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Maersk to announce major corporate reshuffle

Maersk will very soon present a major corporate reorganization as the culmination of two years of divestments and streamlining, several sources tell ShippingWatch.

Photo: Ritzau Scanpix/Søren Bidstrup

Maersk Group CEO Søren Skou will soon present a corporate reshuffle that could mark a culmination so far of the efforts to create the new Maersk.

A series of well-informed sources tell ShippingWatch that the Maersk executive team has met at the Maersk Leadership Center north of Copenhagen to put the final touches on the plan which will reorganize key functions at Maersk.

This process has been largely spearheaded by the Maersk Executive Board, which consists of Skou, COO Søren Toft and APM Terminals CEO Morten Engelstoft as the three undisputed leaders.

Among the 80,000 employees there is naturally a lot of interest in particular in learning what the plan could implicate for the number of jobs, work places and work content, just as they are keeping an eye on which roles the executives will play. The group will almost certainly announce changes in this regard.

Close to four years have passed since Maersk Line announced its most recent large-scale layoffs, in November 2015, when the company said that 4,000 of the total 23,000 onshore positions would be eliminated ahead of 2017, "when digitalization and organization changes will be fully implemented," as Maersk put it at the time.

Digitalization costs jobs

The past two years have seen radical changes since the time when Maersk was a shipping and oil conglomerate. Pretty much all of the group's oil businesses will soon have been sold off, and instead the company has acquired and trimmed its future business area, container and logistics. As recently as the latest press conference following the group's half-year report three weeks ago, when Skou reiterated the ambition to continue efforts to boost efficiency, and he did not hide the fact that the comprehensive digitalization that has been launched will impact the number of jobs.

Since Søren Skou took over the dual role as CEO of Maersk overall and CEO of core business Maersk Line in June 2016, the group has taken organizational steps toward building the future Maersk. First came the creation Transport & Logistics, which marked the path away from oil. And most recently, this year, came the accountancy split of the liner business with the "Ocean" unit  focusing on major container tradelanes and key terminals.

As such, the next step could very well be related to a new reorganization of the companies whose roots date back decades, for instance Maersk Line, APM Terminals, Svitzer, Damco and container manufacturer MCI.

According to ShippingWatch's sources, the goal is to present the plan "before long," perhaps even as early as September.

Old management gone

Furthermore, the plans come at a time when Skou by now has cleared the table for the chief executives who previously headed the core businesses. The best example of this is the clearing out of the old executive team that has occurred at APM Terminals, which is now headed by the duo of CEO Engelstoft and COO Keith Svendsen.

The last senior executive from former CEO Kim Fejfer's team, Henrik Pedersen, left the terminal operator a few months ago and, according to ShippingWatch's sources, his position has not been refilled.

APM Terminals executives scattered in all directions 

The efforts to settle the final details of the new plan have been kept close to the vest at executive levels at the group. In general, external communication from the various companies in the new, combined container and logistics business has been more limited for some time now while work to streamline the business has been underway. APM Terminals' communication unit in The Hague has thus been shut down, and the tasks have been taken over by Maersk's headquarters in Copenhagen.

The plan should also be seen in light of the mandate Skou received from shareholders and, above all, the Maersk family, when he took over the reins, namely to get more out of the investments already made and spend less money on acquisitions, port expansions and container ship newbuilds. Maersk must be made more efficient, so that it can, ultimately, provide bigger returns to the owners.

Or as the Group CEO said at the recent press conference when he was asked about the company's share of the global container market after its acquisition of Hamburg Süd less than a year ago.

"Our ambition is to maintain our current market share of close to 20 percent. This gives us the economy of scale we need. We won't get more economy of scale if the market share increases to, for instance, 22 or 23 percent."

In relation to the half-year report, Maersk lowered its EBITDA guidance for the full year to USD 3.5 to 4.2 billion, according to a statement.

In a comment to ShippingWatch, Maersk says the following:

"Maersk is on a transformation journey that will take 3-5 years to complete. The transformation entails integrating our container shipping and logistics businesses into one, focused company while finding separate solutions for our energy businesses. Within container logistics we are progressing well with the integration of our transport and logistics businesses including the integration of Hamburg Süd, synergies between APM Terminals and Maersk Line and also the integration of support functions across the brands."

English Edit: Daniel Logan Berg-Munch

Just three container carriers booked profits on operations in second quarter 

Søren Skou: "We're now back as a growth company" 

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