SeaLand reborn with great expectations

Both MCC and Seago Lines have proved the effectiveness of the regional shipping line business model. Being closer to the market with greater operational flexibility, they are able to serve certain valuable customer segments better than Maersk Line. Now the model comes to the Americas, with a famous name and high expectations.

Craig Mygatt, CEO of the new SeaLand shipping line: "When Maersk Line bought the original SeaLand Service, our market share in the intra-Americas region was roughly 20%." Photo: Curt Goodwin.

As far as shipping is concerned, the Maersk brand has something to prove in the Americas. Maersk Line, the world’s largest container shipping company by market share and volume, owns a steadily shrinking slice of business in North America.

With the announcement in January of the creation of SeaLand, a new independent intra-Americas shipping line to focus on this business, the ambition is to earn back the respect of the market.

“When Maersk Line bought the original SeaLand Service, our market share in the intra-Americas region was roughly 20%,” says Craig Mygatt, CEO of the new SeaLand shipping line which will begin services on January 1st 2015.

“Today, it is about 6% compared to Maersk Line’s 14% global market share, so it is clear we haven’t served this market well. With the launch of the new SeaLand, I’m confident we can change that.”

A different kind of service
Customers in the intra-Americas market, which includes trade between North and South America, Central America and the Caribbean, are much smaller than typical Maersk Line customers. More than half of them ship fewer than 500 containers per year, while the Maersk Line operating platform is generally geared towards much larger volumes.

“These are not small customers in this region,” says Mygatt. “Many of them are quite large in Central and Latin America, and they require a more nimble carrier with more operational flexibility.”

“Can we delay a vessel for a few more containers assuming we have the right amount of slack in the schedule? Can we find an alternative if they miss a sailing because they can’t wait a week for another option? Maybe they need help with documentation. It’s these things we want to deliver on,” says Mygatt.

A dedicated shipping line shows stability too. “The Maersk brand is well known and respected, but we’re also seen as lacking commitment here,” says Jorge Monzalvo, who travelled the region to interview customers about what they wanted from a new shipping line. “Whether good or bad, many of our competitors have offered the same services since the 1990s, so they are seen as stable.”

Proof is in the product

“The experience with MCC and Seago Lines has shown us the advantage of having an organisation focused on intra-regional trades,” says Vincent Clerc, chief trade and marketing officer for Maersk Line.

“Maersk Line's focus is increasingly on long-haul where our standardisation drive is enabling a lot of the progress on value creation. The short-haul trades have a different dynamic. Customers expect a different level of service, follow-up and focus. Extracting value out of these markets requires a lot of day-to-day work, and this differentiated approach has worked well for us,” says Clerc.

But just as MCC and Seago had to prove to customers they were in fact offering something different, so too will SeaLand. For Mygatt, the big test will come after January 1st when the company officially starts on its own and customers begin receiving SeaLand bills of lading.

“When we make the full changeover to SeaLand, will the customers see the difference? That’s my focus, to prove to them that this isn’t a new paint job, that this new shipping line has been designed specifically to serve their needs,” he says.

The experience with MCC and Seago Lines has shown us the advantage of having an organisation focused on intra-regional trades.


The origin of the name, SeaLand

  •  Sea-Land Service, Inc. was a pioneering container shipping company founded by American entrepreneur Malcolm McLean in 1960. McLean was the American trucking entrepreneur who discovered the big savings to be made from packing goods in uniform containers that could easily be moved by truck or ship (known as “containerisation”).
  • Sea-Land Service, Inc. existed under various changes of ownership before being split up to form two shipping lines and a terminal operator. The international container shipping business and the Sea-Land name was acquired by Maersk in December 1999. In 2000, Maersk Line changed its name to “Maersk Sealand.” It changed it back to Maersk Line in 2006 after the purchase of P&O Nedlloyd.