Bundled Services: Shipping lines with a network of sea, air and land channels can move cargo faster 

Maersk, CMA-CGM, and Mediterranean Shipping Company (MSC), the three largest shipping firms in the world have dominated the sea for many years. They now want to grow into the air and provide their clients with more services. These will be tested in major markets like the US, Europe, and China before it launches in India.

The Danish A.P. Moller-Maersk launched Maersk Air Cargo in April to serve customers’ demands for international air cargo. The Swiss MSC began developing a new service named MSC Air Cargo in September to complement its container transport offerings. The French company CMA CGM, which began operating freight aircraft in 2021, will face competition from the Danish and Swiss businesses.

The CEO of MSC, the biggest container line in the world, said, “This is our entry into the industry, and we intend to continue exploring new opportunities to expand air cargo so that it complements our primary line of business, container shipping.”

One Cost, One doc

Today’s market requires bundled services on a single transport document at a single cost. International integrators like DHL and FedEx support this viewpoint, and UPS are growing their wings with robust air and ground networks. A shipping line with a decent network of sea, air, and land channels can carry a lot of cargo swiftly, affordably, and effectively, according to an industry expert.

Air freight offers just-in-time deliveries on exact timetables, which can save storage costs and help manage inventories. According to a major shipping company spokesperson, there is a significant risk that perishable goods will spoil during prolonged travel durations. Air cargo can help you avoid this.

“Air freight will be combined with other modes of transportation by Maersk Air Cargo. We anticipate that demand for end-to-end logistics will rise along with the need for air cargo, both now and in the future. Due to this, it is crucial that we increase our capacity under our control and continue to implement our air freight plan,” According to Torben Bengtsson, Head of Air & LCL at A.P. Moller

A third of the air tonnes that Maersk carries annually should go through its regulated freight network. They will use a combination of its planes and those it rents to accomplish this. The way they manage their ocean fleet is comparable to this. According to a statement, strategic commercial carriers and charter travel providers will fill the empty seats.

Strategic shift

According to US-based shipping expert, Jon Monroe, every carrier aims to enter the air and the first- and last-mile businesses.

Ketan Kulkarni, Chief Commercial Officer of Blue Dart, believes that combining the greatest features of various forms of transportation and utilising technology can significantly change the logistics sector. It indicates demand in the market when new companies enter the air cargo sector.  This is part of megacarriers’ broader strategic shift to position themselves as multipurpose hubs that can assist customers with the ocean, air, trucking, warehousing, and freight forwarding.

According to G Raghu Sankar of the International Clearing and Shipping Agency, the emphasis is changing away from providing a straightforward logistical solution that includes picking up products at the source and transporting them to the destination. Some large shipping firms desire to partner with or purchase transportation firms, customs brokers, and warehouse proprietors. This is a start in the right direction, even though it might take some time to learn how to manage air cargo and compete with other air cargo carriers and freighter operators. He claimed that because the order books are already filled, it would be simpler for a shipping firm to move goods by air than for an air freight company to move cargo by sea, including scheduling cargo/container ships.

According to Afzal Malbarwala, President of the Air Cargo Agents Association of India, large shipping firms are launching their airlines due to the pandemic’s surge in popularity and the enormous profits they generated. In sea freight, they are not getting that margin. “We’ll have to wait and watch how they perform.”

Published on October 16, 2022