Maersk Line separates tech divisions to drive digitalization

Maersk Line separates tech divisions to drive digitalization

Maersk Line is aggressively pursuing efforts to digitalize the shipping process.

Maersk Line is setting up separate internal information technology (IT) and digital divisions as part of a range of measures to speed up the digitalization of shipping processes and the products and services offered to customers.

The move seeks to solve a core problem that underpins the industry’s slow pace in digitalizing processes by formalizing a distinction between work on backbone IT systems and the deployment of technologies that digitalize customer-related processes and simplify the business.

“There is currently a lot of technological innovation in customer value chains. The opportunity is there for us to play a much bigger part in the value chain and to support our customers in enhancing it,” said Robbert van Trooijen, CEO of Asia Pacific at Maersk Line.

Maersk set up a “design center” and introduced training and scrum methodology to improve the company’s agility in developing digitalized solutions. It is also hiring more staff qualified in fields such a machine learning, applied mathematics, and operational research to work with its shipping staff, van Trooijen told delegates at the TOC Asia conference in Singapore.

Digitalization presents opportunities to deal with major industry pain points such as unpredictable and high-levels of no-shows, a flawed pricing system, low levels of trust between beneficial cargo owners (BCOs) and lines, high transaction costs, and poor customer experience, Van Trooijen said.

“There is a strong case for change in terms of addressing industry pain points and customer expectation, which includes increased use of digital services.”

To improve customer experiences, Maersk Line on Wednesday announced that it has joined forces with Microsoft to roll out software applications in the third quarter that will help BCOs track containers and manage cargo as it moves across the globe.

Meanwhile, Maersk is currently piloting a web-only product on two of its China-Europe and one of its China-India services that offers customers a direct shipping option through Chinese e-commerce platform Alibaba, which provides customer-to-customer, business-to-customer, and business-to-business sales services.

Reducing the number of no-shows is one aim of the premium product. The customer makes a down-payment to secure the booking and equipment and receives a locked-in price. A charge is levied when bookings are not honored.

Digitalization of processes to handle shipping documentation is another focus of the Danish shipping giant. Maersk has tied up with IBM to use blockchain technology to simplify the management of trade documents including goods permits and licenses, customs declarations, waybills, and so on, in a tamper-proof, shared digital database.

Although a new and relatively untested technology, blockchain is considered potentially very suitable for management of trade documentation because it can embed documents in digital code and store them in transparent, shared databases protected from deletion and tampering.

At TPM Long Beach in March, Maersk CCO Vincent Cleric said the line had successfully tested blockchain technology to manage documents on a trial shipment between North Europe and the East Coast of North America. Cleric said the trial demonstrated the potential of digitalization to simplify shipping and potentially “take a humongous cost out of the supply chain.”

Contact Turloch Mooney at turloch.mooney@ihsmarkit.com and follow him on Twitter: @TurlochMooney.

A version of this story also appeared in Fairplay, a sister product of JOC.com within IHS Markit.