The challenge

Over the past few years, A.P. Moller Maersk has been moving into different logistics products and has been acquiring some companies around the globe, including in the Latin American region. Aligned to this strategy, A.P. Moller Maersk was looking for a one-stop shop banking partner that was able to provide a wide variety of solutions, with a focus on core cash management. The company was also interested in a partner that could help it integrate different entities into its treasury structures, while providing tools to optimise daily activities.

The solution

The J.P. Morgan solution chosen by A.P. Moller Maersk has involved several different components.

On the accounts receivable (AR) side, A.P. Moller Maersk previously had issues reconciling certain collections and establishing which entities they were being paid to. Considering the large volume of invoices the company receives, this caused operational difficulties. J.P. Morgan helped the company to improve a multi-currency self-service portal where customers could easily pay invoices and generate a Boleto – a payment slip with a barcode, that allows A.P. Moller Maersk to optimise the reconciliation process.

For the accounts payable (AP) side J.P. Morgan is supporting A.P. Moller Maersk to implement an instant payment system so that customers, without a credit agreement with A.P. Moller Maersk, can pay for their cargo as it is being loaded. Because cargo pricing is based on weight, having this dynamic system allows the payment process to be much more accurate and convenient.

In addition, J.P. Morgan implemented a centralised multi-bank tax payment solution, which allows A.P. Moller Maersk to manage all necessary tax payments from a single portal.

Best practice and innovation

J.P. Morgan’s cash management solutions for A.P. Moller Maersk have displayed innovation in several ways.

The multi-currency receivable portal helped the AR team to manage delayed receivables more effectively and improve the reconciliation accuracy rate.

The multi-format payment slip convertor helped to automate and improve the payment initiation process as well as to reduce the number of typos and manual errors.

The invoice solution brought efficiency and increased productivity in the finance team, as well as improving the relationship with the clients, as they can now easily view and pay invoices on their portal. This project has involved collaboration between A.P. Moller Maersk and, J.P. Morgan as well as its clients and demonstrates how coming up with innovative solutions can create a ‘win-win’ for all stakeholders.

Meanwhile, the multi-bank tax payment solution has reduced the need to have access to various banks. The Brazilian tax payment system is complex and cumbersome. With this solution, there is no need to access several bank portals to insert, approve and release tax payments. This has delivered great process efficiency, as well as cost savings.

Key benefits

• Cost savings.

• Number of banking partners/bank accounts reduced.

• Process efficiencies.

• Increased automation.

• Risk mitigated.

• Improved visibility.

• Errors reduced.

• Manual intervention reduced.

• Increased system connectivity.

By simplifying banking arrangements there has been a reduction in the number of bank accounts by 73%. It has also brought efficiency and better control in the liquidity and cash management processes.

As well as the multi-currency client portal, and the multi-bank tax portal, A.P. Moller Maersk is working on implementing payments via PIX – Real time payment in Brazil.

A.P. Moller Maersk is a huge global institution, but what the collaboration in Latin America shows is the need to accommodate local nuances, whether it is preparing the Brazilian Boleto or paying via PIX. The cash management solutions allow A.P. Moller Maersk in Brazil to simplify operations, reduce accounts and increase automation, which is vital as it continues to add acquisitions.

The solution is both local and global at the same time as it is scalable and integrates with A.P. Moller Maersk’s wider operational frameworks.