Maersk and CMA CGM have agreed to take bookings through Alibaba’s ‘One Touch’ system. This facilitates the delivery of products to customers for Chinese manufacturers who sell through Alibaba’s network of websites. Essentially, such vendors can now book container space directly on Maersk or CMA CGM vessels. The ‘One Touch’ system can, according to Alibaba, also handle “customs clearance preparations and assistance in foreign exchange collections”, although this appears to stop-short of a full door-to-door freight forwarding service.
Alibaba’s original business was not e-retailing, which is handled through its TaoBao subsidiary, but connecting small Chinese manufacturers with retailers or OEMs in the West. Consequently, freight transport outside China has always been very important to Alibaba, its clients and their customers. Yet until now they have had to rely on freight forwarders to organise the delivery of products outside China.
Alibaba has a long standing interest in logistics. It has moved to construct a physical logistics network within China although this has proved to be a struggle. In this case Alibaba was motivated by the variable quality of China’s express and ‘last-mile’ sector. However, the provision of freight forwarding for both air and sea out of China is distinctly different and far broader. Although there is a vibrant sector of small, local freight forwarders, this is complemented by large western forwarders and integrators, notably UPS, DHL and FedEx.
With its latest move it is unclear if Alibaba is moving into the freight forwarding space or simply looking to sell container shipping services in the same manner in which it sells other services and products on its B2B site. If it is the former it would present freight forwarders both large and small with a powerful new competitor of similar dimension to Amazon, at least in the Chinese market.
Source: Transport Intelligence, February 21, 2017
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)