David Williams, Regional Managing Director, Maersk-Africa
Container shipping remains one of the most important and necessary means of cargo transportation through sea routes. Despite a global schedule reliability dip, Africa’s shipping industry has been able to navigate, delivering services that facilitate the import and export of goods without too many administrative barriers.
Just as no container shipping company has a monopoly, resulting in a total lack of friction and tension in the international cargo shipping industry, a few international container shipping businesses lead the race in terms of the volume of operation of their shipping lines. Maersk, the Danish logistics company, is one such example. Maersk, well-known for its container ship fleet, made its debut in the worldwide container shipping market in 1956 and reached the African continent in the 1970s beginning with South Africa. Maersk has nearly as long a history in Africa as the company itself. The company’s first call of a Maersk vessel to a port in Africa was over 100 years ago.
The overall vision for Maersk in Sub-Saharan Africa is defined by David Williams, Regional Managing Director for Maersk in Africa. David has held several sales and commercial positions in Johannesburg and Cape Town, South Africa, as well as Hamburg, Germany, since joining the company 30 years ago. Between 2012 and 2015, he was also the Managing Director of Maersk Line for East and Central China.
In this interview with Africa Executive, David Williams discusses Maersk’s almost 100-year history, the company’s foray into Africa, an examination of its activities since it began shipping, and trends that could maximize cargo shipping services.
How has Maersk lived through these 100+ years?
Maersk traces its roots back to 1904 when the first company was established in Denmark. The first liner service started in 1928 and for the next 90 years and counting, we have helped to connect the world. Over the years, Maersk developed into a global organization with a strong footprint and close ties to our growing 130 countries where we are present. And our current success builds on our strong history, our values, and our brand.
What in your view has been a major milestone in these 100+ years?
The container is a key contributor to the growth of global trade. Since 1956, when container dimensions were standardized, transporting cargo became much more efficient because a container can then be moved from ship to truck, or by train, while the cargo remains inside and is well-protected. This system of moving goods helped lower costs significantly to the point that container shipping is today the most cost-efficient means to move cargo, and this is what customers expect from their transport and logistics partner.
Customers also told us about the need for transparency in the supply chain, and we have transformed to be able to offer this to them. As of 2019, we began offering logistics and supply chain services to meet our customers’ needs. This is a more recent milestone that we’re also excited about. This means we’re able to provide comprehensive end-to-end solutions for needs throughout the cargo’s journey from the time the cargo leaves the production plant or factory at the point of origin until it reaches destination markets in other parts of the world.
What’s Maersk’s history in Africa?
We have a long history in the region – nearly as long as the history of Maersk. The first call of a Maersk vessel to a port in Africa was over 100 years ago. Since then, there has been tremendous development in trade and growth in the region.
We have a fantastic team of around 3800 Maersk employees in Africa today and we are present in almost every country across the continent. Through our operations and business activities, we developed a strong network and built long-term partnerships with customers and stakeholders in the region.
Our focus is on improving how we best serve customers and understand their needs and now we have an exciting opportunity to do this with strengthened Logistics & Services offerings and capabilities. With Africa’s wide and diverse geography, there’s a fantastic opportunity to manage their end-to-end logistics warehousing, supply chain management, customs house brokerage needs, and intermodal transport among many other things. We also continue to develop digital platforms that leverage the power of data to simplify logistics and provide visibility and predictability for better supply chain planning.
What does success look like for Maersk in the continent?
If we look at the long history of Maersk, we can also trace the evolution of global trade. We connect local producers and businesses to markets that they were unable to reach before. Today, nearly all kinds of products reach consumers and households from far away and this was unheard of many years ago.
It may have taken many years for world trade to grow and develop to the extent that it has today, but it is a strong foundation that we have helped build and we are committed to continuing helping to strengthen efficiencies in processes that make it easier for more customers to participate in global trade. According to the World Bank, trade accounts for around 52%of global GDP. Reports have also shown how trade has helped to lift over a billion people out of poverty.
This is why making trade inclusive and accessible to all is important and we will achieve this in partnership with stakeholders in the industry and in government, and through our efforts as an integrated transport and logistics company to meet customers’ needs in a region that will present many growth opportunities over the next decade.
How do you evaluate the volume of Maersk’s trade in Africa each year?
According to the World Bank, economic recovery in the Sub-Saharan Africa region is estimated to decelerate to 3.6% in 2022 (down from 4% in 2021) as the economy in the region struggles to pick up momentum amid the global economic slowdown, supply constraints, and the Russian-Ukraine war, the impact of which will materialize in inflation with higher commodity prices, as well as food and fuel. This is one of many indicators of trade performance and the guidance is also subject to global trade restrictions, and factors affecting container freight rates, rate of exchange, and bunker prices. We also take into consideration the diversity and complexity of a continent like Africa, where countries grow at different paces – some slower than others and some exceptionally fast, and for varying reasons.
What are your thoughts on trade in Africa?
As mentioned earlier, from a shipping and logistics perspective, Sub-Saharan Africa is a complex and diverse continent. There is the variance from country to country, presenting different challenges however there are also plenty of different opportunities, and we are excited about opportunities where we can understand better the end-to-end supply chain and logistics needs of our customers and offer comprehensive solutions to these.
As an integrator of logistics, we’re passionate about forming partnerships and collaborating. The scope of our operations also gives us opportunities to work closely with industry partners and countries to develop transport and supply chain processes, infrastructure, and trade efficiencies. These contribute to creating a more stable market and business environment so that our customers can grow and operate successful businesses.
How do you feel about the government’s initiatives in the ports, shipping, and logistics sectors (in Africa)?
Container shipping is still the most cost-efficient mode of transport, and ocean transport plays a key role in international trade – which in turn significantly impacts economic growth and creates more prospects especially for developing economies. As such, the reforms implemented by Sub-Saharan African countries in the ports and logistics sectors are critical, improve efficiency, and lower total logistics costs.
What trends do you see in the near future that could optimize cargo shipping services?
There are a few trends in the industry we will continue to see in the future starting with the digitization of supply chains with self-service platforms, visibility and planning applications, and mobile payments making it easier for customers to manage and have more control over their logistics processes. More and more customers are also seeing the benefits of long-term partnerships in overcoming challenges more effectively and creating more efficient supply chains.
The events of the past few years have also highlighted the importance of supply chain resilience, and we are observing customers make changes to their supply chains to achieve that resilience and increased agility.
Finally, sustainable supply chains remain one of the most prominent trends we will continue to see in the future as the logistics industry takes drastic measures to reduce carbon emissions. At Maersk, we have brought forward our net-zero target by a decade to 2040. starting with an order of 12 x 16,000 TEU vessels that will operate on green methanol, these will be delivered from 2024, and we’re working with the industry to scale the production of green methanol.
How will digital technologies and innovation support container carrier services in the future?
Digitization is a key enabler for our customers, and therefore in the transformation of Maersk and the industry. Through innovation, we are developing and making available seamless services and improving the experience of customers. Applications like Captain Peter, our Remote Container Management application, help customers monitor the status of their fruit and frozen cargo as it makes the journey.
Today, ninety percent of all bookings are done through our digital platforms and we continue to improve the customer experience through our digital offerings. The events of the last couple of years have highlighted the importance of digitalization in our industry, and Maersk is at the forefront of developing logistics and supply chain platforms that provide visibility as well as predictability. These create efficiencies and give our customers more control over their supply chain flows.
Which of the trade lanes do you see cargo movement growing in the region rapidly?
Keeping in mind the diversity of the region, there is a high degree of variability from country to country in Africa and like volume, cargo movement is also affected by similar factors mentioned earlier.
