Maersk folds Damco business line into main logistics and services unit

Shippers will notice changes at containership giant A.P. Moller - Maersk in coming months, as the Danish company announced yesterday that it would combine its Damco air and less-than-containerload (LCL) offerings with Maersk’s logistics and services products.

In related reorganizations, the company will also:

• integrate its Safmarine brand into Maersk to enhance customers’ access to the global integrated offering, 
• introduce a “simplified and customer-centric” global Ocean & Logistics organization, and
• bring the back offices of Maersk and Hamburg Süd closer together into more customer-centric teams, although those two units will continue as two separate brands with a differentiated service model.

The moves are meant is complement the parent company’s end-to-end offering and to improve customer experience, Maersk said. Due to the changes, the Safmarine and Damco brands will no longer be marketed by the end of 2020. According to published reports, the new strategy will result in job cuts, but Maersk has not specified how many employees may lose their employment.

According to Maersk leaders, the four changes will help the company become an integrated container transport and logistics business, connecting and simplifying customers’ supply chains. “Our customers are at the heart of our vision. Their evolving supply chain needs are increasing the demand for multiple modes of transport and to meet these needs, we’re bringing our company’s expertise and capabilities even closer together,” Vincent Clerc, Maersk’s CEO of Ocean & Logistics, said in a release. “Taking these steps are key to accelerating our transformation.”

In another impact of the reorganization, Maersk said it will no longer offer the Ocean full-container load (FCL) Multi-carrier product—also known as a Non-Vessel-Operating Common Carrier (NVOCC) service—saying instead that it will use its own assets instead of acting as a freight forwarder.

Maersk said that Damco “has demonstrated significant value to customers in the Air and Ocean LCL space” since focusing purely on freight forwarding in 2018. That track record convinced Maersk that its service could be greatly enhanced with the expansion of multiple modes of transport. From the company’s point of view, the integration of Air and LCL into Maersk will help meet these needs and give businesses access to greater scale as well as a simplified, connected, and agile experience under the Maersk brand.

“Businesses need Air and LCL products to connect their supply chains and with these offerings firmly placed in our global integrated portfolio, we aim to serve our businesses better and more efficiently across their supply chains,” Clerc said. “Our colleagues in Damco have delivered a remarkable effort under challenging market conditions, serving customers through focus, discipline and expertise which will now be a strong asset for our customers in Maersk.”

A.P. Moller - Maersk announces changes in Ocean & Logistics to enhance customer experience. The Safmarine brand and Damco’s Air and LCL will be integrated into Maersk’s logistics and services products to complement its end-to-end offering. Learn more: https://t.co/ooyfWSFL8r pic.twitter.com/SoqJnekpXF

— Maersk (@Maersk) September 1, 2020