Poul Hestbaek: “Hamburg Süd restarts: more logistics and hi tech alongside ships” | INTERVIEW

Genova. “In 40 years of career, I can say that what we are leaving behind has been the most challenging period ever”. Poul Hestbaek is the managing director of Hamburg Süd, the German company - today the Maersk group - which has presided over the oceanic routes (nowadays with around 130 ships) for a century and a half and which has its headquarters in Genoa for the central part of Southern Europe. In the city to meet some customers and the Managing Director of the area Gianluca Sussone with his team, Hestbaek paints the picture of what will be “the challenging and complex journey towards a new normality, to regain a stable market with solid customer service and the timely arrival of our ships.” The landfall for Hestbaek is a greener, digital shipping. And certainly less and less limited to sea transport only.

Mr. Hestbaek, are there any specific reasons why you are visiting Genova?
“I am visiting our team to make sure they are all well after the pandemic (when I couldn’t visit them) and following our transformation which has been significant but done very well by the team. And I am visiting several customers. Since Hamburg Süd is the brand that is close to its customers, the customers get regular attention by board members. In order to serve them individually and optimally, it’s important to understand their needs after the pandemical disruptions.”

What about the Hamburg Süd strategy for Genova and Italy, also considering the reorganization in 2020?
“As part of the Maersk Group, we are able to offer integrated end-to-end solutions today from factory at origin to end consumers in Europe or elsewhere around the globe –on all modes of transport incl. rail and air. Due to our closeness to the Italian market our focus is on medium size shippers where we are offering them the full integrated logistics.”

Which is your freight rate outlook for 2023, after two extraordinary years?
“After two extraordinary years with congestions and supply chain disruptions we are now returning to a more normal situation with better schedule reliability and port coverage. At the same time the freight rate levels are also gradually returning to a new lower level. This follows our expectations however the geopolitical (war in Ukraine) impact has accelerated mal. It is too early to come on a freight rate development, but the indication is it will be lower than the last two years. With our new integrator strategy our objective is to build up our logistic business & revenue and thereby be less dependent on the fluctuations of the ocean freight rates."

Thanks to the sky-high freight rates many carriers are investing part of their cash flow in M&A, new vessels and assets, what about Hamburg Süd?
"As part of Maersk we are investing as a Group and aligned across the brands. We have 3 main objectives: First our integrator strategy, i.e. investing in capabilities in all segments along the transport chain to own the assets where it makes a difference for our customers that we have control, e.g. terminals and warehouses. Secondly, decarbonization of logistics. We want to reach net zero (Green House Gas) by 2040 with ambitious short-term targets also for 2030. E.g. we ordered over 400 e-trucks with more to come, and 19 green methanol fueled vessels. Thirdly, we are investing in Technology and digitalization which is about visibility for our customers, helping them to take better decisions and making their supply chains more efficient. Maersk has become a tech focus company. We have tripled our tech staff over the past years and we are developing solutions in a more agile way. All our customers will benefit from those new IT solutions as they become available.”

What about Maersk Group’s plans for the future of Hamburg Süd?
”Within the Maersk Group Hamburg Süd is the brand focusing exclusively on mid sizes shippers with a wide range of logistic needs in addition to ocean shipping. Most of those customers require a mix of digital solutions and local personal assistance which is the key competence of the Hamburg Süd organization in Italy and around thew world.”

Recently a US shipper issued a complaint against Hamburg Süd through the FMC. The political pressure on the shipping lines, both in the US and in EU, is very intense and is focus on two main aspects: the environmental rules and the commercial strategies (with reference to antitrust matters). Which is your point of view about these two topics that are central for the global shipping community?

“The extraordinary market over the past two years have put pressure on all companies depending on and involved in supply change management. Disruption across many elements of logistics have caused havoc for many companies. Despite all Hamburg Süd colleagues having done their utmost, our service delivery has not been at our past standard. This has given rise to claims from customers, which we are addressing. Naturally, in extreme situations authorities are verifying a fair playing field, which we find naturel and we welcome. When it comes to the decarbonization of the shipping industry we need guiding principles and rules from international governmental bodies to ensure an efficient and fair transition to green shipping by 2050.” As final remark, Hestbaek adds: “My colleagues here in Italy and across the world has been critical to ensure the best outcome. They will also be instrumental to assist our customers to arrive at this new market situation. Like for all other industries also the logistics industry must accelerate the transition to a carbon neutral world. Maersk is leading this transformation and will continue with a strong commitment to solve this critical challenge.”