History of Maersk Company
Content
HISTORY OF MAERSK COMPANY
1877- 1909 Foundation
Shipowner A.P. Møller was born in 1876 into a family with many relations to the sea and to shipping. In 1895, A.P. Møller started as a trainee with two of his father’s business contacts in Newcastle, England. Two years later he moved to the East Prussian city of Königsberg – today Kaliningrad – and later to St. Petersburg, working within exports and shipbroking. In February 1904, A.P. Møller returned to Denmark to take up the post as manager of the chartering department of C.K. Hansen, one of the major shipping and brokerage firms in Copenhagen of that time. In April 1904, at the age of 28, A. P. Møller established, together with his father, Captain Peter Mærsk Møller, A/S Dampskibsselskabet Svendborg (the Steamship Company Svendborg) and bought a second-hand vessel, which was renamed SVENDBORG. The company had its first office in A.P. Møller’s childhood home “Villa Anna” in Svendborg. Shipowner A.P. Møller retained his job with C.K. Hansen while slowly building up the new business.
1910-1919 Own Establishment and New Ventures
The ambitious A.P. Møller, located in Copenhagen, did not always agree with the other board members in The Steamship Company Svendborg. He therefore wished to form a new steamship company in which he himself would have the final say and Dampskibsselskabet af 1912, Aktieselskab (the Steamship Company of 1912) was established with a board based in Copenhagen. In 1913, A.P. Møller terminated his position with C.K. Hansen and established his own firm with offices in Copenhagen’s venerable Stock Exchange. During the First World War A.P. Møller managed the Shipping Companies cautiously and with constant care, and both of them had strengthened their positions at the end of the war. Mærsk Mc-Kinney Møller A.P. Møller and his American born wife Chastine had four children. Mærsk Mc-Kinney Møller was born in 1913 and would eventually take over the leadership of the A.P. Moller – Maersk Group from his father. Odense Steel Shipyard From 1918 A.P. Møller took a long lease of roughly 15 acres and also bought an adjoining piece of land by the Odense Canal from the Odence City Council. Here he established by own means a newbuilding shipyard with two building berths. The first six newbuildings from the Yard were all steamships, of which the first was delivered on 26 May 1920, but already in 1921 the first motor vessel was delivered. The business was doing well, and a third building berth was added in 1924-1926. In 1927 the Yard delivered its first tanker.
1920-1929 Liner Shipping and the Tanker Trade
From Tramp Trade to Liner Shipping Already at the beginning of the 1920s A.P. Møller considered the possibilities of going into the liner business. The tramp trade, where vessels sailed from port to port depending on the demand, was anticipated to lose ground to liners in time and, moreover, participation in liner services was in keeping with Mr A.P. Møller’s policy on investment and risk diversification. This of course required careful consideration and thorough preparation – and a favourable agreement. Such an agreement was entered into with the Ford Motor Company, and on 14 July 1928 the m.s. LEISE MÆRSK left Baltimore on its first voyage between the American east coast via the Panama Canal to the Far East and back. The cargo consisted of Ford car parts and other general cargo. Today, Maersk Line is one of the world’s leading liner shipping companies. The first Tanker Vessels enter the Maersk Fleet As the industrial society became increasingly dependent on stable oil supplies, the need for tankers increased. A.P. Møller’s interest in this new business area increased as the company saw the possibility of not only increasing but also stabilising earnings. Having concluded a number of time charter deals for several years, the Shipping Companies’ first tankers were contracted, all of them for delivery in 1928. Two of the five tankers were built at the Copenhagen Floating Dock and Shipyard (completed by Burmeister & Wain in Copenhagen) and the last three at Odense Steel Shipyard.
1940-1949 Operation in Wartime
Occupation and Departure When the German troops invaded Denmark on 9 April 1940, 36 of the Maersk fleet’s vessels, all of them large tankers and liners, were away from Danish waters and therefore outside A.P. Møller’s control. The evening before the invasion A.P. Møller’s senior staff met “to go through the entire fleet, every voyage of every ship, its freight commitment, the charter party and bill of lading, and see what instructions it would be appropriate to give each individual ship”. The outcome was “PERMANENT SPECIAL INSTRUCTION ONE”, which was sent out to all vessels. It was endeavored to carry on the activities of the company from Copenhagen, but due to difficulties with communication among other things, it was decided that Mærsk Mc-Kinney Møller was to go to the USA to manage the activities. Emma and Mærsk Mc-Kinney Møller were married on 22 May 1940, and two days later Mærsk Mc-Kinney Møller was taken on as partner in the Firm of A.P. Møller. Already on 10 June the couple arrived in New York, and it took more than seven years before they returned to Denmark. In co-operation with other Danish shipowner representatives in the USA, Mærsk Mc-Kinney Møller attempted to employ the Danish vessels, until the American Government took command of them in June 1941. After that he was mainly engaged in preparations for peacetime.
In 1943 Mærsk Mc-Kinney Møller established Interseas Shipping Co., Inc., which shortly after changed its name to first Moller Shipping Company and later Moller Steamship Company. The company, which in 1946 became agent for Maersk Line in the USA, laid the groundwork for the present Maersk Inc. First Liner Services after the Second World War After the cessation of hostilities in 1945, the priority for A.P. Møller was to get their vessels moving again, before competitors captured the market. The Maersk fleet had been badly hit by many losses during the war, and the remaining vessels – of which some had still not been returned – were run-down. Furthermore, the Shipping Board’s demand for duty voyages delayed the resumption of own activities. Despite these obstacles and a necessary reorganisation of the Maersk Line organisation, A.P. Møller succeeded, as early as March 1946, in resuming the monthly sailings on the so-called Panama Line from the American east coast via the Panama Canal to the Far East. CHASTINE MÆRSK made Maersk Line’s first voyage after the Second World War with departure from New York on 16 March 1946 and called at Manila, the Philippines and Shanghai, China. Gradual Takeover of Responsibilities When the 34-year-old Mærsk Mc-Kinney Møller returned to Denmark in November 1947 after seven years in the USA, he relieved A.P. Møller of a great deal of work. In his father’s later years he took over an increasingly large share of the daily management responsibilities in the Shipping Companies and affiliated companies, and a distribution of the responsibilities was agreed between father and son. According to the original agreement A.P. Møller maintained the main responsibility for the Shipping Department (which operated the trampers), Tankers, Newbuildings, Purchase & Sales, appointment of captains as well as the financial, fiscal and monetary affairs. Mærsk Mc-Kinney Møller took over the responsibility for the daily supervision of the Ship Inspection, Engine Inspection, conversions, Chartering Department, insurance affairs, internal audit, Line Department and the contact to associated companies, among other things.
