Maersk terminates Damco and ends Safmarine brand with major headcount reductions


A.P. Moller – Maersk is undergoing a significant reorganisation and it appears that the company is pulling out of freight forwarding.

In an announcement released on Tuesday morning (September 1), Maersk said that it would introduce “strategic changes that will further improve customer experience and end-to-end service delivery”. These include the termination of the Damco and Safmarine brands.

In the case of the Damco freight forwarding business, not only is the brand being dissolved but the business is being fundamentally changed. The company’s statement runs; “the integration of Air and LCL (less than container loads) into Maersk will help meet these needs and give businesses access to a simplified, connected and agile experience under the Maersk brand, as well as to its scale. Maersk uses its own assets to offer unique value propositions, hence it will not pursue the Ocean FCL Multi-carrier product (NVOCC) as a general offering.” Presumably, this means an effective end to the Damco freight forwarding business.

Vincent Clerc, CEO of Ocean & Logistics at Maersk commented, “businesses need Air and LCL products to connect their supply chains and with these offerings firmly placed in our global integrated portfolio, we aim to serve our businesses better and more efficiently across their supply chains”. This appears to mean that air freight forwarding and less than container load business will only be offered to customers of the wider shipping business which is being renamed Ocean & Logistics. 

Slightly less traumatic is the integration of the Safmarine brand into the rest of Maersk liner operations. The Safmarine brand will no longer be used and the sales force will be integrated into Maersk Ocean. Something similar seems to be happening at Hamburg Sud, with that subsidiary saying that it will be “closer aligned with that of the parent brand Maersk” in the future.

Although not mentioned in the public statement from Maersk, press reports quote there is the possibility a few thousand jobs may be lost. This has not yet been confirmed by Maersk but it would seem consistent with the logic of the restructuring.

Although announced as being measures around customer orientation, these changes seem to be more significant. A.P.Moller – Maersk is sharpening its focus and withdrawing from at least one area of business, namely freight forwarding. Reducing staff costs by a third will have a significant impact on its margins as well. 

Source: Transport Intelligence, September 1, 2020

Author: Thomas Cullen