DVZ radar: Here's why Kuehne + Nagel is entering US intermodal
Where others may fear to tread
© Sheila Fitzgerald
By Alex Lennane
Major forwarders may abandon Maersk over concerns that the line’s new “integrated” business and “aggressive” strategy creates conflict of interests, and that it wants to cut forwarders from its business.
DB Schenker confirmed to The Loadstar that it had lost key account status with the shipping line, but said it had already switched most of its volumes.
“In May 2020, DB Schenker removed more than 90% of the freight volume loaded at Maersk, and shifted them to other shipping companies,” said a spokesman.
“This adjustment of our carrier portfolio was necessary to ensure optimal access to capacities and freight rates for our ocean freight customers, and to guarantee maximum network stability.
“With almost no volumes left at Maersk, the termination of key account status was a logical consequence and has no implications for our ability to serve our customers’ needs.”
Maersk said it would not comment, owing to “the confidentiality of our customer relationships”.
One forwarding source said DB Schenker was not the only forwarder looking at moving volumes away from the Danish company, with one said to have begun the process this month.
Forwarders claim Maersk has become increasingly restrictive in offering named accounts, while Maersk Spot has taken the FAK business, making it increasingly difficult for forwarders to manage their portfolios and provide customers with rates. One also claimed that Maersk, declining to offer named accounts, instead went directly to the shippers involved.
“It [Maersk] is moving from becoming a supplier to a competitor,” he said.
The closure of Damco and its NVOCC status has upset the market, and DB Schenker famously targetted its customers for discontinued services. (You can read Loadstar Premium‘s take on it here.)
Maersk’s termination of DB Schenker’s key account status was said to be a consequence of that, but one senior forwarder said it was, in fact, a warning to other carriers – “This ‘blacklisting’ of Schenker is just a message to say ‘if you do this, this is how we’ll treat you’.”
One source said two shipping lines had warned customers about using Maersk’s freight management services.
“Maersk can now see how other lines act in terms of weekly allocations; you can’t trust that it doesn’t have a conflict of interests.
“It all starts with Vincent Clerc [APMM chief of ocean and logistics] – as one legal entity, you shouldn’t be a supplier as well as booking capacity with other shipping lines. I can’t see other carriers liking it. It’s an aggressive strategy and, at some point, there will be no way back.
“A carrier’s direct contracts require neutrality, which was given by Damco. Maersk now does everything, but the terms are not clear. The likelihood is high that other forwarders will do what Schenker did and move volumes away.”
One source believed that would be harder for companies like Kuehne + Nagel, which moves large volumes on 2M vessels.
“It would be too tricky for them. I’d not be surprised if a lot of forwarders think about this, but it’s difficult at the moment as volumes are chock-a-block. It will take a few months, but then you would not be a prisoner to Maersk.”
The source claimed aggression was in Maersk’s DNA: “It was the one who drove the rate wars in 2008/9, hoping it would be the last one to survive.”
However, forwarders claim there is no such issue with other lines: “It is not an issue, and never has been, if the carrier has some forwarding activity. That’s normal.
“CMA CGM – owner of Ceva – is doing some integrated marketing, but CMA and Ceva have separate management and they clearly differentiate their behaviour. Ceva is not a big player, and Rodolphe Saade [CEO of CMA CGM] is smarter, and understands that he cannot rule the world.
“Ceva was being actively sold, and it was an opportunity he took to turn a loss-making company into a profit-maker. I wouldn’t be surprised if CMA sells it, and there is no reason to believe that their behaviour will change. MSC, Hapag Lloyd, all the others behave like partners.”
One medium-sized independent forwarder said he didn’t currently have concerns about Maersk, although it was “confusing”, and agreed he had no concerns about CMA/Ceva: “Perhaps the next stage for CMA/Ceva would be to work more collaboratively, but our trust in them is very good at the moment.
“If you were K+N or DHL, you might worry, as they are the biggest customer, and competitor. You might think twice before sending them a customer profile. But CMA is not good enough for that yet.
