- A.P. Moller - Maersk will reorganize into two independent divisions, with one focused on transport and logistics while the other handles energy, the company announced in a press release this week.
- The new transport and logistics division will "focus on growth and synergies" and consist of Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry.
- The company emphasized it saw acquisitions as the "preferred option" for making investments, and Maersk Line would specifically focus on acquisitions for growth.
In the business world, company reorganization is a sure sign of a struggling business. The signs of A.P. Moller Maersk's struggles were there, of course — the company's revenue streams revolve around the shipping and oil industries, both of which are suffering worldwide.
Of course, reorganizing means the company is aware and proactively addressing the issue, and stock markets rewarded the move as the company opened 4.2% higher the morning of the announcement.
Supply chain managers can glean two lessons from the announcement: first, shifts in the market can affect anyone, even the largest shipper in the world; and second, the shipping industry as a whole will change drastically over the next few years.
To the first point, the company says it best in last year's annual report: "The low global economic growth with resulting low container freight rates and oil price has fundamentally changed the short-term outlook of almost all our businesses." The company adds it will focus on short-term cost and efficiency programs in order to stay ahead of competitors.
Based on the press release, this short term strategy is — at least for the shipping industry — growing market share through acquisitions and company synergies. The Dutch company is not alone in this endeavor, however. The Hanjin crisis served as a wake up call for many shippers, and rapid consolidation appears to be on its way.