Maersk counters “carrier commoditization” with new trade finance offering

Maersk Line has introduced a new service for supply chain managers seeking to finance their global trade while optimizing carrier service.

Spokesmen note that supply chains are changing dramatically across sectors, resulting in the need for logistics service providers to increase the scope of their services and offer an end-to-end approach.

To address this, Maersk Line is launching Trade Finance for its customers in the United States in five states - New York, Texas, Florida, New Jersey and Georgia - after several successful pilots in Singapore, India, Spain, the Netherlands.

Leading industry analysts told LM that the specific move was not anticipated, it appears to be part of Maersk’s efforts to offer their shippers a complete package of ocean transportation and trade services.

“It comes at a time when alliances have deepened the commoditization of container shipping and overcapacity has eroded the profitability of shipping itself,” says Dan Smith, a principal with the consultancy, Tioga Group. “Ali Baba and others are making it easier for importers and exporters to purchase shipping, which threatens to leave Maersk and others as barely solvent vessel operators,” he adds. “The shipping business is more than just ships, and Maersk is fighting to keep more of that business in-house.”

Spokesmen for Maersk contend that this “one-stop shop” concept provides a more effective way to manage the ocean leg of end-to-end global supply chains, both financially and operationally.

Among the benefits listed by Maersk are these:

*Less complicated access to capital to finance their business needs when they need it

*Credit worthiness is determined in a less timely fashion and considers both shipper’s financials and shipping history with Maersk Line

*A less complex end-to-end digital solution, removing the paper trail from traditional financing options

 *Expedited release of funds at gate-in, vs. when documents are submitted

*And finally, it may held supply chain managers avoid “the collateral trap,” as the only collateral required is shipping with Maersk shipping companies