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Traditional container transport in the era of electronic commerce

RFL 5

Daniel Bosch Wood

Maritim Lawyer

LLM Southampton

Las Palmas de Gran Canaria

Experts analyze the confrontation between shipping companies and online shopping portals

Throughout the history of container shipping, shippers have transported cargo from physical stores established in different parts of the world to take their products to other latitudes. But with the advent of the Internet and online shopping, transportation logistics has become more complex. The purchase is made through a portal in one country, is processed in another, but the load comes from a third. But this dynamic could be in check thanks to the new business area of ​​Amazon: NVOCC or non-vessel operating common carrier.

According to an analysis by S & P Global Platts, this figure has faced the online retail giant with the owner of the seven seas: Maersk. Amazon is authorized to operate as a cargo carrier between the United States and China, consolidating its role as a logistics company and freight forwarder, since they already have aviation operations, truck transport and manufacturer – the complete logistics chain.

The conquest of Amazon …

Amazon is new to this from manufacturing, as it obtained its first patent to manufacture clothing and other products on demand through its online store earlier this year. With this permission, Amazon now can work directly with Chinese suppliers to manufacture their garments, eliminating the intermediary in all its forms, since it is entitled to operate in all stages of the transaction and dispatch of the cargo … taking away an important participation to older players in the logistics chain.

The problem of this new logistic scenario is that it becomes a trend among other digital retailers, which would put in bottlenecks to the traditional shipping industry. AP Møller Maersk is precisely working to secure the industry amid this incipient – but threatening – storm.

… and the defense of Maersk

The Danish giant partnered with IBM to develop a blockchain strategy to optimize information flows in the transport process. In 2014, both companies led a research where they discovered that for a simple shipment of fruit from Kenya to the Netherlands there were more than 200 interactions and more than 30 professionals involved in the paperwork. With so much information moving, security is widely exposed.

The blockchain Hyperledger used by Maersk and IBM comes to solve precisely that. It is a database that guarantees the validity of the transactions, ensuring that they can not be falsified in the future and adding privacy and security to the data.

And as if the blockchain technology was not enough to secure the transactions, Maersk partnered with the Asian online retailer Alibaba to unite logistics and e-commerce – and perhaps compete as equals against Amazon. Alibaba has the OneTouch platform, which allows suppliers to directly reserve spaces in container ships, thus minimizing freight forwarders. Shipping companies such as CMA CGM and ZIM are part of this platform that also streamlines the processing of foreign trade documentation.

Victims of technological disruption

On the way to the technological race, freight forwarders and smaller-scale shipping companies are hurt, who do not have the resources to compete with giants like Amazon or Maersk. Therefore, the only option they have is to associate and integrate operations in an increasingly globalized world.