11/05/2019
The Danish transport and logistics giant Maersk is moving one step closer to achieving its ambitious vision of becoming a global end-to-end logistics company. Last week it launched a customs clearance online shipping management platform in seven European countries – Germany, France, Denmark, The Netherlands, Poland, United Kingdom and Spain – with the goal of expanding this offering across the world by the end of 2019. The customs clearance digital solution complements the online instant booking platform Maersk launched in November 2018.
Customs clearance is a major pain point in international trade that has long necessitated an upgrade. Maersk claims that their latest offering addresses this problem directly. The one-stop-shop provides ‘downstream benefits of full governance and compliance for ocean customers and eliminates the need to provide a quote as pricing is displayed online, saving three to five minutes per quote’, stated Maersk in a press release. When booking their shipment online, customers can add customs clearance and authorise Damco to act on their behalf.
The latest move underlines Maersk’s shift in strategy and focus on digitisation. It has been restructuring its business over the past several years to become more customer-centric, end-to-end logistics provider by leveraging technology. To resolve shippers’ pain points and reduce complexity in the supply chain, it signed seven local tech start-ups under its “OceanPro” accelerator program rolled out in October 2018 with the goal of leveraging the benefits of blockchain, the Internet of Things, advanced analytics, and artificial intelligence on a larger scale for the development of end-to-end logistics solutions. Last week saw the company making another investment aimed at building up its digital capabilities. It invested in the European digital freight forwarding start-up FreightHub, which offers digital-powered forwarding solutions to more than 1,500 customers and as such paves the way for mutual collaboration opportunities.
While the benefits of automating many steps in the ocean freight booking process are obvious to customers, how will these solutions affect the freight forwarding businesses, which currently make up around 40% of Maersk’s container capacity? The new functionalities reduce the number of intermediaries that customers deal with for customs clearance to a single party and this begs the question whether they will ultimately phase out freight forwarders. Maersk’s CEO, Søren Skou, commented that the overall automation move at Maersk benefits forwarders as they will also spend less time booking freight, however he also warned that if forwarders only provide a booking service, ‘they will have to step up additional services’.
Perhaps the area where Maersk could hurt freight forwarders the most is the SME segment. In the past, Maersk directed small- and medium-sized shippers to forwarders, because it didn’t have the resources or manpower required to manage them. But automation and the recently added functionalities is changing this as they enable shippers of all sizes to book ocean freight directly with Maersk and authorise Damco to handle the customs clearance process in one go. Overall, the ongoing end-to-end integrated strategy coupled with the digitisation investments not only help Maersk build its direct-to-customer business, it also pushes forwarders to up their game.
