Dive Brief:
- Maersk announced a partnership with BlackBuck, an online freight booking and trucking services company, this week to launch an online marketplace for containerized trucking logistics in India, according to a press release.
- BlackBuck will own and operate the as-yet unbranded digital platform, which will be powered by Maersk technology and open to operators in India's containerized trucking industry, including outside of BlackBuck's network. The company was been dubbed a "Unicorn" by some for its rapid fundraising success and progress towards digitizing India's largely paper-based trucking and freight-booking industry. It currently has more than 300,000 trucks in its network and serves roughly 10,000 clients including Coca-Cola and Unilever.
- In addition to the challenge of paper-based operations, "the [export-import] EXIM containerised trucking industry in India ... has the additional complexity of meeting the timelines of sea freight connections," Ramasubramaniam B, BlackBuck co-founder and COO of strategic initiatives, said in the release. As a result, he believes the Maersk partnership and an enhanced digital platform could help bridge this divide, making operations more efficient and driving down costs.
Dive Insight:
India's infrastructure challenges have made transporting freight between its network of coastal ports to urban and inland destinations an expensive and complex process — a problem the government and, more recently, venture capitalists, are looking to remedy with increased development funding and support for private-sector innovation as India's consumer market continues to expand.
Maersk's partnership with BlackBuck on the new containerized import-export freight platform comes as India sets national goals to reduce logistics costs as a share of its GDP from 14% to less than 10% by 2022.
Arjun Maharaj, head of sales for Maersk South Asia, said, "Our customers are dealing with fragmented vendors with varying service levels of communication, geographical, financial & infrastructural disparities resulting in suboptimal supply chains." The goal is to use the digital platform to reduce the number of touch points in the supply chain, improving shipper experiences and opening up greater visibility into the domestic logistics industry.
Currently, roughly 95% of India's international trade by volume is handled through its network of coastal ports. As BlackBuck's COO mentioned in his statement, the lack of visibility and digitalization in the trucking industry can make container hand-offs from ocean to land less than seamless, creating an opening for private-sector solutions.
This isn't Maersk's first foray into onshore containerized trucking. In 2018, the company's venture capital arm, Maersk Growth, invested $21.6 million in Series A funding in digital freight startup Loadsmart, which uses AI-powered algorithms to calculate rates for full-truckloads and automate freight booking processes.
"We see huge potential with Loadsmart. Forward integrations between ocean shipping and over-the-road services can create incredible synergies and eventually provide a full service to shippers," Sune Stilling, head of Maersk Growth, said in a press release at the time.
While the container line has made no announcements to formally invest in BlackBuck, the move represents what appears to be a continuation of Maersk's strategy to expand its end-to-end containerized freight services.
