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Maersk vs Amazon Logistics: The Ultimate Battle of the Same Way

03月24日 10:41:51

One is container shipping lead big brother, one is the richest man in the universe online shopping kingdom, two industry giants from different starting point, towards the same goal, they will encounter together?

Maersk began a strategic transformation a few years ago, no longer satisfied with port-to-port maritime trunk transport services, the service to the two ends of the trunk line. Today, Maersk is more than just a shipowner, offering air freight, towing, warehousing and last-mile deliveries.

at the same time, in another parallel space, Amazon, an online shopping giant, operated its own warehousing services and last-mile distribution in its early years. In recent years, in order to further control its logistics network, Amazon has gradually extended its services upward, dabbling in long-distance trailers, air transportation and even chartering boats. What is even more striking is that Amazon has begun to provide express delivery services to customers who sell on other online shopping platforms to highlight the neutrality of express delivery services. Things have started to go bad

if they continue in the current direction, perhaps in the near future, the vision of the two companies will overlap and compete for the same set of customers: a one-stop, full-link, end-to-end delivery service for e-commerce sellers, extending from the factory warehouse all the way to the end consumer's doorstep. The goal is the most profitable supply chain service in developed countries in Europe and America: the delivery market of e-commerce.

Maersk
: A Logistics Aggregator

to Build End-to-End Delivery Capabilities

Maersk to make a major strategic adjustment in 2016. We can understand the reason behind Maersk's turn by recalling a little history. The shipping market in 2015-2016 is simply the other extreme of the current market: shipowners are receiving goods at freight rates far below cost. Shipowners are not thinking about earning billions more, but how to lose billions less and survive. Trapped by years of losses and ultra-low sea freight, Hanjin Shipping, the original head owner of the U.S. line, declared bankruptcy in 2016, shocking the industry.

Maersk was also in a bad situation. In addition to its main business losing money, because of low oil prices, Maersk's other profitable business, oil exploration, also lost money. The situation was very serious.

in comparison, the head freight forwarding company that provides full logistics services will not be affected by the cycle of the shipping industry, good three years, bad three years, basically can do drought and flood, at most is the problem of earning more and earning less. In September 2016, Maersk announced a strategic transformation, launching extended services from the main shipping line to both ends, trying to break the spell of the shipping industry cycle and realize the foundation of Yongqing.

If the industry has not deeply felt the impact of Maersk's transformation on the market in previous years, the shortage of shipping space and high freight rates during the epidemic have undoubtedly greatly accelerated the pace of transformation. Maersk can take advantage of the shippers' urgent need for shipping space to launch logistics services at both ends in a timely manner, and the record profits brought by the extremely high freight rate can provide a steady stream of funds for the company's acquisition, one by one to build and make up for the short board of back-end delivery capacity.

Maersk's four businesses, shipping still dominates, accounting for nearly 80% of the group's revenue in 2021. The soaring freight rates in 2021 are not a normal year, and the extraordinary percentage of revenue from shipping does not represent the norm. Logistics and services, the second largest sector, made great strides in 2021, with revenue up 41% from 2020.

Information from Maersk 2021 Annual Report

Maersk's logistics and services are divided into three items:

Managed by Maersk: I call it" Malay management ", providing customs declaration, supply chain management, 4PL, cold chain logistics and TradeLens

Fulfilled by Maersk:" Malay delivery ", providing LCL, unpacking, storage and distribution and e-commerce logistics

. Transported by Maersk:" Malay transportation ", providing air transportation, LCL, truck and rail transportation, cargo insurance

can be seen from the annual report that Maersk's logistics and service revenue growth mainly comes from organic growth (organic growth), with a mid-term annual growth target of 10% by 2025 and a 34% surge in 2021. As mentioned earlier, Maersk, which mastered the most valuable resource (shipping space) last year, can easily provide logistics services. In addition, with Maersk's tradition of grasping the big and letting go of the small, 50% of the organic growth should come from the top 200 major customers, reaching 62% in 2021. According to the contract strategy in 2022, it is estimated that the growth of logistics and services will continue to come from large customers.

Maersk last month reported a record profit for 2021 with an EBITDA of $24 billion. Such ample funding provides Maersk with ample ammunition for a corporate takeover to achieve a strategic shift. Since 2019, Maersk has begun to buy the rhythm of buying. It bought Vandegrift (customs broker) and Visible SCM in the United States, and KGH (customs broker) and B2C Europe Holding in Europe. Judging from the companies purchased, it is obvious that Maersk has focused on fulfilled by Maersk. The joining of Visible SCM, B2C Europe, Huub,LF Logistics four companies has greatly enhanced Maersk's e-commerce distribution capability. Maersk's ambition in this field is well established.

