In the 2008 crisis, the commercial shipping sector suffered a strong impact on its global cargo operations, due to uncertainties and retraction of handled volumes. Currently, the sector has seen new challenges due to trade barriers imposed by China and the United States. To face this new paradigm, which has caused financial losses for the world's largest companies in the sector, the offer of services has changed its profile. If before the main focus was on efficient maritime transport, today more is thought about the complete service, which includes land legs at the origin and destination of cargo.
At the end of June 2019, Maersk CEO Soren Skou stated that, “Currently, 80% of our revenue comes from maritime container handling services, and we expect that in two years the company will reach close to 50%-50% with non-oceanic services”. This means that the company is looking for logistic solutions to offer services end-to-end. For this, the company has invested in the acquisition of warehouses, port terminals and brokers. Maersk has more than 70 customers, but less than a quarter use the company to move their cargo between ports and warehouses/distribution centers, meaning there is potential to gain market share with its current customers.
This intention to offer a complete service is not unique to Maersk: the French CMA CGM, another major player in the sector, bought the logistics service provider Ceva Logistics in 2019 for BRL 1,7 billion; China's Cosco has also gone in this direction, with billions invested in recent years in terminals and infrastructure for connections with railroads and highways, optimizing multimodality.
Figure 1 – Shipping companies have increasingly sought to offer end-to-end products and services.
Source: www.maersk.com
The maritime service combined with the land service is already a well-known domestic reality in our country. In the last years, Brazilian cabotage of containers has grown, on average, 13% per year, and much of this growth is due to the fact that there is a door-to-door service (which would be the translation for the service end-to-end), in which the transport company is in charge of picking up the container at the customer's door, taking it to the port, carrying out the maritime section, disembarking at the port of destination and transporting the cargo to the final destination by land. With the tariffing of road freight that took place after the 2018 strike, cabotage returned to the spotlight, as it is a cheaper alternative than the land modal and that has improved its service levels year after year.
The end-to-end service, which is already a reality in Brazilian cabotage, will grow vigorously in the long haul in the coming years, with investments from these major world players. It is possible that, soon, they will be competing directly with UPS, FedEx and, who knows, with Correios in Brazil.
References:
https://www.maersk.com/about/yearinreview
http://www.scdigest.com/ONTARGET/19-07-02-3.PHP?cid=15642&ctype=content
Henry Alvarenga
He has been working in consultancy for 7 years, with experience in more than 20 Demand Planning and S&OP projects, Logistics Network Design, Logistics Master Plan, Inventory Policies, Operations Strategy and Market Intelligence
