Maersk Bets 118 Million on Malaysia as Tariffs Reshape Global Supply Chains

Southeast Asia steps into a new trade era

On the edge of a major expressway in Shah Alam, Selangor, a new 180,000 square meter distribution center is humming with robots and stacked trays that rise several stories. Built by Denmark’s AP Moller Maersk for about 118 million dollars, the facility is the company’s largest distribution site in Asia Pacific. It opened with a simple proposition. In a world of rising tariffs and shifting politics, Southeast Asia can keep goods moving, contain costs, and place production closer to fast growing consumer markets.

Executives say the site will handle everything from chocolates and shoes to surgical equipment. It will feed both domestic retail networks and overseas markets through nearby ports and airports. The bet is tied to a powerful regional trend. Manufacturers facing higher import duties into the United States and Europe are expanding beyond China, while still relying on Chinese suppliers for parts and materials. That shift, known as China Plus One, is creating new hubs in Malaysia, Vietnam, Thailand, and Indonesia.

Trade tensions have dominated headlines since early 2025, with fresh rounds of tariffs on a wide range of goods. Container lines and their customers have redesigned routes, rethought inventory, and built flexibility into every step of the chain. Maersk’s move in Malaysia shows how the industry is preparing to serve customers wherever production lands, even as policy shocks keep coming.

Why Malaysia, why now

Shah Alam offers strategic access to Port Klang, one of the busiest gateways in Southeast Asia, and to Kuala Lumpur International Airport. The location sits inside the Klang Valley, home to a large consumer base and a deep pool of logistics talent. Malaysia has made steady investments in industrial parks, bonded zones, and digital customs processes. That combination of infrastructure and workforce has turned Selangor into a practical staging area for regional distribution.

Inside the Shah Alam megacenter

At Maersk’s new site, container trucks deliver inbound goods to automated receiving bays. Robotics then feed items into smart trays and high bay storage. The system is designed to reduce human handling, cut errors, and speed up the release of outbound orders. The range of products is diverse, from packaged foods to apparel and medical devices. The automation is backed by software that allocates inventory across domestic and export flows, taking into account transit times, tariff exposure, and seasonal demand.

Elaine Low, Maersk’s area managing director for Southeast Asia, framed the logic simply. She said the company will place capacity wherever customers are sourcing and selling.

Regardless of industry, everyone is looking for a cheaper, better way to source products. And I think we will follow wherever the customer goes.

What customers get

The facility is meant to act as a buffer against volatility. Large, modern sheds allow companies to hold inventory closer to final markets so that they can switch destinations quickly if tariffs or rules change. Maersk also aims to lower the cost of trade, which can be two to three times higher in some Asian markets compared with advanced economies. Faster turn times, fewer handovers, and visibility from factory gate to store shelf can reduce the number of touches, and that can trim both cost and risk.

A multiyear buildout across Southeast Asia

The Shah Alam site is part of a broader, region wide expansion. Maersk has planned more than 500 million dollars of investment to extend its logistics footprint in Southeast Asia over several years. The company expects to add roughly 480,000 square meters of warehousing and distribution capacity by 2026 across Malaysia, Indonesia, Singapore, and the Philippines. The aim is to connect ocean, air, road, and rail into a single network that can shift flows as markets change.

Several projects highlight the strategy. In Malaysia, capacity at the Port of Tanjung Pelepas is being positioned as an integrated logistics hub that links sea, road, and rail. In Singapore, additional landside warehouse space at Changi Airport is set to strengthen a regional air freight hub. On the road, Maersk is scaling truck fleets across the region, introducing biodiesel fueled haulage and rolling out electric vehicles where charging networks support them. At sea, APM Terminals is adding capability to support a redesigned ocean network and extra transshipment. The company is also working with authorities on green fuel infrastructure to support a future fleet of low emission vessels.

