Ocean Cargo: Keeping an eye on e-commerce

The announcement of the Alibaba and Maersk partnership made late last year comes as no surprise to anyone watching the booming logistics tech industry. According the Maersk, this digital service allows existing Alibaba “OneTouch” shippers to lock in the price of required cargo spaces on selected routes by pre-paying a deposit amount.

Meanwhile, The New York Shipping Exchange (NYSHEX) has completed its pilot program for digital bookings. According to NYSHEX, over 500 TEU’s have been shipped under pilot and beta testing with a select group of ocean carriers and shippers.

The way the NYSHEX exchange would work is that there would be a fixed “all-inclusive” rate for a guaranteed number of slots and containers while the shipper would collect a penalty if the carrier does not meet its contractual obligation. A penalty also exists for the shipper if the shipper cancels the booking. Each booking is its own service contract agreement that would automatically be filed with the Federal Maritime Commission.

Though the industry has been hard for consumers to fully understand, partnerships like these are about to become very relevant to everyone who shops online.    

“Global logistics is taking center stage like we’ve never seen before,” says Dr. Zvi Schreiber, CEO and founder of the logistics technology platform Freightos. “Building on a massive 80% e-commerce market share in China, Alibaba’s new partnership with Maersk—which controls 25% of all container ships globally—means Chinese manufacturers and retailers have a direct line to U.S. buyers, avoiding middleman markups.”

According to Schreiber, Maersk is “testing the waters” of digital sales with

one of the world’s largest e-commerce companies while threatening forwarder business. But for Alibaba, this is a direct challenge to global retailers like Amazon.

“Beyond drones and futuristic supermarkets, Amazon opted to get licensed as a forwarder [NVOCC],” says Schreiber. “Alibaba one-upped them by going directly to the world’s largest ocean liner.”