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Maersk Line CSR Analysis
- 2. 2
An Introduction to Maersk Line and its Primary Sustainability Challenges
Maersk Line is the world’s largest container shipping company, and the industry leader in advancing eco-efficient
transport. The company provides global transport through its 374 offices in 116 countries. They employ 7,000 seafarers
and 25,000 land-based employees. In 2012, the company transported goods valued at $675 billion. Their industry-
leading Triple-E vessels can hold 18,000 TEUs (twenty foot equivalents).1
Maersk Line is
a subsidiary
company of the
Maersk Group,
which is also
involved in oil
drilling and
other forms of
transportation.
The group has
an overall
sustainability
strategy: To
unlock growth
for society. This
is divided into three focus areas: 1) Energy efficiency, 2) enabling trade, and 3) investing in education. All of these began
implementation in 2014, so no reporting is currently available. The 2013 Maersk sustainability report had a more
widespread focus on sustainability, as the report covers the whole Maersk group with 121,000 employees represented
in around 190 countries.
The United Nations Conference on Trade and Development (UNCTAD) annually ranks all global carriers in the marine
shipping industry.2
The maritime shipping industry assesses the relative dominance of global carriers not by their
revenue, but by the total cargo carrying capacity of their fleets.3
As measured in 2013 carrying capacity, Maersk Line,
headquartered in Denmark, as in years previous, was the number one largest shipping company globally. Maersk Line
currently is responsible for nearly 14% of all maritime shipping, with 2,149,524 TEUs (twenty foot equivalents) shipped
in 2013. Figures 1 illustrates Maersk Line’s relative dominance in the industry.
Maersk Line is responsible for 90% of Maersk Group’s C02 emissions. The CO2 emissions from a tanker is measured very
similar to a car. Therefore, Maersk has a very clear view of how much it emits. Given the thorough transparency of their
emissions data, it is easy track the progress of their stated ambition to reduce emissions each year. Maersk provides an
exact number for their CO2 emissions, as well as showing how much one tanker emits on average. In 2013, Maersk
emitted 34,056 million tons of CO2. This is a drop of 9% from 2012. In the sustainability report, it is clear, that
greenhouse gas emissions are of high importance to the Maersk group. In our interview with their supply chain
department, CO2 emissions reductions were confirmed as Maersk Line’s primary sustainability challenge. (see our
Interview in the Appendix).4
1
http://www.maerskline.com/ar-ae/about/facts-figures
2
Asariotis Regina, et al. “United Nations Review of Maritime Transport.” United Nations Conference on Trade and
Development. Geneva, Switzerland. January 2014.
3
Ibid, page 51.
4
Maersk Lines Sustainability Office. “Big impact. Big responsibility. Sustainability Progress Update 2013”. Maersk Lines.
Copenhagen, Denmark. January 2014.
Global
Rank
(in TEUs)
Shipping
Company
(Company
Headquarters)
Number
of
Vessels
(count)
Average
Vessel
Size
(TEUs)
2013 Cargo
Volume
(TEUs)
2012 Cargo
Volume
(TEUs)
Share of
Global
Fleet
Capacity
(percentag
e)
Cargo
Capacity
Growth 2012-
2013
(percentage)
1
Maersk Line
(Denmark)
453 4,745 2,149,524 2,104,825 13.4% 2.1%
2 MSC (Switzerland) 398 5,186 2,064,118 2,025,179 12.9% 1.9%
4 COSCO (China) 155 4,614 715,219 624,055 4.5% 14.6%
--
All 3 Target
Carriers
1,006 4,899 4,928,861 4,754,059 30.8% 3.7%
--
All Non-Target
Carriers
4,823 2,308 11,129,372 13,155,223 69.2% -15.4%
-- Global Fleet 5,829 2,755 16,058,233 17,909,282 100.0% -10.3%
Figure 1: 2013 Global Cargo Capacity Breakdown
- 3. 3
For the safety area, Maersk shows how many fatal accidents have happened in the past three years, and what steps they
are taking to lower their annual death rate. This is done through various campaigns as well as training the staff. The
number of fatal accidents has dropped dramatically in the past years, from over twenty to only four in 2013.
