The Battle For Change Of Maersk, A Shipping Giant​

- Dec 31, 2019-

"Evolution is the driving force of everything." ――RayDalio


As ray Dalio, founder of qiaoshui fund, said in the principles, in the process of four industrial revolutions, every social change driven by technological change has repeatedly proved to the world that innovative change can lead to profound changes in the world.


Whether it is the establishment of Microsoft Windows system, the launch of competitive online services MSN, or the acquisition of Hotmail, Skype, LinkedIn, which gradually occupy a dominant position in the new market, or Alibaba's move of Yiwu small market to the Internet, step by step to cultivate Chinese online shopping habits, creating the annual double 11 carnival. They are telling us that no matter society, enterprise or individual, only change can keep up with the pace of the times and even create a new era.


In order to survive, the industry has to evolve, as it has in shipping. At present, the global large container shipping companies are making great efforts to transform their strategies and services, and the whole industry is undergoing revolutionary changes. Among them, Maersk Group, a leading shipping company, announced that it will start to develop towards comprehensive shipping and logistics companies this year, and is ready to meet the changes. It will connect and simplify the customer supply chain through global end-to-end solutions, and help customers manage their entire product cycle, including inland service, customs clearance agency, shipping, warehouse management and distribution, so as to create easy and convenient logistics for customers Experience.


Maersk has a long history with China. In March 1924, Sally Maersk docked in Shanghai, China for the first time, which opened the prelude of Maersk's business development in China. So far, it has served China's foreign trade for 95 years, and the Chinese market has become an indispensable part of Maersk's global business.


Since the establishment of the first office in China in 1984, Maersk has established a wide range of service networks including shipping and logistics companies, industrial enterprises, and also engaged in the investment, operation and management of maritime terminals in major coastal cities. After China's accession to the WTO in 2001, the door was officially opened, the rapid development of trade and the sharp increase of import and export volume also brought a golden period for the development of the shipping industry. The market prospect can be described as broad. Maersk, who is deeply involved in the Chinese market, quickly seized the opportunity and achieved a long period of steady growth in China.


After the "boiling point", the transportation industry will meet the "new turning point"


In the 1940s, Malcolm McLean, the founder of container transportation, carried out a huge transformation practice, transformed the container and popularized the use scope of the container, and began to put it into automobile, railway, sea transportation and aircraft transportation. This change is known as the "boiling point" of the transportation industry.


In fact, the container itself is not so strange, nor too many technological elements, but the emergence of the container has changed the disadvantages of the chaos of storage and the time-consuming of loading in the transportation of the general cargo ship, in fact, it has changed the maritime transportation system, and this container revolution has brought the optimization and upgrading of the overall shipping system. As a result, a number of shipping organizations have emerged in the world.


Among them, Maersk Group has grown rapidly. With its strong maritime business strength, it has now grown into the world's largest container carrier company, with a container fleet of more than 700 ships and a total capacity of more than 4.2 million TEU (standard containers).


However, after decades of development in the container revolution, the new turning point is coming, and the shipping industry is experiencing unprecedented challenges.


Influenced by the cost of ship fuel oil, which is the biggest cost of shipping companies, the volatility of crude oil price has a great impact on the shipping industry. Especially in 2018, due to the change of the world oil consumption and trade pattern, the global crude oil price experienced a roller coaster style sudden change, and shipping companies are facing the pressure of rising rigid costs. On the other hand, with the coming into effect of the order of limiting sulfur emissions from ships, low sulfur fuel oil has become the first choice of most shipping companies, which will inevitably cause the global market of low sulfur fuel oil to be in short supply in 2020.


Moreover, the global trade is still in an unstable situation, and the impact on the global economy is still continuing, which directly causes the slowdown of the container demand of the shipping industry, which is undoubtedly a major hit for the shipping group. The once dominant European ship financing market is continuing to shrink, and the uncertainty of tariff also increases many risks for shippers.


Under the joint action of many uncertain factors, how to face the difficulties, find development opportunities from the disadvantages, and make timely changes to adapt to the changing shipping market, which is of great importance to shipping groups including Maersk, the shipping giant.