Maersk taps Indian reefer trade with door offering

Maersk taps Indian reefer trade with door offering

Maersk recently handled an export consignment of six containers of butter from northern India to Turkey that included intermodal, customs clearance, and documentation at origin, in addition to traditional port-to-port ocean service. Photo credit: Maersk India.

Maersk Line’s effort to transform itself into an integrated logistics service provider with end-to-end transportation offerings akin to those provided by DHL, UPS, or FedEx in the express parcel vertical is gaining ground in India.

Expanding its specialized cold chain solutions in the country, the world’s largest container carrier recently handled an export consignment of butter from Bulandshahr, Uttar Pradesh, in northern India, to Turkey.

The six-container shipment, carried out on behalf of New Delhi-based VRS Foods Ltd., was Maersk’s first-ever door-to-door delivery operation for such freight out of India, Maersk (India) officials told JOC.com. The move included intermodal, customs clearance, and documentation at origin, in addition to traditional port-to-port ocean service.

“This has opened up a niche cargo category, encouraging the shipping of an array of commodities within the reefer market,” the carrier said.

In the past, reefer exporters in the region have only had two options: trucking cargo or using intermodal rail to bring it to a port for shipment, both of which can involve considerable delays, a risky proposition for time-sensitive, temperature-controlled freight, Maersk said. Economic conditions in India, in particular a burgeoning middle class, are expected to drive up demand for perishable products, but the country lacks adequate facilities for food processing and cold storage.

“Limited cold chain infrastructure is one of the prominent factors that lead to the loss of produce. Through our endeavor with VRS Foods, our assurance was to provide them with an efficient logistics partner, and in doing so, we can now look to win the confidence of other exporters, given that we can successfully handle end-to-end logistics of refrigerated cargo for all proof of delivery,” Steve Felder, Maersk’s managing director for South Asia, said.

Aided by a long-established expertise in the maritime transportation of refrigerated cargo, Maersk in recent months has delivered a spate of perishable consignments for Indian exporters and importers on a “store door” contract basis.

Maersk Group has also invested in inland infrastructure development in the country, including the opening of a rail depot in Pune (near Mumbai) and the addition of perishable goods handling service at its Ponneri container freight station site (near Chennai), through its logistics arm, APM Terminals Inland Services.

The Indian government has also contributed to these efforts via its mammoth Sagar Mala infrastructure investment and development program. Although the program is primarily centered on the modernization of the country’s ports to increase cargo efficiency, authorities have also taken up the construction of several large food-processing plants close to ports to support food production and distribution.

Maersk's reefer supply chain expansion is a strategic bet on India’s buoyant containerized trade. In a recent regional analysis, the carrier said large-scale infrastructure upgrades, digitization, and various pro-trade reform efforts are combining to make India one of the “top trading destinations” in the world, but noted that more work remains to unlock the country’s full trade potential.

“We believe that India’s trade growth lies in hinterlands. Most of the small and medium enterprises and traders who engage in trade with this segment often face connectivity and infrastructural challenges limiting their scope for growth,” Felder added.

Just last month, Maersk scaled up its trade finance target for the emerging market economy from $150 million in 2018 to $200 million this year.