Maersk Line has announced that it will reduce its network capacity, postpone new investments and reduce operating costs.
Over the next two years, Maersk Line expects to lower the annual Sales, General & Administration (SG&A) cost run-rate by USD 250 million with an impact of USD 150 million in 2016. SG&A savings will be derived from already initiated transformation projects and the standardisation, automation and digitalisation of processes.
“We are on a journey to transform Maersk Line. We will make the organisation leaner and simpler. We want to improve our customer experience digitally and at the same time work as efficiently as possible,” says Søren Skou.
With over 23,000 land based staff employed globally, over 4,000 jobs are expected to be axed by the end of 2017.
“We are fewer people today than a year ago. We will be fewer next year and the following year. These decisions are not taken lightly, but they are necessary steps to transform our industry,” adds Skou.
As a response to the current market outlook, network capacity will be reduced in Q4 2015 and throughout 2016. As already announced, the closure of four (4) services (ME5, AE9, AE3 and TA4) has already been initiated over the last two months and plans are in place to further cancel a total of 35 sailings in Q4.
Maersk Line will continue to manage capacity and does not plan to exercise the previously announced options for six (6) 19,630 TEU vessels and two (2) 3,600 TEU feeders and will postpone decision on the optional eight (8) 14,000 TEU vessels.