1950-1959 Expansion
The A.P. Møller and Chastine Mc-Kinney Møller Foundation The Foundation was established on 26 May 1953 by Mr. A.P. Møller and the present chairman of the board is his son, Mr. Mærsk Mc-Kinney Møller. The Foundation aims to support Danish culture and heritage, Danish shipping and medical science. Only occasionally, grants are made to non-Danish projects. Some examples of major donations from this Foundation are:
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THE OPERA, Denmark’s new opera house at the Copenhagen waterfront (2004). The establishment of The Mærsk Mc-Kinney Møller Institute for Production Technology at the University
of Southern Denmark, Odense (1997). • The restoration of the 17th century Citadel of Copenhagen (1989 and 1999).
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The establishment of The Maersk Mc-Kinney Møller Centre for Continuing Education at Churchill College,
Cambridge, United Kingdom (1992). • Several donations to medical science in Denmark and abroad. The main Shareholder Upon the death of Mr. A.P. Møller in 1965, the Foundation became the principal shareholder in the two steamship companies, Aktieselskabet Dampskibsselskabet Svendborg (the Steamship Company Svendborg) and
Dampskibsselskabet af 1912 Aktieselskab (The Steamship Company of 1912) – today A.P. Møller – Mærsk A/S with the purpose of keeping the companies on Danish hands. A new Shipyard After the Second World War the development of vessels tended towards larger units, especially tankers. The capacity of the yard facilities in Havnegade at the Odense Canal was limited to vessels of about 45,000 dwt, and in 1956 the Yard’s managing director outlined a plan for a new yard to be located on a site with potential for unlimited expansion. In 1957-1959, at Lindø on the east side of Odense Fjord, two building docks with a capacity of 200,000 dwt were constructed, together with a fitting-out berth. Among the other buildings was a welding hall which alone covered an acre and a half. The new yard facilities were inaugurated on 23 November 1959 by Prime Minister H.C. Hansen, and parallel to this production continued on the old yard in Odense, from which the last vessel was delivered in 1966. Until 1980, ship’s sections were still manufactured in Havnegade. Increased Capacity and Innovation At Lindø the capacity was increased in 1969 with the establishment of a dry dock, in which vessels of up to 650,000 dwt could be constructed. At the same time, a gantry crane was erected, the largest in Europe at the time. Lindø’s latest newbuildings, including the world’s first double-hulled supertankers and a series of the world’s largest container vessels, are the result of advanced production technique and the use of high-tech production equipment. It has been decided to cease shipbuilding at Lindø when the last vessels on order have been delivered in 2012.
1960-1969 New Activities: Oil, Off-Shore and Retail
A.P. Møller 1876-1965 Shipowner A.P. Møller died in 1965 at the age of 88, and his son Mærsk Mc-Kinney Møller took over the management of the A.P. Moller Group. A.P. Møller and the Danish Oil The story about of A.P. Møller and the Danish oil falls into four phases: The first phase took place in the years 1960-1963 when A.P. Møller decided to apply for a concession for oil exploration in Denmark. The formation of Dansk Undergrunds Consortium (DUC), the establishment of Dansk Boreselskab (the present Mærsk Olie og Gas AS), award of the concession and since then the extension of the concession area with the Danish North Sea shelf laid the groundwork for the further development. In the second phase from 1963-1973 the attention was increasingly directed towards the North Sea where the delimitation of the shelf area was implemented. DUC made its first discovery in the Danish sector of North Sea, and the Dan Field came onstream in the summer of 1972. The years with high oil prices, 1973-1985, constitute the third phase where DUC implemented an extensive development of the production system on the Danish North Sea fields and entered into a major gas sales agreement with the Danish State which, on the other hand, made extensive cuts in A.P. Møller’s concession.
The fourth phase set in from 1985 when oil prices began to plunge. That triggered off technological innovation, which has formed the basis of the significant progress for both DUC and its operator Mærsk Olie og Gas AS since then. The efforts made by the Partners in DUC since 1962 has had a positive effect on the Danish society. The activities have prepared the grounds for a new Danish industry, created jobs, made Denmark self-sufficient in oil and gas, given a positive effect on the balance of payments, resulting in billion revenues in the form of taxes and royalties to the Danish state. Besides the North Sea, Mærsk Olie og Gas AS today participates in oil production in Qatar, Algeria and Kazakhstan. Exploration activities are carried out in the North Sea, North Africa, Central Asia, the Middle East and South America. Establishment of Dansk Supermarked The retail arm of the A.P. Moller – Maersk Group, Dansk Supermarked A/S was established in partnership with F. Salling A/S. At the death of Ferdinand Salling in 1953, his son Herman Salling took over the management of F. Salling A/S. Having finished a trip around the world to gather inspiration and new ideas, he decided to stake on department stores, stores and supermarkets by chain operation. In 1960 Jysk Supermarked was established, and the same year the first Føtex store opened. Føtex was a completely new type of store in Denmark and was based on the vision of being able to purchase foodstuffs, hardware and textiles under the same roof. Herman Salling aimed to gain a broad foothold in Denmark, and therefore he began the search for a partner who would be able to inject additional capital. Having negotiated with several parties, he found the right partner in 1964: Herman Salling entered into an agreement with A.P. Møller, resulting in the establishment of Dansk Supermarked A/S. Work Horses of the Sea In 1962 A.P. Møller and the Shipping Companies were awarded the concession for exploration for and recovery of raw materials in the Danish subsoil. Among other things, the following years’ activities required the establishment of a supply service between onshore and the rigs that carried out the practical exploration at sea. As is the case today, the exploration activities were handled by Dansk Undergrunds Consortium (DUC), and A.P. Møller submitted in line with other shipping companies an offer for the supply services. As A.P. Møller won the contract, a new business area was added to its activities. Today, the fleet of supply vessels that serves the offshore oil and gas industry includes more than 60 purposebuilt vessels.
