Dive Brief:
- A.P. Moller-Maersk's Chairman of the Board of Directors Michael Rasmussen will step down on March 28, 2017, as the group splits into two divisions in 2017. Former SAP CEO Jim Hagemann Snabe has been nominated to replace Rasmussen in March, according to a press release.
- The announcement followed a tumultuous 2016, where the company recorded an underlying profit of $711 million, compared to 2015's $3.07 billion in profits. "However, it was also a year when we decided to substantially transform A.P. Moller - Maersk for the future," said CEO Soren Skou, emphasizing an earlier decision to split the company's logistics and oil divisions.
- In related news, the company is also delaying delivery of 9 new 14,000 TEU vessels in favor of charters, some of which come from the failed Hanjin line, in order to improve the company's cash flow this year, The Loadstar reports.
Dive Insight:
The decision to appoint Jim Hagemann Snabe as Chairman of the Board reflects A.P. Moller-Maersk's resolution to rethink not just its operational structure, but the elements it would take to drive revenue as a pure logistics provider.
Snabe, who is also nominated to chair the Board of Siemens, is considered a heavy-hitter within the software field and an expert at digitization within the supply chain. A Financial Times profile of the executive reveals the Snabe and his colleagues believe his appointment reveals a change in direction for European industries: a move toward digitization and a new generation of leaders. Snabe is more than ten years younger than Rasmussen, adding to a sense of the passing of the old guard.
Maersk CEO Soren Skou, meanwhile, has not been shy about the company's plans for the future. First, by separating the group's oil division from the transport and logistics services the company will seek to better target investments without worrying about both downward oil prices and shipping industry overcapacity, for example.
In turn, Skou announced big plans for the transport and logistics division, wherein the company would seek to secure industry leadership through acquisitions and investments in ports, while also transforming the group into a full-supply chain service provider. Since the announcement, Maersk has acquired Hamburg Sud, secured a slot sharing agreement with Hyundai Merchant Marine, among other investments. Further, it secured a partnership with Alibaba to allow Chinese shippers to book slots directly and expedite their supply chain process.
"Timing is right for me as well as for the company to retire as the Chairman," Rasmussen said in a press release. Although the announcement was made last week, Snabe will not take the torch until March 28 during the company's annual meeting. Less than a week later will mark the start of two new shipping alliances, and likely the close of various acquisitions. As the shipping industry shifts in April, then, Snabe will seemingly help lead Maersk to an organizational shift as well.
