Interview – Maersk’s ‘from factory to sofa’ e-commerce logistics strategy

Danish shipping giant A.P. Moller – Maersk is aiming to create a world-leading end-to-end logistics service which aims to reduce the complexity of the supply chain and create a highly visible delivery experience, Christoph Stork, Global Managing Director of E-Commerce Logistics, told CEP-Research exclusively.

Integration of recent acquisitions and creation of an asset light last mile delivery offering are just some of the priorities for this year, he revealed in an interview.

Worldwide M&A deals

Maersk is well on the way to creating what it calls a “truly integrated logistics offering” following a spree of acquisitions last year and early this year. The most recent of which was the US$1.68 billion purchase of US transport and final-mile delivery firm Pilot Freight Services in February.

The Pilot acquisition followed a US$3.6 billion deal to acquire LF Logistics, which was finalised in January and a further three acquisitions in the second half of 2021, including US-based B2C parcel delivery and fulfilment services provider Visible Supply Chain Management in August (now rebranded to Maersk E-Commerce Logistics), parcel delivery services firm B2C Europe Holding in October, and HUUB, a Portuguese cloud-based logistics start-up specialised in technology solutions for B2C warehousing for the fashion industry, in September.

In November last year, Maersk also strengthened its global air freight offering with the acquisition of German freight forwarder, Senator International, and announced the purchase and leasing of additional freighter aircraft to bolster its own controlled air network operations.

CEP-Research has previously reported that Maersk’s recent investments have been possible thanks to its record financial results in 2021. Last year, revenue was up 55% to US$61.8 billion while EBITDA tripled to US$24 billion and free cash flow was US$16.5 billion.

Against this background of an ambitious diversification and acquisition strategy to create a world-leading end-to-end logistics offering, Christoph Stork explained more about integrating the recent acquisitions, the group’s “factory to sofa” e-logistics approach, and its plans to develop a global asset light last mile offering.

CEP-Research: what is Maersk’s overall logistics strategy?

Christoph Stork: Our overall strategy is to create an integrated supply chain for our customers. We want to reduce the complexity of supply chains for our clients to make their lives easier. Our customers should concentrate on their core businesses and leave the logistics and the supply chain to us. For us, this is about creating an end-to-end experience for our customers, including visibility, data, and tech, so they don’t have to worry about their supply chain.

How do you plan to integrate all the recent acquisitions into a single logistics network?

We are acquiring different capabilities which we will combine into different Maersk products. The different products will come together and connect as solutions for our customers, so that they have a single integrated offering. Of course, Maersk is a strong brand with a good approach to customer experience, and over the years has gained the trust of its customers, so we plan to integrate all the new companies going forward to benefit from this.

Will all new acquisitions be rebranded?

It is a decision depending on the different brand, but we have just rebranded Visible Supply Chain Management following the acquisition in August last year, for example, so that should give you a good idea that certain acquisitions will be rebranded.

What is your strategy for the final mile delivery of B2C shipments?

We are taking an asset light approach for the delivery of last mile shipments. We want to be able to offer last mile delivery for our customers as part of the integrated overall supply chain. This means that when customers buy ocean containers from us, we want to be able to offer them clearance, warehousing, and delivery – right down to the final mile. As the importance of e-commerce grows rapidly, last mile delivery becomes even more significant in the end-to-end supply chain. Our motto for e-commerce delivery is “from factory to sofa” and we are working building this.

Why are you choosing asset light for last mile delivery, rather than acquiring asset-based companies so you have the last mile under your own control?

For the last mile the plan is to offer a strong tech platform where we can integrate different carriers and provide the right parcel offering to our customers going forward. This is why we acquired B2C Europe and Visible in the US, for example. In Europe we provide access to more than 100 carriers and a handful in the US. We will continue to do this in the future. We want to become a trusted partner for the couriers on the last mile, but we don’t want to get into competition with them.

Our approach to last mile delivery is different to our approach to warehousing for example, where we have announced the acquisition of asset-rich companies such as LF Logistics earlier this year.

What are your main priorities for 2022?

Our main priorities are of course the integration of the acquired companies – both tech-wise and people-wise. We also plan to start talking more to our customers about our end-to-end supply chain offering because right now customers are very open to talk about these kinds of things based on their experiences during the COVID-19 pandemic where supply chains were heavily damaged. Today, customers are looking for this kind of integrated approach and as a result we are starting more and more integrated collaborations with our customers on the supply chain.

Readers can learn more about Maersk E-Commerce Logistics here.