Unfortunately, Maersk does not report data on key air pollutants such as SOx and NOx.
Maersk aims to maintain the sustainability of their supply chain by requiring all of their suppliers to sign a third party
code of conduct. As with the safety area, it is hard to measure how much impact such actions has. Therefore the
reporting is mainly how many people in-house at Maersk, are dealing with making the supply chain more sustainable.
The reporting on safety and supply chain sustainability may seem a little vague, as no numbers are being reported. On
the other hand, this is a fairly complex and difficult area to report on. Maersk reports which initiatives are in place in
each area, but does not provide data on all of them. Maersk is clearly invested in sustainability reporting, but time shall
tell if they are able to bring analytics to all their focus reporting areas. By analyzing the sustainability report, the reader
gets the understanding that the management in Maersk Lines is primarily focused on greenhouse gas emissions
reductions. This is embedded sustainability because the management saves money, by reducing fuel consumption,
which is a win-win situation.
Maersk’s primary sustainability challenge is CO2 emissions reductions. Its second challenge, which is very much
secondary in importance to their CO2 emissions reductions, is worker safety and accident mitigation. They aim to be an
industry leader in addressing both of these key sustainability challenges.
Addressing the Key Sustainability Issues – Carbon Dioxide Emissions and Worker Safety
Carbon Dioxide Emissions
Global seaborne trade, carried by sea and handled by ports, accounts for 80 percent (%) of the trade of all merchandise
by volume. Developed and developing countries rely upon marine shipping and port infrastructure to enable trade and
empower economic development and prosperity. The maritime transportation industry is paramount in driving the
increased globalization of supply chains. Comparative trade competitiveness in the global economy, for all countries –
including landlocked countries – relies significantly on efficacious access to port networks and international shipping
services.5
The interconnected challenges presented by climate change, sea level rise, energy security, and environmental
sustainability are at the top of the agenda for shipping and port businesses around the world. Increasingly, businesses,
industry groups, and policymakers alike are scrutinizing ways to improve energy efficiency and reduce emissions in the
global shipping fleet as it continues to grow in concert with the global economy. Shipping CO2 emissions already
increased by more than 90% since 1990 and if no action is taken, shipping carbon emissions are expected to triple by
2050, representing up to 18% of the 2°C carbon budget by 2050. The industry is responsible for 3% of global GHG
emissions, emitting approximately 870 million tons of carbon dioxide (CO2) annually, which, by comparison, is more
than twice the amount attributable to airline transportation.6
The International Maritime Organization’s (IMO) Marine
and Environmental Protection Committee (MEPC), in their most recent greenhouse gas emissions study, estimates that
technical and operational measures have the potential to reduce shipping industry CO2 emissions by 25 – 75% of their
current levels.7
5
Asariotis Regina, et al. “United Nations Review of Maritime Transport.” United Nations Conference on Trade and
Development. Geneva, Switzerland. January 2014. P XI.
6
Buhaug, Øyvind, et al. “Prevention of Air Pollution from Ships: Second IMO GHG Study.” International Maritime
Organization.
7
Asariotis Regina, et al. “United Nations Review of Maritime Transport.” United Nations Conference on Trade and Development”.
Geneva, Switzerland. January 2014.
- 4. 4
In late 2012, Maersk Line became the first shipping company to receive global
certification from the American Bureau of Shipping for energy management. ABS
requirements for energy management are based on the ISO 50001 international
standard. The company saved almost $90 million in energy costs over three years
by measuring the performance of individual vessels, Maersk Line announced in July
2012.8
As can be seen on the bar chart shown here in figure 2, Maersk has almost achieved
its goal by reducing emission by 40% by 2020. This seems impressive with only 7
years remaining (Figure is from 2013 report) to meet this target. The question is
then, whether the target was too low, or the company is really performing well. The
answer is a mix of the two. A company sets a target, which can be achieved – this
can be used as PR. A target of 40% sounds impressive. Another factor is, that the
first part of the reduction is the easiest as well as the cheapest to gain. Now the company has to start being inventive as
well as spending more money, to shave of the last percentage.
