By digitising the business, Maersk has become one of the world’s leading eCommerce companies. Here is its journey so far...
When you think of the world’s leading eCommerce organisations, it is doubtful that a shipping company will come to mind. Indeed, shipping, with its traditional ways of working and paper-heavy processes, seems like one of the most unlikely industries to claim a global eCommerce champion.
Yet with 99% of bookings made through its online channels, Danish shipping giant Maersk can safely claim to be just that. In achieving this status, it has redefined how it operates and supports its customers, breaking down many preconceptions that exist in the shipping industry.
Chicken or the egg?
This hasn’t happened overnight. Maersk first began to digitise its business over 15 years ago. In an earlier incarnation of what would become its modern eCommerce strategy, the primary focus was on consolidating internal processes and enforcing standards.
Things changed after the global financial crisis. Maersk’s clients increasingly began to demand more ‘e-enabled’ solutions. “Over the past five years, our eCommerce strategy has really taken off and ‘e’ is now at the heart of everything we do when working with our customers,” says Carsten Frank Olsen, Senior Director and Global Head of eCommerce at Maersk. “The key has been digitising the end-to-end customer experience.”
Maersk’s website is unsurprisingly at the heart of its digitisation efforts. “Through our website, our customers can find the solution they need, get a price for this and book in a matter of minutes,” says Olsen. “Previously this process would have taken a few days.”
To drive digitisation through the end-to-end process, Maersk has also built a portal where clients can store and manage documentation. “Trade more broadly has been dogged by a lack of transparency due to the use of paper-based documentation,” says Olsen. “What we have done by digitising documents is give our clients the efficiency and transparency they demand.”
It is not just documentation that Maersk’s clients are able to track. “Companies, and the banks that finance their trade, want to know what is happening at every point whilst the shipment is in transit,” explains Olsen. “We have enabled this by providing tracking of our ships on our website, as well as offering updates about any changes in routing and timings of the shipment.” In recent months, Maersk has extended this service to importers, giving end-to-end visibility to all involved in the supply chain.
Maersk has also placed a significant focus on giving its customers a variety of ways to pay for the company’s service – something that Treasury Today has previously reported as being key to any successful eCommerce strategy.
“Payments for the shipment service are typically wire transfers; this hasn’t changed much over the years,” says Olsen. “What has changed is that we have added credit card payment capabilities through our MyFinance portal. This enables us to seamlessly debit small-value payments for things like documentation charges as the goods are in transit. This stops shipments being delayed because of the late payment of trivial sums.”
Through its MyFinance portal, Maersk also provides an overview of its clients’ invoices and accounts. Olsen comments again how this enhances visibility over the financial flow of the transaction and gives certainty to those involved in the exchange. “This was one of the most sought-after capabilities from our large corporate clients and is a channel we will continue to add functionality to,” says Olsen. True to its word, Maersk has recently enabled trade financing to be offered through this platform.
Forward thinking treasury
Corporate treasury has been at the heart of many of Maersk’s eCommerce initiatives, acting as an enabler and strategic business partner. “The department has been crucial in helping us achieve our objectives and we are privileged to have such a forward-thinking team,” says Olsen.
Olsen adds that treasury has not only realised that supporting the company’s digitisation efforts is crucial for the future of the business, “they have also used this as an opportunity to meet their own objectives”. For instance, the greater transparency and certainty provided by a digital workflow has enabled treasury to improve its cash flow forecasting. It has also enabled the department to speed up the payment cycle and thus drive improved working capital metrics. “The automation of collection processes has gone a long way to freeing up time for treasury to work closely with the business on future strategic initiatives,” says Olsen.
APIs and beyond
One of Maersk’s current initiatives is its partnership with Chinese online marketplace heavyweight, Alibaba. In brief, the agreement allows Alibaba’s customers to reserve ship space with Maersk when making purchases.
This is a transformative initiative that changes the way we engage with those of our customers using the platform, says Olsen. “Most importantly it puts our services at the heart of our customers’ journey,” he says. “This allows us to service our clients better and offer them certainty that they will have a place on our ship for the goods they have just bought.”
It also changes how Maersk get paid. “In offering this certainty we can get paid an amount upfront for our services through the Alibaba platform,” says Olsen. “This could help to redefine our working capital cycle and shows just another benefit that business can attain from going digital.”