1970-1979 Oil Production and Container Vessels
The First Danish Oil came to Denmark On 4 July 1972 Dansk Undergrunds Consortium (DUC) initiated the first Danish oil production. The event took place on the Dan Field, 200 km west of Esbjerg. In the presence of Minister of Commerce Erling Jensen and shipowner Mærsk Mc-Kinney Møller among others, HRH Prince Henrik honoured DUC by opening the taps that allowed the oil to flow ashore.
In competition with other shipping companies A.P. Møller had won a contract for transport of the crude oil from Dan, and it was thus the Danish built tanker MARIE MÆRSK which, on 1 August 1972, could bring the first Danish oil ashore to the Gulf refinery at Stigsnæs. Nearly 12 years had passed since A.P. Møller in the national interest had undertaken a venture whose commercial possibilities at first seemed extremely limited. Having overcome many challenges and invested around half a billion Danish kroner, the Concessionaires and the DUC Partners now received the first small repayment of their efforts. Maersk Drilling The presentation of the new activity in Mærsk Post, the A.P. Moller - Maersk Group’s internal magazine, went like this: “This company will hire out drilling rigs to companies engaged in oil exploration.Three drilling rigs – two so-called semi-submersibles and one jack-up – have been ordered. The two first mentioned will be operated by Storm Drilling Corporation, Houston – competent people with whom we have a close working relationship – the third rig will be operated by us in co-operation with our American subsidiaries, and we mainly aim at employment on the Danish North Sea shelf”. Today, Maersk Drilling operate an advanced and diversified fleet within drilling, floating production and storage. Container Vessels on Maersk Line The transition to modern container transport called for heavy investment, and after several years’ consideration all major liner shipping companies began to make the first preparations in the middle of the 1960s. A.P. Møller’s thoughts on an independent container trade were discussed by successive task groups, and in the spring of 1973 it was decided to place an order for nine fast container vessels for delivery in 1975-1976. This marked the beginning of one of the largest projects in the history of the A.P. Moller – Maersk Group: More than DKK 2 billion was soon invested in vessels, terminals, containers, edp, marketing and sale of this new service. As the first of the new container vessels, ADRIAN MÆRSK departed from the Maersk Line terminal in Port Newark, New Jersey, USA on 5 September 1975. Today, the container business in A.P. Møller - Mærsk A/S consists of the global business units Maersk Line, Damco and APM Terminals as well as a number of local transport and container repair companies. Door-to-Door Transport With containerisation of the liner services in the 1970s, the need for specialised loading (consolidation) of containers to attain higher utilisation of available container space increased. This stimulated the need for improved information and documentation flow, which led to the establishment of Damco, originally called Mercantile and later Maersk Logistics. During the 1980s, other services were introduced in order to manage supply chains from cargo origin to the stores. Today, Damco’s services include an LCL programme, preparation of freight papers, airfreight as well as
warehousing and distribution. Advanced information technology is used for managing the supply chain and keeping customers informed.
1980-1989 Container Vessels from Own Shipyard and Gas Production
A new Generation of Container Vessels The Maersk Line service between USA and The Far East was containerized in 1975. Now the time had come to introduce this service on the Europe-line, the internal nickname for the Far East-Europe line. The new vessels made the voyage between Singapore and Hamburg in only 17 days, which was the fastest transit time on the market, and to the advantage of our customers, the schedule was prepared for arrivals and departures on fixed dates and fixed hours. The new container vessels were the first to be delivered from Odense Steel Shipyard, a part of the A.P. Moller – Maersk Group, in 1980. The series of nine container vessels was planned to have a capacity of 1,800 TEU, but the last vessels were enlarged to meet market demand. Car Carriers in the Maersk Fleet In October 1980 MAERSK WAVE was delivered, and in January 1981 her sister vessel MAERSK WIND followed. These vessels were the first “real” car carriers in the Maersk fleet – but the Company already had wide experience in the transport of cars. In 1969 A.P. Møller took delivery of two bulk carriers, which functioned as car carriers for a number of years. In co-operation with the East Asiatic Company a number of voyages were made during the 1970s, where cars were transported from Japan on special between-decks in the holds of the vessels. The export went to West Africa, especially Nigeria, from where returned goods, e.g. grain, were loaded. BELLA MÆRSK and BRIGIT MÆRSK, the two bulk carriers, had, however, the limitation that only passenger cars could be loaded. In time the transport requirements changed to larger cars, and A.P. Møller wanted to match the market with the new specially designed car carriers. Gas Production in the Danish North Sea More than DKK 10 billion and over eight million working hours distributed on about 20,000 people were invested in the realisation of the new gas production system, with the Tyra Field as its centre – Denmark’s largest and probably most distinct industrial complex so far. Actual gas production commenced on 31 May 1984 when a well was opened on Tyra West and gas flowed into the facilities so as to allow the systems to be tested and trimmed. On 1 July the filling of the pipeline to shore began to test DONG’s (Dansk Olie & Naturgas A/S) facilities at Nybro before the commencement of delivery, which already in 1979 had been agreed to take place on 1 October 1984. On this day Prime Minister Poul Schlüter honoured Dansk Undergrunds Consortium (DUC) by making the official opening of deliveries by pressing the start button in the control room on Tyra East. A new era in the history of Danish energy supply had begun. A new Member of the A.P. Moller Group On 1 March 1985 Norfolk Line became a member of the A.P. Moller Group. At the time of the acquisition the
company was mainly engaged in transport between Great Britain and the Netherlands, Germany and Belgium. Norfolk Line’s history dates as far back as 1946 when the company began as exporter of agricultural products from the Netherlands. In 1960 the activities were so wide-ranging that it was decided to establish own shipping company to transport the company’s cargo. The nature of the activities changed in 1969 when the company took delivery of its first roll-on/roll-off ferry, DUKE OF HOLLAND, and in the course of four years an additional two were added. In 1973 the founder sold his company to Unilever from which A.P. Møller acquired it in 1985.
