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Maersk Line is the global container division and the largest operating unit of the A.P. Moller – Maersk Group, a Danish business conglomerate. It is considered the largest container shipping company in the world by revenue and employs approximately 25,000 people. Maersk Line operates over 600 vessels and has a capacity of 2.6 million TEU (Twenty-foot Equivalent Units).
Maersk Line was first established, via its Ethiopian 3rd party agent “Freighters International plc”, in 1994 as the first foreign shipping company and employs 20 staff in its Horn of Africa Cluster office located in Addis Ababa. Maersk Ethiopia PLC was established in 2007 and Maersk Liner Business trades in Ethiopia through two brands: Maersk Line and Safmarine.
Dan Lauritzen, Managing Director of Maersk Ethiopia PLC talks to Capital about the company’s planned activity to operate dry ports here in Ethiopia and the recent visit of Soren Skou, CEO of Maersk Liner Business. Excerpts:
Capital: Recently your CEO Soren Skou visited Ethiopia and held talks with government officials. What were some of the discussion points during your meeting with Transport Minister, Workneh Gebeyehu?
Dan Lauritzen: We were very glad and honoured that His Excellency Workneh Gebeyehu agreed to fit us into his busy schedule.
In our meeting we discussed the many opportunities in Ethiopia – both short and long term – and the great aspirations for increased exports. An increase in exports will assist this beautiful country in prospering – faster.
Our role, as Maersk Line, is to assist the exporters to the greatest extent possible in providing very reliable transport solutions via our own offices in Djibouti, Ethiopia & Sudan at market relevant prices.
We also discussed the apparent infrastructure bottle-necks and resulting high inland cost in the Ethiopia-Djibouti corridor today and how Maersk Group might be able to assist with investment in, and running & operation of dry ports e.g. in JV arrangement with an Ethiopian partner.
Lastly, we briefly discussed our meeting – earlier in the day – with our large customer & great partner Ethiopian Shipping & Logistics Enterprise. We talked about how our relationship has continued to become stronger over the years and that we have a very constructive and open dialogue.
Capital: How exactly will Maersk support Ethiopia’s growing trade, specifically exports?
Lauritzen: As Maersk Line we today, with our extensive global network, offer the most reliable container shipping to and from the Port of Djibouti (Doralleh Container Terminal). We thereby enable our clients to keep their promises to their customers.
As Maersk Group, through our Port and Terminal Operator: A. P. Moller Terminals, we would be very interested in investing and assisting in optimizing the costly inland corridors – making them far more efficient than is the case today.
Capital: We understand that Maersk has an interest in building a dry port terminal, tell us more about that.
Lauritzen: That is correct. A. P. Moller Terminals, one of the 5 strategic pillars in the Maersk Group, has held discussions with the Ministry of Transport to potentially explore opportunities together. One of those opportunities could be investment in and operation of Dry Ports and Container Freight Stations across Ethiopia.
A. P. Moller Terminals is one of the largest Terminal & Port operators in the world with great expertise also in the Dry Port segment. It is our firm belief that, potentially with an Ethiopian partner, we could be a strong and dedicated long term contributor to significantly improving efficiencies and service levels in the inland corridors.
Capital: During your meeting you stated that you are also ready to look into other areas that can support trade and bring down the cost of doing business internationally overall for Ethiopian companies, what do you mean by that?
Lauritzen: We, as Maersk Group, have unmatched expertise in a number of fields including the transportation of perishables (fruits & vegetables) in so called reefer containers.
Our subject matter experts frequently visit Ethiopia to offer good practise and advice to potential and existing exporters.
Further, Ethiopia is taking strides towards becoming an exporter of sugar. Also here we have great expertise and knowledge within the Maersk Group that we can channel to the relevant players in this segment.
Capital: How did your meeting with various large Ethiopian export customers across areas of coffee, seeds & pulses, textile, leather among others, go?
Lauritzen: It went really well thank you. We have been working with the Ethiopian exporters for a long time and very strong relationships have been built. Our CEO Soren Skou and our CCO Stephen Schueler were both intrigued and enthused by the many opportunities in Ethiopia and with the hard work the exporters do to grow the various export segments. Export (trade) has been and remains key to building nations around the world.
The exporters also shared their concerns with the inefficiencies in the inland transportation and the great cost associated with this. Many of the more traditional commodities exported from Ethiopia remain of a relatively low value compared with (for example)the up and coming garment and textile segments. High inland transportation cost is a great challenge for them and directly impacts their competitiveness in the global market.
Capital: Ethiopia doesn’t have a port, how does that affect your operations?
Lauritzen: Specifically as Maersk Line & Safmarine (the two brands with which we trade in Ethiopia) not a great deal to be honest.
As a dedicated global container carrier our focus is, primarily, on delivering a reliable service to and from the Port of Djibouti. The result of the great distances – over land – in this vast country is, however, that the average “idle time” for our containers in Ethiopia is relatively higher than what we see in other geographic locations.
With more than 90 million people, Ethiopia is the largest hinterland (landlocked country without its’ own port) in the world. One of the greatest opportunities in terms of building this fascinating nation and boosting exports remains, we believe, significantly optimizing the inland transportation and all related disciplines including the customs processes.
The work done so far is impressive and the extent of the further opportunity remains more vast than any of us can imagine.
Capital: It is illegal for foreign transport companies to operate in Ethiopia, how do you go around that?
Lauritzen: It is the country’s law that a foreign transportation company cannot operate solely & independently in Ethiopia. We are setup with Line’s Representative license and with the great assistance from our 3rd Party Agent – our long term friend and partner Freighters International Plc – since 1994 we have been able to offer most of our global services to customers in Ethiopia as well. We operate very successfully within the specific boundaries in Ethiopia just like we do everywhere else in the world – every country is a little different. Our office in Ethiopia also serves as a regional head quarters and we oversee Maersk’s operations in Djibouti, Sudan and Somaliland from here.
Capital: Compared to other countries how do you see the progress of your operation in Ethiopia?
Lauritzen: We are satisfied with the progress we have been able to make in Ethiopia to date and, importantly, see an opportunity to further support our customers here – an opportunity to further grow & develop with our customers.
Capital: CEO’s of such large companies don’t usually travel to countries, what was the significance of his visit to Ethiopia?
Lauritzen: Our CEO Soren Skou and our CCO Stephen Schueler have listened, with fascination for a while, to our reports on the great achievements up to now in Ethiopia as well as the fantastic ambition that the country still has for the future. A future we believe looks bright. On their short trip around Africa they made it a point to visit Ethiopia specifically. From Ethiopia they went to Cameroon then Nigeria before ending their trip in Ivory Coast. It was a great honour for our team to have them here – truly a testament to what Ethiopia has achieved to date and what it will surely achieve in the future.
Capital: What does your relationship with Ethiopian Shipping and Logistics Enterprise (ESLE) look like, is it a competition or cooperation?
Lauritzen: It is 110% cooperation – we like to think of it as a long term partnership. From being a relatively small player in Ethiopia, Maersk has, with the support of ESLSE, become a more significant and very dedicated supplier of liner container transportation to ESLSE.
Capital: How about the multi-modal system, tell us your view on that
Lauritzen: While not a direct user or customer of the multi-modal system, as Maersk Line, it is our belief that there is great room for improvement and significant efficiency upsides to be achieved still.
We are committed to being an integral part of the solution should the opportunity present itself.