Maersk Project Logistics Sets Sights on IMEA Growth

By Simon West

Since its launch two years ago, Maersk Project Logistics (MPL) has fast evolved into a formidable force in the global logistics sector. Breakbulk spoke with Paul Smith, MPL’s regional head for India, Middle East and Africa (IMEA), to explore the company’s growing presence in the region, its entry into exciting new project markets, and the challenges of navigating geopolitical complexities.

Q: How has the breakbulk industry evolved in IMEA since you started working in the region more than two decades ago?

Paul Smith: The whole industry has matured. And I think that maturity has gained so much traction over the years because the projects are getting more sophisticated. They’re building bigger projects; they’re buying from different parts of the world – and it’s going into areas where nothing has ever been done before. Back then, we didn’t have roads or infrastructure. Because of that, we’ve had to stand shoulder to shoulder with the contractor or project owner to say, “guys, we’ve got to figure this out!”. How do we move this big piece of cargo into a destination that we’ve never been to before? I use the example of Iraq – when the country opened up after the conflicts, we were sending in very heavy stuff and the infrastructure was creaking. You could say the same about Africa as well. So we’ve developed and we’ve matured along with our customers who themselves have also got more sophisticated with their contractual terms and expectations from partners.

Q: And you've now seen improvements in the region’s infrastructure?

PS: Each of the areas within IMEA has different maturity levels. The Middle East, in general, has superb infrastructure. Even in countries such as Iraq, developments that have occurred over the last 10-20 years have been incredible. Port infrastructure in India is very good – their feeder services into the terminals and the road conditions are improving greatly. In Africa it’s slightly different. If you come out of the big cities, then you’re really struggling. And that’s not because it’s behind in any sense; it’s just so big! But in general, infrastructure in the region is better by a mile compared to how it was 20 years ago. But there’s still work to be done in certain pockets.

Q: What sectors are driving demand for breakbulk logistics?

PS: The Middle East has been built on oil and gas. And these projects are becoming bigger; they’re becoming offshore instead of onshore – everything is getting more ambitious. But what we’re also seeing is the diversification into other projects, especially on the renewables side. The national oil companies are trying to offset their carbon emissions by introducing a renewable base – be it wind, solar or carbon capture. So we’re seeing a real increase in the number of renewable projects throughout the region.

India as well is a very big renewable market, but in addition to that, it's also manufacturing the renewable components, both for domestic usage and for export. The southern part of Africa has always been quite big in the renewables sector, but we’re seeing that now moving north into more central, eastern and western areas. Renewables is an up-and-coming sector that’s going to get even bigger.

Oil and gas projects are going to remain as a major driver in those regions as well, both onshore and offshore. The energy sector in the region has been offshore for many years – ADNOC in Abu Dhabi for example, and the huge developments in Qatar at Northfield. It’s obviously more expensive to extract from a couple of hundred meters under the sea compared with a site you can drive in and out of on a daily basis, but it’s definitely going to be a stable element of the national oil companies’ mix of oil and gas business.

Q: Are there geopolitical or economic risks in IMEA that affect breakbulk?

PS: Historically, it’s not uncommon in the region for geopolitical risk – it’s something we deal with on a very regular basis, a lot more so than in other parts of the world. As an industry – where we can – we’ve had to prepare and remain vigilant. And we’ve had to learn to pivot very quickly to try to create solutions.

The ongoing problems in the Bab al-Mandab Strait – no-one has ever experienced that before, not in my generation anyway. It’s just severed the artery into global trade. Now we have to go all the way around the Cape of Good Hope. And these projects still have to be delivered! When the customer placed the order for the components, they had no idea that the Red Sea was going to be out-of-bounds; they had no idea that their buying power in China and other countries in Asia was going to be completely offset by the extra costs they’ve got to pay on the transportation side of it. That’s a challenge that we have to try to counteract when a customer says, “well I’ve got this big piece and I have to ship it into Europe for the project, how do we do it?”

Q: Can you outline MPL’s role in the region? Was the company involved in projects before its launch in 2023?

PS: Maersk was and still is very much involved in handling out-of-gauge cargo using their own fleet either on a company container or ship. When the acquisition of Martin Bencher was finalized, we took the special project cargo from Maersk into MPL, which created a strong project department that could go after those contracts in various verticals and the end-to-end project cargo activities with the added advantage of owning the capacity on a container vessel.

Let’s face it, for the majority of these projects, 70-90% of the cargo is moved on containers. And with the ups and downs of the container market, coupled with MPL being 100% owned by Maersk, this gives us we think a unique proposition to say to the customer that they don’t have to go directly to the liner or go via the forwarder to get to the liner. When you talk to MPL you’re actually talking to Maersk directly, which owns 700 vessels and millions of containers. So you have much control and much closer access into the asset.

And there is an advantage and a disadvantage with that. Some people may say, OK, you’re talking about a heavy-lift project but you’re a container carrier. And that’s one of the challenges we’ve had to try and get across to the market. Thankfully the team I’ve got in the region are all old hands who have been in the industry for many years! We want to have more strategic conversations and more strategic relationships, something our customers are very interested in as well. And we have the assets to back this up.

Q: Are there any specific sectors that you’re targeting?

PS: Obviously, everyone knows Maersk, but they might not know us as a project forwarder, so we don’t have the luxury of sitting back and waiting for customers to come to us. We are being very proactive to position ourselves as a service provider of choice. Oil and gas, renewables, power generation, mining – these are the industries we want to focus on. But we are also heavily involved in aid and relief and government business.

The project outlook in IMEA is extremely healthy, so much so we’re comparing our pipeline size to that with a lot of more mature regions in the world. There’s so much infrastructure getting built here – be it a new airport in Africa or a new port in India or a new petrochemical plant in Saudi Arabia.

Q: Can you share any expansion or investment plans?

PS: Maersk is obviously a heavy-asset company. The top asset at MPL is our people. I know everyone says that, but it’s important for us to prove our concept. We’ve got to show our customers that MPL might be new to projects, but it’s been driven by people who’ve been in the business for decades. And that’s what I’ve been focusing on over the last two years, making sure we’ve got the best people in the right places.

Our strategy is not to be asset light, but asset right. So, we’re looking at opportunities in the Indian subcontinent for example, where we see a shortage of equipment that we want to try to help solve. And it’s the same for certain parts of Africa – that’s where we’re looking at the moment.

Q: Can you outline MPL’s goals over the next five years?

PS: Because we’re still in our infancy stage, our short-term goal is to continue doing what we’re doing, to drive the quality of our work, to keep up with our health and safety standards and employ the people we need to at the right locations. Ultimately, we’ve got a plan up until 2030 and we’re going to grow exponentially up until then. We’re definitely looking at a very large chunk percentage wise of growth over the next five years!


Maersk will be exhibiting at Breakbulk Middle East on Feb 10-11 in Dubai.