Exploring Maersk’s new ocean network: Perspectives from Ocean and Terminal Hub leaders

👩 Host: Good morning, good afternoon, and good evening to all of you joining us online today. Welcome to this media briefing about the network of the future and the new ocean network being introduced by Maersk and Hapag-Lloyd through the Gemini Corporation. With me here in the studio today, I’m joined by Johan Sear, who is heading Maersk’s ocean business, and also Michael Jensen, who is the head of the APM Terminals hubs. Welcome to both of you!

🕴️👨‍💼 Johan & Michael: Thank you.

👩 Host: So, just to get us started here, we’re only a few days away from the launch of this new network on February 1st. How is it to be in your shoes today?

🕴️Johan: I mean, the last 12 months have been a massive preparation task for our teams and for Hapag-Lloyd. So now we are there, and I’m really just excited to see this new network coming live.

👩 Host: How about you in the terminals?

👨‍💼 Michael: Well, I can’t wait to get started. Johan talks about the 12 months—I mean, this has been part of my life, on and off, for the last 5 years. So we’re all excited. We’ve planned a long time with the terminals, and when I speak to the terminals in my regular contacts with them, they said, “Just bring it on, we’re ready.”

👩 Host: Well, thank you for setting that scene to all of you. We’ll spend the next 45 minutes diving deeper into all the details of the planning, why it was decided to redesign the network, and so forth. And then, of course, we’ll see this through the APM Terminals and the Maersk perspective. And then after the introduction, we’ll turn to you guys and have the questions. I’ll get to how that works practically later, so stay tuned for that. But first of all, let’s turn to the two gentlemen and have the introduction about this new network. Just to get us started, as you said last, Michael, we’ll have to go back a few years before to explain what has happened here. What was it that made you decide that Maersk needed to redesign its ocean network?

🕴️Johan: As the reason why we have to go back a few years is that, if you look at the network we are sailing today, it’s basically the network that was introduced 10 years ago, when we joined the 2M Alliance. We, together with all of the other players in the industry, had to face this next size of ships—with the big sizes that we have today. So at that time, we had these big ships coming in, and all of our focus was on how to get them on the network and basically to bring down the unit cost that came from those. You can definitely argue that that has been successful from a unit cost perspective. What we have also seen over the course of the last 10 years is that operating these extremely large ships on this type of network has added a lot of pressure on the ports. And together with the volatility that we have seen in the world impacting us—also in the last five years—reliability has suffered. So it’s been very hard for us to sail those large ships on this network with proper reliability.

👩 Host: And turning to the ports, how have you experienced the issue that you wanted to solve from a terminal operator perspective?

👨‍💼 Michael: You can say the congestion in ports impacts the schedule of reliability and so on. It also has a ripple effect on the next ports. So if there is a delay in one port, then the likelihood of actually coming into the next terminal as per the plans is lower. And if there’s one thing that terminals need, it is that regularity and that predictability to get the ships—particularly in a hub—in the right sequence. Then you can operate. So it was increasingly challenging because when ships didn’t come as planned, then the flow of containers didn’t go as planned. Then all of a sudden, there were a lot of boxes at the terminal, and that slowed down the productivity, and that adds to the congestion. So it’s kind of a vicious circle. It’s about breaking that vicious circle, I would say.

👩 Host: And together with Hapag-Lloyd, you have set the ambition to reach a reliability of about—above 90%—once the network is fully phased in. Why do you think that’s so important to the customers?

🕴️Johan: Reliability is certainly a lot of important thing in the dialogue we have with our customers, and ultimately it’s around getting their containers there on time so they can reduce the cost associated with delays, which could sit in the form of buffer stock or emergency transportation—that more expensive mode. So that’s what matters for the customers. And you know, today, if we look at the Canal report that has just come out again for the months of last year, we are simply put in a position where only one out of two ships—and thereby also containers—are arriving on time. So we have set this ambition of 90%, which is a very big difference from where we are today. But if you look at other industries, it’s not an unreasonable expectation to have from our customers that this is the level we need to get to. And that’s basically the level we believe it will take in order for them to remove some of the cost that is right now associated with ships arriving delayed.

👩 Host: Thank you both for setting that.