Julian Thomas
Shipping

Maersk to expand logistics services beyond cabotage shipping

Dec, 14, 2020 Posted by Ruth Hollard

Week 202051

Maersk plans to expand the provision of logistics services in Brazil beyond cabotage. The information is from Julian Thomas, the president of the group in Brazil, Argentina, Paraguay, and Uruguay. “We have the advantage of having a tremendous portfolio of customers who use our ships. With these contacts, we intend to increase the offer of services provided”, says the executive.

According to him, the company plans to expand cargo handling by land, air, and coastal shipping, in addition to planning investments in warehouses and logistics management. The plan to expand operations in the logistics chain is not exclusive to Brazil. It is part of the global strategy of the group, which operates in 130 countries and operates 66 port terminals around the world. In the third quarter, global revenue was US$ 9.92 billion – just 1.37% down from a year ago. Maritime navigation accounted for 71%, but the plan is for this to drop down to 50% in the future, and for logistics operation services to grow.

In recent months, the group has taken another step in its internal reformulation and incorporated two more businesses: Damco, which transports fractional cargo and by air, and Safmarine, with a strong presence in Africa. The idea is to better integrate the services offered.

Thomas sees great potential for offering end-to-end services – which, in the case of Maersk, can range from ocean transport to the final consumer. To complete the portfolio of services in the country, a priority will be to invest in new warehouses, he says.

The group is also studying acquisitions in Brazil, which could accelerate this movement. “There is a potential for inorganic growth, with opportunities that can help us make a leap. But at the moment, there is nothing concrete in that sense, it is an idea we are looking at it”, he says.

Cabotage is also among the segments in which the company wants to continue growing. However, regarding the reformulation of sector rules, specifically the “BR do Mar” under discussion in the National Congress, there is a concern. This is because groups of truck drivers have been putting pressure to prevent shipping companies from also doing ground transportation – which would make part of Maersk’s current operation and its entire expansion plan unfeasible. This prohibition was even included in the text by means of an amendment, authored by federal deputy Fausto Pinato (PP-SP). However, the article was removed from the bill before it was approved and forwarded to the Senate for discussion. Still, it is a point of attention, says the president.

“Cabotage in recent years has grown exponentially, and the problem has not been the lack of vessel capacity, which is the main focus of BR do Mar. Obviously, we welcome any measure that reduces costs. However, what cabotage needs most is a reduction in bureaucracy, which today is an obstacle. For example: to transport a load from Manaus to São Paulo by road, you need two documents. For cabotage, 12 are needed. It is important that this is simplified”, he says.

The company’s expectation for 2021 is very optimistic in Brazil, according to the executive. The goal is to grow by around 20% in revenue. Even with all the uncertainties in the macroeconomic scenario, Thomas sees this expansion as possible due to plans to expand logistics services in the country.

But even the outlook for maritime trade is positive, he says. After 2020 was strongly impacted by the pandemic, mainly in the second quarter, Maersk is already seeing a resumption in imports, In recent months, there has been a recovery that has been much higher than expected and, until the beginning of December, the ships that come to Brazil remain full. In the case of exports, the impact was practically nil, he says. “During the third quarter, imports resumed strongly. It was not enough to recover [the sharp drop of previous months], but, in total volume, we should end the year almost tied with 2019”, he says.

For 2021, the projection in movement is a growth of 7% for imports and between 3% and 4% for exports. In cabotage, the outlook is for an increase between 10% and 12% next year. “Of course, the scenario is still cloudy, but we are optimistic,” he says.

Source: Valor Econômico

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