Trade war turbulence, adaptive logistics

Tariffs have reset the risk calculus for global shippers. The United States has levied across the board duties and higher rates on key partners, including China. The European Union has imposed defensive measures in targeted sectors. Several countries are weighing their own responses. The Organization for Economic Cooperation and Development has estimated that a 10 percent rise in broad tariffs, matched by similar responses, could knock roughly 0.3 percent from global output within three years and lift inflation by about 0.4 percentage points per year. Industry bodies warn that uncertainty, not just the tariff level, can be the biggest drag, because companies pause investment while they wait for clarity.

Even so, container shipping has shown a capacity to adapt. Rerouting around the Red Sea due to security concerns has lengthened transit times between Asia and Europe by more than a week in many cases. Lines have added ships to keep weekly schedules steady. Drought at the Panama Canal has forced weight and slot restrictions, which in turn has pushed some cargo to air freight or to alternative ocean routes. With the right mix of ocean, air, and warehousing, logistics providers can shift volume between modes and entry points.

Maersk’s view from the front line

Charles van der Steene, who leads Maersk’s North American business, said the company expects constant adjustments rather than a collapse in flows.

The global supply chain we know today has been built over many decades. We will see adjustments, in some cases triggered by political motivations, but we do not believe it will change fundamentally as a result. For example, in Asia, the China Plus One strategy is seeing many of our customers expand their sourcing footprint to Southeast Asia.

He pointed to the company’s ability to pivot between entry points when rules shift or when weather or conflict interrupts normal routes. He also noted that Maersk operates its own freighter aircraft, which can move critical goods when production schedules cannot wait for a slower sea journey. The central idea is not speed for its own sake, but reliable arrival on a promised date with pricing that customers can plan around.

Former World Trade Organization officials have warned that the trade rivalry between the United States and China could last for decades. That has nudged businesses to design supply chains that can flex quickly. For many manufacturers, that means building parallel production lines in Southeast Asia, keeping suppliers in China for inputs, and spreading final assembly to countries with lower tariff exposure.

China Plus One fuels an intra Asia shipping boom

Intra Asia shipping has expanded as companies diversify out of China. Industry data shows capacity on routes within Asia, excluding domestic trades, rose by about 13 percent year on year to nearly 2.4 million TEU (twenty foot equivalent unit). Carriers have added more shuttle services that stitch together Chinese ports with Vietnam, Thailand, Malaysia, Indonesia, and the Philippines. Maersk has grown its regional capacity by more than 100,000 TEU over twelve months, while its partner Hapag Lloyd has nearly doubled its footprint in the same market.

Trade patterns support the shift. Exports from China to the United States have fallen, while Chinese exports to Southeast Asian economies have climbed. Factories in Vietnam and Thailand, for instance, have taken on more final assembly of electronics and machinery. Malaysia has attracted investment in advanced packaging and medical devices. Indonesia has seen gains in furniture and consumer durables. This does not signal a retreat from China as a supplier of parts and materials. It shows a rebalancing that shortens the last leg between assembly and the end customer.

One complication is the risk of transshipment duties. U.S. authorities are scrutinizing goods routed through third countries to determine their true origin, and extra duties can apply if items are judged to have insufficient local transformation. Officials in Southeast Asia have pledged to crack down on relabeling or simple passthrough of Chinese goods. That scrutiny is likely to continue. It pushes manufacturers toward genuine localization of production in the region rather than light rework.

The Gemini model and terminal control

In late January 2025, Maersk and Hapag Lloyd launched the Gemini Cooperation, a network that uses a hub and spoke structure. Instead of long round the world loops with many port calls, large vessels call at a smaller set of central hubs. Dedicated shuttles feed cargo to spoke ports. The goal is a stable, repeatable schedule that customers can trust even in a volatile market. Early data from Sea Intelligence showed schedule reliability for the alliance at around 94 percent in February 2025, a promising start as the network scales up.

Lars Mikael Jensen, head of hubs at APM Terminals, said control of key terminals allows the network to recover when delays strike. He described a case in Rotterdam where all cranes were assigned to a late arriving vessel to help it regain time and protect onward connections. He framed the reliability target in practical terms.

The ability to control capacity and terminal operations will give the new Gemini Cooperation the tools to reach its ambitious 90 percent reliability target.

