Maersk Boxes Photo 210476104 © Hieronymusukkel Dreamstime.com
© Hieronymusukkel

AP Moller Capital, the fund manager of APMM, appears to be supporting Maersk’s strategy of developing logistics capabilities to transform into a global integrator, and has signed an agreement with South African RCL Foods to acquire its frozen food logistics division, Vector Logistics.

Chairman Robert Maersk Uggla said Maersk “was on a journey” in its aspirations to be a global logistics integrator.

He said: “Many of our customers have primarily seen us as a shipping company on the world’s main shipping lanes, but since 2016 we have begun to pivot the company towards more integrated logistics offerings and to more inter-regional activities. And in 2022 we saw a 20% organic revenue growth in logistics.”

According to its website, Durban-based Vector Logistics was founded in 1960 and employees over 5,000 people, offering a “fully integrated, temperature-controlled network” via its 26 distribution centres and a fleet of 440 vehicles.

And, during a virtual AGM yesterday, Mr Uggla said the tailwinds for global shipping markets of the past few years “had turned into headwinds, with a challenging outlook ahead”.

Maersk’s operational profit of $31bn last year will see it return nearly $11bn to its shareholders, but with its 2023 ebit guidance being for a more modest $2bn to $5bn, future dividends will be substantially lower.

Mr Uggla said it was a “stark reminder” that “shipping companies continue to operate in an extremely cyclical industry” and added: “The exceptionally strong consumer demand triggered by the pandemic stimulus programmes had given way to an inventory overhang correction.”

He noted that the decline in volumes in the final quarter of 2022 saw the number of containers transported back at 2017 levels.

“Maersk’s customers need to prepare for continued vulnerable supply chains and, hence, will have a pressing requirement for resilient sourcing and logistics solutions,” said Mr Uggla.

He said there were “many different factors driving supply chain vulnerabilities and risks”, identifying geopolitics, climate change and labour markets as particular threats.

“The war in Ukraine and the growing conflict between the US and China have a big impact on trade policy,” said Mr Uggla adding that the “implications of climate change will have a huge bearing on industry regulations and policy which will hold far reaching implications for most industry, including our own the transport system”.

The third supply chain risk was linked to labour markets, he explained, where changes in ageing demographics, inflation and other factors could have an unbalanced impact on global transport systems.

Comment on this article


You must be logged in to post a comment.
  • Rajeev Kathuria

    March 30, 2023 at 2:58 pm

    This is important because to have the Different Stream of Revenue to stay afloat

  • Muhammad Tahir

    March 30, 2023 at 8:19 pm

    The acquisition of Vector Logistics by Maersk is a strategic move in the company’s plan to transform into a global logistics integrator. This move is in line with Maersk’s pivot towards more integrated logistics offerings and inter-regional activities, which has resulted in a 20% organic revenue growth in logistics in 2022.

    However, the outlook for global shipping markets is challenging, with headwinds replacing tailwinds, and a decline in volumes in the final quarter of 2022 resulting in the number of containers transported back at 2017 levels. This highlights the cyclical nature of the shipping industry, and Maersk’s operational profit of $31bn last year will see it return nearly $11bn to its shareholders, with future dividends expected to be substantially lower.

    Mr Uggla’s identification of supply chain vulnerabilities and risks, including geopolitics, climate change, and labour markets, is an important reminder that companies, including Maersk’s customers, need to prepare for continued vulnerable supply chains and require resilient sourcing and logistics solutions. As Maersk continues its journey towards becoming a global logistics integrator, it will need to navigate these risks and uncertainties to ensure its continued growth and success.
    Visit SRD SASSA

  • Adrian Pinna

    April 04, 2023 at 12:13 pm

    Robert Uggla has hit the nail on the head