Times are changing at Maersk Logistics and Damco, which merged under the Damco brand last month. Chief executive Rolf Habben-Jensen talks to Lucy Tesseras about what lies ahead for the revamped business.
We’re living in volatile times, but the businesses that survive are the ones that adapt and evolve, and keep up with the ever-changing needs of their customers. That’s the message from Rolf Habben-Jansen, chief executive of the recently merged Maersk Logistics and Damco businesses, who took up the role at the beginning of 2009.
The two organisations, the former a supply chain management brand and the latter a freight forwarding brand, have been working alongside each other since 2007 when Maersk Logistics acquired P&O Nedlloyd, including Damco Sea & Air.
The businesses have always been very comparable, the only anomaly that remained was the two brand names.
So, to create a unified offering parent company the AP Moller-Maersk Group, which also owns shipping company Maersk Line, made the strategic decision to combine the businesses under the single brand name Damco, which came into effect on 7th September.
“We had three options when choosing a name,” says Habben-Jansen, “to come up with something new, which proved expensive and time-consuming, or to go with either the Maersk Logistics or Damco name.”
The Maersk name is probably better known, however the company decided to go with the Damco branding for that very reason. “We wanted to differentiate ourselves from Maersk Line and to establish ourselves as an independent logistics business,” reveals Habben-Jansen. “We didn’t want people to automatically think we were part of the same organisation.”
In fact, although owned by the same parent company he says they don’t always favour Maersk Line. “Whenever we can work with Maersk Line we will, but we don’t offer them preferential treatment. We ship goods with whoever offers us the best service and the best price.” Damco actually ships around 50 per cent of goods with Maersk Line.
However, although the company is keeping the Damco name it is keen to move towards a new brand image that incorporates the activities of both companies and as such has launched a new logo and tagline: “Global logistics. Individual solutions”.
We are unlikely to see any major changes in the running of the business, but Habben-Jansen says the company will be coming up with additional features within its supply chain management product, which are likely to be launched in November and it is also looking to revamp its air freight product in January.
“The aim is to make it easier for existing clients to use the service, and make it more accessible for new customers in new sectors, such as technology and FMCG. We want to strengthen our operational footprint as much as possible,” he says.
The combined business has 272 offices across 93 countries in Europe, the Middle East, Africa, Asia, North America and Latin America and last year had a net turnover of $2.8 billion (£1.7 billion). Together, the two companies shipped more than half a million TEUs of sea freight, 60,000 tonnes of air freight and handled over 50 million cubic metres for its supply chain management customers.
“Our biggest challenge now is to return to growth. We have seen some recovery over the past two months and we are now on average only five or six per cent behind last year, compared to the beginning of the year when it was more like 20 per cent. No-one has a crystal ball but we hope to return to growth by the beginning of 2010.”
Looking ahead, ambitions are high and he expects the business to double in size over the next five years. “We are relatively strong in emerging markets so we are in a good position to grow in line with them.”
The company has signed a number of deals recently. One in August with high street clothing chain Hennes & Mauritz (H&M) to handle its supply chain in India and Pakistan, building on an established relationship which sees Damco covering the retailer’s operations in Bangladesh, Cambodia, Indonesia, Sri Lanka, South Korea, Vietnam and Thailand.
While, earlier in the month it secured a three-year contract with LG Electronics to manage all warehousing and distribution operations for products imported to Morocco.
Damco has also signed a Memorandum of Understanding with Boeing for the development of industrial and technological logistics tools for improving global supply chain management. The companies will explore opportunities to use Boeing’s modelling and simulation tool to expand into commercial markets and incorporate Damco’s supply chain management knowledge.
There are a number of other deals in the pipeline, so watch this space, says Habben-Jansen.