- Shippers face a choice as they plan their freight strategies: the simplicity of a single end-to-end provider or the reduced risk of a diversified carrier network.
- Maersk pursues an end-to-end logistics strategy , acquiring customs brokers, investing in digital tools like Loadsmart and developing platforms such as Maersk Flow and Twill.
- Maersk marketed the internalization of Damco services using words such as “simplified,” “agile,” “seamless” and with fewer “handoffs.”
- The supply chain landscape began the year absent of a familiar name.
- Damco is no more, after Maersk announced in September it would dissolve the freight forwarder brand by the end of 2020.
- Maersk absorbed Damco’s air and ocean less-than-container-load shipping to combine it with Maersk’s logistics and services products.
A recent news article published in the Supply Chain Dive reveals that the Copenhagen-based conglomerate’s portfolio now boasts air forwarding and LCL in addition to existing services in ocean transport, trucking, customs brokerage, warehousing and port terminals.
Difficult for shippers
“It’s very hard for shippers, and also forwarders, to differentiate,” said Nowroth, who formerly held roles at DB Schenker and Maersk. “Am I dealing now with a freight forwarder? Or am I dealing with a shipping company?”
Shippers face a choice as they plan their freight strategies: the simplicity of a single end-to-end provider versus the reduced risk of a diversified carrier network.
“Shippers can take a call on what sort of service they want and whether they might be willing to pay extra for an end-to-end service from a single provider,” said Chris Rogers, lead supply chain analyst at S&P Global-owned Panjiva in an email.
What does the scrapping of Damco mean?
The scrapping of Damco also leaves freight forwarders at a crossroads. Maersk, once and still a supplier, now offers many of the same services as freight forwarders.
“Forwarders definitely see this as competition,” Rogers said.
The aftermath
After Maersk announced the Damco move Sept. 1, DB Schenker wasted no time swooping in to grab Damco customers who would have been transferred over to Maersk. On Sept. 4, DB Schenker announced a “stability package” for Damco customers, in which DB Schenker would provide short-term services agreements with the same conditions shippers had working with Damco.
Forwarding’s shifting sands
Analysts said the Maersk-Damco move will start to drive a number of changes among freight forwarders and how they market themselves to shippers.
“They have to justify their existence,” said Nowroth. “They have to be far more innovative, they have to be far more clever, about what they can really offer as a value to their own customers.”
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Source: Supply Chain Dive
