In one of the highly anticipated keynotes of Xeneta Summit 2021, our audience got a chance to hear Maersk's views on the future of container shipping, the truth behind RFQs Casinos, vertical integration and sustainability with Lars Mikael Jensen, Head of Global Ocean Network at Maersk.
Patrik Berglund, CEO and co-founder of Xeneta, welcomed Lars to our 5th annual customer event this year and discussed his immersed view on today's supply chain market.
Lars talked about Maesrk's serious commitment to the decarbonization agenda while discussing the industry's view on managing the environmental footprint. He mentioned how Maersk was one of the first few companies to set the target for 2050 and is continuously investing in uncovering carbon-neutral solutions, including alternative fuels options.
He also shared his views on the RFQs casino process and how current market conditions offer an excellent opportunity to reinvent and rethink how can buyers and sellers settle rates through transparency and building trust. Here are a few keynote highlights:
Bringing down the environmental footprint of the industry
Lars believes that 'Sustainability' and 'Digitalization' are two leading topics in each industry and will be a deciding factor in determining the success or failure of any business in the long run.
While giving an example of Maersk's serious commitment towards the global decarbonization agenda, Lars mentioned their recent contract to build eight large dual fuel container vessels to lower the CO2 emissions as they will run on carbon-neutral methanol as well as regular fuel. Lars believes that this is a significant step by Maersk that will encourage the production of carbon-neutral fuel at a global level as currently there is not enough supply of such fuels due to lower demand.
"It's a bet that we have made because today there isn't that fuel time that we need, at least not in sufficient quantities," he said. Lars also suggested that current market conditions offer a great opportunity for the shipping lines to review and invest in their decarbonization goals while keeping end consumers in mind.
Maersk’s Vertical Integration Strategy
While discussing Maersk's vertical integration strategy, Lars mentioned that they had realized very early on that the current market is not as fragmented as it was in the past. Hence, they developed a new integrated approach.
To become a global integrator of the container, Maersk is combining different elements of the company that can offer a true end-to-end experience to their customers. By combining the operations on ocean and land with other parts of logistics, Maersk plan to utilize the full capacity of their global terminal facilities while keeping in mind their customers' needs.
According to Lars, more and more customers are demanding multiple services from a single source, and Maersk can deliver that to them as it has a unique advantage of having asset control in all of these different parts of an end-to-end service.
In 2021, this concept is even more logical as businesses have the capability to use data to their advantage for better market visibility.
Opportunity to rethink the RFQ process
When asked about his views on the ‘RFQ casino’ term coined by Maersk early on, Lars agreed that the current process is not designed for long-term partnerships and focuses more on short-term or annual cycles. He shared his views on how the process is slowly evolving as customers are now discussing long-term contracts ranging from one year to 10 years.
Lars said that it is a golden opportunity for everyone in the industry to put their heads together to work as an integrator of logistics with their customers to find a way to eliminate the inefficiencies of the current RFQ process and achieve their sustainable goals.
Market recommendation for next 12 months
When asked what he would recommend to his customers while budgeting for the next 12 months or so, under current market conditions, Lars shared two tips and quoted – "We all have learned this year that we need to build buffers into our supply chains."
View detailed recommendations below -
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Read more about Xeneta Summit 2021 here.