APM Terminals – a little gem hiding in plain sight
A ‘blankety blank’ cheque book and pen…
The direction of APM Terminals’ move into hinterland container logistics services became clearer this week, after it announced plans to invest in warehouse facilities to serve shippers and freight forwarders.
The company has a vision of becoming a port services integrator and, on the sidelines of this week’s TPM conference in Long Beach, chief operating officer Henrik Lundgaard Pedersen said the next phase of its investment programme would be focused on serving its landside customers – shippers whose cargo passes through its global facilities.
“We have four main container terminal expansion projects under way – Moin in Costa Rica, Vado in Italy, Tema in Ghana and Tangiers in Morocco – and once these are completed, our focus in terms of capex will be on optimising our terminals and the way they interact with the hinterland.”
Whereas previously the operator’s inland services were run by just one executive, a new team has been hired, headed by Dries van Dongen as global head of landside customers and inland services.
“When [our parent company] Maersk talks about being a global integrator of container services, that is end-to-end. Our part of that is to make sure the cargo moves in and out of our terminals on the landside in the most efficient way,” Mr Lundgaard Pedersen said.
At its Buenaventura terminal on Colombia’s Pacific coast, shippers deliver coffee and sugar exports in bags, and APMT has been stuffing these into containers in the terminal yard.
“Similarly, we have de-stuffing at Asian container import yards before the cargo is released inland.”
In contrast, in Chile and Peru the company has set up operations to stuff containers at shippers’ premises – a copper mine in Chile and at a large food plantation in Peru – before they are transported to the sea ports.
This has led to supply chain coordination between different parts of the Maersk group: at an inland APMT facility in Thailand, there are Damco employees working on container logistics on behalf of some automotive suppliers.
“Ultimately, it doesn’t really matter whether it is a Damco or APMT employee performing the tasks.”
The initiative comes as the company seeks to secure cargo flows through its facilities, and Mr Lundgaard Pedersen revealed that landside problems at some terminals had led to some shippers refusing to contract with lines that called at those ports.
“We had an instance this year when a shipping line said they wouldn’t be using our terminal because their largest customer didn’t want to use our facility.
“The line allowed us to talk to the shipper, propose new solutions and eventually we won that service,” he told The Loadstar.
But he was quick to dismiss possible carrier fears around allowing AMPT to talk to their shipper customers, given that the terminal operator is part of the same group as Maersk Line.
“Shipping lines are allowing us to talk to their customers, and the day we use that position to swing a BCO to Maersk Line is the day we become a very different company. Around 40-45% of our global business is with Maersk Line and if Maersk Line was our only customer we would go bankrupt.”
He said that capex would now be focused on building warehouses, both adjacent to its box terminals and at inland locations, as well as investing in smaller handling equipment to operate those facilities and IT to process logistic movements as its inland services build up.
Although it has yet to disclose separate financial results for inland services, Mr Lundgaard Pedersen indicated that this would change at it its next quarterly results.
Comment on this article
gunther ginckels
March 10, 2018 at 3:18 pmThe analysis is correct. The take-over of Sealand in 1999 doubled the number of terminals being part of the “Line” not handling competition showing an average asset utilisation of less than 40% and no view on the financial performance of each individual terminal. APM Terminals as an independent was born. The history of DAMCO (MCCC, Maersk Logistics etc…) is different where the “Line” people always considered this a “Forwarders” activity with little affection. Placing these activities in the market was at the time a necessary move resulting however in a widening gap between internal expectations and deliverables. Handing over “Land Based Activities” to APM Terminals was than a mistake as they had no clue what to do with it and started – under pressure of bottom line targets – selling-out inland terminals, railway companies and haulage units. Re-consolidating these 3 business activities is now the next necessary move and long due. It will cost but they do have the cash in the draws ready to be used. Key to this is the ICT platform where Maersk is partnering with Microsoft and IBM. That is a very strong alliance. With Dries van Dongen’s background from P&O-Nedlloyd, DAMCO, Maersk Line and APM Terminals and subject to boarding the right team, this can only go the right way. Success.
Budha Majumdar
March 10, 2018 at 6:55 pmI am really at a loss as to why gateway terminal operators feel ‘shy’ to speak to BCOs in their hinterland area.
Some feel the need to get permission from the shipping line first?
Why?
Are these gateway terminal operators not themselves providing services to the cargo owners in the country where they are domiciled?
Sometimes charging storage and other fees?
Are they not the terminal’s customers?
Do these terminal operators not work hard at ensuring that the goods pass through the port/terminal as safely, swiftly and efficiently as possible, on behalf of the cargo owner?
Have they not read the recent articles by Drewry and Ince &Co warning them of upheavals around the corner and urging terminal operators to get to know and get close to the cargo owning customers and ensure that they are being provided with the right services they need.
Have they not read Martin Christopher’s articles on supply chain competition trumping port competition.
Do they need reminding that in order to retain competitive advantage, terminals need to ensure they remain an integral part of the most successful supply chain.
And who determines the most cost-effective and efficient supply chain?
Why, it is the cargo owner !!
So, why would you not get to know them and of their needs ?
gunther ginckels
March 11, 2018 at 3:31 pmAsk yourself: “who pays the bills of the Terminals”? Right, the shipping lines. And shipping lines traditionally assume the position for their customers – even to an extend that on the landside they accept MICH (Merchant Inspired Carriers Haulage). And what does that mean? The shipping line is paying for the landtransport and delivery while the merchant imposes the transport company and pay for the one-way inland delivery. That does not mean that your questions are not the right ones to ask. You ask all the right questions and I fully agree and for years attempt to persuade terminals to take control over the flows through a.o. extended gate concept and by offering rail and barge services linking inland terminals with ocean terminals. Imagine the efficiency gains when port container terminals take control from ships stow till door delivered and v.v.? This can reduce cost of port facilities, tailor flows to ocean vessel calls and improve facility management.