Maersk Growing Bangladesh Warehousing Footprint
A.P. Moller-Maersk is expanding its warehousing footprint in Bangladesh to offer more than half-a-million square feet of storage in the South Asian country.
Commissioned in cooperation with container depot and freight station provider Ispahani Summit Alliance Terminals Limited (ISATL), Maersk says it is entering a second phase of its partnership with the Bangladesh-based firm to give customers access to a newly built 210,000-square-foot export customs-bonded warehouse in the country’s southeastern port city of Chattogram.
More from Sourcing Journal
Customs-bonded warehouses are where imported taxable merchandise may be stored or undergo manufacturing operations without any required duty payments.
The warehouse is tailored for retail and lifestyle commodities exporters and should open by April 2024.
“We continue to invest and strengthen our commitment to Bangladesh with the expansion of our footprint in the country,” said Vikash Agarwal, managing director, Maersk South Asia in a statement. “We strongly believe in the potential of this country and its exporters, and we are fully committed to participating and playing a role in their respective growth stories.”
Maersk and ISATL had first entered into an agreement towards the end of 2021, with the latter providing 200,000 square feet of export customs-bonded warehouse space to the logistics giant just 14 months later.
The warehouse developments come as Bangladesh has seen a slowdown in exports owing to current macroeconomic concerns, which has reduced demand for retail goods in Western markets. Maersk says it expects flagging demand “to turn around as inventory restocking begins, giving a boost to exports out of the country.”
But when demand bounces back, Maersk’s Chattogram investments will support consumer goods customers.
The 100,000-square-foot warehousing space it created with Vertex Depot officially opened in February. The newest Chattogram expansion means Maersk will offer customers more than 500,000 square feet of dedicated export warehousing space when the facility opens next year.
Another 300,000 square feet of flexible warehousing capacity is available through local tie-ups to help Maersk’s client meet short-term requirements.
The global storage and warehouse leasing market is on track to grow by $91.27 billion at a compound annual growth rate (CAGR) of 7.17 percent from 2022 to 2027, according to a report from Technavio, a market research firm.
Technology-fueled investments to modernize warehouses are fueling the growth, according to Technavio. This includes automated business process tools and methodologies, Internet of Things (IoT) sensors and robotics deployments, and integrated cross-functional business process components that can identify, track, quantify and report on various sustainability factors.
Maersk CEO Vincent Clerc recently said a “radically changed business environment” drove a 26 percent decline in first quarter revenue to $14.2 billion. Net underlying profit fell 66 percent to $2.6 billion in the wake of freight rates that declined by an average of 37 percent year-over-year.
Amid today’s “freight recession,” Maersk continues investing ahead of the dissolution of the 2M alliance in 2025.
Most recently, after reporting its earnings, the global logistics company opened its first warehousing and distribution facility in Cape Town, South Africa.
The 30,000-square-foot site offers 11,000 square feet of additional open yard space. More than 85 percent of the warehouse is covered with 7,000 pallet racks.
With complete data integration into its warehouse management system (WMS), Maersk says it guarantees clear visibility of customer cargo movement and improves inventory management.
Last month, Maersk opened a new Global Service Centre (GSC) in Mexico City to service its Americas region, as well as a dedicated satellite center in Santos, Brazil. It also signed a new lease for a 685,000-square-foot facility in Derby, England.
To close 2022, Maersk signed a land grant contract to operate its first green and smart flagship logistics center in China’s Shanghai Free Trade Zone. With a total investment of $174 million, the facility is expected to be open by the third quarter of 2024.
Around the same time, the ocean freight titan opened its new Integrated Logistics Park at Port Qasim in Pakistan in December.
The many recent changes at Maersk aren’t just expansion related, despite what some of its recent acquisitions like LF Logistics and Pilot Freight Services would suggest.
The company is divesting its Maersk Supply Service (MSS) division, which is a provider of global offshore marine services and project solutions for the energy sector, to parent company A.P. Moller Holding for $685 million. Peter Wikstrom, head of M&A and strategic brands at A.P. Moller-Maersk, noted in a statement that the divestment “marks the completion of our previous decision to divest all energy related activities and focus on truly integrated logistics.”
Operating in more than 130 countries and employing more than 100,000 people worldwide. Maersk is aiming to reach net zero emissions by 2040 with new technologies, new vessels, and green fuels.
