A. P. Moller Mærsk Group Essay

A conglomerate involved in a wide range of business—containers and related activities, energy, shipping and retail—Mærsk is Denmark’s largest company, a dominant regional player in the North Sea oil and gas industry and the owner of the world’s largest container shipping fleet.

Since its creation in the Danish town of Svendborg in 1904, Mærsk has developed into a multinational corporation, employing approximately 117,000 people in more than 130 countries. Mærsk was established as a privately run shipping business when 28-year-old Arnold Peter Møller together with his father, Captain Peter Mærsk Møller, bought a secondhand steamer of 2,200 tons dead weight. In 1965 Arnold Mærsk McKinney Møller, son of Arnold Peter Møller, assumed the leadership of Mærsk. In 1993 Mærsk Mc-Kinney Møller withdrew from the day-to-day management, and today the group is headed by Nils S. Andersen, who took over as the fourth Group Chief Executive Officer and Partner in 2007.

Mærsk’s container division is called Mærsk Line. It is one of the leading shipping companies in the world, with a fleet numbering more than 550 container vessels and more than 1,900,000 containers. Mærsk already has twice the overall fleet capacity of its nearest rival. Furthermore, Mærsk owns 50 container ports around the world.

Mærsk Line keeps expanding the economies of scale in shipping, a key driver of trade globalization. Mærsk’s container business may play a role in the integration of production processes, not only by moving goods from manufacturers to consumers and coordinating multiple modes of transport, but also by connecting industrial productions that are located in different places. Container shipping and related activities are by far the largest business areas for Mærsk, providing 53 percent of the group total revenue in the first half of 2007. Its container-related activities are under the brand names Mærsk Line, Mærsk Logistics, Safmarine, and APM Terminals.

Mærsk’s main competitor in the container shipping industry is the Mediterranean Shipping Company (M.S.C.), based in Geneva, Switzerland, and owned by the Italo-Swiss Aponte family. M.S.C. specializes both in the container and in the cruise business (revenue in 2007 equals US$14 billion and US$1 billion, respectively). It was established in 1970, is not listed, and is not as diversified as Mærsk. Its organizational chart is light and the consequent rapidity of adapting to market changes is M.S.C.’s main advantage. This fact combined with a competitive price policy has led M.S.C. to achieve a consistent market share as the second largest ocean-carrier in the world.

Tankers, offshore, and other shipping activities are part of the main business in which Mærsk operates. It offers solutions for the transport of crude oil, refined products, and gas; drilling with mobile production units; salvage; and towage activities, as well as door-todoor transport, inter-European freight, and passenger transport. All these activities are under the brand names Mærsk Tankers, Mærsk Supply Service, Mærsk Contractors, Svitzer, and Norfolkline. Excluding Svitzer’s 600 vessels, they operate more than 260 vessels and rigs. Maersk Oil participates in oil drilling in Denmark, Qatar, United Kingdom, Algeria, and Kazakhstan. In addition, Mærsk Oil leads exploration activities in the North Sea, Africa, the Middle East, Central Asia, South America, and the U.S. Gulf of Mexico.

Retail activity includes supermarkets and hypermarkets in Denmark, Germany, the United Kingdom, Poland, and Sweden. Dansk Supermarked incorporates, among others, the Føtex stores, the Netto stores, and the Bilka hypermarkets. The group extends its interests in shipyards in Denmark and the Baltic countries, in the industrial production of plastic products, and in Star Air, an airways company engaged in contract parcel flying in Europe. In addition to this, the group includes a 20 percent stake in Danske Bank. Total market capitalization by March 2008 equalled DKK217 billion (US$45.4 billion).

Bibliography:

  1. Majbritt Greve, Michael W. Hansen, and Henrik Schaumburg-Müller, Container Shipping and Economic Development: A Case Study of A.P. Moller–Maersk, (Copenhagen Business School Press, 2007).

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