1990-1999 Safe Transport of Oil in Double-Hulled Tankers
Container Production Maersk Container Industri AS was established in early 1990 with the purpose of designing, producing and marketing ISO containers of a superior quality and competitive lifetime cost for the customers. Maersk Container Industri AS' first container factory was inaugurated in Tinglev 1991, Denmark, initially for dry containers, and in 1995 the site was expanded with a new building for the manufacturing of reefer containers of a unique design. Today, production has been moved to two Maersk Container Industri container factories in Qingdao and Dongguan, China. A new Generation of Tankers The world’s first double-hulled supertanker was named on 1 December 1992 at the Lindø Yard. This event marked the setting of new standards within the shipping industry by A.P. Møller and Lloyd’s Register of Shipping. The vessel was the first in a series of six with a new double-hulled construction developed to ensure the best possible protection against pollution in case of grounding or collision. ELEO MÆRSK was designed to transport more than 300,000 tons of crude oil at a time. ELEO MÆRSK was sold in 2004. New Day-to-Day Manager of the A.P. Moller Group 30 June 1993 was a red-letter day in the history of the A.P. Moller Group. This day was Mærsk Mc-Kinney Møller’s last day as day-to-day manager after more than 60 years in A.P. Møller; the last 28 years as day-to-day manager and Chairman of the two Shipping Companies. Mærsk Mc-Kinney Møller remained Chairman of the Foundations, Shipping Companies and Odense Steel Shipyard Ltd. Jess Søderberg took over the daily management of the A.P. Moller Group, assisted by Partners Ib Kruse and Per Jørgensen. Danish Oil Production in the Middle East In 1992, Maersk Oil entered into a partnership agreement with Qatar Petroleum on behalf of the Government of Qatar on recovery and production of oil. According to the agreement Maersk Oil was to evaluate the possibility of establishing commerical oil production off Qatar. The drilling of appraisal wells in the Al Shaheen Field, of which two had set a world record in horizontal drilling at the time, was completed in 1994. The same year oil production from the fields was initiated. During the period 1996-99, Maersk Oil drilled several wells in the Al Shaheen Field and thus increased the world record with horizontal wells to 20,900 feet (6.4 km). Since, the Al Shaheen Field has been further developed.
World Record Container Vessels From the Group’s shipyard at Lindø, Maersk Line received two series of records breaking container vessels in 1996 and 1997. REGINA MÆRSK had a capacity 6,000 twenty-foot containers and SOVEREIGN MÆRSK delivered a year later had a capacity of 6,600 TEU. Both were so-called post-panamax vessels, meaning that their size did not allow them to sail through the Panama Canal. Two large Acquisitions to Maersk Line In 1999, Maersk Line significantly increased its market presence by acquiring first Safmarine Container Lines and later the international container business of Sea-Land Service Inc. All parts of both businesses were integrated with the A.P. Moller group companies, where it naturally belonged, commercially and geographically.
2000-2009 New Leadership and Increased Growth
Merger to Form A.P. Møller – Mærsk A/S In 2003, the original shipping companies, Svendborg and 1912, were merged to form A.P. Møller – Mærsk A/S, with the objective of obtaining a more manageable organisational structure. Mærsk Mc-Kinney Møller retired Mærsk Mc-Kinney Møller retired as Chairman of the Board of A.P. Møller - Mærsk A/S on 15 December 2003 and simultaneously retired from the Board. Michael Pram Rasmussen was elected as new Chairman of the Board of Directors of A.P. Møller - Mærsk A/S with effect as of that same date. Mr. Møller remained Chairman of The A.P. Møller and Chastine Mc-Kinney Møller Foundation and Chairman of Odense Steel Shipyard Ltd., and remained a partner of Firmaet A.P. Møller. World Record Breaking Drilling Rig Maersk Drilling took delivery of MÆRSK INNOVATOR, the world’s largest and most advanced jack-up drilling rig. The new jack-up drilling rig lives up to its name ’innovator’. MÆRSK INNOVATOR is thus unique in many ways. Compared to a traditional jack-up, the first thing you will notice is that the lay-out of the deck has been changed. The accommodation unit is divided into two sections, which are folded around the front leg as a large V. This releases space on the deck which, with its 2,500 m², is twice as large as on a traditional rig. With its 205 m long legs, MÆRSK INNOVATOR can operate all year at water depths of up to 150 metres in the North Sea and other areas with a corresponding harsh environment. This was over 25 metres more than the existing record for jack-up rigs held by another Maersk rig, MÆRSK GALLANT. Maersk Line growing by Acquisition On 11 August 2005 the A.P. Moller - Maersk Group took over all activities in Royal P&O Nedlloyd N.V., which was the result of a merger between British P&O Containers and Dutch Nedlloyd Lines in 1996 and a number of subsequent acquisitions. Maersk Oil Increases Production by Acquisition
With effect from 1 July 2005 A.P. Møller - Mærsk A/S’s subsidiary, Mærsk Olie og Gas AS (Maersk Oil) acquired the majority of Kerr-McGee’s UK oil and gas interests. As part of the acquisition Maersk Oil took over a staff of more than 500. Maersk Oil acquired interests in ten producing fields, five of which as operator. The total share of production was some 60,000 barrels oil equivalent per day. In addition, a number of smaller oil and gas discoveries as well as an exploration portfolio were acquired.
