The news that Maersk has launched a container booking system with Alibaba has left some shippers unimpressed, saying that freight forwarders and consolidators can provide a broader range of services and are more cost effective than the carriers.
This was the reaction from Sunny Ho, Executive Director of the Hong Kong Shippers’ Council to the announcement that the world’s largest container shipping line, Maersk, has teamed up with one of the world’s largest e-commerce platforms, Alibaba, to offer a container booking system to customers.
As most on-line shipments are for individual items in small packages, there is a need for consolidation. Traditionally, this Less than Container Load (LCL) business has been the managed by specialist Non-Vessel Operating Common Carriers (NVOCCs), freight forwarders and consolidators.
“Most shipping lines refrained from accepting LCL shipments many years ago because they were unable to offer competitive and comprehensive services. Freight forwarders and consolidators are in better positions to offer those kinds of services unless the cargo is of special nature,” said Mr Ho.
Maersk began offering the service to registered users on Alibaba’s OneTouch booking website on December 22, 2016. Using this system, shippers can book space on container vessels directly using the internet.
“The initial launch … allows existing Alibaba OneTouch (registered) users to lock in the price of required cargo spaces on selected routes by pre-paying a deposit amount,” the Maersk spokeswoman said.
Recently, e-commerce companies have been exploring ways to maintain better control over supply chain networks. For example, Amazon.com has leased planes to do more of its own deliveries in the United States. Alibaba has also made forays into logistic services by investing in courier companies and purchasing warehouses.
OneTouch was acquired by Alibaba in 2010 and targets small and medium-sized Chinese exporters, offering them services, such as customs clearance, online. Customers can also book airfreight and parcel delivery services.
According to Maersk, freight forwarders, which traditionally have handled this process will not be bypassed as the OneTouch platform still needs these firms to provide services such as haulage and warehousing.
The booking service is currently offered on routes from a few Chinese ports, including Shanghai and Ningbo, to ports in Asia and Europe.
What the editors say
Gavin van Marle, Editor of The Loadstar
“There is certainly the potential for a shift in shippers – in this case, Chinese exporters – booking directly with carriers, but whether they will be able to secure the sort of rates that forwarders would on their behalf remains to be seen. In any case, shippers have always been able to book directly with carriers should they have wanted, it’s just that carriers don’t seem to put much effort into that unless they are dealing with largest shippers and negotiating long-term contracts. We suspect that the real motivation behind this for Maersk is that gives impetus to its digitisation initiatives; while Alibaba simply wants to use every opportunity available to it to increase sales. We also asked a number of forwarders if they felt threatened by the project, and we found that some have their own deals in place with Alibaba. And as I write, it has just signed an agreement with the WCA family, which means that well over 4000 forwarders have some kind of relationship with the platform. In that context, the deal with Maersk doesn’t have quite the same magnitude as it might initially appear. But for any forwarder to ignore this will be a mistake. Remember that last year Amazon effectively became certified in China as an NVOCC, enabling the US e-commerce giant to enter the ocean shipping business.”
Greg Knowler, Asia Editor for IHS Maritime & Trade
“The major global forwarders will not be too concerned by the Maersk-OneTouch tie up. At least not yet. But the forwarders that should be worried are the smaller, locally-based players that will find their customers able to go directly to the carriers, avoiding a middleman. “Forwarders are also under fire from another area. Online booking and rate platforms –such as Freightos, Cargosphere, and a multitude of others – are attracting attention from investors and Silicon Valley, and while many of the start-ups will fail, others will find a formula that works. Then even the larger forwarders will be nervously looking in their rearview mirrors.”