Peggy Hollinger (Inside Business, December 30) quotes a Maersk IT executive suggesting that Maersk, accounting for almost 17 per cent of the world’s container shipments, “[is] now a technology company where we have some physical devices we need to move around”. Rightly, the “sea captains” disagree. After all, 78 per cent of group revenue is earned by the maritime unit.
Undoubtedly, Maersk spends considerable sums to develop and maintain computer information systems to deliver logistics services and products to shippers, captains, and network planners to help each optimise their respective tasks. If these information services and products are primarily used within Maersk to optimise the company’s transportation network, they constitute inputs into its downstream final output which is currently primarily transportation “services”. Only if the revenue from direct sales of Maersk technology services and products to non-Maersk customers were to vastly exceed maritime unit earnings would Maersk be a technology company.
But that goal might not even be worth pursuing. After all, technology is “knowledge about how to produce”, and any new knowledge developed by Maersk might well be worth more to the company as inputs into its own downstream shipping activities than from direct sales to others.
This would make Maersk a producer of knowledge-intensive transportation services and products, but still not a technology company.
Associate Professor of International Economics, The Fletcher School of Law and Diplomacy, Tufts University
Medford, MA, US