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Creating Global Opportunities: Maersk Line in Containerisation, 1973-2013

Author(s):Jephson, Chris
Morgen, Henning
Reviewer(s):Sjostrom, William

Published by EH.Net (May 2015)

Chris Jephson and Henning Morgen, Creating Global Opportunities: Maersk Line in Containerisation, 1973-2013. Cambridge: Cambridge University Press, 2014.  xxix + 442 pp.  $80 (cloth), ISBN: 978-1-107-03781-6.

Reviewed for EH.Net by William Sjostrom, Centre for Policy Studies, National University of Ireland, Cork.

The Maersk Line, a division of the Danish conglomerate A.P. Moller-Maersk Group, was, from 1996 to 2013, the world’s largest container shipping line.  (It was surpassed during 2013 by the Swiss-based Mediterranean Shipping Company (UNCTAD 2013).)  Chris Jephson, a retired senior manager at Maersk Line, and Henning Morgen, the archivist for A.P. Moller-Maersk Group, have written a history of Maersk Line.  It focuses mostly on Maersk Line’s involvement since 1973 in container shipping, those mostly twenty and forty foot long boxes that carry most products in seaborne trade other than the bulk trade.  (Liquid bulk, primarily oil and gas, and dry bulk, primarily iron ore, grain, coal, bauxite, and phosphate rock, are shipped in vessels with large holds for pouring or pumping the cargo in.)

In the prologue, the authors brag about their extensive access to company archives and their interviews with a number of company executives.  Sadly, however, they make only the most banal use of them, and the result is a deeply disappointing book with a light, shallow narrative and a heavy component of cheerleading (although the many photographs are good).

Chapter 1 gives a very terse introduction to Maersk Line’s parent company and its founding in 1904 by the Danish seaman A.P. Moller.

Chapters 2 and 3 discuss the lead up to and the entry of Maersk Line into unitized cargo, and eventually into containers.  Containers made it much easier to integrate ships, train, and truck transport, offering what the authors call door-to-door service, and Chapter 3 in particular tells the story of Maersk’s development of an internal computer system and proprietary communications network for tracking cargo door-to-door for customers.

Chapters 4 through 12 narrate a series of events in the history of Maersk Line from 1978 to 2013.  The story is told sequentially; Chapter 4, for example, covers 1978-1984, and Chapter 12 brings the story up through 2008-2013.  Each chapter simply tells a few stories about events in Maersk Line history, and the chapters are not integrated.

Some of these stories are potentially interesting for the business historian.  Chapter 4, the best chapter in the book, has a nice discussion of how capacity was expanded not only through the slow process of ordering new ships, but also the much faster process of enlarging existing ships.  It also has a good discussion of the development of reefers (refrigerated containers) and the trade-offs Maersk and the rest of the industry faced in figuring out how to best power them.  The chapter also explains in detail Maersk’s relationship with the rate setting Far East Freight Conference, including Maersk’s difficulties in joining the conferences, as well as its later decision to leave.

The level of detail and analysis is, however, usually minimal.  In Chapter 7, we learn that the sanctions imposed on Iraq following the 1990 Iraqi invasion of Kuwait and the subsequent Operation Desert Storm posed substantial but unspecified problems for serving that route.  How were they solved?  We learn only that they were solved with “patience and persistence.”

Chapter 9 covers Maersk Line’s 2005 merger with P&O NedLloyd.  The chapter has a decent summary of the challenges the merger posed, from regulatory problems to managing a much larger network, with extensive use of quotations from interviews with managers from both companies.  Nothing is said, however, about how those challenges were overcome.  Even the details are ignored.  The acquisition is described as big, but readers would have had a much better sense of the scale if the authors noted that Maersk was the biggest carrier with 10.7% of TEU slots (TEU, or twenty foot equivalent unit, is the usual measure of counting containers) and P&O NedLloyd was the third largest carrier with 5.2% of TEU slots (UNCTAD 2006).

Chapter 9 also discusses Maersk’s 1999 acquisition of the liner business of the South African shipping line, Safmarine.  But other than a couple of vague sentences about unspecified synergies and lower costs, there is only a several page recitation of who wrote to whom and when contracts were finalized.  The interview here, with Knud Stubkjaer, Maersk Line’s CEO from 1999 to 2007, could have provided insights, but gives us only this: “There were some best practices that we could share in both directions.”  And it stops there, with no elaboration on what any of these are.  This pointless use of interviews is the norm throughout the book.

The discussion of Maersk’s 1999 acquisition of Sea-Land is similarly limited.  We learn that Maersk wanted Sea-Land’s terminal facilities and its superior sales capacity.  But we are also told that Maersk bought the assets, not the organization, and most of Sea-Land’s staff were not hired by Maersk.  How Maersk was going to gain Sea-Land’s superior sales capacity while not keeping the staff is left unexplained, and is characteristic of the lack of depth of the book.

The authors have substantial experience in the shipping industry, and yet they pass up opportunities to explain how the industry works.  Here is a simple example.  The authors quote (pp. 325-26) from a piece in the Containerisation International Yearbook (the major industry trade journal) that the Emma Maersk, delivered in 2006, was rated at 11,000 TEU by Maersk, but was more likely to have a capacity of 13,800 TEU.  They then inform us that the ship’s real capacity is 15,550 TEU, “which just goes to show how challenging capacity discussions can be.”  That’s it.  The reader gets no idea why three different capacity numbers were offered, or why there is a dispute.

It is not clear what audience the authors had in mind.  There is too little substance in the book to be of much benefit to economic historians.  For general readers, it is thick with names and dates, who met or wrote to whom, or who got together for a business lunch – a mess desperately in need of a good editor.  None of the people involved come alive, in the way Levinson (2006) makes a good read for both economic historian and the general reader.

References:

Levinson, Marc, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, Princeton: Princeton University Press, 2006.

UNCTAD, Review of Maritime Transport, 2006, New York: United Nations, 2006

UNCTAD, Review of Maritime Transport, 2013, New York: United Nations, 2013

William Sjostrom is Senior Lecturer in Economics at the Centre for Policy Studies, National University of Ireland, Cork.  He is the author of “Competition and Cooperation in Liner Shipping” in C. Grammenos, editor, Handbook of Maritime Economics and Business, second edition, Informa 2010.  Email: w.sjostrom@ucc.ie

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Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII