FedEx's belt-tightening on track... while goading UPS
Just as headwinds persist
In an effort to attract larger shippers, Maersk is expected to announce that it will only handle cargo from direct shippers from 1 November, cutting out freight forwarders.
The Danish carrier has made no secret of its ambition to become the ‘integrator of the seas’, offering a single platform to allow shippers to book cargo from door-to-door, claiming it will simplify movements and offer beneficial cargo owners (BCOs) greater supply chain visibility.
However, major freight forwarders, including Kuehne + Nagel, currently offer much of the cargo mix for the carrier. But it has been claimed forwarders have been taking contract rates, of some $4,000/feu from Asia to Europe, and reselling to customers for $20,000/feu.
“That’s $16,000 Maersk is losing, so the line is looking to punish the forwarders,” claimed an industry veteran.
Otto Schacht, K+N’s global head of seafreight, would not comment on rates and its relationship with the carrier, but Maersk told The Loadstar: “Forwarders have been, are and continue to be one of the biggest customer groups we have on our ships.”
Nevertheless, Maersk added that it wanted to improve its reliability in the “extraordinary market conditions we see today, where demand far exceeds supply”.
As a consequence of these market conditions, “we have informed some customers that we won’t be able to meet all of their expectations, particularly on specific tradelanes, like Asia to Europe and Asia to North America, where we have seen unprecedented congestion and disruptions. They can, however, still do business online as well as on the other 40+ trade available lanes.”
Some shippers will be winners, according to James Hookham of the Global Shippers’ Forum (GSF), who believes Maersk may launch a new trading platform to develop its integrated approach to supply chains.
“The writing’s been on the wall for some time,” he explained. “With the evolution of trading platforms it has always been on the cards that lines will offer cargo capacity directly to shippers.”
But the question remains whether some BCOs will want to deal directly with Maersk.
“The option has always been there to deal directly with the lines, but shippers preferred a more personalised service,” said Mr Hookham.
According to the GSF, much of the work outlined by the Digital Container Shipping Association, formed by the lines to standardise digital exchanges, “may have seemed abstract and remote, but it will give an alliance the ability to pass business to each other,” explained Mr Hookham.
The industry is moving inexorably toward an airline-style booking system, where “you think you’re booking with BA, but you fly with Qantas,” he added.
Maersk could offer door-to-door prices, and that would be “a really exciting prospect for volume shippers, but smaller shippers may feel they will be left behind”, said Mr Hookham, but he pointed out: “We still have bookshops and travel agents.”
He also warned that sharing commercially sensitive information, such as a retailer’s forecast sales figures, should not be a part of this move forward.
“Regulators will need to play catch-up, because we don’t want the shipping lines to be the next Facebook or Amazon; it’s a wake up call for the EC,” he said.
Comment on this article
Robert Barcelo
October 20, 2021 at 2:09 pmThis announcement will certainly not sit well in south Florida.
gunther ginckels
October 20, 2021 at 3:16 pmIt is comforting to see my predictions become reality. Yet the top-5 container carriers have still some way to go and it ties-in with my plea for developing synchro-modality and that is what Maersk and other top-5 will do. KIS – Keep It Simple will be the driver where the cargo will enter his E2E needs and receive a simple offer with a rate and time of collect/delivery. And what with forwarders. For some time i try to convince them to concentrate on activity niches. geo-area’s and products te Top-5 will not be able (lack local expertise) to handle or willing (insufficient volumes/activity) all themselves hence need to subcontract to…. forwarders who are able to deliver local experise and service delivery. All on the principle of “If you cant beat them – join them” To be continued.
Elton Tan
October 20, 2021 at 3:39 pmThey are getting greedier by the day. Liners are just part of an entire supply chain. Companies like Maersk are too big and rigid. End of the day, shippers will move back out and go with the Freight Forwarders. Door to door? It’s easier said than done.
Daniel Pettersson
October 20, 2021 at 3:54 pmWhat a strange article. The first part lines of this story is spectacular news, while the rest of the article doesn’t really say anything about where this rumor is coming from, the extent of it nor its credibility. And why would Maersk look to punish a forwarder for having an additional mark up on the rates they agreed on? Nonsense!
Cheslavo Korytkowski
October 21, 2021 at 8:01 amOcean carriers getting their shoes into the freight forwarding industry are proven not to succeed in all markets and they are mostly oriented to high volume accounts, leaving a huge niche of LCL cargo, and mid-sized and small exporters and importers out of their grips…Maersk’s Damco it’s a proof of failure when carriers want to get their feet into waters they don’t know at all and are not properly prepared to deal with; same happened to CSAV with their freight forwarding venture, which was a total chaos and ended up going out the market after no more than one year in business.
Carriers getting into freight forwarding are not a threat at all and they are not capable of performing door to door in every market so, nothing to fear
Eric Mooney
October 22, 2021 at 5:27 pmLOL this is not happening… Except for perhaps some of the lower end “undesirable” forwarders
Héctor Acosta
October 24, 2021 at 11:24 amIf big Shipping lines succeed on such a plan, they will be so strong that Market will disappear.
John Doe
October 29, 2021 at 2:08 pmNick Savvides, from a business model this article makes no sense and like many others below, I question the accuracy of this article. Seems to me like ‘fake news’. Maersk globally has approximately 18,000 employees. It would be good to know ‘who’ at Maersk collabarorated on this article.