Latest / The Operations Podcast with Fexingo: Process, People, and Profit in Modern Business / How Maersk Rebuilt Global Shipping Operations After the Canal Crisis
Transcript
- Lucas: Luna, let's start with a number: in November 2023, Maersk had about 700 vessels in its fleet. By May 2026, that number is hovering around 740. But the real story isn't the fleet size — it's how they're using those ships. Luna: Right, because the Red Sea crisis and the Panama Canal drought basically rewrote the rules of global shipping in 2024. Lucas: Exactly. For decades, the industry optimised for speed — a ship from Shanghai to Rotterdam in twenty-seven days, full speed ahead. Then the Houthi attacks in the Red Sea and low water levels in Panama forced Maersk to reroute vessels around the Cape of Good Hope. That added ten to fourteen days per voyage. Luna: So suddenly, the operating model that made 'Daily Maersk' famous — their guaranteed daily departure from key ports — was impossible. Lucas: And they didn't fight it. In early 2024, Maersk quietly dropped the Daily Maersk promise. That had been their signature reliability product since 2011. What's interesting is what happened next. Luna: I remember reading that their on-time performance actually improved after they dropped the guarantee. That seems backwards. Lucas: It does. But here's the logic: when you promise a daily departure, you sometimes hold a vessel at port for extra cargo, or you rush loading to hit the schedule. That creates compression in the terminal and stress on the crew. Once they removed the fixed schedule, Maersk started sailing when the ship was ready, not when the calendar said so. Their on-time performance for the vessels that did sail went from about 65 percent to 73 percent in the second half of 2024. Luna: Eight percentage points. That's not nothing. So the trade-off was: fewer guaranteed departures, but better reliability for the sailings that actually happen. Lucas: Exactly. And this brings us to the core operational decision Maersk made: they chose capacity buffers over speed buffers. Let me explain what I mean. Lucas: A traditional lean operation tries to eliminate buffers — no extra ships, no extra containers, no slack in the schedule. But Maersk, under CEO Vincent Clerc, moved in the opposite direction. They chartered an additional 60 vessels in 2024, mostly smaller feeder ships, to maintain coverage on secondary routes when the big ships got stuck on longer Cape routes. Luna: Isn't chartering expensive? Especially in a tight market? Lucas: It was. Day rates for a 6,500 TEU feeder doubled between late 2023 and mid-2024 — from about $15,000 a day to $30,000. But Maersk calculated that the cost of losing a major client like Walmart or Nike to a competitor who could deliver reliably was much higher. They were buying insurance in the form of operational slack. Luna: So they're essentially saying: we'll pay more for capacity now, to keep our customers from defecting. That's a big shift from the 2010s era of ultra-lean shipping. Lucas: It is. And it's not just about number of vessels — it's about speed. Maersk also slowed down its average cruising speed from about 22 knots to 18 knots on the Cape route. That's 'slow steaming' — a practice they pioneered during the 2008 financial crisis to save fuel. But this time, the motivation was different. Luna: Fuel savings, sure, but also schedule alignment, right? Lucas: Exactly. If a ship leaves Shanghai ten days late because it had to wait for a berth, but you slow it down to arrive in Rotterdam exactly when the terminal has a slot, you avoid sitting idle at anchor for three days. Idle time at anchor is pure cost — no cargo moving, crew still paid, fuel for generators running. Maersk found that slow steaming plus flexible arrival windows cut port waiting times by 40 percent across their network in 2024. Luna: That's a huge efficiency gain, even though it sounds counterintuitive. You go slower but you waste less time at the destination. Lucas: Right. And this is where the operations mindset really shines — the interplay between transit speed and terminal throughput. Maersk didn't just optimise the ship in isolation; they optimised the entire door to door journey, including the bottleneck at the port. Lucas: By the way, Luna — I'm reminded that this kind of deep-dive analysis is exactly why we keep this show ad-free. We don't have to sell you anything to justify our time here. If these conversations have moved your work forward in some small way, you can support that choice at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small gesture that lets us stay completely independent. No sponsors, no pressure — just the operations stories we find interesting. Lucas: Exactly. So back to Maersk's network redesign. The longer routes forced them to rethink which ports they called directly versus which cargo gets transshipped at a hub like Algeciras or Tanjung Pelepas. Luna: Transshipment is basically reloading containers from a big ocean vessel onto a feeder ship, right? So that adds a handoff. Lucas: It does. And every handoff is a risk of delay, damage, or lost container. But Maersk realised that with the Cape route, skipping smaller ports and concentrating volume at hub ports actually reduced total transit time for most cargo. They closed direct calls at six secondary African ports and four in South America in 2024, routing that cargo through hubs instead. Luna: That seems like it would hurt those