Maersk CEO Vincent Clerc has announced a 13-week timeline for the full rollout of the Gemini Cooperation network.
Vincent Clerc, CEO of Maersk, expects the full rollout of the Gemini Cooperation network, in partnership with Hapag-Lloyd, with all ships operating under the new structure, to take approximately 13 weeks. Speaking during this morning’s webcast on Q3 performance, Clerk highlighted that the shift will be a “pretty big undertaking” from the current business model as the two liner companies transition to a widely anticipated concentrated hub-and-spoke approach.
With four months to spare until the launch of the new services in February 2025, Vincent said that the switch from 2M to the Gemini network will be immediate. Clerc explained that throughout the past decade with the 2M alliance, Maersk has redeployed its network eight times. Nevertheless, the Gemini redesign will mark a more radical departure due to the new design model and partnership.
“These significant redesigns are something that we’re used to doing,” Clerc said, adding that after the switch from one service to another, operations within the Gemini network will settle into a steady weekly rhythm, aligning with past implementation experiences.
“We expect an orderly transition from one to the other and go straight into Gemini. All in all, the longest services that we have have a 13-week rotation. So until the last ship and the full cycle of the service is working on the same network, then it takes about 13 weeks, ” he added.
Speaking about the reliability target of 90%, Clerc emphasised the importance of fewer port calls and a “cleaner rotation.” He explained that with this approach, disruptions at one port would not ripple through the entire network as they do today; instead, they would be contained within a single module. This containment is crucial for significantly enhancing reliability.
Clerc also highlighted the complete integration of ships and terminals in the hubs at the process and technology level. Over the past three years, Maersk has made substantial investments in co-location and the harmonisation of processes, technology, and teams across its hubs and ocean network. This integration ensures connectivity at the hubs with a quality level that would be unattainable without in-house collaboration, he stressed. The third layer is a unified operational philosophy with Maersk’s Gemini partner Hapag-Loyd, prioritising quality and the understanding that achieving high quality from the outset is more cost-effective than maintaining a network with only 50% reliability.
“We have in the past couple of years run a lot of tests before we got to the 90%. So we did not go out with that number lightly, I would say. For us, the real core now is to scale this up and to be able to verify,” Clerc said, adding that for anything that hasn’t been tested solutions would have to be found on the way. “We feel pretty confident that we have tested a lot of the things that we could think of in terms of the resilience of the product.”
Patrick Jany, the Chief Financial Officer (CFO) of Maersk, noted that in addition to improved schedule reliability the network is also expected to bring a significant boost in asset turnover within the network, enabling the company to handle market growth over the next two to three years with the existing fleet size. This efficiency, Jany said, supports Maersk’s goal to transport more volume without expanding the fleet, ultimately allowing the company to maintain market share.
Addressing the potential need for a more aggressive pricing model for the Gemini Cooperation network rollout before its reliability is proven in the market, Clerc does not see this as necessary. With regard to costs, he acknowledged Gemini will require higher asset intensity during the initial transition phase, but he expects production cost improvements to begin immediately. Clerc clarified that while Gemini will operate in a hybrid model for 13 weeks from mid-February, the new network structure will enhance service reliability and quality, making aggressive pricing unnecessary.
“At this stage, I see no reason why when we’re selling a higher quality and higher reliability product, we would have to discount or price more aggressively in order to sign up customers,” Clerc concluded.
