Transforming Maersk Delivering Integrated Logistics

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Transforming Maersk Delivering Integrated Logistics
Transforming Maersk
   Delivering Integrated Logistics

       James Wroe – Head of Ocean Customer Logistics
       23rd September 2021

Classification: Confidential
We have gained solid execution momentum and are
       starting to deliver superior outcomes

        2016                    2017-2019           2019-2021            2021-2023             2023-2025

                 Framing the       Activating the    Gaining execution    Achieving superior       “Always on”
               transformation     transformation        momentum              outcomes            Transformation

Classification: Confidential
Bringing together three strong businesses with significant and tangible synergies

                        Customer
                        Synergies

         Logistics &                  Ocean                       Terminals
          Services
                                                    Financial
                                                  & Operational
                                                    Synergies

                                    Technology
Technology driving competitive
advantage
                                 Building in-house technology powerhouse
                                 Working integrated with the business

                                 Customer uptake of digital solutions accelerating
                                 Across platforms, channels, and for our digital products

                                 Using technology to drive internal efficiency
                                 Automation of terminals, fuel efficiency, data products to
          Technology             support decision making
Ocean has become a higher quality
        business, more resilient at higher
        earnings levels

        Reduced volatility            CAPEX discipline
        Agile capacity management     Competitive scale achieved
        Improved view of demand       with Hamburg Süd acquisition
        Long term contracts           Grow through efficiency and
Ocean                                 focus on replacement

        Differentiated products
        Differentiated offerings to
        meet our customers’
        diverse supply chain needs
We have built a strong growth engine in
             Logistics & Services

             Improved product portfolio       Strengthened organisation
             Comprehensive product            Attracted industry experts with
             offering                         Logistics and Service capabilities
             New digital products             while fostering internal talent
                                              development
             Truly integrated logistics for
             our customers
 Logistics
& Services
             Expanded partnerships            Growth momentum
             Growing collaboration with       Proof points of organic growth
             customers
                                              Accelerated inorganic growth
             Ocean customers buying more      with three successful
             Logistics & Services products    acquisitions
We are on the way to deliver superior
            returns in Terminals

            Step-change in results               Best-in-class operator
            Improved ROIC, now ahead of peers    New operating model: APMT
            Doubled EBITDA margin since 2017     Way of Working
            Realising synergies with Ocean       Automation roll-out in
                                                 modular approach

Terminals
            Satisfied customers                  Selective growth
            NPS growing double-digit every       Focusing on organic growth and
            year since 2017                      investments in existing locations
            Expanding offering to create value   Selected new investments with
            for customers                        synergies with Ocean or best-
                                                 operator
The next step in building the Integrator

                       Continue the          Rapid growth in          Focus the portfolio   Decarbonise logistics
                       strengthening of      Logistics & Services –   on the integrator
                       Ocean and Terminals   organic and
                                             inorganic

Classification: Confidential
Ocean and Logistics at a glance

                                         +70k                                                         ~25m
                                                                                                                   7%1
                                                                                                                                      ~5m
                                                                                                                                              4%2
                                                                                                                                                                                       ~2m
                                                                                                                                                                                           112%3
                                                                                                                                                                                                       ~5m
                                                                                                                                                                                                           14%
                                                                                                                                                                                                                         ~13m

       +70k customers, representing a                                                  CBM going through                              Land                                   Customs                  Purchase orders   FFEs shipped
       community of 845k unique users                                                  our warehouses                                 deliveries                             declarations             managed
       interacting on Maersk.com and
       with our +51k colleagues

       Note: Absolute figures based on FY 2020, growth figures based on H2-20 vs. H2-19; 1. Excl. acquisitions increased by 3%. 2. Carrier haulage % growth; 3. Excl. acquisitions increased by 24%

Classification: Confidential
Transportation

                Origin services                                                                 Destination services
                                                   Air

    Factory         Export        Warehouse                          Import/Custom                                        Customer
                                                                                       Warehouse         Intermodal
   Shipment        Customs                        Ocean                Clearance                                          Warehouse       Final Delivery

                                                   Rail
Orchestration

The traditional supply chain has been                     Status                                   Consequences
structured around cost optimisation of                    • Most efficient set up in a static      • Need large orchestration layer internally or
                                                            environment                              through 3PL to manage the lack of flexibility and
standard products or transactions                         • Vulnerable to external shocks and        resilience
                                                            disruptions                            • Disruptions cause extra costs which is not
                                                                                                     possible to capture up front
Transportation

                       Origin services                                                              Destination services

                            Export                                          Import/Custom
       Factory                                                                                                             Customer
                           Customs                                            Clearance
      Shipment                                 Warehouse                                                                   Warehouse
                                                                                            Warehouse

