Jakob Friis Sorensen, Danish President Director of Maersk Line Indonesia, is also the Chairman of the European Business Chamber of Commerce (EuroCham). I speak to him about the global drop in his industry’s demand as well as Maersk Line’s work in Corporate Social Responsibility.
Jakob, what first got you into the world of logistics and transport organization? What is it about this industry that excites you?
When I was young and out of the army after high school, I got a job painting harvest machines. It was the best paid job I’d had thus far but not very healthy. I was young and wanted to see the world, not standing in a garage somewhere in rural Denmark. Luckily, Danish tradition goes far back when it comes to shipping, so I applied for A.P. Moller Shipping School trainee and got the job.
You’ve been with the Maersk Group since 1989, making you quite the expert in your field. Please tell us how your journey with Maersk began and developed into what it is today.
The Shipping school was classes early morning then office work and classes again in the evening. It was 2-in-1 but promised, after two years, a posting overseas. I was supposed to go to Cairo but then suddenly was changed to Jakarta. I had no clue about Indonesia but soon found myself starting up our logistics activities here, then called Mercantile Cargo Consolidators. I clearly remember how we stuffed the first containers with footwear in Marunda and loaded them in Tanjung Priok, bound for USA.
I spent three years in Indonesia, then moved to another job in Japan. Returned to Denmark in 1995 but then quickly came back to Malaysia where I was involved in establishing Ikea’s first large distribution Centre in Asia. Four years in India really showed me what it takes to get an emerging economy going when it comes to logistics. From 2003-06 I was regionally responsible for Maersk Logistics based in Singapore, before coming “home” to Indonesia — I have been here eight years now and enjoy every moment.
The Steamship Company Svendborg was established in 1904 in Denmark by A.P. Møller and his father Peter Mærsk Møller, which marked the beginning of Maersk’s journey. Could you tell us a bit more about your company’s rich heritage?
The Moller family has been seafarers for generations and Mr. A.P. Moller and his son Maersk McKinney Moller were truly visionaries who saw the opportunities of steamships and later containerization of cargo. Their values and business acumen have built our company up from the ground. As mentioned, shipping is in the blood of the Danes which, like Indonesia, is an archipelago of more than 300 islands and one Peninsula, Jutland, which sits on top of Europe. Trade and commerce have driven our nation, which is otherwise not rich in natural resources, apart from the sea.
Under the Maersk Group there are several subsidiaries, including Maersk Oil, Maersk Line and Damco. Please tell us a bit about your subsidiary groups and what their operations consist of.
In the beginning, the different businesses grew organically all over the world as opportunities arose and entrepreneurial, young Danes were entrusted with great responsibilities in challenging locations. As the business diversified, so did the people and a good example is the in-house people development system where Maersk international Shipping Education produced over 400 graduates from all nationalities every year. The Group has changed a lot, especially after Mr. Maersk Mc Kinney Møllers’ gradual retirement. Today the units are separate, transparent, vertical businesses in a conglomerate structure.
Is Maersk researching or developing projects in renewable energies?
Maersk Oil is in oil and gas but has a strong focus on environment and to get the optimal out of the existing fossil resources. We have been looking into bio fuel and other energy sources for our vessels. In Maersk Line the efforts put into designing our newest vessels (the triple-E series) is unrivalled and brings down the fuel consumption and CO2 pollution by more than 50% .
Maersk Group operates in around 130 countries with a workforce of over 89,000. A.P Møller-Maersk has recently been listed by Forbes as 142nd largest public company in the world. What do you believe is the secret to your company’s growth and success?
Hard work is no secret. I strongly believe that it’s the values of Mr. Møller, especially Constant Care, which keeps every employee on his/her toes and that great and prudent leadership has ensured that we have been able to build the business every year.
Let’s talk about Maersk Line, which you head up here in Indonesia. What is the company’s main focus area at the moment?
The container industry has suffered in the recent years following the Lehman Brothers default. Global demand dropped drastically, especially in the developed countries, so followed the rates down. This left us only with cost and at the moment Maersk Line is focused on simplifying the business and taking non-value adding costs out of the system. This includes leaner processes and also fuel savings and better utilisation of our vessels.
Do you have plans to expand in Indonesia in the future?
