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Maersk Invests $500 Million in Southeast Asian Supply Chain Infrastructure

Maersk is planning to invest over $500 million to support its supply chain operations in Southeast Asia.

The Danish shipping firm said in a Monday (Dec. 4) press release that the investment aims to boost efficiency, reduce trade costs and strengthen supply chain resilience in the region.

Maersk plans to increase its warehousing and distribution capacity in Southeast Asia by up to 50%. By 2026, the company aims to add nearly 480,000 square meters of capacity in key locations such as Singapore, Malaysia, Indonesia and the Philippines.

By expanding its infrastructure, the company said it will be better equipped to handle disruptions and challenges, ensuring a smoother flow of goods and services. Additionally, Maersk noted that trade expenses in the region can be two to three times higher compared to other parts of the world, and hopes that the investment will help lower costs.

The investment also aligns with Maersk’s commitment to sustainability. The company said it has been exploring alternative fuels for shipping, including the world’s first methanol-fueled container vessel, Laura Maersk.

“Our investments in Southeast Asia aim to deliver a truly end-to-end supply chain and logistics solution to our customers, offering them greater visibility and control,” Elaine Low, area managing director, Southeast Asia at A.P. Møller–Maersk, said in a statement. “Customers will have the flexibility to choose different transport models, omnichannel-fulfilment services and their preference for eco-friendly supply chain solutions depending on their sustainability goals.”

Maersk’s investment comes as the ocean freight industry is seeing a decline.

A decrease in consumer demand for goods is driving the fall, PYMNTS reported in October, making voyages unprofitable at current rates, with daily market prices for cargo transportation from Asia to the United States and Europe dropping by as much as 90% since early 2022.

In August, Maersk reported that the decline in global demand for the shipping of containers by sea caused its revenue to decline by 40% year over year.

Maersk CEO Vincent Clerc said at the time that customers have been reducing their inventory and there is no sign of this destocking coming to an end anytime soon.

“Our case is not for a recession, but it is for a really subdued environment that will continue for the rest of this year,” Clerc added.