In a year overshadowed by supply chain snags, Denmark’s shipping giant A.P.-Moller Maersk A/S (Maersk) is acquiring Hong Kong-based distribution firm LF Logistics to strengthen the former’s capabilities beyond ports, giving it reach into inland distribution and last-mile delivery.
With a reported price tag of $3.6 billion, the deal is seen as Maersk’s move to get a larger piece of Asia-Pacific action particularly, where LF Logistics has established a large regional network.
It’s the latest — and largest — pact of its kind, as logistics firms focus on creating interoperable ecosystems that are more efficient and resilient in the face of disruptions like the pandemic.
A blockchain component is also implied, since Maersk and development partner IBM took the wraps off their jointly developed blockchain-based TradeLens shipping solution, which digitizes and standardizes logistics data to remove friction from global shipping touchpoints.
In a statement, Maersk CEO Soren Skou said, “The acquisition of LF Logistics is an important and truly strategic milestone on our journey to become the global integrator of container logistics; a global logistics company that provide digitally enabled end-to-end logistics solutions based on control of critical assets.”
He added, “With the acquisition of LF Logistics, we add critical capabilities in Asia Pacific to support our customers long term growth in Asia Pacific as well as capabilities and technology we can scale in our contract logistics business globally.”
As Reuters reported, “With the deal, Maersk will own 549 warehouses globally and increase total warehouse floor capacity by 40%, creating the world’s seventh largest contract logistics company behind the likes of UPS, DHL and Kuehne+Nagel.”
For its part, LF Logistics CEO Joseph Phi said, “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 for our people and our customers. It has a substantial presence around the world and will utilize LF Logistics’ talent base and operational platform across Asia to build out its logistics and fulfillment offering globally.”
That quest for a connected global logistics ecosystem is a key component of the deal.
In a separate statement, Maersk Regional Managing Director for Asia Pacific Ditlev Blicher said, “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 growing their business.”
See also: Shipping, Logistics Costs Expected to Keep Rising in ‘22
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