Advisories
A.P. Moller - Maersk to strengthen omnichannel fulfilment capabilities through landmark acquisition
22 December 2021
As your trusted supply chain partner, Maersk is now taking another significant step to provide our customers with integrated logistics as we announce our intent to acquire LF Logistics, shifting the balance of our customer offering significantly towards global logistics and integrated end-to-end services and solutions.
LF Logistics, a Hong Kong-based omnichannel fulfilment company, will allow us to offer truly global door-to-door supply chain solutions to our customers, supported by their premium warehouse fulfilment services, omnichannel footprint and ecommerce and inland transport competences. Combined with our existing capabilities in origin consolidation, deconsolidation and distribution, after the completion of this acquisition, Maersk will be able to provide your business with a more holistic service across your logistics. With a vital, new omnichannel fulfilment product, the opportunities are almost endless with a fully integrated global supply chain.
Maersk’s origin consolidation, purchase order management and ocean services have long been highly acknowledged. The addition of LF Logistics’ excellent destination omnichannel fulfilment capabilities will help to close the loop, enabling fully integrated supply chains for our customers. There will be one homogeneous fulfilment mechanism across all geographies, with less contact points, more visibility, and more data, truly supporting our customers grow their business.
LF Logistics will significantly change our portfolio of business. They employ 10.000 people and in addition to those competencies, they bring with them an extensive warehousing network covering the Asia-Pacific markets and an attractive operational and technology platform with a proven capability to scale across multiple locations.
There are many systems in the market, but LF Logistics’ is one of the best-in-class. Having developed it themselves based on customer needs and feedback; their entire operation runs on this single, standardised ecosystem. Not only will implementing this system alongside our existing systems ease the data transfers between Maersk and your business, the standardised deployment methodology and technology will also allow us to implement a new warehouse in only three months, significantly reducing the time it takes today. Combined with our very ambitious growth strategy for our future warehouse footprint, where our ambitions are to expand to more than 800 warehouses by 2026, this will allow for new facilities every week, if needed - exactly where they benefit customers the most.
We recognize that for LF Logistics to be a global leader in the industry, achieving scale is of paramount importance. Maersk provides the ideal fit. Together we will deliver a compelling value proposition that will allow our people to attain their full potential and our customers to achieve sustainable growth.
In the past year, the need for supply chain resilience has never been more prominent. However, the key is that the resilience is scalable and agile – to be switched on and off as needed, not only from a supplier perspective, but on a company level. Our future offering that we will be able to present to you after completing this acquisition, will allow you to build end-to-end visibility with ease, seamlessly connecting supply with demand down to SKU level. Having all this flow in synergy will allow you to react quicker if disruptions happen and at the same time allow us to prioritise your most urgent cargo first. Seamless API access will support these efforts.
We look forward to sharing more details on our expanded capabilities and the added value to your logistics in due course. The transaction is expected to close in 2022, subject regulatory approvals, and until then, LF Logistics and Maersk will remain two separate, independent companies running their businesses in the ordinary course. Please visit our web advisory on Maersk.com, where you will find a more detailed Q&A prepared by our teams. Should you have any questions on how we can help you and your business please contact your local Maersk professional.
External Q&A in connection with Maersk’s intended acquisition of LF Logistics
The intended acquisition of LF Logistics is a landmark milestone in Maersk’s strategic transformation, significantly moving the needle towards Maersk becoming a truly integrated end-to-end logistics company, covering all transportation modes with value-adding services on top.
With the intended acquisition of LF Logistics, we will be even better positioned to respond to the rapidly growing needs of our customers for Contract Logistics, taking integrated logistics to a new level.
Our vision for our customer offering is to create a fulfilment-as-a-service offering, where customers can select outcomes with the following characteristics:
- Available from both origin and destination: from origin through our network of consolidation and deconsolidation warehouses and in combination with our transport offering, or straight at destination with our fulfilment network.
- Multiple capacity options: from large anchor regional warehouses to on-demand access, which will gradually be made available in all relevant geographies.
- Multiple speed options with On-Time-In-Full delivery promise: flexible access to services to allow for swift responses to changing demand or external events.
With the intended acquisition, we will add 223 distribution centres to our existing portfolio and approximately 10,000 logistics employees will join the Maersk organisation. LF Logistics will allow us to truly offer global door-to-door supply chain solutions for our customers across several fast-growing geographies, supported by their excellent warehouse fulfilment services, omnichannel footprint and ecommerce and inland transport competences.
LF Logistics will be a key enabler for our development plans not only in Asia, but also across other regions. Their operational excellence, founded in strong processes and systems, represents another key benefit to Maersk that we can use globally. Their scalable operational platform will become key for our expansion plans in the coming years and fuel our global growth in fulfilment services.
LF Logistics is a Hong-Kong based omnichannel fulfilment company, founded in 1999 and runs as a standalone company separate from Li & Fung. Today, LF Logistics is a well-established contract logistics player with a world-class reputation in omnichannel fulfilment operations through its network of 223 distribution centres across 14 countries in Asia and Oceania.
LF Logistics works predominantly in the Asia-Pacific region, working across 14 countries, including China, India, Vietnam, Australia, Japan, Korea, Cambodia, Thailand, Indonesia, Malaysia and Singapore.
Asia-Pacific is the largest regional economy in the world and is considered a key growth region. However, with a complex and diverse set of consumer markets in Asia, both Asian and Western firms have struggled to optimise their logistical costs, speed, and reliability across the region. Joining forces with LF Logistics will directly address those pain points and simplify access to the region.
Maersk’s origin consolidation, purchase order management and ocean services have long been highly acknowledged. The addition of LF Logistics’ excellent destination omnichannel fulfilment capabilities will help to close the loop, enabling fully integrated supply chains for our customers. Additionally, LF Logistics’ excellent operational and technical ecosystem will enable easier and faster integration with the warehouses, saving customers cost and time. A fully integrated global supply chain will mean one homogenous fulfilment mechanism across all geographies, with fewer variables in contact points, as well as heightened visibility and data output.
Given our deep vertical expertise in Maersk, we know that the needs differ depending on the sector in which the customer operates. With LF Logistics’ impressive portfolio of multinational consumer goods customers, we will significantly improve our offering to the Lifestyle, Retail, FMCG and Technology verticals where customers service end-consumers and require consolidation/deconsolidation capabilities at key international flows, as well as omnichannel fulfilment capabilities, including B2C distribution.
The transaction is expected to close in 2022, subject regulatory approvals, and until then, LF Logistics and Maersk will remain two separate companies running their businesses independently, in the ordinary course. After the expected closing, nothing will change in the way we service our customers. Maersk will honour the contracts and terms customers have with LF Logistics today.
We expect to communicate further details following obtaining required regulatory approvals and closing of transaction during 2022. Until then, we remain two separate companies.
