News / Maersk steps in as India's online sellers search for low-cost fulfilment

Maersk is again extending its much-publicised integrator role in India: this time into e-commerce logistics, as the emerging economy adds online shoppers at a rapid pace.

The carrier has unveiled a fulfilment product it claims is not only “a first” by any container line, but also has the potential “to redefine the logistics playbook” for small and medium-sized online sellers.

Its “one-country, one-price” offering promises low-cost storage and distribution options for Indian brands using its countrywide warehouse network at a pre-declared, flat rate – 80 rupees ($1) for an order weighing no more than .5kg, versus the fixed monthly costs retailers or manufacturers typically incur using third-party fulfilment centres.

“This [fee] will include 60 days of storage, delivery across India, covering 18,000 pin codes in 48 hours, 20% returns to origin and no fixed monthly costs or minimum orders,” said Maersk.

There will be minimal incremental higher prices for orders that exceed the threshold, but Maersk promises a standardised rate sheet upfront, “to provide price predictability and transparency”.

According to industry estimates, India had some 220 million online shoppers over the past year, with the gross merchandise value expected to hit $350bn by 2030.

However, Vikash Agarwal, Maersk’s MD for South Asia, said the high growth potential of India’s e-commerce industry was being stymied by fragmentation and supply chain complexities.

“Maersk is integrating sellers’ logistics requirements and providing a single-window solution that takes care of system integration, warehousing/storage and distribution, all at a flat rate, thus taking the complexities out of their supply chains,” he told The Loadstar.

However, he added, Maersk was not attempting to fill the shoes of pure marketplaces like Amazon or Flipkart, which command over 30% of the country’s online retail market. 

“Rather than competing, as we support omni/multi-channel fulfilment, we are actively promoting fulfilment to these and other marketplaces,” Mr Agarwal explained.

Efficient sortation systems, integrated warehousing management systems and on-time delivery are critical for outsourced fulfilment networks, and Maersk is well positioned to leverage technology already deployed in its supply chain systems.

“All these logistics requirements will be available to the e-commerce business through Maersk as a single partner,” it said. “The enablers for Maersk to deploy such a solution include multiple warehousing facilities in multiple cities.”

Maersk operates some 20 warehouses across India, and to start in e-fulfilment, the carrier has selected five locations, Bhiwandi, Bangalore, Chennai, Kolkata and Farukhnagar. It has a large road fleet, with some EVs added recently, for the last-delivery leg.

For Maersk, this is yet another significant step in its increasing transformation from a port-to-port cargo carrier to one involved in the end-to-end transit of goods. And its peers may not take too long to follow, as they search for new sources of revenue and market leadership opportunities amid heightened demand challenges across trades.