Maersk plans to be Global Integrator of Container Business

Posted by Daily Shipping Times on 22-02-2018        Tweet

COPENHAGEN: Maersk CEO Mr. Soren Skou spelled out his plan for the group to become a global integrator of container logistics with customers using its online platforms to find prices, arrange all documentation, and pay for shipments in one place.

“We want our customers to be able to deal just with Maersk. We want to carry the box from one port to another, we want to provide the inland service, we want to provide Customs house brokerage, finance the goods, insure the goods, consolidation, and whatever other services that may be relevant for our customers,” he said.

Within Maersk Group is logistics unit Damco, carrier Maersk Line, and Port operator APM Terminals.

Skou drew parallels with this strategy and the business of UPS and FedEx and DHL in the courier and express package industry. “We are building a global integrated company very similar to UPS and FedEx and I hope that they will be considered peers of ours when we are done with this journey in three to five years. Because that is an industry where you deal with just one party if that is what you want to do when you ship your goods. We want to digitalize the transactions with our customers as much as we possibly can, enabling the customers to self serve when it comes to getting price quotes, getting bookings, to uploading documents, and paying the bill.”

The Maersk Head gave a frank view of container shipping that despite the relatively low cost of transporting goods was perceived by customers as being difficult, complicated, and frustrating. “We truly believe we can do a better job for our customers, and we launched this vision of becoming a global integrator, connecting and simplifying our customers’ supply chains,” he said.

It is an ambitious goal and one that is strongly tied to technology, with its success requiring that the new transport and logistics company transform itself digitally. “We need to built the digital front end to run our business, we need to build the digital tools that will help us optimize the way we run the business on a day-to-day basis, how we optimize asset productivity, and we have to build the digital model to allow us to drive new revenue sources for the future.”

Part of the digital strategy involves blockchain technology, and Maersk Line and IBM have created a joint venture aimed at providing the container shipping industry with a blockchain "pipeline" where other carriers, terminals, freight forwarders, railroads, and others submit cargo movement information to provide shippers with an end-to-end record. The aim of blockchain is to digitalize the complex paper trail involved in the global supply chain, and IBM and Maersk estimate the initiative could save the industry billions of dollars.

Maersk Line reported a $541 million profit in 2017, with the impact of a mid-year cyber attack, rising fuel prices, and industry overcapacity seeing the carrier falling short of its $1 billion profit improvement target.

The Maersk CEO also maintained his positive outlook for the container shipping industry, saying the fundamentals continued to be the best they have been in a decade with broad based and strong global economic growth. “Europe is doing well and the US will continue to do so. The commodity-based countries are also growing again because commodity prices have come up and costs have come down. Oil at $65 a barrel today is good for those economies and that drives container demand.”