APM Terminals in Salalah, Oman is seeing a lot more Maersk Line containers than it did only a year ago. The number of moves is up by 80% after Maersk Line transferred volumes from nearby terminals.
Both parties are gaining financially, adding a combined USD 5 million on the bottom line every year, and the case works well to illustrate how businesses across Maersk's Transport & Logistics division can find synergies and money by working together.
"The potential to make deals like this has always been there," says Jan Esbech, Head of Global Marine & Inland at Maersk Line and the co-head of the 'collaboration team' that has been set up between Maersk Line and APM Terminals.
"We needed the willingness to compromise, which we have now where we are working together to make as much of Maersk Line's volumes as we possibly can," he adds.
Bo Lindberg Andersen, Global Client Director at APM Terminals and Esbech's counterpart in the collaboration team, explains that the Transport & Logistics division has essentially seen Maersk Line and APM Terminals turn their relationship upside-down:
"We used to be two very individual companies, a seller and a buyer, which gave us two completely different sets of incentives and a lot of internal competition," he says. "With a dedicated collaboration team and combined targets, we've been able to set a new tone and help push a new way of doing things."
Change takes time
Last year, when A.P. Moller - Maersk announced its intention to become an integrated container shipping, logistics and ports company, it broke with a long-standing principle of operating each business as a stand-alone company. By integrating the businesses and working together, synergies like the case in Salalah and others across the division, are expected to improve the division's return on invested capital by two percentage points over a period of three years starting in 2017.
"Last year's financial result was unsatisfactory, and we are in a recovery phase. The result from the first quarter shows that we are on the right track. The same goes for the second quarter where we are beginning to see some cost-synergies and collaboration wins start to kick in," says Jakob Stausholm, Chief Financial, Strategy & Transformation Officer at A.P. Moller - Maersk.