1877- 1909 Foundation
Shipowner A.P. Møller was born in 1876 into a family with many relations to the sea and to shipping. In 1895, A.P. Møller started as a trainee with two of his father’s business contacts in Newcastle, England. Two years later he moved to the East Prussian city of Königsberg – today Kaliningrad – and later to St. Petersburg, working within exports and shipbroking. In February 1904, A.P. Møller returned to Denmark to take up the post as manager of the chartering department of C.K. Hansen, one of the major shipping and brokerage firms in Copenhagen of that time. In April 1904, at the age of 28, A. P. Møller established, together with his father, Captain Peter Mærsk Møller, A/S Dampskibsselskabet Svendborg (the Steamship Company Svendborg) and bought a second-hand vessel, which was renamed SVENDBORG. The company had its first office in A.P. Møller’s childhood home “Villa Anna” in Svendborg. Shipowner A.P. Møller retained his job with C.K. Hansen while slowly building up the new business.
1910-1919 Own Establishment and New Ventures
The ambitious A.P. Møller, located in Copenhagen, did not always agree with the other board members in The Steamship Company Svendborg. He therefore wished to form a new steamship company in which he himself would have the final say and Dampskibsselskabet af 1912, Aktieselskab (the Steamship Company of 1912) was established with a board based in Copenhagen. In 1913, A.P. Møller terminated his position with C.K. Hansen and established his own firm with offices in Copenhagen’s venerable Stock Exchange. During the First World War A.P. Møller managed the Shipping Companies cautiously and with constant care, and both of them had strengthened their positions at the end of the war. Mærsk Mc-Kinney Møller A.P. Møller and his American born wife Chastine had four children. Mærsk Mc-Kinney Møller was born in 1913 and would eventually take over the leadership of the A.P. Moller – Maersk Group from his father. Odense Steel Shipyard From 1918 A.P. Møller took a long lease of roughly 15 acres and also bought an adjoining piece of land by the Odense Canal from the Odence City Council. Here he established by own means a newbuilding shipyard with two building berths. The first six newbuildings from the Yard were all steamships, of which the first was delivered on 26 May 1920, but already in 1921 the first motor vessel was delivered. The business was doing well, and a third building berth was added in 1924-1926. In 1927 the Yard delivered its first tanker.
1920-1929 Liner Shipping and the Tanker Trade
From Tramp Trade to Liner Shipping Already at the beginning of the 1920s A.P. Møller considered the possibilities of going into the liner business. The tramp trade, where vessels sailed from port to port depending on the demand, was anticipated to lose ground to liners in time and, moreover, participation in liner services was in keeping with Mr A.P. Møller’s policy on investment and risk diversification. This of course required careful consideration and thorough preparation – and a favourable agreement. Such an agreement was entered into with the Ford Motor Company, and on 14 July 1928 the m.s. LEISE MÆRSK left Baltimore on its first voyage between the American east coast via the Panama Canal to the Far East and back. The cargo consisted of Ford car parts and other general cargo. Today, Maersk Line is one of the world’s leading liner shipping companies. The first Tanker Vessels enter the Maersk Fleet As the industrial society became increasingly dependent on stable oil supplies, the need for tankers increased. A.P. Møller’s interest in this new business area increased as the company saw the possibility of not only increasing but also stabilising earnings. Having concluded a number of time charter deals for several years, the Shipping Companies’ first tankers were contracted, all of them for delivery in 1928. Two of the five tankers were built at the Copenhagen Floating Dock and Shipyard (completed by Burmeister & Wain in Copenhagen) and the last three at Odense Steel Shipyard.
1940-1949 Operation in Wartime
Occupation and Departure When the German troops invaded Denmark on 9 April 1940, 36 of the Maersk fleet’s vessels, all of them large tankers and liners, were away from Danish waters and therefore outside A.P. Møller’s control. The evening before the invasion A.P. Møller’s senior staff met “to go through the entire fleet, every voyage of every ship, its freight commitment, the charter party and bill of lading, and see what instructions it would be appropriate to give each individual ship”. The outcome was “PERMANENT SPECIAL INSTRUCTION ONE”, which was sent out to all vessels. It was endeavored to carry on the activities of the company from Copenhagen, but due to difficulties with communication among other things, it was decided that Mærsk Mc-Kinney Møller was to go to the USA to manage the activities. Emma and Mærsk Mc-Kinney Møller were married on 22 May 1940, and two days later Mærsk Mc-Kinney Møller was taken on as partner in the Firm of A.P. Møller. Already on 10 June the couple arrived in New York, and it took more than seven years before they returned to Denmark. In co-operation with other Danish shipowner representatives in the USA, Mærsk Mc-Kinney Møller attempted to employ the Danish vessels, until the American Government took command of them in June 1941. After that he was mainly engaged in preparations for peacetime.
In 1943 Mærsk Mc-Kinney Møller established Interseas Shipping Co., Inc., which shortly after changed its name to first Moller Shipping Company and later Moller Steamship Company. The company, which in 1946 became agent for Maersk Line in the USA, laid the groundwork for the present Maersk Inc. First Liner Services after the Second World War After the cessation of hostilities in 1945, the priority for A.P. Møller was to get their vessels moving again, before competitors captured the market. The Maersk fleet had been badly hit by many losses during the war, and the remaining vessels – of which some had still not been returned – were run-down. Furthermore, the Shipping Board’s demand for duty voyages delayed the resumption of own activities. Despite these obstacles and a necessary reorganisation of the Maersk Line organisation, A.P. Møller succeeded, as early as March 1946, in resuming the monthly sailings on the so-called Panama Line from the American east coast via the Panama Canal to the Far East. CHASTINE MÆRSK made Maersk Line’s first voyage after the Second World War with departure from New York on 16 March 1946 and called at Manila, the Philippines and Shanghai, China. Gradual Takeover of Responsibilities When the 34-year-old Mærsk Mc-Kinney Møller returned to Denmark in November 1947 after seven years in the USA, he relieved A.P. Møller of a great deal of work. In his father’s later years he took over an increasingly large share of the daily management responsibilities in the Shipping Companies and affiliated companies, and a distribution of the responsibilities was agreed between father and son. According to the original agreement A.P. Møller maintained the main responsibility for the Shipping Department (which operated the trampers), Tankers, Newbuildings, Purchase & Sales, appointment of captains as well as the financial, fiscal and monetary affairs. Mærsk Mc-Kinney Møller took over the responsibility for the daily supervision of the Ship Inspection, Engine Inspection, conversions, Chartering Department, insurance affairs, internal audit, Line Department and the contact to associated companies, among other things.