Terminal control also creates strategic options. If volumes out of China dip while shipments from Vietnam or Indonesia rise, larger vessels can be redeployed without redesigning an entire 16 stop loop. If a port faces new fees on specific ship types, calls can be shifted to nearby hubs and moved on by shuttle. The approach is resource intensive, because it requires ownership or long term control of key hubs, but it gives carriers levers to keep service predictable.

What it means for Malaysia and its neighbors

For Malaysia, the new megacenter and related port investments help move the country up the value chain. Modern distribution spaces attract high mix, high value sectors such as medical devices, packaging for semiconductors, and premium consumer goods. They also support more sophisticated retail fulfillment for the domestic market. The location near Port Klang and the expressway network means exports can flow with fewer handovers. That can reduce dwell times and improve reliability for time sensitive products.

Jobs will shift in type. Automation reduces repetitive handling, while demand grows for technicians, software specialists, and inventory planners. Training partnerships between operators, local colleges, and state agencies will be key to fill those roles. Over time, deeper pools of logistics talent can attract even more investment, reinforcing a cluster that benefits exporters across the region.

Risks to watch

Tightening rules on transshipment and origin could hit some exporters that have relied on minimal processing to avoid tariffs. Authorities in Thailand and Malaysia have signaled they will address illegal relabeling. Manufacturers are responding by adding more genuine local content and by spreading product families across several countries to avoid concentration risk. Policy whiplash remains a worry. Broad tariff rounds that pull in many countries can reduce options to reroute cargo. A deep slowdown in the United States would also weigh on volumes, given the country’s share of containerized imports.

Operational risks remain. Security in the Red Sea continues to divert ships around the Cape of Good Hope, adding up to ten days on some services. Water levels at the Panama Canal have constrained transits. Weather extremes can shut ports or alter agricultural export flows. These shocks argue for more inventory placement closer to final markets and for flexible contracts that let shippers switch modes or destinations when needed.

Sustainability and the next phase of growth

Decarbonization is becoming a core design parameter in logistics networks. Maersk is increasing the use of biodiesel in regional haulage and has begun to introduce electric trucks where charging networks permit. Terminal and warehouse upgrades are being built around energy efficient equipment and data driven yard planning. At sea, the company is preparing for green fuel options as regulators tighten climate targets and as customers demand lower emissions per shipment.

Green methanol and other low emission fuels are in early adoption, and the buildout of bunkering infrastructure in Asia will be essential. Collaboration with port authorities on power supply and with energy firms on future fuels will influence where hubs grow. At the distribution center level, automation that improves vessel utilization and container turns can cut fuel burn per unit moved. Reliability, which keeps large ships fuller and avoids idling, can matter as much as speed in reducing emissions intensity.

At a Glance

• Maersk opened a 180,000 square meter distribution center in Shah Alam, Selangor, after investing about 118 million dollars, its largest such facility in Asia Pacific.
• The site uses automation and high bay storage to handle goods ranging from food and apparel to medical devices for domestic and export markets.
• The facility is part of a regional plan to invest more than 500 million dollars in Southeast Asia, adding roughly 480,000 square meters of capacity by 2026.
• Key projects include upgrades tied to Port of Tanjung Pelepas in Malaysia and added warehouse capacity at Singapore’s Changi Airport for air freight.
• Road fleets are expanding with biodiesel fueled trucks and the introduction of electric vehicles, while work continues on green fuel infrastructure for ships.
• Tariff rounds and security issues have disrupted trade, yet logistics networks are adapting by shifting routes, adding ships, and using air freight when needed.
• China Plus One is boosting intra Asia shipping. Industry data shows capacity on regional routes near 2.4 million TEU, with Maersk and partners adding services.
• The Gemini Cooperation between Maersk and Hapag Lloyd uses a hub and spoke model to improve reliability. Early data shows schedule performance above 90 percent.
• Malaysia and its neighbors stand to gain from new investments, but face risks from transshipment scrutiny, tariff expansion, and operational shocks.
• Decarbonization is shaping investment choices, with greener trucking, terminal efficiency, and preparation for low emission marine fuels high on the agenda.