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Marine Log

January 8, 2008

Maersk Line to shed up to 3,000 jobs

Maersk Line, the container shipping division of the A.P. Moller Maersk Group, is to cut its global organization by 2,000 to 3,000 jobs, out of 25,000.

The job cuts are part of a new strategy to "drive the turnaround of the business and return to sustainable profitability."

Maersk says that "the future will be a Maersk Line delivering a highly reliable service focused more closely on customers' needs."

Core elements of the strategy are

Filling ships with profitable cargo
Providing the most reliable product demanded by customers
Providing a faster, more responsive service closer to customers
Reducing complexity and cost.

The job cuts come under the category of reducing complexity and cost. Maersk says the main element is reducing regional organizations into smaller teams and pushing decision-making out to the countries -- closer to the customers. It says that a "thorough process excellence project" will reduce bureaucracy and streamline processes.

For Maersk Line to concentrate on its core business of container shipping, container inland services (trucking, rail, stevedoring etc.) and logistics activities (Maersk Logistics and Damco) are being separated from the Maersk Line organization. Maersk Line's structure will also be reduced from 14 to 11 regions to further simplify the global organization.

The reorganization is expected to be completed by April 2008.

A new management team has been established to take responsibility for the delivery of the strategy, headed by Eivind Kolding, CEO, Maersk Line, who comments that "The reality is that a leaner and simpler business requires fewer people and this means there will be fewer positions in Maersk Line, mainly in the middle management layer."

The new management board, led by Eivind Kolding, will assume daily management responsibilities within the company.

The board will be:

Eivind Kolding, Chief Executive Officer
Hanne B. Sorensen, Chief Commercial Officer
Michel Deleuran, Head of Network & Product
Morten Engelstoft, Chief Operating Officer
Soren Laungaard, Chief Process Officer and Head of Customer Service
Peter Ronnest Andersen, Chief Financial Officer
William S. Allen, Head of Human Resources.