The Nordics have long been major players in the maritime industry, from Danish Maersk to Norwegian energy production. The environmental movement is more prominent —and important— than ever, leading to changes across many industries from food to trade logistics and more.
The world’s population is growing rapidly and a lot of the food that could feed this growing population goes to waste, in large part because of outdated and/or inefficient trade practices. Globally-known shipping companies such as Maersk investing in the future of trade and improving logistical efficiency all along the supply chain.
In pursuit of doing things the “Nordic way,” it is vital that we look toward the future. We need to understand how innovative enterprises are leading the way forward into the future of trade.
In this column, we asked the Head of Growth at the Maersk Group Sune Stilling a few questions about his thoughts on the future of trade.
Grit Daily: Tell us a little about yourself and what you do.
Sune Stilling: I have been working with Maersk in many different capacities and regions for around 20 years. My career has spanned five continents, focusing on radical industrial turnaround and transformation in emerging- and developed markets — the last 10 years in CEO and MD-level positions.
Maersk is a global transportation and logistics company. We are based in Copenhagen, Denmark, with subsidiaries and offices across 130 countries and around 88,000 employees.
Currently I lead our venture arm, which launched about two years ago. We’re primarily an early stage fund (for seed and series A startups) but also have a separate vehicle to take on later series and larger ticket deals. We made our first investment in April 2018 and currently have 13 portfolio startups.
Our team reports directly to the Maersk CEO and we work closely with each of our business units and product owners to understand their needs and see how our investments might be able to partner with them.
GD: What, to you, is “the future of trade”? What are the gaps between where we are right now and that future?
SS: The global transportation and logistics industry is extremely paper heavy and manual. Documentation and information don’t flow as smoothly as the actual products being moved around the world. Our industry has a notoriously poor customer experience partially driven by manual and obscure processes, which only benefits middlemen and brokers.
There’s a clear case for automating some of these many manual processes using AI. Can you imagine millions of documents being scanned, typed and re-typed into many different systems in hundreds of different formats?
Another opportunity area is in the optimization of cargo flows both in-land and maritime: what’s the optimal way of packing, routing and triangulating the physical flows by connecting the different players in the ecosystem?
We invest in three areas which we believe to be important to change to build a better future of trade:
Smart logistics: The future of cargo mobility is digital, flexible, transparent, and convenient. We invest in ventures that use technology and new business models to embrace collaboration, data- and asset-sharing enhancing the global flow of goods.
Enable trade: SMEs face a disadvantage in trade due to complexity in the supply chain and lack of information, trust, and financing. We invest in ventures that remove these barriers by reducing complexity and increasing access and trust.
Sustainable shipping: Global sustainability is a key societal aspiration and logistics has a large part to play in reducing waste and emissions. We invest in ventures that improve sustainability by reducing emissions and waste across the supply chain.
GD: With a legacy industry like logistics, why is it so important to look towards the future?
SS: Our industry is very inefficient, very manual and hence very ripe for disruption. That said, startups are wrong if they think everyone in shipping and transportation are idiots because we haven’t solved these issues. Clearly there’s a lot of optimization to be done across the board but you have to keep in mind that our industry moves physical goods and that makes it that much harder to optimize.
Ultimately, I think in order to disrupt this industry, you have to partner with it — it’s hard to believe that a startup in isolation can go out and disrupt the global transportation industry.
It’s also important to remember that building a better future of trade will have real meaningful impact on the global economy; as everything is basically at some point either shipped, flown, railed, trucked or similar. Creating a more sustainable method of organizing global trade is definitely a big, impactful and meaningful mission and we are excited to be part of the change.
GD: What role do startups and SMEs have to play in the future of trade?
SS: Startups can play a huge role in the transformation of the industry. I personally would be excited to see startups working on creating a more circular economic system in supply chain.
For example, right now if a t-shirt is produced in China, it gets packaged and transported to a port on a truck, then shipped to the USA and finally makes its way into a store where it’s sold. You buy the T-shirt and wear it a few times and throw it out. Wouldn’t it be good to know if that T-shirt had been made under good labor conditions with organic recycled cotton? I imagine the brands themselves might want to provide this type of provenance information to their customers in order to help them make more informed buying decisions. Afterwards, what if the consumer can bring the T-shirt back to the store to recycle it instead of just throwing it away? Something like this type of circular economy would be really exciting to see; how to make the product relevant to the customer throughout the entire product lifecycle.
But any startup that’s doing a great job in optimization, track and trace, or other areas that will help Maersk expand its value proposition is of immediate interest to us.
As mentioned before, we believe disruption is only possible through collaboration. Before we invest in any company we ask ourselves if we can truly add value to this startup in a way that no other regular VC can. This is one of our first selection criteria. Our team knows the Maersk organization very well and we know what it’ll take to get things done for the startup in terms of partnerships with different parts of our organization. So we already select for startups who we can work with to build the future of trade.
GD: What do the Nordics do well in terms of trade and logistics?
SS: Denmark has always been a nation of seafarers building networks and relations and trading across the world. As a small country, we have always been bound to seek foreign markets to source and sell goods. Maybe that is why two of the world’s largest logistics companies have been founded here in Denmark. In Maersk we have been good at building a global footprint and becoming a trusted brand worldwide, allowing us to attract world-class talents and remain market leaders in the shipping industry. But now the world is changing: there is a shift in customer demand and expectations, and we need to adapt to accommodate that.
GD: Where could we improve?
SS: On a general note, we highly value the power of collaboration. Despite being the world’s largest shipping company, we cannot change the industry ourselves. I think this goes for Danish business in general as well as the startup ecosystem specifically. Within and across industries and business sizes, we need to collaborate, and we need to be ambitious. We should aim for the moon and beyond, building new businesses that solve the big problems like global warming, poverty and hunger. That is how you make an impact and that is how you can put the Danish ecosystem on the map.
GD: What are some exciting innovations taking place within trade and logistics?
SS: We invested in a startup called Loadsmart late last year. At the core, Loadsmart is a technology company but also a digital road freight forwarder. The reason we invested is that we have a significant overlap in customers and because Loadsmart’s product offering fits well with Maersk’s and will allow us to provide additional value to our customers.
Loadsmart is using machine learning to do trucking optimization in a way that we’re not right now; partnering with them allows us to expand our value chain beyond just the port / ocean freight. We just launched a joint product with Loadsmart called Maersktransportation.com that exactly showcase our synergies. This is similar to how we work with all of their portfolio companies.
I would always recommend startups in the transportation and logistics space to reach out to us at Maersk Growth. If I were an entrepreneur in the industry, I would be excited about having access to 88,000 capable and motivated internal industry experts in the midst of a very large transformation and digitization journey.