local economies — fewer direct connections. Lucas: In the short term, yes — some importers in Nigeria and Kenya complained. But Maersk's data showed that the overall reliability for those markets improved because the feeder networks from hubs could operate on more predictable schedules. A container from Shanghai to Lagos via Algeciras was taking 38 days instead of 32, but the variance dropped from plus or minus 6 days to plus or minus 2 days. That predictability is often more valuable than raw speed for a manufacturer planning production. Luna: So they traded speed for reliability. That's the same theme we saw with the Daily Maersk decision. Lucas: Consistent thread. And this is where the old Toyota production system philosophy — 'just-in-time, zero inventory' — bumps up against the reality of global supply chains after 2020. Maersk's big strategic bet is that the future belongs to 'just-in-case' operations, where you accept some extra cost for capacity buffers in exchange for keeping the system running when disruptions hit. Luna: But isn't that just returning to the pre-1990s model? Before containerisation made shipping so efficient? Lucas: Not exactly. Pre-container, ships carried breakbulk cargo and spent weeks in port. Today, even with buffers, a modern super post-Panamax vessel like Maersk's new 16,000 TEU 'A-class' ships can unload and reload in under 24 hours at an automated terminal like Rotterdam's Maasvlakte II. The baseline efficiency is so high that you can afford some slack without collapsing your margins. Luna: What about the financial side? How did Maersk's operating margin hold up through all this? Lucas: They reported a 12.4 percent operating margin for full year 2024 — down from the pandemic peak of 27 percent in 2022, but still solid for a historically low-margin industry. And crucially, their customer retention rate stayed above 90 percent. Compare that to rivals like MSC and CMA CGM, which saw retention dip to around 80 percent as they chased spot market volumes. Luna: So the operational buffers paid for themselves through customer loyalty and higher utilisation of the ships they did sail. Lucas: That's the argument. And it's not just Maersk — the whole industry is recalibrating. The UN Conference on Trade and Development estimates that global shipping capacity utilisation fell from 85 percent in 2023 to 78 percent in 2025, meaning more empty slots on vessels. But those empty slots are the buffer that kept the system running through the Red Sea crisis. Luna: Which raises the question: when the Red Sea normalises and the Panama Canal gets its new reservoir in 2027, does Maersk revert to the old model? Lucas: That's the million-dollar question. Vincent Clerc told investors in March 2026 that Maersk will maintain 'structural flexibility' — meaning they'll keep a pool of chartered vessels ready to activate when disruptions spike. They've also invested in a real-time data platform called Navify that integrates weather, port congestion, and geopolitical risk into route planning. Luna: So the operations team now has a live dashboard that says 'the Red Sea is risky, take the Cape' — and they can adjust fleet deployment in days, not months. Lucas: Exactly. That's the operational infrastructure that Maersk built during the crisis. It wasn't just about surviving the disruption — it was about learning how to flex capacity dynamically. The 60 chartered vessels became a 'swing fleet' that they can redeploy or release as needed. Luna: That sounds like a competitive moat. A smaller operator couldn't afford to hold that much slack. Lucas: Exactly. Scale matters here. Maersk's market share is about 17 percent globally, and their financial strength lets them absorb the cost of idle capacity. A smaller line like Zim or Wan Hai has to run leaner — and they were hit harder during the Red Sea rerouting, with on-time performance dropping below 50 percent at some points. Luna: So the big get bigger, not just through cost advantage, but through operational resilience that small players can't match. Lucas: That's a key takeaway. The Maersk case shows that in operations, having slack isn't waste — it's a strategic asset, as long as you know how to deploy it. The best operators don't eliminate buffers; they design buffers that can be activated quickly and cost-effectively. Lucas: One last number to leave you with: Maersk's average vessel age is 14 years, which is actually older than the industry average of 11. They've been investing in retrofits — new propellers, hull coatings, exhaust gas scrubbers — rather than buying brand new ships. That operational choice saved them about $1.2 billion in capital expenditure compared to competitors who ordered newbuilds in 2024. Luna: So they're running older ships, but running them smarter. That's the opposite of the 'newer is better' mindset. Lucas: It is. And it ties back to the core theme: operations isn't about having the newest tools; it's about how you coordinate the tools you have. Maersk's post-crisis playbook proves that a focus on buffers, real-time data, and a willingness to drop sacred cows like Daily Maersk can turn a crisis into a competitive advantage. The question now is whether they can sustain that discipline when the waters grow calm again. Luna: And that's the challenge every operations leader faces: how do you hold on to the lessons from the disruption once the disruption is over? Lucas: Exactly. Thanks, Luna. That's a great place to leave it.