Container line confirms that its online spot booking product with cargo loading guarantee has had a positive effect on overbookings and rollovers in its first six months
The world’s largest container line Maersk has welcomed the strong uptake of its Maersk Spot product, which has gained a strong momentum since its launch six months ago, growing to currently cover one quarter of the company’s short-term or spot market volumes.
It was hoped that the online spot booking product, which has a cargo loading guarantee at a fixed price upfront, will help break “the vicious cycle of overbookings” within container shipping, with Maersk confirming that it has had a positive effect on overbookings and rollovers.
A spokesman told Lloyd’s Loading List: “I can confirm we have been positively surprised by the uptake on the Maersk Spot product. This also includes how well customers have reacted to this new proposition.
“As for benefits, we have seen overbooking reductions of 75% for the Maersk Spot volumes compared to a traditional model, and rollings of shipments booked on Maersk Spot below 1.5% on such bookings. We can confirm that the reduction in downfall and rollovers is providing benefits both in terms of customer satisfaction and operational efficiencies already.”
As well as direct bookings from shippers, Maersk said there are several ways of integrating Spot with freight forwarders’ own systems – with some using Spot via APIs and then reselling the volumes to their own customers.
At the launch in June of the “fully digitally enabled” product ‘Maersk Spot’, Maersk said it was taking “further steps towards simplifying the supply chains of its customers by addressing some of the fundamental inefficiencies that exist across the industry”, through “a truly online product that can break the cycle of overbookings and offer a much simpler way to ship a container with load guarantee”.
Global head of ocean products Silvia Ding said it was not uncommon to see overbookings to the tune of 30%, which often leads to rolling of customers’ cargo, leading to a cycle of overbooking to compensate for the high downfall – which creates a lot of uncertainty for customers. “With Maersk Spot, we provide full visibility of the price and terms that will ensure cargoes get on board, ultimately allowing customers to move their cargo in a much simpler and more reliable way,” Ding said.
“Maersk Spot radically simplifies the buying experience for our customers. Today’s offline process can be up to 13 individual steps, often involving a lot of communication and paper work from rate sheets to terms and conditions and surcharges, etc. With Maersk Spot, this cumbersome process is reduced to five simple and integrated steps – all online.”
Maersk said a mutual commitment between the customer and the carrier was essential in order to break container shipping’s bad habit of overbookings, noting: “When a booking is confirmed by the customer, Maersk commits to load and grants certainty in operational execution. This is a mutual commitment between the customer and Maersk which ensures that the vicious cycle of overbookings is addressed.”
In case of booking cancellations by the customer, fees apply at the customer’s charge, but if cargo is rolled, Maersk compensates the customer, the line explained – a model that had already been welcomed by customers in the early experience of the product launch.
Maersk Spot is currently available on all trades, except in and out of the US. A spokesman told Lloyd’s Loading List: “We are building the capability to make the required rate filings in line with the product and expect to be able to offer Spot on US trades in the first half of 2020.”