“But Maersk is still a bit confusing, and it’ll be interesting to see what it is trying to do.”
Meanwhile, one forwarder said that publicly poking DB Schenker could be a bad move by Maersk.
“DB Schenker, together with Deutsche Bahn, could probably take all the central European business if Maersk wants to play hardball. Maersk is trying to change the game and whomever I speak to says the same – long-term, Maersk doesn’t want forwarder business.”
Coming soon: Loadstar Premium takes a deeper look at Maersk and its relationships in logistics – and how its rivals feel
Comment on this article
Xabi
October 20, 2020 at 2:15 pmCan’t believe such unappropiate use of info. you should get inform better. Schenker broke relationships with Maersk or viceversa due to the fact that Schenker launch a campaign to Damco customers under Maersk logo and words #alltheway.
any other forwarder has broken relationships with maersk, further tnat common local discussions.
that’s PINK press!!! you are trying to confuse readers and that’s is shameless.
Alex Lennane
October 20, 2020 at 2:51 pmWe are certainly not trying to confuse readers! Schenker’s business with Maersk had all but gone when Maersk took it off the KA. Other forwarders have big reservations about working with the ‘new’ Maersk.
Mirko Stefanac
October 20, 2020 at 5:10 pmFrom the best with average 92% reliabilty to almost worst bearly 64%.From shipping line to.forwarder owes vessel fleet.From.IT pioneer in shipping to cheapest solution in India with the most “maintance” system performance on the market
Alessandro Pasetti
October 20, 2020 at 5:34 pm“Schenker broke relationships with Maersk or viceversa due to the fact that Schenker launch a campaign to Damco customers under Maersk logo and words #alltheway.”
Read the story and then try again, Xabi. Thanks for your comment.
Javi
October 20, 2020 at 7:21 pmAnd that wasn’t the beginning of the bad relationship between the both of them.
Maersk “stole” one of Schenker rock Star in Europe (Germany I guess), and the childish reaction from them was to remove all the cargo but the strategical ones (probably the movements around May that the article is mentioning). Since then, Schenker became a regular customer (rumors say they were given bad services on purpose by Maersk). The point of not return was as Xabi mentioned when they provocatively used #Alltheway. After that was sent the message to the whole organization that not to renew any contract to them under any circumstances.
Alessandro Pasetti
October 20, 2020 at 8:13 pmHi Javi, thanks for your comment. Are you referring to Ditlev Blicher, new MD for APAC at APMM who joined from Schenker?
Emmanuel
October 20, 2020 at 4:13 pmEven in Nigeria, Maersk is seen as a threat to forwarders business. There growing door to door service is obviously an act that will terminate the forwarders business.
Nora F Bingham
October 20, 2020 at 5:13 pmSo is this the norm? I think Mearsk needs to break this down better in our news letters! I inherited shares from my grandfather and now I worry as to why there is a ships captain on the board? Care to explain why? Just curious is all…
Ben
October 21, 2020 at 2:41 amWow, Global Forwarders sure know how to whinge. Maybe if they put their efforts into modernising their business they would be at a stage where they would be at a stage where Maersk, a company that is more restricted by its assets than enabled, would be limited to a niche role limited to 20% of the container freight industry. Instead most of the forwarders have failed to reinvest in improving their business processes and are having to face competition from all sides. Stop the whinging and get better at what you do!
Fredrik
November 06, 2020 at 9:50 amTrue!
