- A.P. Moller Maersk will merge Maersk Line and Damco into one organization at the beginning of 2019 in an effort to provide "end-to-end logistic solutions for cargo owners," the company announced Wednesday morning.
- Damco's freight forwarding businesses will continue to operate as a separate entity, allowing the company to "focus fully on freight forwarding."
- Three of A.P. Moller Maersk's regional carriers — MCC Transport, Sealand and Seago Line — will merge as "SeaLand - A Maersk Company," beginning Oct. 1.
Those in the supply chain industry expected for years that Maersk would announce a significant restructuring of its business this month. As with any highly anticipated announcement, rumors have circled around what would be Maersk's next step.
The announcement this morning confirms what many analysts have speculated — that logistics unit Damco would merge with Maersk Line, renewing a focus on supply chain service offerings. While some analysts also expected Maersk to announce a realignment with APM Terminals, the division was not mentioned in this morning's announcement.
In the past few years, A.P. Moller-Maersk has spun off and divested many of its oil businesses to concentrate instead on logistics.
"Logistics is a segment where we want to grow," Vincent Clerc, chief commercial officer for A.P. Moller-Maersk, told investors on a call last month. Clerc will head the integrated Maersk Line-Damco organization.
With the merging of the two divisions, "This is the next step in the Maersk journey to become a global, integrated container transport and logistics company," the company said.
The realignment of Damco to focus only on freight forwarding comes at a time when supply chains are increasingly streamlined. Many shippers and carriers have sought to eliminate intermediaries such as distributors and freight forwarders.
Damco added Twill to its toolkit in April 2017, allowing it to compete with emerging digital freight forwarders. "We are sitting with a product ... that is making [a customer's] supply chain easier and faster," Damco CEO Klaus Rud Sejling told Supply Chain Dive in an interview last year. Starting next year, Sejling will be Head of Maersk's Logistics and Services Products, reporting to Clerc.
"A.P. Moller - Maersk aims to build a well performing and global freight forwarding business that can grow and prosper," the company said in today's announcement.