Yes, we are monitoring the port developments, both in Jakarta but also Surabaya and elsewhere, which will enable us to upsize our ships. Furthermore, both in Sumatra around Kuala Tanjung and in the Eastern part of Indonesia in Bitung we are looking for ways to support the Indonesian maritime development and improve connectivity.
Let’s talk about your CSR work. As I understand it, Maersk provide emergency assistance to help those affected by natural disasters, for instance in the Philippines. Could you tell us why this is important to you and what your company does to help around the world?
As a shipping company we have the ability to be mobile and agile, so we found that somewhere there’s always a disaster happening. We helped with relief and reconstruction in Aceh, we have brought goods to people affected by Mt. Sinabung and Mt. Merapi eruptions. We are part of several international organisations for fast logistics response to disasters. Maybe therefore we have had less focus on “softer” CSR programs but as example we participated in Clean Up Jakarta Day in October.
And what about Maersk Line Indonesia’s social and environmental responsibilities within your business processes? Could you share a bit about your current and future plans?
We certainly have consciousness about our green footprint. Our global footprint is very much around the ships, but on land as well we are concerned with pollution caused by trucks, so we use rail where possible. In Jakarta we are part of the efforts in IPC to make the trucking in and out of the port more efficient, thereby reducing congestion and waste. But also in our offices we are active. Therefore we have installed LED lighting, we recycle paper, etc. It’s about having a mind-set focused on sustainability.
Maersk have a very good branding presence, and many people think ‘Maersk’ when they think of shipping and logistics. Tell us your company’s branding strategy.
As a company we changed quite visibly when Mr. Nils Andersen became CEO. He opened up much more to the press and we have very visible examples of the brand appearing on film like Captain Phillips or Building the Triple E vessels on National Geographic. We are however, business-to-business so we don’t brand ourselves like sportswear or fashion items. But it is all about communication and that’s nice when you have a good and positive story to tell.
The movie ‘Captain Phillips’ was based on the true story of the hijacking of Maersk Alabama in the Indian Ocean. Do you often have incidents of hijacking on your cargo ships, and where does this happen most? How does Maersk deal with this issue?
Luckily we have seen a dramatic improvement in the number of pirate attacks in Indonesian waters. I would say that today this is not a problem, however we do experience theft and pilferage, so safety and security remain an area of high priority and we work a lot with preventive actions.
What traits does Indonesia have that are interesting for entrepreneurs and business owners?
With 17,000 islands and being an archipelago, 250 million people, natural resources, friendly climate, Indonesia has unlimited opportunities. We can all see what the shortcomings are, so for me the challenge is always to answer; HOW do we make changes? There a plenty of solutions available and what motivates both foreign and Indonesian entrepreneurs is to see the progress and improvements which affect so many people here.
EuroCham aims to facilitate trade and investment between Europe and Indonesia. As the Chairman, how do you encourage links and growth within this relationship?
We always seek to have a dialogue with all the stake holders; as I mentioned above, for every challenge Indonesia face we also have solutions in Europe, so I feel there is a perfect match and complementarity. The obstacles are often political or simply bureaucracy, and again, the only way we get those cleared is through dialogue.
Do you also work towards making the business processes easier for European companies in Indonesia, for instance with rules and regulations when starting a business?
Exactly. We think there is so much to gain for Indonesia if it is made easier for European companies, also SMEs to do business here. It’s about solving problems and expanding the cake — not stealing. And it is also a two-way stream; Indonesian goods and companies are welcome in Europe but that is a very competitive market where players need to have a high quality of goods and services. So those require a lot of efforts in a business plan that includes market research, distribution and marketing in Europe. Indonesian companies also need good partners in Europe.
Jakob, what about your own personal successes — what key traits do you always strive towards that you believe are pivotal for success in business?
I thrive when working with people, connecting people and seeing the positive story of change. It’s hard to change if you can’t see the better future so again, I like to communicate with people and convince them to embrace it and make a better tomorrow. I don’t dream about money, but the reward for me is to see the results and having fun; and as I get older it becomes more and more exciting to help young people to develop. I spend a lot of time spotting and coaching talent in our organisation and outside. The best success is when taking a chance on some young person and letting them learn and get out on top. As one of my old friends once told me, a day long ago, somebody took a chance on us. Giving back is to support young talent develop.
Maersk Line was the main sponsor of Clean Up Jakarta Day 2015, helping to raise awareness of the rubbish problem in Jakarta. For more information please visit www.maerskline.com