Foreword:
This week at the Bernabeu Stadium, home of the Real Madrid club in Madrid, Spain, Maersk held a conference that may have far-reaching significance, the name should be called GLOBAL SALES CONFERENCE. More than 2,000 sales of the world’s largest shipping company gathered together, the theme is summarized as the following words:
1 UNITED FOR GROWTH
2 BUILDING CONNECTIONS,
3 THE FUTURE IS NOW,
4 WE ARE ONE MAERSK.
Combined with the performance of Maersk in the past year of 2018, the convening of this conference has a strong background of the times and is definitely worthy of consideration and consideration. Below in the body, I will discuss my own point of view in detail. Here I want to emphasize that my point of view is based on my own experience in the international freight forwarding industry, and only represents my own point of view.
I. The meeting of Maersk’s conference reflects the brutal competition in the international container shipping market.
Let us look back to July 2016, South Korea’s largest shipping company Hanjin fell into a bankruptcy vortex, and eventually went bankrupt. Han Jin’s bankruptcy was due to the fierce competition in the international shipping market. However, the bankruptcy of Hanjin may delay the difficulties for other shipping companies. So the major shipping companies have come out in 2017 with brilliant results. Among them, Maersk Group’s revenue reached 31 billion US dollars, an increase of 13% compared with 2016’s 27 billion US dollars. Compared with the 2016 loss of 496 million US dollars, the actual profit in 2017 increased by 852 million US dollars, reaching 356 million US dollars.
But the good times are not long, and by 2018, the performance of major shipping companies has come out of the eye-popping results, as shown below.
It can be seen that, except for Hapag-Lloyd and SITC, the profits of other shipping companies in the table are negative. In this situation, Mr. Søren Skou, CEO of Maersk, is pessimistic about the shipping market. His comment was quoted as below:
The views and judgments of Maersk CEO, I believe, directly promoted the transformation of their Maersk’s global strategic thinking. The global Maersk sales meeting also came into being.
II. Analysis of the theme of the Maersk Global Sales Conference
1. UNITED FOR GROWTH
The meaning of this sentence, I think, is to unite to fight for a bigger victory. The negative growth of all profits comes from two reasons. One is that the sales revenue has stopped, and the other is that the cost is high. The shipping company can’t jump out of this basic framework. Maersk should have already realized this profoundly. The key point, I think, is to work hard on sales performance, and there may be some effective measures to improve the sales performance of Maersk as a whole. Therefore, Maersk held this meeting to unify thoughts and work together for the overall goal.
2. BUILDING CONNECTIONS
That is to establish a full contact with the customer. It is estimated that Maersk will invest more energy and ability in the small and medium-sized customers on the basis of consolidating the relationship with VIP customers. In the global economic downturn, the Sino-US trade war, and the changes in US policy, the shipping company’s original sales path may need a certain degree of adjustment. I think one of them should be that Maersk needs to spend more time and energy on small and medium-sized customers. The characteristics of small customers are numerous, but each individual shipment is small. If you can seize the majority of small and medium-sized customers, you can not only integrate the quantity, but also increase the unit profit rate. The overall effect may be a good reflection.
3. THE FUTURE IS NOW
If you do not seize the current opportunity, it is equal to handing over the market share to others. As the leading shipping company, Maersk has always been the industry benchmark. This time I feel that they want to make the e-commerce platform, Maersk’s online booking platform (ship.maerskline.com) bigger and stronger. I believe that Maersk can also provide financial support to a wide range of small and medium-sized shippers. This trend is very promising. Simply put, the new model in the future may greatly simplify complex operating procedures. With advanced WEB technology and supply chain model, the majority of small and medium-sized customers can directly access the services of the shipping company. Once the platform is built up and the stickiness is raised, Maersk’s future can be expected. At present, in the future, this platform model is likely to be imitated and followed by other shipping companies, thus fundamentally changing the current sales model (shipping company—intermediate agent—end customer).
4. WE ARE ONE MAERSK.
In this sentence, I believe that Maersk will implement this policy as a whole from a global perspective, not just certain regional or regional policies. The reason is simple. Maersk is a company with a very high degree of globalization. Stayed on the first throne for a long time, followed by MSC CMA COSCO. The status of the boss must be managed to maintain, otherwise they will not spend so much money and time to engage in such a conference.
III Twings’ Review
I think this conference may be an iconic milestone that will have a profound impact on the international container shipping market. Exaggerated, it may be a revolution. Who is the revolution aimed at? Of course it is the freight forwarder. Under the premise of the lack of profitability of the shipping company, the first thing that comes to mind is how to grasp the end customers. Therefore, he will inevitably take some measures to smooth out certain barriers (for example, the price can be applied directly, without having to go through an intermediary agent; or, opening and simplifying booking procedures, one-stop service booking, etc.), these measures or means are precisely what the traditional freight forwarding company used to provide to customers as services.
So what should the freight forwarder do? It goes without saying that this is hard to answer. If you can’t catch customer needs, or can’t provide effective demand to customers. There is no need for a freight forwarding company to exist. However, we can also see that in the industry of container import and export, the requirements of the shipping company are on the one hand, which may be simplified; however, customs, docks and other requirements are another aspect. It may not be easy for the customer to simplify at once. Therefore, if these aspects still require the assistance of freight forwarding, then the freight forwarding will still have value. And the value is great.
For our freight forwarders, we should embrace change, instead of blaming others on the other side, it is better to actively explore these new models of shipping companies, and strive to be familiar with the new model as soon as possible. The advantage of this is that it can adapt to changes in advance, and then targeted analysis to find the areas in which our freight forwarding can enter. In order to identify our position and better serve our customers.
When the wolf is really coming, crying is useless. The best way is to take up arms and defend your territory.
