Maersk Plans To Invest $ 500 Million To Support Its Supply Chain Operations In Southeast Asia

Maersk intends to invest more than $500 million in Southeast Asia supply chain activities. According to a press release issued by the Danish shipping company on Monday (Dec. 4), the investment intends to increase productivity, lower trade costs, and enhance supply chain resilience in the entire area.

Maersk intends to enhance its Southeast Asian warehouse and distribution capacity by up to 50%. By 2026, the company intends to increase capacity by almost 480,000 square meters in major locations like Indonesia, Singapore, Malaysia, and the Philippines.

The company stated that by increasing its infrastructure, it will be better able to deal with disruptions and obstacles, assuring an easier flow of services and products.

Furthermore, Maersk stated that trade charges in the region might be two to three times greater than in other regions of the world and that investment will assist in decreasing costs.

The investment also coincides with Maersk’s sustainability mission. The business stated that it has been researching alternatives to shipping fuels, including the world’s first methanol-fueled container carrier, Laura Maersk.

The investments in Southeast Asia aim to deliver authentic end-to-end supply chain and logistics solutions to customers, giving them more transparency and control, said Elaine Low, A.P. Mller-Maersk’s area managing director for Southeast Asia.

Customers will be given the flexibility to select various transport models, omnichannel-fulfilment solutions and their preference for eco-friendly supply chain options depending on their sustainability goals. Maersk’s investment comes at a time when the ocean freight business is in decline.

According to PYMNTS, the collapse is being driven by a decrease in consumer demand for goods, making journeys unprofitable at current rates, with everyday market costs for cargo transportation from Asia to the US and Europe falling by up to 90% since early 2022.

Maersk said in August that a drop in worldwide demand for container shipping by sea caused its income to fall by 40% year on year.

Customers have been lowering their inventories, according to Maersk CEO Vincent Clerc, and there isn’t any sign of this stopping very soon.

Reference: Maersk

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