Big freight forwarders steer cargo carriers toward one-click shipping
MANILA, Philippines — Freight forwarders led by Kuehne + Nagel International AG are prompting shipping firms including Maersk Line, the world’s biggest, to rethink their strategies after grabbing a chunk of the seaborne container market.
Kuehne + Nagel, the top sea-freight forwarder, and fellow Swiss competitor Panalpina Welttransport Holding AG are joining Deutsche Post AG’s DHL Global Forwarding and Deutsche Bahn AG’s DB Schenker unit in shifting focus from trade routes to target key industries such as pharmaceuticals, where shipments need close control throughout the journey.
The strategy has helped the cargo brokers, which act as middlemen between freight companies and manufacturers, to take a 35 percent share of boxed sea freight. That’s still far short of their near-domination of air markets, where forwarders handle 95 percent of cargoes, leaving “huge scope for expansion,” said Damian Brewer, an analyst at RBC Capital Markets in London.
“The shipping lines’ market share will drop below 50 percent in the next four to seven years,” Kuehne + Nagel Chief Financial Officer Gerard van Kesteren said in an interview at the company’s headquarters near Zurich. “They can’t fight it because they can’t offer the end-to-end solutions that global clients need.”
Kuehne + Nagel stock is down 3.6 percent this year, compared with a 15 percent decline in A.P. Moeller-Maersk A/S, of which Maersk Line is a unit. Panalpina, also based in Switzerland, has lost 7.9 percent in the period.
While shipping companies will still reap revenue from carrying containers, the rise of the forwarders will diminish their bargaining power over rates, said Janne Vincent Kjaer, an analyst at Jyske Bank A/S in Silkeborg, Denmark. It also means the shipping lines will have to better target the forwarders, which could soon hold sway over more than half their income.
“Freight forwarders are a large part of our business and it’s absolutely important that we produce solutions that are attractive to both forwarders and cargo owners,” Michael Blach, Maersk Line’s vice president for key client management, said in a June 20 telephone interview.
Maersk Line is responding by overhauling a business model that has barely changed in 35 years and swamps clients with paperwork, the Copenhagen-based company said.




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