Logistics

After last year’s bold measures, Maersk Line reports improved reefer yield for less volume with greater focus on customers. 
During his presentation at Cool Logistics Global in Rotterdam, Thomas Eskesen, Maersk Line’s Global Head of Reefers and Special Cargo, concluded that where the reefer business is concerned the operating margins were insufficient to warrant billion-dollar future investments in the sector. Reflecting on key points learned from their high profile Revenue Recovery restoration program announced a year earlier, he remarked that “For years, inflation and increasing bunker prices were not reflected in the reefer rates.” 
Despite well-documented cost savings and organizational restructuring to cut costs from the system, we were still not achieving a profit anywhere near our capital costs.
Thomas Eskesen: “If we wanted to stay in this business and continue to invest in the high quality products demanded, we needed to do something different and ask customers to pay more.” Initially, this measure caused shock and disbelief, but eventually it led to customers paying increased rates, thus improving total reefer yield for less volume. As expected, Maersk has lost some market share and expects to end 2013 with a loss of 10 percent in volume.
Interestingly, in addition to the better reefer yield, there have been other favorable side-effects. “Our ability to deliver on our commitments and promises to customers has improved. Data shows, perhaps predictably, that Maersk Lines’ customer satisfaction scores improved steadily throughout 2013 after an initial nosedive in Q1. Maersk Line has kept its focus on long-term relationships with customers and is convinced that partnerships are the future value drivers. Thomas Eskesen: “The increased rates give us long term stability, which means long-term reliability for the customer.” Multiple year contracts are becoming an increasing trend as clients realize we need to have open books and a long-term approach to improving cold chain efficiencies and innovating together. This is simply not possible with short-term contracting. Due to its size and global reach, Maersk Line can also offer the customer flexibility in unforeseen situations. Thomas Eskesen: “The more unpredictable the business is, the more the customer will need a reliable, highly intensive service provider. The need for a Plan B is increasing in line with increasing climatic uncertainty.” Another reaction that Maersk Line received following the rate hike was: please don’t leave the reefer business. In closing, Thomas Eskesen confirmed Maersk Line’s firm commitment to the reefer business. “The APM/Maersk group has already invested billions in the reefer industry, be it on containers, vessels designed for reefer trade or landside terminal investments. We are not going to divest, but we had to send a clear signal to our customers that we need to get paid more for what we do. 

 

Wim Dillen, senior business development manager with the Port of Antwerp, is clear about this: they want to be there to facilitate the expected growth. Wim Dillen explains that there will indeed be growth. “Today there is less industry, which will increase the need for imports at the same time as innovative companies in the hinterland will cause exports to grow. There is also a growing world population, which is expected to lead to increased migration towards Europe.” The number 1 banana port in the world nowadays receives over 4,600 container vessels a year. On a yearly basis, 1.4 million kilos of fruit—mainly bananas, pineapples, apples and stone fruit—is handled from over 400 specialized reefer vessels. The Port of Antwerp has a lot to offer to its customers. Wim Dillen: “There are no monopolies in the Port of Antwerp; our customers can choose their preferred terminal and are thus able to shape their strategy without anyone looking on. The Port of Antwerp is a complete deep-sea port that allows access for all types of vessels. Since our port is a deep-sea inland port, the goods are 80 kilometers closer to the customers, offering sustainability and transportation advantages.”  The Port of Antwerp is under continuous development to meet the ever-changing demands of its customers. Wim Dillen: “A lot of potential capacity is available; the Flemish authorities are making 1,100 hectares available for expansion.” Wim Dillen is positive about the future: “There will be growth and people have to eat perishables, too.”