Maersk Dips Its Toes in Digital: What You Need to Know
Maersk has been in the news a lot this year. Between striking deals with Alibaba and unleashing plans to build a network of inland container depots in India, the shipping giant is hard to ignore. So it was no surprise when word came this week that the Danish company is testing a major expansion of its digital capabilities.
You can read more details about the specifics of their plans here.
But for Freight Forwarders and others in the logistics industry, there are some interesting angles here that may seem counter-intuitive. As we’ve seen over the past 20 years of the digital revolution, when large companies embrace technology, they often serve as pioneers, both validating the approach and providing “free lessons” to those that follow. But, to use an example from another industry, just as how Barnes & Noble seemed poised to dominate online bookselling in the 1990s, Amazon came along and transformed e-commerce for a generation.
Here are three new takes on how we might think about the new Maersk digital initiatives.
The Importance of Choice and Neutrality
Maersk is the largest overseas cargo carrier and, as such, they handle a material percentage of global freight. But many are surprised to learn that they only have 14.7% market share, and number two, Mediterranean Shipping Company, isn’t far behind. That means that manufacturers and freight forwarders have many more choices when selecting a carrier. Maersk’s new initiatives may give it a leg up on the competition, but it’s not as if they’re the only game in town.
Plus, market share is only part of the story. When shopping for capacity, NVO’s and the platform technologies that enable them make it possible to search for the best combination of departure and destination ports, type of cargo, capacity, and of course price. And it’s important that these intermediaries are neutral, i.e. they find you the best fit, without conflicts of interest. A supermarket that only carries its own store brand may provide great value, but consumers ultimately want far broader choices.
Innovation is Everywhere
Maersk is a formidable company with ample resources, so we’re certain that whatever digital initiatives they undertake will provide value. But as we wrote in a recent blog post, startups are still the hotbed of innovation. That’s why large companies often acquire smaller ones, whether it’s for their technology, their customer base, or sometimes just for their leadership vision. It’s important that all players in the freight industry keep their eyes on both ends of the marketplace: the huge corporate players, but also the small startups that are cultivating the next big idea.
READ MORE: The One Chart You Need to Understand the Future of Ocean Freight
There’s Room for Multiple Winners
As mentioned above, the ecosystem of freight logistics is vast and varied, ranging from Maersk (which constitutes 14% of Denmark’s GDP!) to “two guys in a garage.” Each is trying to find its market niche … new ways to add value to the industry. Maersk will surely learn much from its digital initiatives, and we will all learn a lot from the results. Other carriers may adopt a similar variations on this approach. The trick is to channel this knowledge to help your own business. That may mean adopting new technologies. It may mean partnering with Maersk. But it also may mean partnering with other logistics or tech players.
We’re rooting for Maersk as they go deeper into digital. We’re all in this cargo ship together (pun intended)! Their approach will have strengths and weaknesses, and therein lies the opportunity. No one company can do everything. The trick is to learn everything you can, adopt the right technologies, and always be thinking towards the future.
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By: CoLoadX on Dec. 5, 2017, 1:23 p.m.