“Supply Chain Management” as a phrase was first used in 1982. Bringing products to a manufacturing site or to the market at the right time has been a challenge for thousands of years, but with the dramatic growth in the world economy and the global market, the task of organizing the timely movement of goods became a discipline.
Maersk’s entry into logistics started in 1977, two years after the introduction of the containerised service on the USA-Asia route. Exports from the up-and-coming Asian economies – Taiwan, Indonesia, etc. – were on the rise, but not all customers shipped enough to fill up a container.
Cargo consolidation and distribution; Mercantile’s early solutions complemented the carrier’s role, working with the various exporters and assemble their small lots and overflows from larger shipments.
Maersk’s first logistics company was called Mercantile – the first brand name in this story. The company offered consolidation services; break-bulk cargo from several customers was consolidated into one container at a warehouse, the container was shipped as any other container and at a destination distribution centre, the cargoes were unpacked and sent onwards. This was not supply chain management, but efficient shipment of break-bulk cargoes.
To introduce proper supply chain management, innovation in IT and communication was needed. The use of the barcode with easy-to-read information about the item combined with the ability to move data from one location to another faster than the item moved were crucial for developments.
Combined with developments in information technology, two simple innovations play the main parts of the global trade revolution: the container and the barcode.
The concept of the Stock Keeping Unit (SKU) was invented – the idea of being able to track the location and movement of one box or one item at any given time. With IT and communication, the supply chain became manageable and cost could be taken out of manufacturing, purchasing, shipping and inventory.
Mercantile’s first contract on supply chain management was entered in 1990. A staggering 11,000 TEU were shipped for that one customer during 1991. Data was managed at purchase order level including support for tracking, tracing and historical movements all leading to a single electronic invoice covering all services per shipment, at an item level.
Crucial data management: a demonstration screen from 1993 showing the future of moving cargo from Jakarta to New York.
With the acquisition of Sea-Land’s container business in 1999, Maersk’s supply chain capacity was significantly strengthened. The brand was changed to Maersk Logistics and with offices in 70 countries the business was grown significantly.
The new MAERSK LOGISTICS logo clearly visible as a new shipment is being planned.
The third brand name in this story came about when the P&O Nedlloyd acquisition was made in 2005 and the supply chain and freight forwarding business took a new name. The DAMCO name derives from one of the forerunners to the logistics part of P&O Nedlloyd, a Dutch company started in 1905, a year after A.P. Møller initiated today’s A.P. Moller - Maersk.
DAMCO moved its headquarters from Copenhagen to The Hague in 2013. 10,900 employees work from 300 locations offering services within freight forwarding in ocean, airfreight and inland transportation, supply chain management, customs brokerage, warehousing and distribution.
As it was in 1977, at the beginning of containerisation, DAMCO’s logistics services are an integral part of Maersk’s end-to-end offerings – still founded in close contact to the customer and the efficient management of data about the individual SKU.