Amazon: Rebuilding an AWS( Amazon Web Services Division)

If Maersk is gradually extending its services back from the port-to-port trunk line, Amazon is gradually building and increasing its control over logistics services from the back end. Once the platform is built, they can turn it into a neutral company that provides services to the outside world like AWS. In fact, they're already doing it.

is different from Maersk's attempt to get out of the shipping cycle and make a strategic transformation, Amazon's drive to extend upstream logistics comes from real needs. In 2013, online shopping was in the ascendant. At that time, Amazon relied too much on Fedex and UPS express delivery services. As a result, orders increased greatly during the Christmas sales season that year, but express delivery services failed to keep up and delivery was seriously delayed. Starting the following year, Amazon was determined to speed up the construction of its own distribution center and began buying trucks, planes and delivery vehicles.

Amazon's investment in logistics in recent years is amazing, spending nearly $80 billion each in 2020 and 2021, and only 56 billion in the five years from 2015 to 2019. The effect of such a heavy investment is also remarkable: Amazon Air Transport has a AmazonAir 85 aircraft. Last year Amazon also began to charter its own ships and build boxes to make up for the lack of capacity.

Amazon's own express delivery volume has almost skyrocketed since 2018, surpassing Fedex in 2020 and is expected to surpass UPS this year.

Amazon International Logistics is operated through Amazon Global Logistics(AGL). From the following Amazon official website AGL service introduction, AGL promotion is mainly aimed at sellers on the platform, the promotion is very strong, but also can provide freight discounts. AGL's services currently already cover FCL, LCL, regular ships, express ships, and air transportation services. The service area includes mainland China and Hong Kong for export to Europe, the United Kingdom and Japan. From trailer services at both ends, boarding, labeling, to customs clearance and cargo insurance services, AGL can already provide end-to-end one-stop services in the above markets.

AGL's global revenue has gradually started from 2017 to over 80 billion US dollars by 2020 and may have exceeded 100 billion US dollars by 2021.

the

U.S. line alone, Amazon in 2016 at the same time in the United States and China registered NVOCC, but the real start with NVOCC in the name of the shipment is in 2018, and then every year at a rate of 2-3 times the crazy long, to 2021 more than 110000 TEU, in China to the United States freight forwarders ranked 9th.

AGL cooperation shipowners are mainly Maersk and Dafei, and gradually join other shipowners in the later period. Last year, when the shipping space was extremely tight, it was said that the shipowner's support for AGL was still very strong. In addition to the ultra-low freight rate, most of the weekly shipping space could be guaranteed. The low price + shipping space gave wings to the growth of AGL.

Amazon Logistics was initially positioned to serve sellers on its own platform. However, as a company with a fine tradition of taking outsourcing services back to do it itself and gradually turning it into an independent revenue-generating department for foreign business, there is every reason to believe that Amazon will turn logistics services into an independent courier company to undertake the logistics and distribution business of sellers who are not on the Amazon platform. In other words, Amazon's logistics service could be the next AWS(Amazon Web Services). At the beginning, AWS mainly met the internal company's virtual hosting service needs, and then AWS began to provide services, and gradually turned AWS into the world's largest cloud computing companies, AWS is also Amazon's most profitable department.

actually Amazon Logistics has already started to do so. They launched Amazon Shipping service in the UK. Any e-commerce seller, whether an Amazon platform customer or not, can choose Amazon to deliver packages for them. Industry estimates that Amazon will launch a similar service in the United States as soon as this year.

the

same way: a common prospect?

, Maersk and Amazon Logistics start from different places and are driven by different reasons, but the final direction may be the same: provide one-stop, vertically integrated delivery services for e-commerce customers. From the warehouse of the factory to the door of the final consumer, they implement and monitor the supply chain services through their own sea, land and air transportation network. If the two giants can control the mainline transportation service well, due to the complexity of laws and regulations for trailers around the world, they may need to seek partners for last-mile distribution. If you build your own capabilities throughout the process, you may not be able to scale up quickly.

For customers, the benefits of one-stop service are self-evident. Cost controllable, process visible. When everything goes well, customers can focus on trade and logistics will be handed over to a company. However, when the supply chain encounters bottlenecks or there is a shortage of cabinets and shipping spaces, customers lose their initiative due to excessive reliance on the two giants, and the priority of cargo transportation is no longer under their own control, and it is entirely up to the two companies to decide. Needle without two tips, cane without two sweet. Customers enjoy the convenience of low-cost services, but also the loss of logistics flexibility and initiative.

there is no direct competition between Maersk and Amazon, and everyone builds their own delivery capabilities on their respective tracks. On the contrary, Maersk has been Amazon's main partner in terms of the volume of Amazon's U.S. line partners. The question is, will shipowners' thinking and positioning of Amazon change as Amazon Logistics gradually becomes a neutral platform, increasingly providing logistics services to non-Amazon sellers?

Source: Roger put the wine to see shipping

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