Maersk Line Limited to Reduce Headcount and Restructure

Maersk Virginia, image: Maersk Line Limited

An internal Maersk Line Limited (MLL) memo sent to gCaptain indicates changes are on the horizon for the Norfolk, Virginia-based U.S. flagged shipping company.

In particular, the company notes plans to reduce their shore-based head count, restructuring the company into two divisions, while offering a “Voluntary Severance Program” for shore-side senior management.

The memo notes:

“The business environment for U.S. flag companies in international trades is growing more and more intense as our Government and commercial customers demand lower costs and higher output. Adding to the pressure is the declining need for U.S. flag capacity as DoD winds down its 12 years of overseas contingency operations and federal agencies face budget cuts. U.S. military cargo bookings are off 50% from their peaks and by all forecasts this current level is expected to be the “peace time normal” going forward.”

Maersk Line Limited notes that due to inherently different customers and business models, the company will be split into two divisions, one associated with their U.S. flag container and roll on/roll off ships engaged in commercial trade (Liner Business) and the other associated with all other vessels (e.g., Government-owned vessels, tankers, Ammo, etc.).

Based on previous MLL announcements, it seems likely the liner business will be brought under the Sealand brand and the rest will be under 3PSC.

We have reached out to Maersk Line Limited for further comment.

UPDATE: Maersk has sent us the following in response to this article:

The email correspondence gCaptain received is fairly straightforward as it outlines the background facts and objectives associated with the reorganization. It is an unfortunate but necessary exercise to ensure competitiveness in the marketplace… We have no plans to close the Norfolk office or to reduce the size of our fleet.