Read the full transcript from Brian Cartwright’s interview with Christian Juul-Nyholm, Managing Director, Maersk Line, UAE, Iran, Qatar & Oman. (First published November 2017 in Global Supply Chain Magazine)
Brian Cartwright, Managing Director, Top Management Resources Group:
This month I met with Christian Juul-Nyholm who is the Managing Director for Maersk Line, UAE, Iran, Qatar & Oman.
Christian has a long history of living and working in the Middle East logistics sector with his first stint from 1997 until 2006. He returned to the region again in 2014 after 9 years of working in various countries across Europe and Asia Pacific.
Representing the world’s largest container shipping company, Christian was pleased to share some thoughts around current market dynamics which are influencing the Supply Chain.
What are your thoughts on the changes in alliances between shipping lines and recent mergers and acquisitions?
Despite the new alliances our industry is still fragmented. Over the coming years we can expect even more consolidation. The alliances will offer a more equal playing field for the carriers and there will still be plenty of competitive offerings for shippers. Initially, there might be some disruption to services, as new networks are put in place.
Is the rise of the mega vessels a major contributor to overcapacity?
Mega ships make sense to reduce carbon footprint and reduce unit costs when demand meets expectations but when demand suddenly/ unexpectedly drops, the economics become challenged if you are unable to fill the ships. When you order vessels it’s important to keep a relative balance between your current fleet size and the expected market growth. While there was a bit of a frenzy the past years, today the order book is at a 27-year low.
Overcapacity in shipping is a common discussion, but what about under capacity in some trade lanes which has raised shipping costs and increased lead times?
As a business you always aim to match capacity to demand to ensure utilization stays high. The space crunch seen in Europe this spring came from the normal Chinese New Year deployment coupled with an unusually strong demand from Europe to Asia (growth in excess of 12 percent).
Due to the high number of ‘no-shows’, carriers need to overbook vessels every week. A better coordination on forecasting is vital to improve the supply chain.
How is Maersk Line contributing to creating more sustainable supply chains?
Our customers’ require sustainable products and we are seeing significantly higher interest in partnership to reduce environmental impact.
Firstly we can influence reducing average pollution per transported unit. If we can ensure that every slot is full every time a ship leaves a region, there would be significant reduction in carbon footprint.
Maersk Line continuously evaluates alternative fuels and reduced fuel consumption. Even if sea-freight is by far the eco-friendliest way to transport goods, we can do more.
Digitization is a topic that regularly comes up during my discussions with Supply Chain and Logistics professionals, what are your thoughts on digitization in shipping, and what actions are you taking in regard to this?
We are cognizant that the container industry needs to be in sync with the digitized age. Maersk Line’s focus is clear – making the entire process of getting a container from A to B seamless. We are working with companies like IBM, Microsoft and Alibaba to make this a reality in the very near future. This is also perfectly aligned with the UAE government’s focus of being completely digital in the coming five years.
What are your thoughts about doing business in Iran as its one of the countries under your remit which has some very unique challenges when compared to the rest.
The Iran market represents good opportunities in the coming years. European companies in particular have resumed doing business with Iran, and we expect this segment to experience a significant growth in the next five years. Regardless of who is the first mover, there are ample prospects to do good business in Iran.
I am interested to hear your thoughts on talent in the industry, are you finding it difficult to attract and retain people?
The company is good at retaining talent. We try to maintain a balanced mix of nationalities from all regions. In terms of attraction, we receive many senior management enquiries from Asia, but lately we are receiving less enquiries from Europe.
Prospects in Europe have improved, causing people to stay put, and attractiveness of Dubai from a compensation/cost perspective has deteriorated in comparison.
We experience that attracting candidates with families to come and work here is proving increasingly difficult.
Have you been successful in attracting local nationals in the countries you lead?
In the UAE we try to attract more Emirati employees, but as an industry we struggle to compete with both public and private sectors e.g. banks which are viewed more favourably. Dubai was built on trade/logistics, yet we still have a challenge to make the industry appear attractive. In Oman we have a majority of Omanis working.
Are there any specific initiatives you currently run, aimed at attracting local nationals which are proving successful?
We run a global initiative called ‘Go with Maersk’ – every year we hire aspiring young employees into our trainee program and we hope to attract GCC nationals too.
Is Maersk Line involved in supporting local communities through any kind of CSR initiatives?
Every winter we run a CSR funfair in Dubai. We invite around 1,000 customers and their families. Our employees work the stands and proceeds are donated to projects through government approved charities. It’s a great day for the organisation to engage with customers and a great motivator for the team giving something back to the community.
Brian Cartwright, Managing Director of the Top Management Resources Group (TMR Group), is well known throughout the international Supply Chain & Logistics sector as a focused and highly proactive business leader, mentor, and thought leader. He has partnered with Global Supply Chain magazine to run a series of exclusive interviews with senior executives to uncover the facts and provide real time insight on what’s happening in Supply Chain & Logistics sector across the region.