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2 min read  | Supply Chain

Alibaba, Maersk, & CMA CGM: A Game-Changer?

Patrik Berglund  | February 17, 2017

First was the post-Christmas announcement that Alibaba's shipping platform, One Touch, would partner with Maersk. That was a potential game-changer in trade, analysts said, as online booking would basically bypass freight forwarders. Now, CMA CGM is added to the lineup and have signed a Memorandum of Understanding to work together with Alibaba. A steady stream of cargo may well be the difference that carries Maersk and CMA-CGM through some near-term hard times. 

One Touch offers import- export services such as customs clearance and logistics capabilities, and also books air freight on behalf of Alibaba's supplies, manufacturers, and customers, so once again Alibaba was taking the lead in changing another complacent industry. 

Here at Xeneta we think this is a game-changer on several levels. 

First; it ties those using Alibaba, the world's largest e-commerce platform, directly into the world's first and third-largest shipping companies, Maersk and CMA CGM. As there is no change expected for several years in the current oversupply of shipping space, this move serves to channel a huge volume of cargo to Maersk / CMA CGM. This is a huge financial plus for them, while sucking cargo away from both the Ocean Alliance and THE Alliance carriers. 

Even though it was a bit lost in 2016's freight rate collapse and the Hanjin debacle, we shouldn’t forget that Amazon China is now a year into their new venture as a freight forwarder.

The Amazon-China freight forwarding operation does the same; however no dedicated carriers have been announced. Amazon China’s freight-forwarding operation enables China's manufacturers and distributors to sell directly to American consumers through Amazon's huge North American distribution system. 

Copycat systems are already being announced: two weeks ago Australia-based China Sea Rates launched the world’s first plug-and-play, door-to-door ocean freight booking system for e-commerce websites. Aimed at US consumers buying Chinese products, the platform can be installed on any e-commerce or shipping company website to enable a “supplier-to-consumer” supply chain for large and/or bulky items. Their goal is to facilitate shipments by potentially bypassing a host of middlemen, including freight forwarders, which will reduce costs to the consumer. 

The world ocean shipping market is changing in ways most shippers and carriers are likely unaware. Ocean shipping is not known to be a flashy hi-tech business; it's a low margin, hi-volume business where reasonable profits go to the most efficient and the others either get bailed out by their governments, merge, or switch alliances in hopes of regaining profitability. 

Seemingly forgotten by most is that ocean shipping profitability depends on filling one's vessels, and once again, Maersk and CMA CGM kept their eye on the ball. They will fill their ships with either boxes of LTL cargo going to thousands of consumers or thousands of TEU's going to the huge retailers. 

For sure the container price data Xeneta charts is important, but it's worth remembering that supply chain management entails all the steps necessary to get goods from point of manufacturing to point of use. As always, profitability goes to those who are best-managed and can use technology best, and it should be no surprise that Maersk, CMA-CGM, Amazon, and Alibaba are currently leading the way.

 

                                                     

 

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