1950-1959 Expansion
The A.P. Møller and Chastine Mc-Kinney Møller Foundation The Foundation was established on 26 May 1953 by Mr. A.P. Møller and the present chairman of the board is his son, Mr. Mærsk Mc-Kinney Møller. The Foundation aims to support Danish culture and heritage, Danish shipping and medical science. Only occasionally, grants are made to non-Danish projects. Some examples of major donations from this Foundation are:
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THE OPERA, Denmark’s new opera house at the Copenhagen waterfront (2004). The establishment of The Mærsk Mc-Kinney Møller Institute for Production Technology at the University
of Southern Denmark, Odense (1997). • The restoration of the 17th century Citadel of Copenhagen (1989 and 1999).
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The establishment of The Maersk Mc-Kinney Møller Centre for Continuing Education at Churchill College,
Cambridge, United Kingdom (1992). • Several donations to medical science in Denmark and abroad. The main Shareholder Upon the death of Mr. A.P. Møller in 1965, the Foundation became the principal shareholder in the two steamship companies, Aktieselskabet Dampskibsselskabet Svendborg (the Steamship Company Svendborg) and
Dampskibsselskabet af 1912 Aktieselskab (The Steamship Company of 1912) – today A.P. Møller – Mærsk A/S with the purpose of keeping the companies on Danish hands. A new Shipyard After the Second World War the development of vessels tended towards larger units, especially tankers. The capacity of the yard facilities in Havnegade at the Odense Canal was limited to vessels of about 45,000 dwt, and in 1956 the Yard’s managing director outlined a plan for a new yard to be located on a site with potential for unlimited expansion. In 1957-1959, at Lindø on the east side of Odense Fjord, two building docks with a capacity of 200,000 dwt were constructed, together with a fitting-out berth. Among the other buildings was a welding hall which alone covered an acre and a half. The new yard facilities were inaugurated on 23 November 1959 by Prime Minister H.C. Hansen, and parallel to this production continued on the old yard in Odense, from which the last vessel was delivered in 1966. Until 1980, ship’s sections were still manufactured in Havnegade. Increased Capacity and Innovation At Lindø the capacity was increased in 1969 with the establishment of a dry dock, in which vessels of up to 650,000 dwt could be constructed. At the same time, a gantry crane was erected, the largest in Europe at the time. Lindø’s latest newbuildings, including the world’s first double-hulled supertankers and a series of the world’s largest container vessels, are the result of advanced production technique and the use of high-tech production equipment. It has been decided to cease shipbuilding at Lindø when the last vessels on order have been delivered in 2012.
1960-1969 New Activities: Oil, Off-Shore and Retail
A.P. Møller 1876-1965 Shipowner A.P. Møller died in 1965 at the age of 88, and his son Mærsk Mc-Kinney Møller took over the management of the A.P. Moller Group. A.P. Møller and the Danish Oil The story about of A.P. Møller and the Danish oil falls into four phases: The first phase took place in the years 1960-1963 when A.P. Møller decided to apply for a concession for oil exploration in Denmark. The formation of Dansk Undergrunds Consortium (DUC), the establishment of Dansk Boreselskab (the present Mærsk Olie og Gas AS), award of the concession and since then the extension of the concession area with the Danish North Sea shelf laid the groundwork for the further development. In the second phase from 1963-1973 the attention was increasingly directed towards the North Sea where the delimitation of the shelf area was implemented. DUC made its first discovery in the Danish sector of North Sea, and the Dan Field came onstream in the summer of 1972. The years with high oil prices, 1973-1985, constitute the third phase where DUC implemented an extensive development of the production system on the Danish North Sea fields and entered into a major gas sales agreement with the Danish State which, on the other hand, made extensive cuts in A.P. Møller’s concession.
The fourth phase set in from 1985 when oil prices began to plunge. That triggered off technological innovation, which has formed the basis of the significant progress for both DUC and its operator Mærsk Olie og Gas AS since then. The efforts made by the Partners in DUC since 1962 has had a positive effect on the Danish society. The activities have prepared the grounds for a new Danish industry, created jobs, made Denmark self-sufficient in oil and gas, given a positive effect on the balance of payments, resulting in billion revenues in the form of taxes and royalties to the Danish state. Besides the North Sea, Mærsk Olie og Gas AS today participates in oil production in Qatar, Algeria and Kazakhstan. Exploration activities are carried out in the North Sea, North Africa, Central Asia, the Middle East and South America. Establishment of Dansk Supermarked The retail arm of the A.P. Moller – Maersk Group, Dansk Supermarked A/S was established in partnership with F. Salling A/S. At the death of Ferdinand Salling in 1953, his son Herman Salling took over the management of F. Salling A/S. Having finished a trip around the world to gather inspiration and new ideas, he decided to stake on department stores, stores and supermarkets by chain operation. In 1960 Jysk Supermarked was established, and the same year the first Føtex store opened. Føtex was a completely new type of store in Denmark and was based on the vision of being able to purchase foodstuffs, hardware and textiles under the same roof. Herman Salling aimed to gain a broad foothold in Denmark, and therefore he began the search for a partner who would be able to inject additional capital. Having negotiated with several parties, he found the right partner in 1964: Herman Salling entered into an agreement with A.P. Møller, resulting in the establishment of Dansk Supermarked A/S. Work Horses of the Sea In 1962 A.P. Møller and the Shipping Companies were awarded the concession for exploration for and recovery of raw materials in the Danish subsoil. Among other things, the following years’ activities required the establishment of a supply service between onshore and the rigs that carried out the practical exploration at sea. As is the case today, the exploration activities were handled by Dansk Undergrunds Consortium (DUC), and A.P. Møller submitted in line with other shipping companies an offer for the supply services. As A.P. Møller won the contract, a new business area was added to its activities. Today, the fleet of supply vessels that serves the offshore oil and gas industry includes more than 60 purposebuilt vessels.
