Twill’s move under the Maersk brand was announced this week as part of the company’s strategy to become “a global integrator of container logistics offering end-to-end solutions.” Such an ambition is not uncommon in the wider forwarding market where there is an increasingly intense focus on providing higher-value, end-to-end solutions. In and of itself, it’s not an uncommon strategic move in a market characterised by diminishing margins, intense competition, the introduction of new technology and the threat of new tech-enabled entrants.
For several years now there’s been extensive analysis of the key issues forwarders face. Perhaps the most important and uniting factor has been the need to increase customer-centricity and to deliver the services clients want and in the way they want them. One doesn’t need to search too hard to find references to this driver in the rationale for launches of Shipa Freight, Saloodo! or even Twill itself.
The move towards for customer-centricity is both an end and part of the forwarding market’s response to margin pressures and push to introduce higher-value, end-to-end solutions. The launch of online freight platforms from established players like those above is one of the latest tools in addressing these issues and others. Viewed from this perspective, the realignment of Twill within the AP Moller-Maersk group signals where Maersk believes it needs to improve and add capability to meet its own end-to-end goals. Online portals, platforms and marketplaces have created a new front-end of forwarding. They provide a highly scalable, polished and easy to use route into forwarders for shippers, and a new route to market for those same forwarders. If Maersk is going to develop end-to-end logistics services for its customers, it evidently feels the need to provide an easier entry point to its services for those customers.
While calling Maersk a forwarder isn’t strictly accurate, the addition of Twill to its service offering, and its ongoing end-to-end integrated container logistics strategy, mean that its services will increasingly present to the market as a sea freight forwarding service. Vincent Clerc, Maersk’s CCO reinforced this ambition, saying “Maersk is becoming an integrated company, delivering best-in-class services across customers’ entire value chain. With Twill we are offering small and medium sized companies a simple and easy way of shipping their goods, providing them better control of their supply chains. We are excited to now be able to offer this service to customers across the Maersk business.”
From a rationale perspective, it can be argued that the move isn’t vastly different CMA-CGM’s investment in CEVA, of which Rodolphe Saadé, Chairman and CEO of CMA CGM said “together, the two companies will also explore possible co-operations allowing us to propose an ever more differentiated and qualitative offering while integrating services beyond maritime transport,” which seems like another way of saying ‘higher-value, end-to-end solutions’ (even if by markedly different means).
Maersk’s outward looking shift, though, needs to come with an inward focus if it’s to be a more than superficial change. Research for Ti’s Global Freight Forwarding 2018 report found that the world’s largest forwarders are transforming from within, embracing new technology and operating models as quickly as the new start-ups are innovating and enhancing customer experiences. Amongst the industry’s largest forwarders, there is a significant drive towards process automation to lower internal costs, via automatic milestone reporting, visibility platforms, online tracking, data dashboards and custom reporting amongst other developments. Together it means that shippers can manage their shipping process online rather than needing to communicate personally with the forwarder, taking up time and incurring additional cost for forwarders. Moving into end-to-end solutions will require any LSP, whether traditional forwarder, tech-forwarder or shipping line, to push capability forwards both internally and externally.
Source: Transport Intelligence, September 6, 2018
Author: Nick Bailey
Global Freight Forwarding 2018 provides a detailed look at major trends and drivers affecting the freight forwarding market in 2018 and beyond. For more information, click here.
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