Getting on board with traceability

Gerard Morrison, Maersk Line NZTraceability and visibility are the biggest concern for markets in Asia, says the new Maersk Lines chief executive Gerard Morrison.

After 2013’s food-related global scares, such as the horsemeat scandal in Europe, the one thing that’s constant in all his dealings with food industry customers is food safety, says Morrison.

“Traceability and visibility is a big concern for other markets around the world, but particularly for emerging markets in Asia. Our concern is to keep working with New Zealand’s meat and other food industries to develop cold chain systems to meet their requirements.”

The company moves between 5,500 and 8,000 20 foot containers of New Zealand meat each year, along with handling very substantial cargoes of dairy, fruit and vegetables for New Zealand’s food exporters. “Spoilage can occur occasionally, but it is our goal to ensure it never happens,” he says, adding that Maersk invests significant resources in research to ensure the integrity of the cold chain.

The shipping line has recently been working with AgResearch on temperature modelling to determine exactly what happens when a refrigerated container (reefer) is left off power in a port or on ship. The work is looking at how temperatures can fluctuate in different situations, how the cargo could potentially be affected, not only by temperature but also by humidity, while  constantly keeping in mind the desired core temperature of the meat, he explains.

Another new initiative for the food industry is a transparent film, developed by Maersk, to coat the inside of food containers. However, as most New Zealand meat is exported boxed, this is more relevant to dry cargoes, like grain, and some dairy products.

Morrison is the successor to former managing director Julian Bevis, who has moved to Delhi, India, to take up the role of Group Representative for the AP Moller-Maersk Group in South Asia.

Former ex-pat Kiwi and proud Cantabrian, Morrison is rapt to be back in New Zealand with his Christchurch-born wife and two small children, he says. After spending more than 17 years out of the country, he relishes that he is now in a role that presents him “with a different perspective on the world.”

Previously he worked in the telecommunications industry in both the UK and Japan, before moving to Australia in 2001 where he moved into the freight forwarding industry. He moved to Maersk in 2006 where he was initially tasked with setting up the Australian Global Freight Forwarder programme, later becoming head of key client management for Australia in 2008, where he was responsible for the development of Maersk Lines Global Key Clients.

Maersk has had a good year globally and here in New Zealand, he says, “We got back to an acceptable level of return.”

However, growth rates in freight have declined over the past few years in line with the state of the global economy, particularly in the European Union and the US. Consequently, there has been pressure on the business, with changes driven by the mismatch between supply and demand in different parts of the world, says Morrison.

This has led to a focus on costs in business, such as investment in staff which he regards as “consultants, not sales people”, and on variable costs, such as bunker fuel, says Morrison. “There has been a little help this year with the oil price, but we need to make sure that the business is sustainable.”

The world's largest container ship, the Maersk McKinney Moller.
The largest container ship in the world the new ‘Triple-E’ class Maersk McKinney Møller: 399 metres in length with a cargo capacity of 18,270 TEU (twenty foot equivalent) containers. It is the subject of a new Discovery Channel documentary about its development (see video at bottom of item).

The company’s focus on sustainability led Maersk to order 20 new ships, built to sail more efficiently in 2011 The first, the world’s largest container ship, a Triple-E christened the Maersk McKinney Møller in Okpo South Korea in June 2013, sets new standards in the container industry, not just for size but also for energy efficiency and performance. It is operating on the east-west trade between Asia and Northern Europe and has since been joined by three other Triple-E’s, with 16 more scheduled to join the Maersk fleet in 2014.

Such large ships are restricted in the number of ports that can actually accept them – only eight are big enough at this time – which means that other networks needed to be developed around them.

Maersk entered an operational alliance with the Mediterranean Shipping Company (MSC) and CMA CGM in the middle of the year. The new P3 network will operate a capacity of 2.6 million TEUs (initially 255 vessels on 29 loops) on three trade lanes: Asia to Europe; Trans-Pacific and Trans-Atlantic. The P3 Network vessels are will be operated by a joint vessel operating centre, but the three lines will continue to have fully independent sales, marketing and customer service functions.

Whilst the P3 is still awaiting regulatory approval, Morrison is of the opinion that it is still on track for the scheduled third quarter 2014 start date.

“When approved, New Zealand meat, and other food exporters, will benefit from the good connections through the network that will add more ports and give more flexibility through to market.”

No New Zealand ports will be able to take the big ships, but Maersk has two main services, each with eight vessels, taking New Zealand meat out of ports here – Auckland, Tauranga, Nelson, Lyttleton, Wellington, Port Otago and also Napier for a short summer season this year – to and from Asian hubs, to connect with the east west service.

This year will see the company continuing more of what it has already started. “There will be more focus on customers too,” he promises, adding his team will be talking to customers to see how they can help take complexity out of the logistics equation. The plan is to move to more online solutions, like e-transactions, which he says New Zealand is already quite advanced in, “and, generally, being more visible about how we perform.”

(See the following time-lapse video from Maersk about the first Triple-E ship’s build).

(This article has appeared in Food NZ magazine (February/March 2014) and is reproduced here with permission.

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