Maersk is accelerating its plan to shift from a container shipping giant to an integrated logistics company following its strong performance during the pandemic, according to statements by CEO Soren Skou.
Maersk, which handles one in five containers shipped worldwide, intends to expand its onshore logistics services, hoping to gain a bigger share of the supply chain from existing shipping customers such as Puma and Walmart.
“I don’t want to put a date on it, but I’m sure our logistics business has potential to become as big as shipping measured in turnover,” Skou said.
While container shipping, which accounted for 73% of revenue last year, will remain the company’s focus, inland services, such as shipments from factories, customs services and warehousing, will be its “growth engine,” Skou said.
“The pandemic has certainly underscored the value to our customers of doing business with a company that can take responsibility for everything from factory to final destination,” Skou added.
Maersk is targeting like-for-like growth in its logistics business of more than 10% over the next five years, supplemented by future acquisitions that could reach $1 billion, he said.
“We see a huge opportunity in inland logistics,” Skou said, noting that its 200 largest container shipping customers currently place only a “very, very small fraction” of their inland logistics with Maersk.
Last week, the Copenhagen-based company posted a record quarterly profit and said it expected the exceptionally strong performance to continue for the rest of the year, driven by high demand for containers to meet a surge in orders.
Skou told investors on Tuesday it expected a return on invested capital (ROIC), a measure of how well a company uses capital to generate profits, above 12% from 2021 to 2025, compared with an average of 2.3% in the previous five years.
The focus on inland logistics could see Swiss rival MSC overtake Maersk as the world’s largest container carrier during the second quarter of next year, said Hua Joo Tan, an analyst at shipping consultancy Liner Research Services.
“If MSC ends up having more capacity than us, it’s not the end of the world,” Skou said. “That’s not how we think about being No. 1. Our goal is to have a much higher volume of business per container we ship.”
Maersk owns or operates some 710 container vessels with a total capacity of 4.1 million containers and operates 66 container ports worldwide.