Maersk-Damco union risks being a bad game changer: customs broker
FOLDING Damco into Maersk risks disrupting the shipping and logistics industries worldwide, says Zeus Logics customs broker Roger Crook, reports IHS Media
FOLDING Damco into Maersk risks disrupting the shipping and logistics industries worldwide, says Zeus Logics customs broker Roger Crook, reports IHS Media.
'By combining, Maersk plans to provide an 'end-to-end logistics solution', and if successful, is poised to gain enormous advantages over competitors,' said Mr Crook, also the former head of DHL Global Forwarding.
'It may be too early to call Maersk the Amazon of the supply chain, but this takes them a major step closer. It's time for other carriers to consider building out their own end-to-end offerings if they want to compete with Maersk,' he said..
Typically, importers must juggle a wide range of logistics companies - carriers, customs brokers, freight forwarders - to ensure the delivery of a single shipment.
'Damco already managed all those relationships on behalf of their customers' supply chains. As a result, it can provide a seamless experience for their customers - and a single point of contact for all parties,' he said.
By integrating Damco's logistics offerings, Maersk hopes to reach its customers directly, simplify their operations significantly, and eliminate the need for intermediaries such as freight forwarders.
There are a number of reasons this is likely to change market dynamics significantly, he said. 'For example, will Damco's current customers still be able to book with other carriers? Will Maersk's new forwarding platform ever engage the services of, say, Mediterranean Shipping Co or Hapag-Lloyd,' Mr Crook said.
Some of the market advantages from which Maersk will profit without a vigorous response from others in the industry include:
Pricing advantages: As the largest ocean carrier in the world, Maersk enjoys economies of scale that will allow them to keep prices as low as possible.
Damco has a large roster of its own customers, and they can now use those existing relationships to steer shipping contracts to Maersk.
Forwarders have to rethink their digital strategy in light of this market development. Considering Maersk's current market dominance coupled with this new offering, other logistics businesses must aggressively innovate if they want to survive and thrive.