Karuna Tiwari from RAMEXIM LOGISTICS, CHENNAI INDIA
October 21, 2020 at 4:52 amIt is dangerous sign for small players
Big fight ahead on this game
Winners will be end user for now
But when Mearsk has control on rates , they overprice and sale
Pankaj Kalaiya
October 21, 2020 at 10:17 amMonopolistic trends are rising and will impact not only independent forwarders but resulting into poor end user services. Maersk is an example. Shoddy customer service. Expansion and globing Everything in its sight will eventually Lead to the balloon bursting
Ketan Dholakia
October 21, 2020 at 1:48 pmIronical to sound but Maersk customer service levels for us (a mid sized local forwarder in India) have actually improved. Minimum they are at least transparent. Hapag charges 150 USD on top of quotes for positioning to ICD, CMA agents ask for various deals separately fropm website, OOCL’s website cannot do half things Maersk can. There is bad shortage of 40 foot units in New Delhi but Maersk right now is only line behaving cleanly. Even forwarders want side commission…tell me, who will win with such ethics?
YMJ
October 21, 2020 at 5:25 pmMaersk is too internally focussed to optimise and reduce costs that it hardly cares about serving it’s clients. Cistomer service always takes a backseat with them. Unfortunately, it is the biggest carrier, and one can only hope that smaller carriers who care to serve take advantage and gain at Maersk’s expense.
Lendre ilitch Yalou
October 21, 2020 at 6:19 pmBusiness is about trust each other
Alfred Romano
October 22, 2020 at 2:37 amMirror mirror on the wall – some of these forwarders are whining to what avail. What have they been doing since 2009? They’ve had 11 years to recalibrate their options and none of them moved the bar. Let maersk be, they should be more worried about the new digital and some of local indian chinese polish forwarders who are growing faster. Look how Kerry continued to grow… look at sennder and flexport. The current dichotomy lies in the fact that they are suffering while carriers make hey in Q3 ans Q4. Their FCL heads are probably kicking themselves for now buying slots from China and being stingy. May the smartest one win…
NALU TOUR AND TRAVEL LTD
October 22, 2020 at 8:54 amThis so called Maerk is totally a big problem to us we had a shipment from Japan and it was supposed to stripped from Mombasa and it arrived Mombasa on 29th of May 2020 but upto now they have failed to release our container and they are counting demurrage daily and it was there problem of shifting our container to Naivasha for months and they are not listening partners at all i hurt this company
MRX
October 22, 2020 at 10:44 amMaersk aside, CMA gave CEVA rock bottom rates and locals worldwide to boost it and claim it was a successful acquisition.
Fortunately CEVA is not that good in my market.
Ketan dholakia
October 22, 2020 at 7:40 pmCEVA and CMA have been down since a week or more. Are forwarders happy with their cyber attack response?
Trevor Norrish
October 23, 2020 at 2:52 pmmy ywo cents worth is that we just find it impossible to deal or work with Maersk in Italy, they will go to client in a few minutes after they get the name of shipper, yet look at MSC owning a majority stake of 2 big italian forwarders in Italy and Hapag Lloyd in bed with K&N – this is not new and it will get worst for us middle size forwarders
Arnold Peter
November 11, 2020 at 3:41 pmMaersk are an asset owner, they want to control access to their assets and see that rather like Amazon has been able to take data from the transactions of companies using its “platform” in order to sell their own wares (Amazon basics) profitably so too Maersk want to use the data it is collecting from its customer and partner relationships in order to maximise its value.
The days of true neutrality are clearly waning and we should be concerned as to what this will do to competition and most importantly the obvious conflict of interest which is at play here. Nasarka have never liked working with forwarders, they seem them as “pond skaters” as PONL once described them and simply skimming value off the Maersk brand. The truth is that the brand alone is not worth paying for, value has to be added in the supply chain and customers will pay for that if they can identify and discern that value in the benefit it derives into their own product or the service they in turn can add to their own customers.
$100 US says that CGM will go this way in the next few years, however all is not lost as from experience what happens in these situations is that the carrier management end up taking on the forwarder roles and this is where it starts to fall apart for the likes of Maersk. Without the forwarding value adding skill sets (well paid forwarders will be let go or will leave because the new regime won’t suit their character type, largely) the carrier management will focus on asset utilisation and not on what their value proposition is to the customer. This is why the likes of KN and DHL will continue to do well as the carriers are simply not in that mindset, in my honest opinion.