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How Has Maersk Line Achieve a Profit Increase of 55% So Far?

September 8, 2014 12:10 pm Published by Leave your thoughts

In August 2014, Maersk Line reported a $1.1 billion first-half profit that was 55 percent higher than the same period in 2013. This left some investors wondering how the world’s largest container line was able to achieve such a huge change, in only a year’s time. You can be certain it was not because of any such short-term measures, especially since Maersk has been showing profits consistently since 2012.

Industry analysts believe that Maersk's success is tied in part to a long-term cultural and organizational change in the way the Danish carrier does business. To accomplish such a huge shift in its culture, Maersk had to change its organizational from a largely decentralized, entrepreneurial management structure organized around regions, into more a top-down hierarchy with a laser focus on cutting costs.

We have been committed to being very disciplined about deploying capacity and being very focused on taking cost out, because we do see that in this great environment the trend is only one way, and that is down … So, to my mind, lowest cost will win.- CEO Maersk Line

Maersk Line earned a $547 million second-quarter profit, up nearly 25 percent year-over-year on a 6.6 percent increase in global container volumes, which generated a 2.9 percent rise in revenue to $6.9 billion from $6.7 billion in 2013. According to the company, its higher profitability has been driven by a combination of increased volumes and lower costs per unit.

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