Maersk is reporting a clear
number, of how much CO2 it
emits. This is a very open
approach, and is not a
common thing to do. The
figure shows, as well as the
issue addressed further up,
that Maersk is definitely on
the right track, and is
performing well. It offers a
service, very heavy in fuel
consumption, so it is no
surprise that it is a key factor
to limit the fuel consumption
and at the same time limit the
emission.
The effort to optimize the Maersk Line network in 2013 went beyond simple maintenance. 2013 saw a major network
overhaul and – equally important – the adoption of a new approach to network planning. This contributed significantly
to lower CO2 emissions and fuel consumption in 2013. Network improvements improved efficiency by policies aimed at
integrating slow-steaming and making more stops with fewer ships. Furthermore, the speed on the different legs of the
individual routes was reviewed and equalized so the speed is more constant. This saves fuel by avoiding sailing legs at
high speeds.
Since 2007, Maersk Line has seen a 25% reduction in CO2 per container, and since 2010, the group has achieved an 8%
improvement in CO2 efficiency, principally through the proliferation of its new Triple-E Vessels.
In a recent interview, CEO Soren Skou, was clear about what the next steps will be for the company: “Our CO2
performance has never been better, but we still see significant potential for further improvements as our new and more
efficient Triple-E ships enter into service in 2013 and 2014. Based on our performance over the past 5 years, we feel
confident setting a new target for 2020: a 40% reduction of CO2 emissions per container – kilometer, using 2007 as a
baseline.”9
8
"Maersk Beats 2020 Carbon Goal." Environmental Leader RSS. N.p., 25 Jan. 2013. Web. 07 Dec. 2014.
9
"The Rise of a Sustainability Leader: Maersk's Journey to the Triple-E - GCaptain Maritime & Offshore News." GCaptain Maritime
Offshore News ICal. N.p., 02 July 2013. Web. 07 Dec. 2014.
Figure 2
Figure 3 - Maersk CO2 Reductions
- 5. 5
Worker Safety
Various automation technologies have been introduced to shipbuilding and ship operations, including self-
loading/unloading systems, computerized navigation, and the global positioning system (GPS). Automation has markedly
reduced the number of crew needed and at the same time substantially improved safety standards. According to data
service provider “IHS Fairplay”, total vessel losses (due to accidents or sinking) have declined from more than 200 a year
in the mid-1990s to about 150 now – a remarkable improvement in safety when measured against the exponential
growth of the global fleet. 10
Maersk Line has adopted a principle that “no injury is
acceptable.” The graph in Figure 4 illustrates the
development in Maersk Line´s safety performance in
2012-2013 for Maersk Line owned vessels. Lost Time Injury
Frequency (LTIF) is defined as the frequency of work-related
accidents that resulted in at least 24 hours away from work.
Total Recordable Case Frequency (TRCF) is defined as the
frequency of work-related accidents that were either: lost-time
incidents (LTI); incidents that required medical treatment
(MWC); or restricted work incidents (RWI).11
In 2013, Maersk Line had no fatalities in their operations. Danish
authorities have conducted formal investigations of two work-
related fatalities in 2012. These confirmed that early actions
taken by Maersk Line in response to the fatalities were
appropriate and no further recommendations were made by the
authorities.
The simple accidents are the most common of all on board Maersk Line vessels. The 2013 Get Home Safe campaign used
cartoons and humor to raise awareness on board, and promote safe thought-processes and emergency preparedness
and response. The fact that it is not always in high-risk areas was a challenge when deciding on the medium for the
campaign. In the end cartoon posters were chosen as the medium for the campaign. This made the campaign less like
finger-wagging and made sure that the crew was reminded of the message in many different areas on the ship.