1970-1979 Oil Production and Container Vessels
The First Danish Oil came to Denmark On 4 July 1972 Dansk Undergrunds Consortium (DUC) initiated the first Danish oil production. The event took place on the Dan Field, 200 km west of Esbjerg. In the presence of Minister of Commerce Erling Jensen and shipowner Mærsk Mc-Kinney Møller among others, HRH Prince Henrik honoured DUC by opening the taps that allowed the oil to flow ashore.
In competition with other shipping companies A.P. Møller had won a contract for transport of the crude oil from Dan, and it was thus the Danish built tanker MARIE MÆRSK which, on 1 August 1972, could bring the first Danish oil ashore to the Gulf refinery at Stigsnæs. Nearly 12 years had passed since A.P. Møller in the national interest had undertaken a venture whose commercial possibilities at first seemed extremely limited. Having overcome many challenges and invested around half a billion Danish kroner, the Concessionaires and the DUC Partners now received the first small repayment of their efforts. Maersk Drilling The presentation of the new activity in Mærsk Post, the A.P. Moller - Maersk Group’s internal magazine, went like this: “This company will hire out drilling rigs to companies engaged in oil exploration.Three drilling rigs – two so-called semi-submersibles and one jack-up – have been ordered. The two first mentioned will be operated by Storm Drilling Corporation, Houston – competent people with whom we have a close working relationship – the third rig will be operated by us in co-operation with our American subsidiaries, and we mainly aim at employment on the Danish North Sea shelf”. Today, Maersk Drilling operate an advanced and diversified fleet within drilling, floating production and storage. Container Vessels on Maersk Line The transition to modern container transport called for heavy investment, and after several years’ consideration all major liner shipping companies began to make the first preparations in the middle of the 1960s. A.P. Møller’s thoughts on an independent container trade were discussed by successive task groups, and in the spring of 1973 it was decided to place an order for nine fast container vessels for delivery in 1975-1976. This marked the beginning of one of the largest projects in the history of the A.P. Moller – Maersk Group: More than DKK 2 billion was soon invested in vessels, terminals, containers, edp, marketing and sale of this new service. As the first of the new container vessels, ADRIAN MÆRSK departed from the Maersk Line terminal in Port Newark, New Jersey, USA on 5 September 1975. Today, the container business in A.P. Møller - Mærsk A/S consists of the global business units Maersk Line, Damco and APM Terminals as well as a number of local transport and container repair companies. Door-to-Door Transport With containerisation of the liner services in the 1970s, the need for specialised loading (consolidation) of containers to attain higher utilisation of available container space increased. This stimulated the need for improved information and documentation flow, which led to the establishment of Damco, originally called Mercantile and later Maersk Logistics. During the 1980s, other services were introduced in order to manage supply chains from cargo origin to the stores. Today, Damco’s services include an LCL programme, preparation of freight papers, airfreight as well as
warehousing and distribution. Advanced information technology is used for managing the supply chain and keeping customers informed.
1980-1989 Container Vessels from Own Shipyard and Gas Production
A new Generation of Container Vessels The Maersk Line service between USA and The Far East was containerized in 1975. Now the time had come to introduce this service on the Europe-line, the internal nickname for the Far East-Europe line. The new vessels made the voyage between Singapore and Hamburg in only 17 days, which was the fastest transit time on the market, and to the advantage of our customers, the schedule was prepared for arrivals and departures on fixed dates and fixed hours. The new container vessels were the first to be delivered from Odense Steel Shipyard, a part of the A.P. Moller – Maersk Group, in 1980. The series of nine container vessels was planned to have a capacity of 1,800 TEU, but the last vessels were enlarged to meet market demand. Car Carriers in the Maersk Fleet In October 1980 MAERSK WAVE was delivered, and in January 1981 her sister vessel MAERSK WIND followed. These vessels were the first “real” car carriers in the Maersk fleet – but the Company already had wide experience in the transport of cars. In 1969 A.P. Møller took delivery of two bulk carriers, which functioned as car carriers for a number of years. In co-operation with the East Asiatic Company a number of voyages were made during the 1970s, where cars were transported from Japan on special between-decks in the holds of the vessels. The export went to West Africa, especially Nigeria, from where returned goods, e.g. grain, were loaded. BELLA MÆRSK and BRIGIT MÆRSK, the two bulk carriers, had, however, the limitation that only passenger cars could be loaded. In time the transport requirements changed to larger cars, and A.P. Møller wanted to match the market with the new specially designed car carriers. Gas Production in the Danish North Sea More than DKK 10 billion and over eight million working hours distributed on about 20,000 people were invested in the realisation of the new gas production system, with the Tyra Field as its centre – Denmark’s largest and probably most distinct industrial complex so far. Actual gas production commenced on 31 May 1984 when a well was opened on Tyra West and gas flowed into the facilities so as to allow the systems to be tested and trimmed. On 1 July the filling of the pipeline to shore began to test DONG’s (Dansk Olie & Naturgas A/S) facilities at Nybro before the commencement of delivery, which already in 1979 had been agreed to take place on 1 October 1984. On this day Prime Minister Poul Schlüter honoured Dansk Undergrunds Consortium (DUC) by making the official opening of deliveries by pressing the start button in the control room on Tyra East. A new era in the history of Danish energy supply had begun. A new Member of the A.P. Moller Group On 1 March 1985 Norfolk Line became a member of the A.P. Moller Group. At the time of the acquisition the
company was mainly engaged in transport between Great Britain and the Netherlands, Germany and Belgium. Norfolk Line’s history dates as far back as 1946 when the company began as exporter of agricultural products from the Netherlands. In 1960 the activities were so wide-ranging that it was decided to establish own shipping company to transport the company’s cargo. The nature of the activities changed in 1969 when the company took delivery of its first roll-on/roll-off ferry, DUKE OF HOLLAND, and in the course of four years an additional two were added. In 1973 the founder sold his company to Unilever from which A.P. Møller acquired it in 1985.
