A.P. Moller - Maersk to strengthen omnichannel fulfilment capabilities through landmark acquisition

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.