MAERSK Line is attempting to fix the problem of chronic late Asia-Europe deliveries with a new ‘conveyor belt’-type service. Vessels going to and fro between four Asian ports (Ningbo, Shanghai, Yantian and Tanjung Pelepas) and three European ports (Rotterdam, Felixstowe and Bremerhaven) will have fixed transportation times every day of the week.
The daily cut-off times offered by Daily Maersk removes the need for cargo to be kept in storage after production in order to be freighted on a less frequent service. Doing so will create a continuous ‘giant ocean conveyor belt’ on the trade lane, said Maersk.
It will also boost the poor reliability track record of shipping lines. According to the unit of Danish AP Moeller-Maersk, 44 per cent of all containers on the lane are late and 11 per cent are more than two days late.
Maersk’s 70 vessels servicing the trade lane will continue to ply on this new arrangement, but it will not be adding capacity.
When Daily Maersk is launched on Oct 24, the shipping line will be putting its money where its mouth is. It will pay its customers US$100 a container if it arrives within a day to three days late, and US$300 for each container if there is a delay of more than three days.
Said Thomas Knudsen, CEO for Maersk Line, Asia Pacific region: ‘We have a situation where markets are tough. But for us it is important to offer a differentiated product for our customers. If we create value for them, they will be willing to support us with more of their business without focusing on what the rate is today.’
The problem with shipping times has created headaches for supply chain managers and companies around the world, which are trying to rely less on warehousing to reduce costs.
‘They have been using a number of different shipping lines (in order to cut out warehousing), but this means juggling more than one cut-off. The more suppliers you deal with, the more complex it gets,’ said Mr Knudsen, who stressed that the new service will enhance ease of business.
He believes the new service has in a way been helped by the practice of slow steaming, or running ships at slower speeds to reduce carbon emissions. However, nine in ten businesses have protested that it slows down transit time, according to a recent study by logistics firm BDP International.
‘Right now, manufacturers may have their product ready on Monday but have to wait for shipment on Saturday,’ said Mr Knudsen. ‘With Maersk Daily, there is no need to store it in the warehouse. The service compensates for the slow steaming effects.’
Maersk is able to roll out Daily Maersk because of the liner’s extensive network.
‘No other container line deploys a similar network,’ said Mr Knudsen. ‘It will be difficult to mirror what we are doing.’
More information about the service can be found on MaerskLine.com and DailyMaersk.com.
Font – Lynn Kan / The Business Times
By Rodrigo Cintra