Maersk unit merges with Damco

       A.P.-Moller-Maersk, the Danish shipping multinational, has merged two subsidiaries under the Damco brand to expand its customer base and increase revenue.
       Maersk Logistics, a leader in supply chain management services, will now be part of a single business unit with its sister, Damco.
       Damco is a leading global freightforwarding services arm of A.P. Moller.The integration of these companies under one brand will allow Damco to offer more integrated logistics services to both sets of brand-loyal customers and to reduce complexity.
       "The integration will allow us to be a one-stop service provider for customers,whereas only a few players in the market can offer integrated service so far. It will also allow us to develop other logistics services to better respond to consumers'demand," said Kiattichai Pitpreecha,Damco Thailand's managing director.
       The new entity combines Damco's freight forwarding services - which include ocean freight, sea freight, custom clearance and tracking - with Maersk's services, such as supply chain management, consultancy, warehouses and distribution. The brand integration took effect early this month.
       Mr Kiattichai hopes the enlarged customer base from combining Damco's and Maersk's clients will boost local operations next year.
       Together, Damco and Maersk have grown by an average of 20% a year in the past five years.
       "Though market conditions are expected to shrink our growth to 10% this year, we hope 20% growth will resume next year partly from the integration,"he said.
       Next year's growth forecast and an improved margin will be achieved if the global economy gains as much as many analysts have projected, he said.
       Damco hopes its strong presence in the Asia-Pacific, considered an emerging market, will enable it to gain from the global recovery. However, a crude price surge would be a risk factor.
       Damco forecasts a growth rate of only 10% this year from shrinking export markets affected by the global slump,said Mr Kiattichai.
       "A smaller cake means fiercer competition and that has narrowed our margin by between 10% and 25%, depending on market size at each period of time.But we managed to maintain growth while other operators are recording contractions," he said.
       Diversifying customer and industry base, increasing sales activities to promote brand awareness and maintaining good service to keep customers are the key to growth, said Mr Kiattichai.
       The company also plans to improve its services in warehousing and distribution and expand freight forwarding.
       "We want to be a market leader in these services as well as supply chain management," he said.