 Orchestration

“Most supply chains are too static and traditional, we need more
flexibility, less complexity and fewer hand-overs between the
multitude of players”
Mark R. Chadwick, Executive Sourcing Leader,
General Electric and GSA President
Origin services                      Transportation                                     Destination services

                                              Rail                    Air

     Factory       Export
                                  Warehouse                                 Import/Custom                                      Customer
    Shipment      Customs                                                                   Warehouse       Intermodal                     Final Delivery
                                                                              Clearance                                        Warehouse

                                                       Ocean
Operational control

Technology

Our winning aspiration is to create                  Status                                                              Consequences
customer value by integrating modules                • Today we are building operational capabilities to cover the       • Improved customer experience and
and leveraging network to provide a                    whole chain                                                         reduced need for orchestration due
                                                                                                                           to elimination of complexity
resilient, flexible, and efficient supply            • Modular value propositions supported by technology
                                                       which accommodates for customers’ individual preferences
chain end-to-end                                                                                                         • Lower end-to-end actual costs
                                                     • Single point of accountability to deliver a final outcome           over time
                                                       through operational excellence
We deliver          1   Changing our business model to create a more
                        profitable and resilient Ocean, through differentiated

integrated              value propositions

logistics through   2   Strong modular products in Logistics & Services will
                        enable us to build integrated solutions for customers
different levers
                    3   Investments in digital capabilities are new value
                        levers for customers
3      Technological capabilities

       Technology is critical to deliver integrated logistics – momentum is building up

       Building in-house technology          Accelerating modernisation of      Customers are validating our new
       powerhouse                            legacy infrastructure              digital strategy

        1     +2,500 technologists hired      1   Adopted cloud-first,
                                                                                          Bookings via Twill increased from 8,919 FFE in 2019 to
              the last three years, 1,000         scalable and modular
                                                                                          116,822 FFE in 2020 – a growth of 13x
              more over next year                 architecture
                                                                                          Number of unique customers with recurring usage of
                                                  Driving greater agility and             our mobile shipment application have increased from
        2     Adopted best-in-class agile     2
                                                  speed to market, while                  2,389 end 2019 to 5,273 end 2020
              software development
              methodologies                       reducing the cost-to-serve
                                                                                Maersk    More than 100,000 containers contracted year-to-date
                                                                                 Flow     2021

        3     Leveraging data as a differ-
                                                                                          Targeting over 10,000 Blockchain-Enabled electronic
              rentiating asset to improve
                                                                                          bills of lading in 2021; on track for 100,000 by 2024
              quality of our products

Classification: Confidential
3     Technological capabilities

       New digital products create additional customer value

                                     9,000,000                                      100,000                                    15 Terminals
                                     Truck visits per year                          Online visits a day                        With monetised data services

       Advanced truck appointment system                     Online self-service tools                     Data products & services
       • Allows our customers to optimize their daily        • Enable our customers to use, book and buy   • Customers can leverage real-time information to
         planning by booking appointments online               services when and how they want               optimize their supply chain planning

       • Digital foundation for gate automation to           • Currently over 20,000 registered users on   • Aim to launch our industry-first data services via
         minimise truck turn times                             apmterminals.com and other platforms          our API Store in 22 terminals in 2021

       • Basic Truck Appointment System already              • Track & Trace functionality has been used   • By 2022, all financially controlled gateways will
         available in 26 terminals, advanced Truck             4 million times in 2020                       be onboarded
         Appointment System currently being developed
         in two pilot terminals

Classification: Confidential
2     Best in class operator example

       Port Elizabeth                                                                      Reduced disruptions
       New Jersey, USA                                                                     Despite one of the worst winters in recent years,
                                                                                           the terminal experienced little disruption and
                                                                                           was the first terminal in the complex to open for
                                                                                           normal business
                                                        Customer
                                                        satisfaction has
                     Leading rail service               gone up                                                Safety improved                  +20% capacity
                     24 hours after discharge, the      Net Promoter Score has moved                           Following fatalities in recent   Terminal can handle +20% more
                     container is on the train headed   from -12 (2020) to +5 (2021 YTD)                       years, the safety                volume than two years ago
                     towards the hinterland. This                                                              performance has improved
                     compares to 48-96 hours in most    This is partly driven by a new                         and we have won two safety
                     other facilities in the port       truck appointment system and                           awards
                                                        automated gates

Classification: Confidential
A unique value proposition

              Customer
              Synergies

Logistics &                 Ocean                      Terminals
 Services
                                         Financial
                                       & Operational
                                         Synergies

                          Technology
James Wroe – Head of Ocean Customer Logistics, South East Asia & Oceania

       james.wroe@maersk.com

Classification: Confidential
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