New Maersk booking reliability product making inroads

New Maersk booking reliability product making inroads

Shippers are booking an average of 8,000 FEU each week on the largest global container carrier's Maersk Spot platform. Photo credit: Shutterstock.com.

A Maersk Line product launched in June that penalizes shippers that fail to deliver cargo as booked online and rebates them if the carrier doesn’t keep up its end of the booking has already begun making sizable inroads.

In its second-quarter results, the largest global container carrier said an average of 8,000 FEU are being booked each week on its Maersk Spot platform, which is offered on all global trades except on US trades that are regulated and monitored by the Federal Maritime Commission. Lars Jensen, CEO of SeaIntelligence Maritime Consulting, said the guaranteed cargo volumes accounted for about 8 percent of the total spot cargo handled by Maersk. Of the 3.4 million FEU handled in the second quarter, 38 percent was booked on the spot market and the remaining 62 percent via long-term contracts.

The initial growth in Maersk Spot volumes gives carriers further impetus to provide similar products that offer guaranteed contract reliability. Gordon Downes, CEO of New York Shipping Exchange (NYSHEX), a neutral third-party platform for carrying out enforceable ocean freight contracts, said he’s confident other carriers will launch similar products to Maersk Spot and NYSHEX. The latter launched two years ago and has delivered virtually 100 percent contract reliability through its six member carriers, of which Maersk is one. Hapag-Lloyd and CMA CGM are both expected to offer similar offerings, according to sources with knowledge of carriers’ development plans. 

The loading guarantee for spot rates booked on the Maersk e-commerce site is part of a larger effort to digitize more transactions, providing shippers, forwarders, and non-vessel-operating common carriers (NVOs) with an experience analogous to other consumer experiences where commitments are met, Johan Sigsgaard, Maersk’s head of trade for Europe, said in a June interview with JOC.com. Unlike past attempts to charge no-show fees or similar reciprocal penalties, the current digital environment now enables more of the transaction to happen in one connected process, he said. Maersk aims to get the greenlight from the FMC to expand Maersk Spot to US trades by the end of the year. 

Cargo no-shows — also referred to as “downfalls” — have plagued the industry for decades, but carriers have paid more attention to the issue in recent years as pressure to decrease waste rises, and digitalization provides opportunities to streamline the booking process. No-show containers can exceed 40 percent on a voyage in the most severe cases, but generally account for a quarter of bookings, according to Hapag-Lloyd CEO Rolf Habben Jansen. Hapag-Lloyd, along with Maersk, has been vocal in calling for the need for a crackdown on no-shows and attempted to levy penalties on shipments booked but not delivered with mixed success, at best.