The Splitting of A.P. Moller-Maersk Group, Impacts of Hanjin Shipping Collapse and Future of Global Logistics

The Splitting of A.P. Moller-Maersk Group, Impacts of Hanjin Shipping Collapse and Future of Global Logistics

maersk shippingThe Splitting of A.P. Moller-Maersk Group, Impacts of Hanjin Shipping Collapse and the Future of Global Logistics

-Maersk and Alibaba Team Up

The biggest news in global logistics for 2016 happened when Maersk and Alibaba announced their partnership in which Maersk offers Chinese shippers the option to reserve space on Maersk’s Containerships through Alibaba’s OneTouch Booking system.  At present, traditionally shippers must go through freight forwarders. This was the first formal collaboration between the Danish ocean containership master and the Chinese retail e-commerce giant, which is expected to have significant impacts on global logistics.

The Trans-Pacific trade lane became a heated battlefield after the collapse of Hanjin Shipping at the end of August, 2016. The two front runners, Maersk and MSC, added trans-Pacific services right after the bankruptcy of Hanjin Shipping. Meanwhile, Maersk split its business into two divisions: transport/logistics and energy, aiming to put more emphasis on its logistics business as the result of low oil prices. In the following four months, Maersk Line (the Maersk logistics division), expanded aggressively in Pacific trying to compete with MSC and take over the business left by Hanjin Shipping, as traditionally it has operated more in Asia-Europe routes. The collaboration with Alibaba could be seen as a strategic step trying to compete with MSC as the latter has a longer history with the Asia-Pacific routes. Maersk could pave a way for Alibaba to win global e-commerce superiority over Amazon by giving it direct access to US customers without middlemen. In return, Maersk is expected to see dramatic growth in its Asia-Pacific business and eventually outgrow and overtake MSC. This partnership could turn out to be the biggest story in the global logistics industry history since the advent of the container ship.

Aside from its Asia-Pacific and Asia-Europe businesses, it’s been reported that Maersk saw over 20 percent growth in Mexico over the past year due to the expansion of Panama Canal. This also indicates that Maersk took successful advantage of the expansion and is now trying to grow its business in the Americas. With its strengthened focuses on Asia-Pacific, Asia-Europe and Americas businesses, Maersk could emerge to become an even bigger container carrier giant to which others simply can’t catch in large part by fulfilling its goal to become the global integrator of container logistics.

So, what will the future of global logistics would turn out to be? Will the year of 2017 witness more mergers as Asian shippers are struggling and Maersk and MSC are making the Asia-Pacific logistics a tougher and tougher game to compete in? And what impact may the new president’s opposition to TPP have on Maersk – and to a greater – to the wider global logistics industry?  We don’t have any answers yet, except to say to that 2017 bodes to be an interesting year in logistics.

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