1990-1999 Safe Transport of Oil in Double-Hulled Tankers
Container Production Maersk Container Industri AS was established in early 1990 with the purpose of designing, producing and marketing ISO containers of a superior quality and competitive lifetime cost for the customers. Maersk Container Industri AS' first container factory was inaugurated in Tinglev 1991, Denmark, initially for dry containers, and in 1995 the site was expanded with a new building for the manufacturing of reefer containers of a unique design. Today, production has been moved to two Maersk Container Industri container factories in Qingdao and Dongguan, China. A new Generation of Tankers The world’s first double-hulled supertanker was named on 1 December 1992 at the Lindø Yard. This event marked the setting of new standards within the shipping industry by A.P. Møller and Lloyd’s Register of Shipping. The vessel was the first in a series of six with a new double-hulled construction developed to ensure the best possible protection against pollution in case of grounding or collision. ELEO MÆRSK was designed to transport more than 300,000 tons of crude oil at a time. ELEO MÆRSK was sold in 2004. New Day-to-Day Manager of the A.P. Moller Group 30 June 1993 was a red-letter day in the history of the A.P. Moller Group. This day was Mærsk Mc-Kinney Møller’s last day as day-to-day manager after more than 60 years in A.P. Møller; the last 28 years as day-to-day manager and Chairman of the two Shipping Companies. Mærsk Mc-Kinney Møller remained Chairman of the Foundations, Shipping Companies and Odense Steel Shipyard Ltd. Jess Søderberg took over the daily management of the A.P. Moller Group, assisted by Partners Ib Kruse and Per Jørgensen. Danish Oil Production in the Middle East In 1992, Maersk Oil entered into a partnership agreement with Qatar Petroleum on behalf of the Government of Qatar on recovery and production of oil. According to the agreement Maersk Oil was to evaluate the possibility of establishing commerical oil production off Qatar. The drilling of appraisal wells in the Al Shaheen Field, of which two had set a world record in horizontal drilling at the time, was completed in 1994. The same year oil production from the fields was initiated. During the period 1996-99, Maersk Oil drilled several wells in the Al Shaheen Field and thus increased the world record with horizontal wells to 20,900 feet (6.4 km). Since, the Al Shaheen Field has been further developed.
World Record Container Vessels From the Group’s shipyard at Lindø, Maersk Line received two series of records breaking container vessels in 1996 and 1997. REGINA MÆRSK had a capacity 6,000 twenty-foot containers and SOVEREIGN MÆRSK delivered a year later had a capacity of 6,600 TEU. Both were so-called post-panamax vessels, meaning that their size did not allow them to sail through the Panama Canal. Two large Acquisitions to Maersk Line In 1999, Maersk Line significantly increased its market presence by acquiring first Safmarine Container Lines and later the international container business of Sea-Land Service Inc. All parts of both businesses were integrated with the A.P. Moller group companies, where it naturally belonged, commercially and geographically.
2000-2009 New Leadership and Increased Growth
Merger to Form A.P. Møller – Mærsk A/S In 2003, the original shipping companies, Svendborg and 1912, were merged to form A.P. Møller – Mærsk A/S, with the objective of obtaining a more manageable organisational structure. Mærsk Mc-Kinney Møller retired Mærsk Mc-Kinney Møller retired as Chairman of the Board of A.P. Møller - Mærsk A/S on 15 December 2003 and simultaneously retired from the Board. Michael Pram Rasmussen was elected as new Chairman of the Board of Directors of A.P. Møller - Mærsk A/S with effect as of that same date. Mr. Møller remained Chairman of The A.P. Møller and Chastine Mc-Kinney Møller Foundation and Chairman of Odense Steel Shipyard Ltd., and remained a partner of Firmaet A.P. Møller. World Record Breaking Drilling Rig Maersk Drilling took delivery of MÆRSK INNOVATOR, the world’s largest and most advanced jack-up drilling rig. The new jack-up drilling rig lives up to its name ’innovator’. MÆRSK INNOVATOR is thus unique in many ways. Compared to a traditional jack-up, the first thing you will notice is that the lay-out of the deck has been changed. The accommodation unit is divided into two sections, which are folded around the front leg as a large V. This releases space on the deck which, with its 2,500 m², is twice as large as on a traditional rig. With its 205 m long legs, MÆRSK INNOVATOR can operate all year at water depths of up to 150 metres in the North Sea and other areas with a corresponding harsh environment. This was over 25 metres more than the existing record for jack-up rigs held by another Maersk rig, MÆRSK GALLANT. Maersk Line growing by Acquisition On 11 August 2005 the A.P. Moller - Maersk Group took over all activities in Royal P&O Nedlloyd N.V., which was the result of a merger between British P&O Containers and Dutch Nedlloyd Lines in 1996 and a number of subsequent acquisitions. Maersk Oil Increases Production by Acquisition
With effect from 1 July 2005 A.P. Møller - Mærsk A/S’s subsidiary, Mærsk Olie og Gas AS (Maersk Oil) acquired the majority of Kerr-McGee’s UK oil and gas interests. As part of the acquisition Maersk Oil took over a staff of more than 500. Maersk Oil acquired interests in ten producing fields, five of which as operator. The total share of production was some 60,000 barrels oil equivalent per day. In addition, a number of smaller oil and gas discoveries as well as an exploration portfolio were acquired.
