Challenging the norms of the industry
Frey not only addresses the problem of moving empty containers from the Americas to Asia but also aims to build new capabilities within Maersk.
Frey: A bold new venture
Incubated within Maersk Growth, Frey is a trading company that was born to address the inefficiencies in the container value chain, like moving empty containers back to deficit areas. Since its inception in December 2018, it has sourced grains and oilseeds in container surplus locations, transporting them to and selling them in container deficit locations.
Frey has gained traction trading between North America and Asia. Jeff Laursen, co-CEO of Frey says, “We still have a long way to go, but the fact that we have started moving volume is a major milestone that shows we can be competitive. This adds value to Frey as well as to Maersk through increased volume and avoiding moving those containers back to Asia empty.”
Utilizing dialogue and expertise
The key to this milestone was collaboration and dialogue on a local level between Frey and Maersk.
“We have a close dialogue on how and where we can develop competitive sourcing of commodities and match it with structural equipment surplus locations or how we can overcome bottlenecks in the inland operation,” says Peter Hildebrandt, Senior Transformation Partner & Board member of Frey.
Another success factor was Frey’s partnership with Danske Commodities (DC), Europe’s biggest power and gas trader which has successfully built and scaled a data-driven trading company. Jeff says that they have found good compatibility with DC’s skill set and expertise in developing solutions.
Transform and build
Frey is taking an active role in the global commodities market, which today is largely a bulk market. Here, says Jeff, they found a great conversion opportunity. “There is an opportunity to tap into a market that is not large on containers, but it requires a level of innovation and willingness to challenge the norms of the industry.”
Peter adds that Frey is building new capabilities that can generate incremental revenue and growth over time. “Whilst the starting point is addressing a problem of physical flows, there is also a significant opportunity in working with the trading element and leveraging the expertise of DC. Over time that can also open up opportunities in other segments and geographies.”
“There is an opportunity to tap into a market that is not large on containers, but it requires a level of innovation and willingness to challenge the norms of the industry.”
— Jeff Laursen, co-CEO of Frey
Taking a bold step
“We ventured into a new area of sourcing several thousand tons of soybeans and taking ownership of the cargo. We need to be open and willing to try new things,” says Peter.
He also speaks of how the Maersk brand has helped in this new joint venture. “Frey has been well received in the market, and that is certainly also a testament to Maersk, as an owner in the venture, being a trusted brand, that carries a lot of weight.”
In the long run, Frey’s aim is to become a leader within the segment, by adding on trading activities, developing value chain activities and expanding the portfolio of commodities.