions of competitors such as Sea-Land, along with changing strategies, helped shaped the culture of Maersk Line over the last two decades. And the book also tells the story of how some of the carrier's top executives directly opposed the changes launched by the headquarters in Copenhagen, aimed at creating a more modern and efficient Maersk Line.

Here is an excerpt from the new book on Maersk Line

This was not least the case with the implementation of the Starlight strategy, which began in 2004 and which caused unease among the carrier's Area Managers, as they had till that point acted very autonomously. The carrier established new organizations in the 17 designated area locations, APM Terminals moved its headquarters to the Hague, in the Netherlands, and Maersk Logistics was restructured. Challenging the Area Managers, the so-called "Kings" of Maersk, was originally not part of the Starlight strategy, but more an actual consequence of the business strategy. But the opposition was clear.

Difficult challenge

"In some countries local management simply continue with business as usual. In other countries, they challenge headquarters, and promote reasons as to why their specific country has special circumstances warranting an exemption. In some cases, it is even seen, that unwelcome messages are re-interpreted on the way from Copenhagen to the country in question," as revealed in the book.

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Former Area Manager at Maersk Line, Tomas Dyrbye, experienced this development himself when he was heading the Nordic Area:

“At the outset I believed in the concept, and thought it would be quite simple to implement. However, it turned out to be exceedingly difficult, and it had serious negative consequences. As an example, the Danish country organization was directly opposed to the planned changes and actively worked against it. I also realised that the change began to tamper with the joy and pride associated with the work. For many managers abroad, myself inclusive, the ability to influence your work directly, was a source of significant job satisfaction. As Area Manager, you ended up between a rock and a hard place. In the Area, we were supposed to make a range of decisions, and hired staff to assist with this, but at the end of the day, it turned out that all main decisions were taken at headquarters. Many did not take well to this change, as it challenged the ability to directly influence developments, and through this be directly responsible for the business. As I experienced it, it resulted in people distancing themselves from responsibility for their own actions.”

Prioritizing customers

The Starlight analysis had shown that the smaller customers were costing Maersk Line significant amounts of money, and the Area Managers were thus instructed to prioritize their efforts. Some considered this fact in itself a challenge to the traditional Maersk principle that everyone could expect a second-to-none service.

In some countries, Maersk even went so far as to inform certain smaller customers that the company was no longer able to visit them, though adding that these decisions had been made back at headquarters in Copenhagen. The result was that some of the smaller customers experiecned that Maersk Line had deliberately deselected them.

Later today, ShippingWatch brings an exclusive excerpt from the new book's chapter on "Starlight."

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