Maersk’s $500 Million Investment to Expand SE Asian Capacity 50%

Glenn Taylor
·4 min read

A.P. Moller-Maersk is throwing more weight behind Southeast Asia, announcing a more than $500 million investment in the region earlier this month.

The logistics giant is scaling its existing regional warehousing and distribution footprint there by up to 50 percent, while also investing further in air cargo, inland logistics, ocean shipping and terminal operations.

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Maersk aims to expand its presence in the four Southeast Asian markets where it already operates: Singapore, Malaysia, Indonesia and the Philippines. By 2026, Maersk expects to add nearly 480,000 square meters (5.2 million square feet) of capacity spread across the four countries, where employees number over 5,000.

The container shipping titan said the sustainable “mega distribution centers” are strategically located to serve both customers and partners, and feature advanced automation capabilities.

Maersk did not reveal how many jobs will come from the expansion, or how many new facilities would be built.

Sourcing Journal reached out to Maersk for comment.

Maersk’s planned three-year investment will largely target its logistics and services arm, but at the same time, the company says a “substantial” undisclosed investment will also fund ocean and terminals infrastructure.

“A digitally savvy population, coupled with an e-commerce boom, government’s efforts to capitalize on global manufacturing diversification, growing regional brands, and rising inter-regional trade is spurring sustained growth in this area,” said Vincent Clerc, CEO of A.P. Moller–Maersk, in a statement. “Our investment reflects the commitment to being the global logistics integrator addressing the changing needs of our customers, now and in the future while remaining steadfast to our decarbonization agenda.”

Maersk, like many logistics companies fighting a freight recession this year amid weak consumer demand, is picking its spots when it comes to long term investing. With the ocean carrier seeing net income fall 94.5 percent in the third quarter to $489 million while sales plummeted 46.9 percent to $12.1 billion, the logistics giant cut thousands of workers to rein in expenses.

In the long run, Maersk expects to lower the cost of trade across its network with the Southeast Asian expansion, which the company says is up to triple the global average in some markets.

Maersk highlighted its investment in Malaysia’s Port of Tanjung Pelepas, which it expects to become a key integrated logistics hub in the region due to its multi-modal connectivity to domestic customers.

Furthermore, Maersk is also investing in increasing its landside warehouse capacity at Singapore’s Changi Airport, which the company hopes will help solidify its position as Maersk’s regional air freight hub. In July, the logistics player broke ground on a 1.1 million-square-foot distribution center in Singapore called World Gateway 2, which should be finished in early 2025.

The Singapore facility could preview what’s in store for the new capacity Maersk expects to deploy. An automated storage and retrieval system (AS/RS) inside the new distribution center handles 30,000 pallets, with a large floor plate of 160,000 square feet.

The company is making investments into landside connectivity as well, significantly increasing its haulage truck capacity in Southeast Asia. As part of its push to offer greener solutions depending on customer needs, Maersk will also pilot biodiesel-based haulage trucks and introduce electric vehicle (EV) trucks by 2024.

On the ocean and terminal front, Maersk continues to invest in expanding its infrastructure across the region through its subsidiary APM Terminals to support enhanced ocean network design and bring additional transshipment to the region.

Maersk is also working closely with local authorities to explore opportunities in building green fuel infrastructure to support its future green vessel fleet. Maersk launch its first methanol-fueled container vessel in July, when it set sail from South Korea to Europe. The company has ordered 25 of these vessels so far.

“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,” said Elaine Low, area managing director, Southeast Asia at A.P. Moller-Maersk, in a statement. “Customers will have the flexibility to choose different transport models, omnichannel fulfillment services and their preference for eco-friendly supply chain solutions depending on their sustainability goals.”

As the world’s second-largest container shipping firm by volume transported, Maersk operates in more than 130 countries and employs over 100,000 people.