With the acquisition of Visible Supply Chain Management (Visible SCM), a U.S.-based B2C e-commerce logistics and parcel delivery company, A.P. Moller–Maersk has expanded its reach across the entire supply chain.
Maersk said its customers can now increase speed and service coverage in their supply chains to keep pace with the rapid rise of e-commerce for U.S. consumers and the need for faster deliveries to residences at a lower cost.
“We have set out to build strong e-commerce logistics capabilities that complement our existing end-to-end supply chain offering,” Vincent Clerc, CEO of Maersk Ocean & Logistics, said. “Visible SCM’s operating model and value proposition will strengthen our customers’ e-commerce logistics, enabling them to sell through any sales channel, deliver in any way and manage their supply chains seamlessly. While our customers trust us with a wide part of their supply chain, this acquisition will contribute to an even better end-to-end experience by providing more key e-commerce capabilities.
Clerc said Maersk’s new supply chain architecture will allow more of its small and medium-sized customers to tap into the growth driven by increased online consumer shopping. The company noted that speed, delivery visibility and cost of delivery are important decisions in consumer buying behavior when shopping online and that Visible SCM’s capabilities add a strategically located warehousing fulfillment footprint designed for optimal delivery zone coverage.
Combined with the technology of a distributed order management system essential to ensure a smooth customer experience at scale, e-commerce businesses are able to compete with the biggest brand names out there today.
“Integrating our company with Maersk aligns with our values and strategic goal to scale our services to reach more customers with our business model,” Jared Starling, CEO of Visible SCM, said. “Together we can be a trusted partner across all customers’ supply chains and bring our B2C expertise to Maersk customers with direct-to-consumer fulfillment, parcel delivery and supply chain visibility in an end-to-end offering.”
Maersk and Visible SCM said they will continue to deliver strong service to Visible SCM’s customers throughout the integration process. To ensure the company strengths continue to grow, Visible SCM’s leadership team and employees will join the integrated company to keep all customer-facing activities on a high pace.
Salt Lake City, Utah-based Visible SCM operates nine fulfillment centers in the U.S. that complement Maersk’s current warehouse presence in North America. Visible SCM handles 200,000 orders a day and 200 million packages a year with 99.8 percent order accuracy and reaches 75 percent of the U.S. geography within 24 hours.
Maersk said the enterprise value of the transaction is $838 million. Based on the company’s 2021 forecast, the revenue is estimated to around $550 million. Last week, Maersk reported that second quarter revenue grew 58 percent to $14.2 billion, with earnings before interest and taxes (EBIT) increasing almost fivefold to $4.1 billion.
Maersk also announced the intention to acquire B2C Europe Holding B.V. (B2C Europe) a logistics company focused on B2C parcel delivery services in Europe and based in The Netherlands. B2C Europe’s core offering is in parcel delivery services for retailers and brands, as well as for logistics operators, with a focus on cross-border deliveries. The acquisition of B2C Europe will enable Maersk to offer Europe-wide last mile rates to customers through one simplified interface and the convenience of full control and visibility on all parcel deliveries. The transaction is subject to closing conditions including regulatory approvals and is expected to close in the fourth quarter.
“The strong results benefited both from the exceptional circumstances in Ocean, where congestions and bottlenecks continued to drive up rates, and from solid progress in executing on our strategic transformation, where we kept a firm focus on our customers need for integrated solutions across their supply chains,” CEO Søren Skou said. “We continue to build a higher quality Ocean business with more long-term contracts, a rapidly growing logistics business and a value-creating terminals business. Our exceptional earnings and high cash flow enable us to further accelerate our transformation, invest in growing our activities, also through acquisitions and at the same time return cash to shareholders,” adding that the acquisitions of Visible SCM and B2C Europe complement existing supply chain offering and addresses customers need for e-commerce logistics.”
Speaking on a conference call with analysts, Skou said the current historically high freight rates are the result of unmet demand.
“There’s simply not enough capacity” right now, he said. “While the current earnings will come down at some point as we are able to deploy more capacity to meet currently unmet customer demand, we believe very much that we will have a much healthier business with a strong portfolio of long-term contracts when it happens.”
Also speaking on the call and discussing the new acquisitions, Clerc said the company sees that customers are moving their supply chains toward an omnichannel model, adding e-commerce to physical stores, which has led to the strong emergence and need for business-to-consumer supply chain solutions.
“The transition to omnichannel is not only about warehousing, distribution and last mile,’ he said. “It has significant upstream implications, as well, impacting sourcing decisions, size of purchase order, mode of transport and delivery needs. Being able to cater for this impact across the full supply chain is a big opportunity and a good illustration of why e-commerce is so important in our end-to-end offering, as well as why we are well positioned to lift the challenge and help our customers through the transition.”
Maersk, an integrated container logistics company working to connect and simplify its customers’ supply chains, operates in 130 countries and employs 80,000 people.