Looking forward, Maersk Line is focusing on driving down the frequency of incidents on the basis of the principle that no
injury is acceptable. They will continue to follow up on all injury cases. Lost time incidents, especially repetitive in-
juries, will continue to be a priority. Maersk Line emergency response preparedness was tested a number of times in
2013, for example in an incident on Emma Maersk, where the engine room was flooded with seawater. The crew
handled the situation with a very high degree of professionalism, thereby preventing any personal injury.12
10
IMO. “AMENDMENTS TO THE CODE FOR THE INVESTIGATION OF MARINE CASUALTIES AND INCIDENTS.” 21
st
Session of the IMO
Assembly.
11
Maersk Lines Sustainability Office. “Big impact. Big responsibility. Sustainability Progress Update 2013”. Maersk Lines.
Copenhagen, Denmark. January 2014.
12
Ibid.
Figure 4 – Worker Safety Improvements (2012-2013)
development in 2013. Lost-time inci-
dents frequency (LTIF) where employ-
ees are forced to stay away from work
for a shorter or longer period of time,
was reduced for Maersk Line´s owned
fleet to 1.26, which beats the annual
2012
ciden
medi
strict
the e
his o
longe
In
opera
cond
two
ese
taken
the f
furth
by th
O
focus
are r
follow
occu
focus
of an
our ve
In
on dr
dents
no in
ue to
time
juries
e graph illustrates the development in Maersk
Line´ssafe performancein2012-2013forMaersk
Line owned vessels.
Lost Time Injury Frequency (LTIF) is defined as
the frequency of work-related accidents that re-
sulted in at least 24 hours away from work. Total
Recordable Case Frequency (TRCF) is defined as
thefrequencyofwork-relatedaccidentsthatwere
either: lost-time incidents (LTI); incidents that re-
quired medical treatment (MWC); or restricted
work incidents (RWI).
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
Feb12
Apr12
Jun12
Aug12
Okt12
Dec12
Feb13
Apr13
Jun13
Aug13
Okt13
Dec13
TRCF
LTIF
Maersk Line's safe
performance, 2012-2013
- 6. 6
Appendix 1: Interview with Caroline Mortensen, Maersk Line Supply Chain Department – December 5th
, 2014
What are, in your opinion, the most important sustainability issues Maersk is facing?
For Maersk line of course it is the CO2 issue. The shipping department is responsible of the majority of CO2 emission.
(90% red.) This has to come down in the coming years. No doubt about that!
We are already achieving some of the targets we’ve set, but we are ambitious and can see possibilities for further
reduction.
What other areas are you focusing on?
For Maersk line that’s the most important.
For other parts of the group we’ve set new targets and areas of focus. From 2014 we’ve changed our sustainability
strategy. This is done so it is simpler, and creates more value for all parties involved.
Other than energy reduction, which is our most important objective, we’re focusing on a fair trade around the world as
well as improving education in Maersk.
In Maersk line what is second biggest issue?
Apart from energy efficiency, that we have already discussed, it is the safety protocol, which we’ve been focusing on the
past year.
We strive to have the best work and safety environment on board out ships. Compared to the industry we have had a
very low number of accidents. You can find all the relevant data in the sustainability report.
Going back to the efforts relating to Energy efficiency, how do you rate Maersk’s performance and reporting in an
international context?
We are doing very well. We see ourselves as industry leaders in all aspects of being environmentally friendly.
As you can see in our sustainability report, we are doing well in almost every aspect, and we our meeting the targets we
have set for ourselves.
Maersk has been a driver in the creation of the Triple E vessels, which have been a revolution to the shipping industry.
Other companies have started to follow our lead, which we see as a clear indicator, that we are going in the right
direction.
So to sum up: We se ourselves as been amongst the best when it comes to reporting and performance. The New type of
sustainability report launching in 2014, will be a step further in the right direction.
A final question: When looking at the sustainability report, many things are only addressed verbally but not
quantified, why is that?
Many things in the report is hard to put a number on. That’s why we try to describe what we are doing, and the results
we are getting.
We have our internal standards and guidelines that we follow in many aspects, to ensure, that we are living up to
international standards.
