With the take-over of P&O Nedlloyd, Maersk did also acquire P&O Nedlloyd Logistics and Damco Sea & Air. Although P&O Nedlloyd Logistics is already integrated into the Maersk Logistics organization, the Damco organization is not integrated yet.

Maersk Logistics is offering sea and air service as well, but is still a minor player in the market. In 2001 Maersk Logistics did acquire certain activities and assets of US logistics company Distribution Services Limited (DSL). In 2004 the new of new DSL Star Express brand and logo was launched and from that moment on all ocean activities of Maersk Logistics were executed under that new brand name. The name is commonly used in the USA and in Asia. But will this change?

Damco Sea & Air is an international Freight Forwarding organization with its Head Office in Rotterdam, The Netherlands, at the heart of Europe’s most important freight hub. Damco Sea & Air was established under the name Damco Maritime in 1988, following the acquisition by Royal Nedlloyd, at that time the parent company of the Van Gend & Loos Group. Both concerns had a variety of freight forwarding companies trading under different brand names with a number of specialty services. Additional businesses were added to the Group as Royal Nedlloyd widened its net within Europe. In 1997 Damco Maritime became part of the merged International sea freight interests of P&O Nedlloyd, wherein they acted as a neutral, stand alone and independent operating division. Since then the company has redefined its product offering, placing greater emphasis on the development of Airfreight. In 2000 the company changed its name to Damco Sea & Air to reflect this initiative. Following the take-over by AP Moller-Maersk of P&O Nedlloyd in August 2005, Damco forms part of the AP Moller-Maersk Group of companies.

Because of the difference of the culture of Maersk Logistics and Damco it was expected that Maersk would sell the Damco activities. But on the other hand the Damco company could help Maersk Logistics to reach its huge growth ambitions for the near future. At this moment Maersk Logistics is not a major player in the forwarding market. The company is not mentioned in the top 10 of freight forwarders in the world. Nevertheless the company realized a net revenue of 2 bn in 2005, and wants to increase that to over 5 bn in 2010. Furthermore the net result should increase from 47 million to over 200 million in 2010. For that it should transport over 6 million TEU’s. If that can be realized, Maersk Logistics will be one of the top 5 freight forwarders in the world. But this growth can not be established in an organic way only.

With this strategic objective selling the Damco organization would not be very wise. But Damco is a straight freight forwarder and Maersk Logistics is remains a a part of shipping company. Expressing a monopolistic shipping company culture it can not compete with the traditional freight forwarders like DHL, K+N, Schenker, Ceva, UPS, Panalpina and Geodis. In the past it has be proven that Maersk Logistics did not get the status of an independent company. The majority of activities are still based on the offerings of Maersk Line. So a solution could be the creation of an really independent freight forwarding company. And that is very likely to happen in the coming months.

It is expected that the Damco organization will be the basis (and most likely the new name) of this independent freight forwarders organization. All ocean, air and customs activities will be taken out of the Maersk Logistics organization. The in 2004 introduced brand name DSL Star Express will only be used as the name of the NVOCC operator and not of the freight forwarder. This is similar to Kuehne + Nagel which uses its Anchor Line as NVOCC operator, but the K+N brand name as the freight forwarder..

After the integration Maersk Logistics will only focus on contract logistics and warehousing and the new Damco DSL organization will market itself as a truly independent freight forwarder with ambitions to be one of the top 5 players. So on one hand a traditional freight forwarder like Kuehne + Nagel is flirting with Hapag-Lloyd to expand into shipping. And on the other hand a shipping company like Maersk has ambitions to become an independent top 5 freight forwarder.

But to really become a player in the top 5, the integration of only Damco, DSl and Maersk Logistics is not enough. Maersk should and will acquire other companies to fulfill his strategic ambitions in the freight forwarding market.

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